How your social commitment impacts the success of your business

How your social commitment impacts the success of your business

If there’s something that has defined 2020 (other than COVID-19) it might just be global activism. More than ever before, the average consumer has strong opinions on environmental policies and social justice, and they expect the businesses they buy from to have strong opinions too. But when taking a political stance can mean alienating potential buyers, how can small businesses satisfy social demand and keep up revenue?

What counts as social responsibility?

All businesses have some impact on the world around them, from how they produce products and how they deal with waste, to who they hire and how they treat employees. In fact, every decision a business makes could have an impact on its environment or the local community. That’s why businesses are encouraged to consider their corporate social responsibility (CSR): what they can do to reduce the impact of their work and operate in a more sustainable way.

CSR strategies are adopted by businesses of all sizes and include:

• Commitments to diverse hiring (race, gender, sexuality, disability etc.)

• Reducing and offsetting business or production waste

• Investing in and donating to social or environmental causes

However, with consumers being more attuned to activist causes than ever before, CSR strategies might not be enough. Many businesses are now structuring their operations around causes they believe in, such as racial equality, sustainability, combating climate change, or community investment. In the modern business market, how you deal with major social and political events is more important than ever.

Why bother?

Being socially responsible as a business isn’t always easy. In fact, it can even feel like a chore, and an expensive one at that. But just because it’s easier in the short-term to put your head in the sand, doesn’t mean it’s always the best for your business.

Business owners are often afraid to stake a strong social or political claim because it might alienate a section of their market. While it’s important to strike a balance, the data shows that the majority of consumers appreciate businesses that make their values known. For example, a 2018 survey showed that 71% of consumers would spend more money at a small business that supported a social cause. 

This has become even more obvious this year, with movements like Black Lives Matter taking to the streets all over the world.  A survey from June this year showed that 60% of consumers decide whether to buy or boycott a brand based on how they respond to Black Lives Matter protests. For Millennial and Gen Z consumers, the value of socially responsible business practices is even higher. Just under 70% of these younger consumers think brands should be actively involved in the Black Lives Matter movement. 

Factor in the fact that Gen Z has the fastest growing economic power of all generations and you can start to see how responsible practices can actually drive revenue, not sideline it. In fact, if you continue to ignore social responsibility for too long, you might soon find young socially-conscious start-ups taking over your market.

How to be a responsible business

Responsible business practices pay dividends, but only if you go about them in the right way. You want to put effort into your ideas, but don’t go all in without testing the water first.

1. Be sustainable with your policies

There’s no point promising half of your revenue to a social cause if that prevents you from operating properly. The definition of sustainability involves balancing social, environmental and financial needs so that each area can still function. Try starting with one initiative – switching to environmentally-friendly packaging or investing a percentage of profits in a local social benefits cause – and see what that does for your revenue.

2. Be authentic

Be careful with your motivations: responsible practices are not (and should not be) a get-rich-quick scheme. Consumers are very aware of businesses that try to cash in on social and environmental causes with public but ineffective policies. Think about how authentic your policies are: are you being proactive in your responsibility? Are they actually helping, or just self-serving? The answers to these questions will tell you how authentic you’ll seem to consumers.

The Takeaway

Responsible business practices, both social and environmental, are a fact of the current corporate landscape and can’t be ignored. Taking responsibility for your impact on the world will benefit your business by building credibility with your customers and boosting your values to new consumers. So, take a look at your business, and see what you can do to make the world a better place.