The number of companies dedicating 1% of their turnover to socio-environmental actions across the world (Source: Axylia). Why more and more brands adopt such a contributory mission a.k.a. « Profit for Non-profits”? Is there any underlying opportunism i.e. “greenwashing”, “social washing” or “mission washing”?
Companies, just like the individuals who make them up, see the most pressing challenges to people and the planet we now face
Traditional economics and neo-liberalism have produced, in recent decades, glaring social disparities and systematic destruction of life and the planet; more concretely :
- The wealth of the richest 1% of the planet corresponds to the wealth of 90% of the world’s population, or 6.9 billion people (source: Oxfam)
- From 1970 to 2014, the size of vertebrate populations fell by 60% (source: Atlas of the Anthropocene · Sciences Po)
- Between 1989 and 2016, tropical deforestation intensified: for example, 8% in Brazil, 25% in Argentina and -4% for Paraguay. Thus within 44 years, those 3 countries (from our planet lungs) have conducted a massive deforestation involving an area equivalent to France (source: Atlas of the Anthropocene · Sciences Po)
In other words, the house is burning and we just can’t consider our sole individual impact to extinguish the fire. Of course it is now essential aiming for carbon neutrality, eco-design of products with a longer life cycle, promotion of inclusion within organisations, local and responsible supply, etc. However, a new form of contributory economy must emerge, tied with the idea that progress shall not be measured by GDP only, but by progress made in matters of health, the environment, inclusion, culture, the fight against inequalities, etc. Such a Profit for Non-profits approach implies that part of the wealth produced is redistributed in favour of the common good, through impact projects that sometimes do not seem to have any short-term financial value but contribute, in one way or another, to the progress (and the stability) of humanity.
A new form of contributory businesses is now emerging meanwhile more traditional companies have no more choice but to evolve towards a contributory mission.
Many recent companies have already added socio-environmental goals to financial objectives from their incorporation; in their DNA. For more « traditional » companies, it’s now time to step beyond with an impact mission. Such a change may be difficult and sometimes suspicious: can a company become (more) virtuous?
Yes, it does.
A business is foremost a human organization, just like a tribe or a nation, etc., which often obeys to its own narrative; a blend of culture, values, mission and vision. Such a narrative can quickly shift from one extreme to another and History gives us a relevant example: the contemporary German narrative has been recently illustrated by Angela Merkel while welcoming a million migrants in Germany (2015); only 70 years after the Second World War and a very different narrative.
For a business, the narrative (or storytelling or branding) tends to cope to stakeholders’ expectations: its employees’, investors’, customers’ and leaders’. In short, a company becomes virtuous because its stakeholders clearly request it. And they do: the understanding of health and socio-environmental issues accelerates the rise of awareness amongst individuals: brands have no choice but to become virtuous to keep doing business. Numbers support this analysis: for Millennials, who will represent 75% of the global workforce by 2025, 75% of the brands they know provide so little value that they believe they will soon disappear (Boston Consulting Group – The Millennial Consumer – Debunking Stereotypes). With disparate interests and heterogeneous profiles & behavior, Millennials share a deep concern for environmental protection, social issues and employment, as well as for their health. Thus they expect brands to do more and better.
Indeed, 64% of consumers around the world reported that they buy on belief. These « Values Driven Buyers » will choose, switch, avoid or boycott a brand based on where it stands on the socio-environmental issues they care about (Source: Edelman 2018). A remarkable increase of 13 points since 2017. While having to cope to its customers’ expectations, companies must also care about attracting and retaining employees: 55% of employees say that a company’s socio-environmental mission is a more important criterion than salary. A number that reaches 76% among millennials (Source: Cone Communications, CSR Study, 2017).
In their own interest, traditional businesses must rapidly adopt a responsible behavior, while contributing financially to the common good. In other words, through effective social and environmental actions, they must become responsible companies with a contributory mission.
Contributing to the common good with a self-benefit: is this "greenwashing"?
To attract new employees or increase sales, a contributory mission makes sense. However, a brand (re)positioning to this extent can be perceived as a way of balancing a (past or present) doubtful behavior or simply seizing a business opportunity. Media may speak of greenwashing, of social washing and more recently of mission washing; such a backfire perspective gives companies cold sweats. This may even paralyze them whereas any real & impactful result is now much needed — as the socio-environmental issues are so pressing today.
In fact, it is the lack of tangible results – versus companies’ commitments, which exposes brands to greenwashing. As an example, in France (Source: Edelman):
- 64% of consumers reported that they are concerned about brands’ ability to ignite an impact mission that is aligned with their values ; to communicate reliable information and give clear feedback about actions and impact outputs.
- 44% of consumers are disapointed because they consider that brands failed to deliver on their promises.
While the need for a socio-environmental purpose is now obvious for any company, implementing an efficient impact mission must be tangible, real and aligned with stakeholders values and interests. Companies must give stakeholders regular feedback as well as the ability to follow up impact results; quantitatively and qualitatively.
NooS professional solutions have been designed to answer such a need: thanks to its turnkey digital solutions, NooS help companies to implement efficient impact mission by engaging stakeholders and keeping them informed, collectively and individually. They gain access to access to dynamic impact data and feedback ready to inspire, inform and engage.
Photo credits – Cover: Tim Mossholder through Unsplash