Leveraging Company Operations and Scale to Drive Social and Business Impacts
During the last 25 years, traditional cause marketing and cause branding have evolved. Americans’ expectations for companies when it comes to supporting social issues remain at an all-time high (83 percent in 2007, according to the 2007 Cone Cause Evolution Survey), and today’s savvy consumers recognize companies can make an even greater impact on society by leveraging their core business practices.
Leadership companies such as Nike, The Home Depot and GE have seen how integrating cause-related initiatives and corporate responsibility practices can have even greater social and business impacts. Bottom line benefits may include: enhanced reputation and brand equity, stronger relationships with NGOs and influentials, increased sales, market development and product innovation. These companies are creating and executing what Cone refers to as “Socially Aligned Business Initiatives.”
Socially Aligned Business Initiatives
A Socially Aligned Business Initiative (“SABI”) is a strategy that leverages an organization’s operations and scale to drive long-term social change, while providing the greatest opportunities to grow and reinforce the business. It may be considered an extension of social entrepreneurship for a well-established company. Like social enterprises, companies with Socially Aligned Business Initiatives are using business principles to organize, create and manage a venture to drive social change. They measure success in terms of the bottom line and the social benefits.
These companies look at supporting a cause through a corporate responsibility lens. They identify what are traditionally corporate responsibility-related social issues that are also aligned with their business goals; manufacturers might focus on child labor and the environment, retailers might commit to workforce well-being and diversity and pharmaceutical companies might choose healthcare access and safety. These companies build upon their business practices by tapping corporate giving, human resources and marketing functions to make the issue more relevant to a broader group of stakeholders with compelling content, communication and a clear call-to-action. They forge relationships with key NGOs and thought leaders, provide grants to complement corporate responsibility goals, engage suppliers, raise awareness among consumers and lead product innovation efforts.
Companies with Socially Aligned Business Initiatives do this all with an eye toward affecting systemic transformation for both business and society.
A SABI approach may be effective for companies striving to become good corporate citizens and build and maintain solid reputations in today’s tough business climate:
o Companies face pressure from activists regarding various corporate responsibility issues; they are also expected to take part in the ever-expanding environmental movement. Companies are using SABI to bring what would otherwise be a socially or environmentally responsible business practice to the mainstream, raise awareness and inspire action among internal and external stakeholders.
o Business-to-business (“B2B”) companies are being asked about their commitment to causes too, but traditional social issues that resonate with end consumers are generally not as relevant to B2B customers. A SABI approach guides B2B companies in identifying appropriate causes to support and thus boost brand equity.
o Consumers are not distinguishing between cause and corporate responsibility; they simply desire that a company overall is “good.” Socially Aligned Business Initiatives allow companies to work toward being good corporate citizens by finding the alignment that exists between internal operations and external causes and ultimately affects the greatest social and business returns.
What does this look like in the marketplace?
Nike faced backlash over the years for its treatment of young female factory workers in South Asia who were not provided with the tools they needed to become successful. Nike bolstered its long-term operational changes—global supply chain transparency around positive working conditions for women—by harnessing Foundation goals and leveraging consumer support. In 2005, Nike, recognizing the benefits that both its business and consumers derive from emerging economies, focused its Foundation dollars on grantmaking, advocacy and partnerships to help adolescent girls become agents of change in the developing world. By working with key NGOs, including the United Nations Foundation and the World Bank Group, Nike has helped girls become a powerful force in transforming their families, communities and the world, while strengthening its reputation and mitigating risk.
In 2007, The Home Depot strengthened its early environmental responsibility practices—responsible lumber sourcing—by launching a 10-year, $100 million commitment from The Home Depot Foundation to community forestry and affordable green housing. Its recently launched EcoOptions brand designates environmentally responsible products and engages suppliers by incentivizing them with prominent in-store shelf space and features in weekly newspaper inserts. The company Web site, which offers green living tips and product information, has raised awareness among consumers and driven green purchase behavior. By working with marketing, suppliers and the Foundation to extend its environmental commitment outside the company, The Home Depot has inspired product innovation while laying the groundwork for the development of new markets and increased sales.
GE too has focused its efforts around environmental sustainability with its well-known ecomagination initiative. Ecomagination was launched in 2005 as a business strategy; at its very core, it is about operations and product innovation and has already delivered the commercial potential envisioned. In 2006, GE invested more than $900 million in cleaner technology research and development (significantly reducing its own energy consumption and greenhouse gas emissions) and created 45 ecomagination-certified products (resulting in $12 billion in revenues for 2006).
Ecomagination has become a citizenship effort as well as GE has extended its business practices to the mainstream, investing significant marketing resources in its Web site, advertising and annual reports to inform consumers, shareholders and the general public. The company has also evolved its philanthropy to engage consumers on environmentalism in new ways, particularly with its mtvU GE ecomagination Challenge, which offered funds for college students proposing creative ways to green their campuses. GE is now considered a leader in raising awareness for environmental issues, even helping to transform how other companies think about and model their own business practices.
These and other companies deserve credit for embracing Socially Aligned Business Initiatives, but there is still a spectrum of approaches companies can take for supporting causes and improving business operations. Companies need to evaluate their business objectives, the needs of their stakeholders and their resources to determine the most impactful approach.
This article was written by Alison DaSilva, vice president of knowledge leadership and insights at Cone LLC. This piece is currently featured in PR News 2008 Guide to Best Practices in Corporate Social Responsibilty, Volume 2. To order a copy or get more information, please visit http://www.prnewsonline.com/store/9.html
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