Monday, March 30, 2015

Why Business Can Change the World

There is a compelling humanitarian and economic argument for embedding sustainability and social purpose into a company's DNA. Far too often businesses are singled out for egregious wrongs like environmental insults or employee mistreatment. However, there is an alternative. While many businesses conduct themselves in ways that contribute to the popular perception that capitalism is the problem, others are on the forefront of working towards meaningful change.  Having a social purpose and being focused on sustainability are not yet be the norm. However, interest is growing as companies realize that doing social and environmental good does not detract from the bottom line it adds to it.

The need for businesses to lead has never been more urgent as we ebb ever closer to irreversible climate tipping points and we witness the growing gulf between the rich and the poor. The intransigence of conservative politicians in places like Canada, Australia and in the US Congress make political solutions difficult if not impossible for the foreseeable future. 

Some members of the business community have already demonstrated that they are capable of leading efforts to address environmental and social problems. There are a number of social actions from corporate brands that have received recognition. This includes everything from Apple's renewable energy leadership to water stewardship.

One good example involves Coca-Cola. After Typhoon Haiyan in the Philippines, Coca-Cola suspended its brand advertising and directed the budget toward relief. The company also donated $2.5 million to relief efforts. This type of passive marketing is social entrepreneurship at its best. Coca-Cola doubled its global mentions without spending a dime on advertising. It is important to note that this does not compete with the profit incentive it adds to it. When a brand strives to address social issues it ultimately expands their customer base.

As Fred Keller, founder and CEO of Grand Rapids-based Cascade Engineering, said at a TEDxGrandRapids conference, "I believe that business has this wonderful opportunity to change the world for the better. Not because we must, but simply because we can." As Keller explained businesses are very well positioned to be change agents. They are directly tied to the economic system and as such they can quickly effectuate change.

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