As a business leader, who wouldn’t want to do good and make money? There are very few who would answer “no” to this question – and yet many companies are still grappling with a decision that doesn’t have to be made. Steve Jobs famously said, “The ones who are crazy enough to think that they can change the world are the ones who do.” While Jobs was speaking about technology, the same applies to companies and the impact their profitability can have on social impact and causes.
Earlier in my career, as a young entrepreneur in the medical device industry, the idea of sustainability, ESG reporting, the United Nations Sustainable Development Goals, and community engagement was confined to several paragraphs in the appendices of a corporate annual report.
But in today’s world, companies are driving a more socially focused agenda, and there are many proving that social impact and profitability are not mutually exclusive. According to Duke University, social impact is defined as “any significant or positive changes that solve or at least address social injustice and challenges. Businesses or organizations achieve these goals through conscious and deliberate efforts or activities in their operations and administrations.” Moreover, as consumers – especially the Millennial generation — we demand real outcomes and impact. Transparency and accountability are no longer enough. We expect real progress and authentic corporate advocacy.
Social Impact is a step above Corporate Social Responsibility (CSR) as it seeks to create actual impact in society, instead of simply being a corporate credo and checkbox. Social impact can apply to any matter of causes – from food insecurity to healthcare access, climate action, and arts programming, as well as awareness initiatives that spark movements, change behavior, and generate support for a more just, equitable, and sustainable world. There is no shortage of causes or organizations to support and partner with.
Yet some companies are slow to see that social impact is equally important to profitability. Nor do they realize that they are no longer in opposition in today’s business landscape. Business strategy that aligns with the values rooted in the communities where a company has a footprint is a required part of business activities – now and in the future. This is not a passing trend, a niche industry, or a new fad business that must jump on to stay relevant. This must become core to business operations and company culture.
Profitability is required in all good businesses. We’ve got to make sure we use this moment, as we approach the next phase of pandemic recovery, to do the things we haven’t been able to do or afford to do before, and ensure social innovation and impact are embedded in our business strategy. It is now expected that part of profitability will be channeled into social impact programs and causes.
Employees are demanding to work for companies that stand for something they believe in, customers are demanding to support companies that align with their social beliefs, and investors are starting to understand the positive impact that impact can have on the image but also on revenue and profitability. Individuals have been shifting their spending power towards socially-minded businesses with 64 percent of consumers reported supporting socially responsible brands, while more than one-third are spending more on socially-minded goods and services, according to Forbes.
Large companies such as Google, LEGO, Warby Parker, Microsoft, and Lemonade are examples of socially-minded companies that have established themselves as leaders in CSR. Equally successful but smaller organizations – like Bombas, Flatiron Health, and Patagonia, as well as HERhealthEQ, which brings refurbished medical equipment to medical facilities in underserved economies globally – have embedded social change in their guiding principles and business strategy.
This thinking isn’t new or niche, it’s becoming part of the main-stage conversation. Conferences all have at least one discussion on social impact related to the specific business its discussing, social impact groups are being created within large companies, impact investors are becoming more in-demand, and companies with social missions, including social entrepreneurs, are one of the fastest-growing subsets of innovators and entrepreneurs. According to several sources published prior to the pandemic, at least 10 percent of all entrepreneurs and business in the U.S., UK, and Europe were social impact-driven – and all predictions is that that growth doubled during the pandemic.
Social impact can come in the form of philanthropy, can be profit-based, or can be in the form of shared services. While the definition of social impact is clear, what is not clear is the way to impart it. And that is evident in the many forms in which it is categorized and measured, which hopefully will become more concrete measurements in the near future.
In the last several years, MacKenzie Scott has been living the values in which she believes, has signed the Giving Pledge, and understands that her position of wealth is a result of company success. She feels that “People struggling against inequities deserve center stage in stories about the change they are creating. This is equally — perhaps especially — true when their work is funded by wealth. Any wealth is a product of a collective effort that included them.”
Social impact is the way businesses need to function today, tomorrow, and into the future. We can no longer work for and with companies that do not care about others and only care about profits. We have been seeing the repercussions of profit-only businesses starting to suffer and expect it to continue. Those companies are in the past; doing good in the present and the future.
About the author
Marissa Fayer is the founder and CEO of HERhealthEQ, a nonprofit working to improve the health outcomes of women by providing essential medical equipment to developing regions around the world. A 22-year veteran of the Medtech industry was included among the “Top 100 Women in Medtech” by Medical Design & Outsourcing in 2018, a PeopleMaven’s Top Woman Activist to Watch, and a recipient of the Africa Development Award in the same year. She currently serves on the board of Welwaze Medical and DeepLook Medical, which are focused on improving the diagnosis of breast cancer, and Ultrasound AI focused on preterm birth.
By Marissa Fayer