The state of public discourse surrounding the world’s expectations from the business community has evolved quite a bit over the years. In many ways, there has been a major paradigm shift from the Milton Friedman philosophy of corporations having no responsibility except to maximize shareholder value to a much broader expectation of adding societal and environmental value.
For large corporations, reporting frameworks and organizations such as the Global Reporting Initiative, Carbon Disclosure Project, and the Sustainable Accounting Standards Board, have proliferated throughout the ecosystem, ushering in a new standard for corporate disclosures and transparency. These reporting frameworks, impressively, illustrate not just corporate environmental efforts, but also augments the value brought to employees, suppliers, investors, regulators, and other external stakeholders. This body of knowledge has made one thing clear: most large public companies are guided and operated fundamentally differently than they did before. As such, corporations are continuously being calibrated to ensure multi-stakeholder impact because their experiences have significant and demonstrable long term, shareholder value.
Similarly, for medium and small companies, there have been many fundamental changes over the past few years. Consider B2C challenger brands in categories such as packaged goods, electronics, and apparel. Among these categories, one would be hard-pressed to identify one in which social responsibility is not a prominent go-to-market theme in emerging company strategies.
Why is this the case?
Is the social-enterprise-model just another flavor-of-the-day orientation that will ultimately fizzle out over time? We don’t think so. In fact, we know this strategy is here to stay because a new social contract has emerged and manifests in wide-spread employee-giving campaigns, community activism, and citizen journalists, to name a few: forces that have highlighted social responsibility efforts by small and medium sized businesses.
Arguably, the world, business, the workplace, and nearly every aspect of our lives have changed for the better. Change that people demanded and businesses embraced for altruistic and pragmatic reasons have established a new reality: every enterprise is a social enterprise.
Sooner or later, companies large and small are compelled to incorporate social, environmental, and governance efforts into their day-to-day operations. Gone are the days when companies would question research studies showing consumer preferences towards socially responsible brands. Instead, most companies live and breathe the business value of good corporate citizenry.