Four Trends for Better Business in the Years Ahead
As companies continue to become stronger, more engaged brands that maximize the positive value both for their businesses and society, here are four emerging trends that will impact our current and future clients.
The Fundamental Business Model is Becoming More Socially Conscious than it is Today
Research from the Massachusetts Institute of Technology and Net Impact, a community of more than 50,000 student and professional leaders creating positive social and environmental change, shows that young people today want to work at more socially responsible companies. Many are even willing to take a pay cut to do so. This is our future talent pool, and they will play a crucial role in ensuring that the fundamental business model will shift to have responsibility embedded at its core.
In some cases, new companies will be developed or redefined with sustainable growth and shared value integral to their mission, vision and values. Additionally, we will see growth in new models that have emerged in recent years, including certified B Corps like Method and Ben & Jerry’s, social enterprises like Greyston and Juma Ventures and companies built on buy-one/give-one models like TOMS. More new and transformative brands will ultimately transform their industries.
In other cases, companies will refine and even redefine themselves to attract and retain the best talent, because they see better, long-term business opportunities in pursuing sustainable growth. As business success and corporate responsibility become more intertwined and mutually reinforcing, a focus on single, bottom-line outcomes will become less common, less viable and less acceptable.
Consumers Are Making More Responsibility-Centric Purchasing Decisions
A 2013 Neilsen study found 50 percent of global consumers surveyed are willing to pay more for goods and services from socially responsible companies. With the advent of common standards like the Global Reporting Initiative (GRI), the surge in corporate responsibility reporting and various awards and rankings that commend corporate leaders and expose bad players, consumers are equipped with more information than ever before to activate this willingness to pay more. It remains difficult, however, to unpack and use all the publicly available information and discern which factors (e.g., product ingredients, labor issues, resource use) should inform our purchases and to what degree.
I predict that tools like Good Guide will become more mainstream, empowering consumers to develop personalized formulas they can use to make their own tailored responsibility-centric purchasing decisions. Through online links and in-store scanning, consumers will have increased access to the relevant information at their fingertips.
New International Actors and Requirements is Resulting in More Global Action
There have been several examples of what is just the beginning of non-U.S. and non-European countries defining what is required and what is possible in this field. India became the first country to mandate Corporate Social Responsibility (CSR) when its parliament passed the Companies Act Section 135 in April 2014. The new provision requires companies of a certain size to spend at least 2 percent of their three-year annual average net profit towards CSR activities. In another part of the world, two Brazilian companies made the 2014 ranking of the Global 100’s Most Sustainable Companies in the world. In the years to come, we will see much more engagement and leadership from diverse geographies that will lead to more innovation and action.
A More Established Field is Shaping the New Floor and a New Ceiling
Finally, with more activity in this field than ever before, the floor for expected activities is getting higher. Expectations and, in some places, mandates, will continue to grow and prompt the development of more strategic and impactful approaches. The ceiling is ever-evolving, too. The new field leaders are integrating with business, engaging diverse company resources and addressing unmet needs – ultimately redefining business leadership for tomorrow.
Admittedly, these four projections are based on an optimistic view of our collective future. Yet that’s what inspires me to do this job — the knowledge that the future is not just something we imagine, but something that we will create.