Why is Impact Important?
Oftentimes, the business’ mission experiences a disconnect between business success and the GREATER or COMMON GOOD.
Today employees, consumers and wider stakeholders are demanding that companies lead the way by demonstrating greater care. They do this by employing more robust corporate governance structures, executing broader and deeper corporate social responsibility approaches, and developing business models that contribute to greater sustainable development for the GREATER GOOD of ALL or face extinction where these issues remain unattended and are left to fester.
Now more than any other time is the time to return to the original moorings of business for social good.
Businesses cannot afford to ignore the social impact of their business or the interests of their wider stakeholders. Businesses in particular must make social impact part of their core business model.
The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint (see image below) that can guide business efforts towards economic growth while contributing towards ending poverty, improving health and education, reducing inequality, tackling climate change and preserving our natural environment.
United Nations Sustainable Development Goals
More on Impact.
There have been a number of studies looking at the relation between companies’ environmental, social, and corporate governance practices (ESG) and their financial performance. The vast majority of them find a direct link: companies that do good by the environment, their labor force, and communities, do well financially.
Some of these benefits include:
- Saving costs by making reductions to environmental impacts and treating employees well;
- Increasing revenues by improving the environment and benefiting the local economy;
- Reducing risk through engagement with stakeholders;
- Building reputation by increasing environmental efficiency;
- Developing human capital through better human resource management;
- Improving access to capital through better governance;
- Other opportunities from community development and environmental products.
IFC Study: Developing Value The business case for sustainability in emerging markets 2002 – By Kavita Prakash Mani, Jodie Thorpe and Peter Zollinger