How To Drive Social Impact By Tweaking 5 Things Your Company Is Already Doing

Baby Steps For Businesses Seeking Both Financial & Social Returns

Do you feel that? It’s a tremor under your feet. It’s a questioning of all that you knew. It’s the tsunami of investment capital in search of measurable financial and social returns. When I launched my company in 2011 with the mission to “change how the world does business,” I was accused of being naïve at best and a cult leader at worst. But the change has come, and the market is listening.

From BlackRock®’s prerequisite of sustainability as an investment term to Vanguard’s recently launched Environmental, Social and Governance index ETFs, the market is embracing social impact as a path to inclusive growth and wealth. According to the Global Sustainable Investment Alliance, impact investing capital has increased by a quarter in the last two years (to $23 trillion) and outpaces the rate for total professionally managed assets.

Wait a minute. Isn’t it conventional wisdom that “doing good” is just a side hustle for reputable businesses? Isn’t the number one corporate goal to make as much money as fast as possible no matter the cost? Isn’t unchecked growth the best way to ensure there’s a large enough pie to do everything including help those in need? And if these beliefs are no longer true, then what are sane, red-blooded capitalists supposed to do instead? When the world around you changes, your next step can seem daunting.

Don’t worry! Achieving social impact doesn’t necessarily require wholesale change or even additional resources as a first step.

I understand if you’re skeptical, but I recently spoke about social impact to the guardians of capitalism — Fortune 500 corporate treasurers and investors. Below are five practical insights I shared with these industry leaders that can drive social impact in your company.

1. Procurement

Large institutions buy everything from pens to planes. While the budget may vary based on organizational and macroeconomic trends, procurement spending is comprised of existing and predictable dollars. You do not have to ask for additional funding. You do not have to get approval to prioritize social impact. If you have spending authority over toilet paper, pick a vendor with sustainable practices. If you have a choice between comparable bids, pick the vendor that employs a larger percentage of women and people of color. Prioritizing companies that have strong environmental, social, and governance (ESG) practices are about more than “doing good”. In fact, multiple studies have concluded that companies with strong ESG scores outperform their peers. So remember, when you make procurement decisions with an ESG lens, you’re positioning your company for both social and financial returns!

2. Benefits

Any leader worth her salt is laser-focused on whether or not she has the right talent on her team. Millennials are the next generation of professional talent and overwhelmingly prefer organizations with a social impact mission. Even if your company’s product or service is not intentionally designed to change the world, your benefits are a tool that can set your brand apart. You can do everything from offering 401k investments in sustainable organizations to providing flexible working arrangements for working mothers. Regardless of what you offer, your benefits are a tool to reinforce the culture and values that your organization aspires to uphold. Focusing on benefits that drive social impact will differentiate your organization from its competitors in order to attract and retain the best talent.

3. Products & Services

I have two kiddos and am a recent convert to “athleisure” wear. What’s not to love about stretchable clothing that’s cute, comfortable, and chic? There are numerous stats that demonstrate how consumers will pay a premium for products and services that deliver a social mission. I was not a big fan of expensive athletic wear. That is until I encountered Athleta. Athleta is a B Corporation-certified subsidiary of the Gap. In order to maintain their B Corp certification, Athleta must commit to the delicate balance of environmental, financial, and social returns. And while I hate to perpetuate “mom wear” stereotypes, I must admit that I unapologetically flaunt Athleta clothing because I believe the product improves our quality of life. What I love about the Athleta brand is that it proves even well-established companies can find creative and authentic ways to attract socially conscious consumers.

4. Corporate Giving

Even the most successful companies do not have clear guidance on how to build an effective corporate giving platform. Let’s be honest with ourselves: corporate giving is often a financial earmark designated to assuage guilt or deflect blame. This is not to detract from the benefits of corporate philanthropy, regardless of intention, but thoughtful and strategic investors can achieve more. If you’re fortunate enough to define corporate giving priorities, you also have the unique opportunity to use these philanthropic dollars to amplify aligned social impact. One of my former clients, Walmart, willingly supported the needs of fierce competitors like Costco. On the surface, this may seem like bad business, but in practice, Walmart investing in the community well-being drove loyalty to the brand in the local market.

5. Corporate Investments

Most large companies invest their cash in multiple asset classes, and there are more and more products that have social impact and ESG as part of their investment thesis. One innovative model is a partnership with Good Returns and Inverdale Capital Management. Inverdale has developed investment strategies that take into account an “impact weighting,” using either strictly equity securities or a tactical allocation strategy across many different asset classes. After choosing a strategy, investors also choose to allocate anywhere between 10 and 100 percent of their investment to serve as a Good Returns guarantee. Good Returns uses the cumulative guarantee amount to mobilize more capital to invest in social impact companies. This is one of many different models through which existing investment capital can cause a multiplier effect for social impact.

Through conscientious procurement, benefits that create your culture, socially conscious products and services, corporate giving that uplifts your community, and corporate investments that create social impact, you can leverage your existing assets to drive social change. There are tons of ways your company can create social impact — these are just the tip of the iceberg. What other tools do you know of? By sharing this knowledge with one another, we can change the way the world does business.

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