Your Business Can Do Well While Doing Good
Cell-Ed—a female-led company with a mobile learning solution used to teach language, job, and digital literacy skills to low-skilled workers—announced in July 2018 that it had raised $1.5 million in capital in California. How this company meets expectations will not just be defined by shareholder ROI. Its stakeholders (women, low-skilled workers, communities, local economy) also want to reap the benefits of its success. Leveraging modern technology, this social enterprise addresses a societal need and, while aiming to make a profit, the double-bottom line.
This is becoming the norm for all companies, no matter their missions. Stakeholders are of increased importance to companies as global issues—such as diversity, inclusion, income inequality and global warming—move to the forefront of society. They expect the private sector to adopt citizenship and social impact as a core part of their strategies and identities.
Cell-Ed’s mission undoubtedly makes a social impact and attracts impact investors. These impact investors are looking for financial return but are willing to balance that for measurable social benefit. According to a the article, “How Social Impact Investment Delivers Superior Returns,” Forbes reported that venture capitalist funds with a social mission generated internal rates of return of more than 30%, which is more than triple other funds without that holistic aspect. The Global Impact Investing Network reported in its 2017 Annual Impact Investor Survey that there is at least $114 billion in impact investing assets worldwide. These assets are performing well financially and helping companies reach goals of economic growth, renewable energy usage and gender equality metrics.
Here are a few ways any business can develop a socially conscious business model:
Make it a priority – Leadership sets the tone. Align your company’s values with initiatives that make a positive impact on your community. Engage your board and employees on ways to be more thoughtful in business practices and policies. Does your technology properly secure customer data? Are you sourcing materials from suppliers with high ethical and environmental standards? Are you empowering employees through a diverse, respectful, and inclusive work environment?
Go green – Cut waste, implement a recycling program and use energy-saving measures. These practices can not only save money but create shared value with your customers, investors and employees.
Start a corporate social responsibility program – Make a statement by publishing a report or creating a webpage on how you give back to your community, employees and stakeholders. IBM, Cisco, Microsoft and Google—to name a few—try to differentiate their brands by demonstrating their responsible business practices, philanthropy and volunteer efforts.
Become a Benefit Corporation – Thus far, 34 states have passed laws allowing businesses to file as a Benefit Corporation, which is a legal tool to protect a company’s mission, expanding its goal from creating value for its owners to how it serves its mission. Each state has reporting requirements, generally requiring a description of how the company pursues its mission for the public benefit. Visit benefitcorp.net.
Get B-Corp certified – Approximately 2,500 companies worldwide have become Certified B Corporations from the nonprofit B Lab. The organization’s rigorous standards of social and environmental performance, accountability and transparency help differentiate companies that serve to make a social impact.
No matter the approach, any company can do well in its bottom line by making a difference in the community. In order to remain competitive, companies will find this becoming increasingly a need rather than a want.