Updated: Sep 28, 2018
Consumers are ever more impatient for brands to embrace the greater good.
It finally happened. An entire company swore off meat. Citing environmental concerns, WeWork banned meat in a bold attempt to save the planet. In a nod to Elon Musk, co-founder Miguel McKelvey said that vegetarian efforts can “reduce their personal environmental impact even more than switching to a hybrid car.”
It sounds extreme, but here’s the thing. Enlightened business goals like sustainability and social responsibility don’t have to turn your business upside down. They’re actually good for your company’s bottom line. Take Starbucks’ ban on plastic straws, for example. It’s a good move for the environment, but it’s also likely to boost coffee purchases. Starbucks made its move in response to consumer demand. While it’s true that the company has always leaned left economically and environmentally, it’s safe to say that business hasn’t suffered from taking such stances.
The coffee giant isn’t alone. As company leaders consider adopting a more compassionate capitalism, they're finding strength in pursuing sustainable choices. Brands such as Walmart, Mars and Disney are all profiting from environmentally friendly policies.
“Profits and ethics are not at odds -- at least, they don’t have to be,” says Peter Seligmann, founding CEO and chairman of the board at Conservation International. “When you cultivate a mindset of enlightened self-interest, you can help your company thrive while also helping people. And isn’t that the Holy Grail?”
Much of the bad rap surrounding capitalism today stems from pitting self-interest against the good of people and the planet. But it’s a false dichotomy -- and one you’d do well to eschew if you want to reap the greatest rewards. Here are just a few reasons why doing good is good for business.
1. You will attract top talent.
If you want to bolster your company with input from the best and brightest for many years to come, you’re going to need to attract millennials and post-millennials. These younger employees, some of whom are now leading organizations, won’t wait long for their employers to catch up to their values.
Those values are increasingly clear. According to Deloitte, 87 percent of millennials believe financial metrics are insufficient measures of success. They and younger post-millennials continue to look for brands whose ethics align with their concern for the environment, income inequality and other societal issues.
2. You can satisfy consumer demands.
Employees aren’t the only ones putting pressure on companies to pursue ethical profits. Consumer demand has influenced corporate policies and products in a number of ways, whether it’s pressure to go green or to give back to a good cause.
When you see organizations the size of Fruit of the Loom or Walmart trumpeting sustainability initiatives, it’s clear that demand has reached a tipping point. As more cause-oriented companies respond to this demand and saturate the marketplace, you have no choice but to demonstrate your own commitment to a cause (or causes) as well.
3. You reduce costs.
It’s nearsighted to believe that committing to sustainability is unsustainable, which is only the case if you equate success with short-term profits. In the long run, environmentally sound business practices are actually more cost-efficient; they reduce energy use and direct resources into more profitable endeavors.
Many of these practices require very few, if any, upfront costs. Employees can turn off unused lights or reuse paper, for example. True, you will garner more significant savings by spending money on a geothermal heating and cooling system, to name one example, but that step may be more attainable after you’ve first reaped savings from less costly initiatives.
4. You enhance your brand image.
Ultimately, your brand image -- a critical driver of profitability -- is at stake. At a time when social media backlash can quickly deface a company, it’s critical for organizations to demonstrate that they connect with the concerns of their customers.
A survey by the Natural Marketing Institute found that 58 percent of consumers consider a company’s environmental impact when making a purchase. Other customers look for businesses that are involved in social causes or invested in their local community in some way. The examples are myriad. What matters is that consumers are watching.
If anything is certain in business, it’s that the path to profit is fraught with ethical tangles. But the high ground is clearly marked, and it’s not as difficult to walk as you may think. You may not even have to give up meat to get there.
Author: Barrett Wissman | Chairman of IMG Artists and Principal in Two Pillar Management