Tags: shopping | socially | conscious | commerce

Green for Good: Socially Conscious Commerce Takes Root

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By    |   Thursday, 14 February 2019 02:58 PM

Capitalism is not as black-and-white a mode of economy as it seems, and despite a strong focus on shareholder value it can also benefit other stakeholders.

Our modern business ecosystem has evolved to respond to external concerns such as the environment, the increasing wealth gap, the need for better healthcare, and other important causes by making it possible for companies who do good in the world to also do well financially.

Called "corporate social responsibility," it’s an idea that capitalizes—literally—on the trend of customers who “vote with their money” for businesses which form better relationships with workers, customers, and the global community at large.

There is a real market for ethical, socially transparent products and services. People are increasingly looking to shop where the full value of their dollar will not go straight to the shareholder, but also to places where it can make a wider positive impact. In 2019, organizations can make this happen and are indeed rewarded for it. Data shows that CEOs are acutely aware of their new responsibility and its relevance to success, with 65% of executives polled indicating that inclusive growth and sustainability were a top concern. The ways that many firms have responded to this relatively new trend have spanned a spectrum of socially conscious creativity.

Catalyst for Conscious Business

In the post-2008 crisis period, where financial recovery has arguably exceeded all expectations, the “rising tide” hasn’t lifted many boats. Despite stellar economic progress and corporate earnings in the last decade, these achievements haven’t translated to an equivalent increase in the quality of life for individuals. Combined with political instability and other external factors, it is no wonder that Americans polled after the market crash were 50% less confident in the free market system.

With trust in governments bearing the brunt of decline in 82% of countries, according to the most recent Edelman Trust Barometer, calls for leaders in the private sector to step up and contribute to the communities they operate in are louder. Corporations wield immense financial power to make workers wealthier, create environmental initiatives, and tackle broader societal challenges as well. This shift away from businesses that use their power and influence to achieve further power and influence represents a sea change for capitalism, and it has manifested in many ways.

Social Entrepreneurship Leads an Ethical Corporate Future

Social entrepreneurs are businesspeople who build ideas that contribute as much to customers as they do to the world. The chance for these types of companies to thrive is greater given that consumers today are vocal about their desire to patronize these businesses. New models and corporate strategies are being created to strike this balance, including those that employ “on the ground” employees in local communities, incubate groundbreaking technologies, use a one-for-one contribution model with charities, and encourage networking with all their stakeholders.

A simple example is Yoobi, which responds to the sad notion that teachers are spending an average of $500 per year out-of-pocket to equip their students with supplies. Yoobi has identified the neediest school districts and formed partnerships with them, so that every item bought off its digital or physical shelves also pays for a stapler, set of pencils, or notebook for a needy child. Another more comprehensive example of social entrepreneurship is Me to We, an e-commerce portal that sells goods and experiential products like trips and more, but only those that accomplish an altruistic goal.

On MeToWe.com, for instance, one can purchase ‘Chocolate That Changes Lives’, which employs Ecuadorian cacao farmers on a fair wage scale and provides education for children in the local communities. Profits from the website go to the company’s WE charity, which organizes a network of youth programs around the world and ensures their efficient funding through eCommerce. Businesses that are as much about the bottom line as they are cognizant of their potential social impact cater to the modern consumer’s need to help change the world in any small way.

Legacy Corporations Integrate Social Innovations

Like massive oil tankers, large corporations take much longer to turn than startups, which can pivot with dinghy-like speed. Nevertheless, they’ve seen the threat in similar businesses with socially conscious elements and have realized that taking a sustainable and long-term-positive tact for their many stakeholders will also help solidify their dominant position. For their part, consumers are willing to let corporations consolidate power if they know it doesn’t come at the expense of the workforce or the environment.

Costco is a good example, with the famous big-box chain incorporating an eco-friendly and humanitarian supply chain for most of its Kirkland-branded products. The giant company has even told its farmers that if they’re willing to grow all organic produce, they will be given money to invest in land directly. Costco’s Sassandra Program is another special cooperative that focuses on making the supply chain transparent for its cocoa products, with yearly audits to ensure no child labor, proper environmental practices, and that the livelihoods and educational opportunities of its local staff are the best possible.

A Long Way to Go

The push for businesses to take the ball on social conscientiousness that was fumbled by governments in recent decades is a good start. However, the trend still relies on consumers to see a good or service as the sum of many parts rather than what it can do for them.

Global events and inequalities that encourage this perspective show no signs of waning, so corporations and startups are folding altruism into their offerings at every possible touchpoint on the value chain.

The ability to help others can therefore be more easily achieved given the increasingly global reach that businesses wield every day.

Jim Hoffer is founder and managing director at Hoffer Financial Consulting. Follow him on Twitter.

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The push for businesses to take the ball on social conscientiousness that was fumbled by governments in recent decades is a good start. However, the trend still relies on consumers to see a good or service as the sum of many parts rather than what it can do for them.
shopping, socially, conscious, commerce
Thursday, 14 February 2019 02:58 PM
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