There’s one thing about the recent economic downturn on which both sides of the political aisle can agree: consumers are more conscientiousness about how, when and with whom they spend their money. Consumers’ expectations of business are changing, and corporations are increasingly asked to help solve our shared economic, social and environmental challenges. The conversation is shifting from how the “shareholders” (company leadership and investors) benefit to how “stakeholders” (the company and the community) benefit.
In a marketplace rife with choices, consumers are asking about the origin of a product, the environmental impact of its production, and how the company plans to “close the loop” to minimize – if not entirely eliminate – waste. Consumers want to know what percentage of profits is used to benefit their community. Further, consumers want to know your stated corporate values and are checking to see if your actions mirror those values.
Government regulators and industry standards may be tough to satisfy, but today’s consumers and their expectations of your business are tougher.
If you have not yet included social responsibility as part of your plan for sustainable, long-term success, it’s time to get on the bandwagon. In the last decade, there has been a growing acknowledgment that companies that improve the welfare of people and the environment become more profitable. The concept has taken root on both US coasts, the West Coast in particular, and is rapidly reaching into all corners of our country. Texas is no exception. While our collective Texan business persona is often described as that of the maverick set on doing things her own way, barriers and critics be damned, it is not a persona that will withstand the growing pressure of consumer expectations as we surge toward a post-consumerist economy.
Quite plainly, companies that have adopted a Triple Bottom Line (TBL) approach to business are landing new clients, setting themselves above and apart from their competition, and solidly staking claim to a leading position in their markets. What is TBL exactly?
As Andy Savitz, author of The Triple Bottom Line, states: “TBL is the place where corporate and societal interests intersect. It is a new way to measure the bottom line — where profits go side-by-side with environmental and social performance.” Mr. Savitz further asserts, “The truly sustainable company would have no need to write checks to charity or ‘give back’ to the local community, because the company’s daily operations would not deprive the community, but would enrich it.” It makes sense; it sounds like the definition of a good corporate citizen, but amped up.
So you may be thinking, “TBL. Got it. I’ll get my team right on that.” Is TBL enough? It’s a good start, but no. It’s not enough. Consider this: on top of this consumer demand for a healthy TBL is a growing interest in and focus on localized economies. Therefore, businesses are faced with a unique challenge to not only talk the talk of TBL, but also to walk the walk … in their own backyards. In other words, consumers want businesses to demonstrate social responsibility by putting their money where their life is.
As is becoming increasingly evident, operating a sustainable, successful business is tied more closely than ever to localized social responsibility. For even the most sophisticated of Texas companies, this is no short order. So, how can your senior leadership create a roadmap to sustainability while also achieving a positive TBL with appropriate localized interests? With a few well-crafted strategies:
• Select and focus on localized, high-impact issues that align with your corporate values
• Build long-term partnerships with action-oriented community organizations
• Develop an internal process for managing and directing resources where they have the greatest impact
• Align company, consumer and advocacy policies
• Analyze the market for existing gaps and craft a conscientious response that will result in a win-win situation for your company and underserved communities/
These strategies aren’t just for large corporations; they are achievable by smaller businesses as well. In fact, I would posit that smaller, locally owned businesses have an advantage. Local businesses are considered the real pillars of a prosperous, sustainable economy. Organizations such as Sustainable Seattle contend that of every dollar spent at a locally owned business, 45-cents of that dollar is reinvested locally by way of jobs, purchasing other goods and services, and tax revenue. Trends indicate that Americans are shifting their spending from goods to services, economic activity that promises to expand the local business sector, since most services depend on direct, personal, and, ultimately, local relationships.
Incorporating social responsibility into your company’s sustainable business strategy is not only smart, but also simply the right thing to do. As you plan for your next fiscal year, keep your eye on the Triple Bottom Line, and be deliberate about your company’s role in and responsibility to the communities in which it lives. And when you are well on your way, we’ll talk about upgrading to an Integrated Bottom Line.