The Pressure's On. What Will You Do?
This week, over 200 of the world's major businesses convened at the Business Roundtable to redefine the purpose of business. Rather than simply earning profits, businesses are to "invest in their employees, protect the environment and deal fairly and ethically with their suppliers." (New York Times)
As consumers increasingly demand responsibility from the businesses they patronize, it's clear that all businesses — not just the B Corps of the world — are going to have to prove to their customers that they can do more than just offer a great product. While nobody doubts the value of the public and nonprofit sectors, it's clear that massive issues such as economic inequality and climate change cannot be addressed without the participation of businesses.
If businesses ignore this call, they risk losing their customers' loyalty and support. And where public outrage is kindled, regulations may be soon to follow (think about that next time you're sipping on a drink out of a compostable straw).
But if businesses answer this call, they have the opportunity to define their unique value proposition and purpose in this world. Not just capital value, but social value. They have the opportunity to be the kind of company that employees are proud to work for and customers are proud to support.
If you are a business owner (let's chat!) thinking about social value creation for the first time, there are a few places you can start asking the question "is how I'm operating my business addressing a social need, or contributing to a societal problem? Is there a possibility to shift how I'm doing business to create social value or reduce social harm?"
Sustainability: establishing business practices that reduce waste, water, or energy use, and purchasing or using materials to operate your business that do so as well
Employment: creating pathways for employment for people who have traditionally been excluded from economic opportunity (ex: people who have been formerly incarcerated or are experiencing houselessness)
Community support: engaging with local nonprofit and advocacy organizations to offer goods or services that will help these organizations further their social impact initiatives
If you're not a business owner, you're no less powerful in redefining the purpose of the private sector. Every day, we vote for our values with the money we spend. Choosing to support businesses that prioritize sustainability and social value creation helps those businesses become the standard, not the exception.
And before you dismiss values-based consumerism as a luxury for the rich, take a quick look at this article from the Social Enterprise Alliance on how purchasing one-time quality goods is better for your planet and your wallet.
It's time to throw out the textbook on "business as usual" and start living by our values. Interested in learning how Novel can help? Drop us a line here and join the conversation on social at #NOVELIDEAS.