What are social impact companies?
In essence, they are organizations that seek to make significant positive changes in communities and solve social challenges through conscious, systemic, and sustainable business methods. These companies attempt to create deep, structural shifts in the status quo, helping underserved populations and often those lacking essential resources or services.
Social impact is systemic in the sense that a business’s entire operations across the supply chain commit to sustainable and ethical values. Companies may choose to source their materials from suppliers that respect human rights and pay their workers a living wage. For example, Ben and Jerry’s purchases their brownies from Greyston Bakery, a Certified B Corp. employing adults who have struggled with homelessness and substance abuse.
This holistic approach expands the definition of sustainability, a term often associated with environmentalism, to the social equity and economic development of businesses as well. A corporate value system of promoting ethical treatment of employees, advancing inclusion and diversity in the workplace, and prioritizing the health of our planet for long-term economic success are all important principles that drive social value.
How do business leaders identify the social problems to tackle?
In 2015, the United Nations adopted the 17 Social Development Goals (SDGs), which outlines a blueprint of global thematic issues for government and business organizations to advance by the year 2030. Some of these goals include eradicating extreme poverty worldwide, reducing inequalities for persons with disabilities, combating climate change, and advancing gender equality for women and girls.
Many businesses are already aligning their strategy with the SDG framework. Huawei’s TECH4ALL digital inclusion initiative built DigiTrucks, or mobile, solar-powered classroom bringing digital schooling and resources to underserved communities. Levi Strauss recognizes the negative impact of the apparel industry—The denim company has launched Levi’s SecondHand, a buy-back program that allows customers to purchase second hand clothing to reduce our carbon footprint and encourage a more circular, sustainable supply chain.
Why does social impact matter, and what are the limitations of it?
Social impact creates new opportunities for minorities and underprivileged groups and helps reduce the degradation of our natural capital. It encourages companies to develop innovative strategies aimed to solve complex social challenges and bring about long-term positive impact. However, these companies alone are not enough to solve all of our social problems; the synergy of individual efforts and government policies are other important components to bring about global change. To help, we can opt to be more conscious consumers by supporting brands that make a positive impact. Although shifting a historically unsustainable paradigm takes time, many companies are striving to contribute to the greater good. ✽