In the last year, life and priorities have shifted for nearly every American household. The blinds have been torn off social injustice and the climate crisis has taken center stage. And while individuals are key to sparking change, we need more social impact companies to drive it.
These are private sector companies and nonprofits that are changing the way business is done, disrupting tired industries, and offering products and services that actually help consumers tread lightly on the planet and properly value the work of people around the world and in their home offices.
There are many iterations of for-profit businesses and nonprofit organizations doing good, but the core is always putting people before profit—both customers and employees.
This goes beyond the “sustainability” trend. It doesn’t mean forgoing profit, it means finding new ways to organize business structure and pursing profit while operating ethically in all areas of the company.
Yes, We Need More Social Impact Companies. But Where to Start?
Social impact is about leveraging your business to do good in the world.
You can make social impact one of the core values of your organization, or it can be your entire mission. But either way, it means baking it into your operations and being transparent about your actions. And it’s where the market is going, as research shows the vast majority of Americans expect companies to act as leaders to do more than make a profit.
There are a number of ways to organize your business as a socially responsible company, each of which entails something different. Here, I’ve distilled the most common categories to help you get clear on which road to social impact will help you meet your business goals and purpose.
The concept of a social enterprise is evolving rapidly as companies meld the best of traditional business, nonprofit, and the public sector to create a market-driven approach to solve problems and do good.
Think of them as mission-driven businesses dedicated to solving problems like a nonprofit while making a profit like a traditional business.
The Social Enterprise Association outlines three main categories:
Opportunity employment organizations employ people like the homeless or those with disabilities, who have significant barriers to mainstream employment. Goodwill Enterprises is one of the earliest examples of a social enterprise, but I love London-based Cracked It, which provides skills training to young people with prior convictions.
Transformative products or services create social or environmental impact through innovative products and services. Examples include TOMS shoes, Benetech, and Gemini Mountain Swimwear, a sustainable and handcrafted bathing suit brand local to me.
Donate back organizations contribute a portion of profit to nonprofits addressing basic unmet needs. I believe so much in this model that I’ve committed my business Wild Path Consulting to donate 2% of my profits to public lands advocacy organizations like Business for Montana Outdoors, Winter Wildlands Alliance, Outdoor Alliance, and Outdoor Afro.
B Corp stands for benefit corporation. It’s a business structure driven by both mission and profit. In order to earn a B Corp certification, companies need to achieve and uphold a rigorous set of standards.
B Corps use profits and growth to impact the lives of their employees, communities, and environments with the intention of creating a global economy that balances purpose and profit. Essentially, B Corps are so dedicated to creating a global economy that prioritizes doing good that they commit to the highest standard of performance and continue to find ways to make smaller harmful impacts on their communities and the environment.
To become a B Corp, companies must:
- Pass the B Impact Ratings System, a rigorous test scoring environmental impact.
- Discuss the score with a B Lab staff member.
- Adopt the B Corporation Legal Framework
- Go through a challenging recertification every two years
Having a B Corp certification shows that your business balances profit and purpose. This certification speaks to the growing view that businesses should play a role in solving societal and environmental change.
Any kind of business can apply to be a B Corp. You don’t have to be producing a sustainable product or service to apply. Instead, B Corp is about the way you structure your business, how you treat employees, and how your operations affect the environment.
Regenerative businesses believe sustainability doesn’t go far enough. They believe it’s our responsibility not just to sustain and maintain our world, but to leave it better than we found it. And they believe businesses are responsible for creating opportunities for people to engage in regenerative practices in their everyday lives.
Companies focused on the regenerative philosophy view each aspect of their operations, their employees, and their impact on the world as interconnected. They investigate each part of their business – from business strategy to products and materials, to how they invest in the community – and work to make improvements in each section while turning a profit.
All Goods Brand is a regenerative business because their core practices include wild land farming to restore and regenerate healthy soils and their products are reef friendly and support reef health initiatives. Another, UpCycle & Co, is working to change the way organic waste is collected and reused by diverting organic waste from landfills and using it to create rich soil that helps with carbon sequestration.
The ORION podcast has one of my favorite explanations of Regenerative Philosophy (regenerative discussion begins at 20:00). The podcast is hosted by A Stellar Co, which has a great strategic planning program to help businesses work toward the goal of becoming regenerative.
Corporate Social Responsibility
Corporate social responsibility (CSR) is a blanket term for a corporation’s self-determined commitment to manage its social, environmental, and economic effects on society. It can touch every aspect of a business, from company culture to material purchases. In most cases, a company sets its own standards for CSR, although some industries impose standard regulations that already protect people and the environment.
Examples of corporate social responsibility activities:
- Charitable giving programs
- Dedication to reducing carbon footprint
- Community volunteering policies
- Investing in fair trade
- Requiring vendors or contractors to be socially or environmentally responsible
Examples of dedicated CSR in large corporations Initiatives:
- Johnson & Johnson’s global health, sustainability, and charitable contributions
- Ford Motor Company’s initiative will introduce 40 new electric car models
- Bosch’s investment in environmental research, local communities, and their workforce through various charitable giving and social programs
CSR initiatives can help consumers decide which companies align with their principles. Additionally, they can save companies money by improving efficiency and reducing waste.
The pros of CSRs can also be the cons. Companies can add CSR as a portion of their work, but there is no set standard to measure success. Transparency can also be an issue. For example, BMW has a CSR mission to help protect the environment, yet it has had scandals involving the emissions of its cars.
Corporations must be transparent and ensure the mission of the initiative doesn’t live in its own silo. It needs to influence the structure of the entire organization.
How Social Impact Relates to Marketing
Social impact cannot be a marketing gimmick. Companies have tried and failed to “greenwash” their products. They always get caught.
Successful social impact marketing doesn’t put itself on a pedestal. It isn’t a fad or a trend, and it needs to stand the test of time. It starts with telling your organization’s genuine story. The story continues as you update your customers and readers of the impact they are making by supporting your company.
Next, your marketing has to be focused on the needs of the customer. Good marketing is of service, helping solve problems and giving people important information they need to make decisions. Your social impact initiatives are part of that, but they aren’t the only piece. You need to understand what your customer is looking for, and give it to them.
At Wild Path Consulting, I revolutionize the way social impact companies do marketing. After I identify the big picture, I challenge them to align their marketing with their business goals. Then I build tailored marketing systems and support them as they get it done.
To learn more, sign up for a free consultation, and I’ll help you find the diamonds in your own social impact story and leverage them to make your company stand out above the rest. Social impact is the future, so let’s get out ahead of the curve and show your company is a leader.