The Evolution of Business: From Bottom Line to Value Creation And Impact
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIn today’s world, consumers want to know how corporations, as a whole, are taking a stand. In fact, customers are 43 percent more likely to purchase a product from a company they know is committed to social value.
It’s not just consumers pushing this trend. Financial service industry leaders, like KeyBank’s Beth Mooney and BlackRock’s Larry Fink, are challenging business owners and the C-Suite to rethink their economic impact, environmental footprint and social conscience. In practice, the number of companies directing corporate citizenship from the C-Suite has increased nearly 75 percent compared to five years ago. At KeyBank, I can tell you our corporate social responsibility initiatives have led to $2.5 billion in small business/farm lending through 2022.
Rethinking a business’s social conscience isn’t confined to financial services or Fortune 500 companies. Small businesses are at the heart of this movement. Not only do they hold unique understandings of their local communities, but small business owners also care. They want to see Main Street booming and add value to the community in any way possible.
Corporate social responsibility is heavily localized. This is another factor that makes small businesses vital. Almost two-thirds of mid-sized companies target their social responsibility efforts within their home state. That includes community fundraisers, disaster-relief, education, youth services and medical aid.
Social awareness continues to be a rising factor for customer loyalty. 55 percent of consumers say they are willing to pay more for products from socially responsible companies. It’s not just about driving revenue, but building relationships and crafting the making for customer loyalty to exist.
Many companies will only go as far as their employees will take them, and corporate social responsibility is playing an even larger role in this too. The Millennial generation has shown, they are committed to doing good and supporting companies that do the same. In fact, 79 percent of Millennials said they consider corporate responsibility when deciding where to work, and 74 percent say their job is more fulfilling when they are provided opportunities to make a positive impact at work.
A big question remains: How can businesses prove to employees they are socially responsible and authentically showcase philanthropic efforts? For for-profit organizations, consider registering as a B-Corp, which can demonstrate to employees how the business is legally recognized as an organization with a duty to serve their community. B-Corp classification can validate a business’s sustainable practices within the market.
While the added economic value of corporate social responsibility is evident, it’s important to remember people care and businesses should, too. If your business can improve on social conscience, your community will thank you.
Juan Gonzalez is central Indiana market president at KeyBank.