Purpose Beyond Profits Takes on New Meaning as the Role of Business in Society Evolves
If you’ve ever studied business, you are likely familiar with the term corporate social responsibility (CSR). CSR, which became popular in the 1970s, is the notion that businesses have an obligation to effectively serve the needs of society, not just produce profits and satisfy shareholders. While this concept evolved slightly over the next half a century, it is taking on a whole new meaning in the wake of 2020.
We’ve written before on trends spurred by the prior year, but what was not covered was the renewed focus on the role that businesses play in the larger society, how they are expected to act, and who they should benefit. The cumulative events of the prior year seem to have ripped open the public consciousness to the responsibility we all – individuals, businesses, governments, and other organizations – have to one another.
Everyone from Big 4 accounting firms, to professional services giants, to tech companies and media corporations are now rallying for the use of business as a force for change for the better. It’s no longer just the right thing to do; it’s become an imperative for long-term business success. Business leaders have been issuing their advice based on various studies and their own unique perspective but one theme is common: consumers’ attitudes and expectations towards business have changed.
EY (Ernst & Young) Future Consumer Index
- 53% of consumers say their values have changed
The June 2020 EY Future Consumer Index revealed that more than half (53%) of consumers say their values have changed as a result of events in the last year. Kristina Rogers, EY Global Consumer Leader, says, “Organizations will need to work out how to serve a more value-conscious, health-conscious consumer, but also a consumer who demands purposeful brands that reflect their environmental and social values.”
Capgemini Research Institute Consumer Survey
- 78% of consumers believe companies have a larger role in society
Another study conducted the same month by the Capgemini Research Institute showed that 78% of consumers believe companies have a larger role to play in society. According to Harvard Business Review, “The lesson is that how a company treats stakeholders, such as communities and employees, is now core to how the C-suite is judged…Increasingly, companies are responsible for a much broader definition of their “impact” on society than just physical impacts like pollution or land use. Anything that contributes to an unjust society is on the table.”
Accenture Global Survey
- 70% of workers think companies will operate more sustainably post-COVID
One of the prominent voices surrounding is the multinational professional services company Accenture, who in October launched the campaign Let There Be Change focused on this very notion. “As we think about the opportunity we have today to rebuild economies, industries, and to re-imagine companies, having a strong moral compass, so that we rebuild for the benefit of all, is absolutely vital at this time.” CEO Julie Sweet went on to say, “We did a study [in September], and seventy percent of workers think that their companies will operate more sustainably and think about society more than they did pre-Covid. Even pre-COVID, about sixty percent of consumers cared about what their favorite brands said, what they stood for.”
Salesforce State of the Connected Customer Research Report
- 56% of customers have reevaluated the societal role of companies
Tech companies, like Salesforce, are seeing this from a different perspective but ultimately have drawn the same conclusions from their own experiences as well as through a recent study on customer engagement. In the words of Chief Digital Evangelist, Vala Afshar, “[Businesses] need to listen and respond to customer demands for empathy and understanding, innovative products and services, and a fundamental rethinking of the role of businesses in society.”
The list of studies and quotes could go on and on and these findings and sentiments are likely to be echoed by more companies as the trend becomes more evident. The idea of corporate social responsibility is no longer just a concept taught in business schools. It’s no longer something a company can achieve by a once-a-year community service day or a snappy branding campaign. It has become an imperative being demanded by consumers that will expect to see a company’s values evidenced through their everyday actions, no longer just their words or occasional photo ops.