I was just pointed to The Girl Effect, a shared mission to create opportunities for girls (change agents) around the world and especially in developing markets. It's rooted in the work of the Nike Foundation. I encourage you to watch the video opening of the website; it's very well done.
A new study by global management consulting firm A.T. Kearney indicates that firms with "true commitment to
sustainability" outperform industry peers in the financial markets. The study, called Green Winners: The Performance of Sustainability-Focused Companies During the Financial Crisis, found that in 16 of 18 industries, sustainability-focused companies outperformed their peers by 15% in a six-month period. The performance differential translated to an average of $650 million in market cap per company.
The big takeaway for me is seeing that the companies prospering now were the companies who embarked on this journey ten years ago, well before it became a media-worthy item. Now these companies have pulled ahead of the pack in terms of competitive advantage and are building momentum.
The report cited as an example a global consumer packaged goods company that "views sustainability as not just a philanthropic endeavor but a fundamental part of its business strategy." It began its sustainability efforts more than 10 years ago and has incorporated sustainability
practices in every link of the value chain.
Despite increasing production volume by 76 percent since 1998, and
over the same period reduced greenhouse gas emissions by 16 percent,
water consumption by 28 percent and energy use by 3 percent, according
to the report. In 2007, improvements in energy efficiency led to a $30
million savings. Over a 16-year period, the company saved more than
$500 million by optimizing packaging volume.
This is a trend that is not going away. If your business hasn't committed to baking in sustainability (and/or a social-good outcome that's more directly related to your business) into your business strategy, the mounting data on both consumer expectations and competitive advantage suggest that you will be left behind.
I just received a pointer to www.dotherightthing.com, a community-driven site that collects news stories about companies and assigns a social-good rating based on the collective news-story ratings by readers. Check it out and see how your company rates.
Virgin offers a great case study of a company that's seeking ways to align inputs and outputs with social good to create both competitive and societal advantage. They're making an active effort to not only run more sustainable businesses, but also to integrate social good into the customer experience and raise awareness and social engagement among their customers.
Outputs (customer-facing products, services and touchpoints):
Virgin HealthMiles is a first-of-a-kind health incentives program that empowers Americans to take greater control of their health and fitness. In a pilot deployment in 2006, 40% of members who had previously been categorized as inactive moved up to the active category. Additionally, 21% of members saw a reduction in hypertension over a period of six months.
Inputs as Outputs (turning sustainability into competitive advantage)
Virgin Trains is actively marketed as the more sustainable travel option compared to cars and planes. They also launched Europe's first 20% biodiesel train.
They're also leveraging the power of community, actively engaging customers in socially good actions like:
VirginUnite, Virgin's non-for-profit entrepreneurial foundation. In addition to being a social entrepreneur incubator and a consultancy to Virgin businesses to be a force for social good, it's also a facilitator to help everyday people start their own fundraisers.
Virgin Mobile's RE*Generation, a pro-social initiative
to build awareness about the issues surrounding at-risk youth and teen
homelessness. Musicians donate ringtone royalties on selected tracks, and Virgin Mobile donates 100% of net profits from the same selected tracks. Virgin Mobile customers can also
contribute to The RE*Generation by sending a text message to deduct $1
from their balance as a contribution or making a cash donation via credit
card at VirginUnite. Their blank2clothe initiative, in partnership with American Eagle Outfitters, donates clothing to homeless youth for every 5 videos that customers upload.
I'm compiling a list of companies who have baked social good into their brands, and will be writing about them on this blog. If you have other examples (Whole Foods, Ethos water, Timberland, Zipcar come to mind) I'd love to hear about them.
I just ran across an article in WSJ that answered the question,"How much are consumers are willing to pay for ethically produced goods?"
These statistics are only among coffee drinkers (cotton t-shirt buyers had a much narrower range of price elasticity) but it's a good data point that the "conscious consumer" is no longer a niche market segment.
A recent study called Rethinking Corporate Responsibility by Fleishman-Hillard and the National Consumers League gives even more evidence. 52% of consumers seek out the CSR record of specific companies, and 82% say that social responsibility is influential in purchase decisions.
I think most companies understand this and are making efforts to improve their business practices. Some are leading the way and others are lagging, but for the most part I'm optimistic that progress is being made.
What about you... optimistic or pessimistic about businesses' abilities to meet both shareholder and consumer expectations?
(Via JustMeans) Sun Microsystems recently completed the largest data center consolidation project in the company's history. It will save 11,000 metric tons of annual carbon dioxide emissions, and save the company more than $1 million in electricity
costs. It will reduce Sun's carbon footprint in the US by
six percent. But they're not stopping there.
Following this major announcement, Sun has also launched new data
center efficiency services to help customers retrofit and build more
efficient data centers as part of its data center Strategy, Design and Build-Out Services based on the same data center design methodologies and best practices Sun used in building its own data centers.
This is a great example of a company aligning its core capabilities with a social-good initiative to achieve triple-bottom line results.
After almost two years at Prophet, I am reconnecting with my entrepreneurial spirit to start up a new social-good consulting firm called Fruitful. The focus is on aligning business strategy with social good to achieve triple-bottom-line results. I'm really excited about it... I've been wanting to use my skills to help make the world a better place and I think this will be a great vehicle through which to do so.
I'm a "glass is half full" kind of person, and I believe this is the perfect time to start a business like this. Here's why:
Change equals opportunity. We're seeing a convergence of market forces that indicate that the era of “business as usual” is coming to an end (more on this in my next post.) Game-changing opportunities are being created for businesses to be powerful and profitable catalysts for good. Yet the recession is causing wide-spread, knee-jerk reactions to cut or eliminate spending. Businesses will either be seen as a leader or a me-too in their respective categories when times improve.
Perception is reality.
There’s a lot of skepticism towards companies jumping on the social-good bandwagon. Accusations of greenwashing abound. Socially good business is not about PR programs or legal checklists. The only way to succeed is by embedding social good initiatives throughout your entire organization in a way that supports and extends your brand and business strategy. It’s about walking your talk.
There's a smart way to prune. Many larger businesses have numerous philanthropic efforts that don’t align with their brands or support their business strategies. This is a good time to eliminate scattershot programs in favor of a strategic, focused approach that can effect greater change and drive future growth. And hey, maybe even be profitable.
I'll be writing a lot more about socially good business here on this blog until I get my new website (with an integrated blog) up and running. So stay tuned...