Social Impact Matters
Over the last few years, the corporate world has become increasingly conscious of its responsibility towards larger social good. The objective of an enterprise has evolved from being focused merely on providing ever greater financial returns to its shareholders or owners. It now encompasses the idea of contributing to the well-being of all stakeholders, including not only employees, suppliers, distributors, and customers, but the community too.
Also, with greater understanding of the larger consequences of an organisation’s operations and wider concerns like pollution and climate change, sustainability – in its broadest sense, covering ESG – is now the new buzzword. As a result, social impact has assumed importance and is now centre stage.
Social impact has, of course, long been the objective of development organisations (civil service organisations or NGOs) and of a multitude of government programmes. Now, it is also the main goal of many for-profit enterprises. Giving them a boost are a growing number of social impact funds.
Pioneering CSR laws
In addition, India’s pioneering corporate social responsibility (CSR) laws have, in effect, made it mandatory for certain organisations (large and profitable ones) to spend 2 per cent of their profit on social programmes. Some of them, even before these laws, realised their social responsibility and were spending substantial amounts on social development programmes. Mandatory CSR spends have now increased the thrust on social impact.
What is significant, though, is the new awareness amongst consumers and prospective recruits, many of whom now place a premium on organisations that are involved in doing social good. Thus, it is no longer merely about the 2 per cent CSR spend, but whether the organisation carries out all its operations with a sense of social responsibility. Increasingly, this is also beginning to be recognised in the stock market, with the company’s ESG record being an influencer of its valuation.
Beyond bottom line
Equally, a new generation of business professionals have imbibed this understanding of the role of business in society and they are driving companies to look beyond the bottom line of profit. Thus, social impact and responsibility are a part of their own agenda and not based only on a “tick-in-the-box” for legal compliance. It has gone beyond a public relations ploy and a few pages in the annual report, to being a core part of company values.
This may sound like a rosy-eyed view of a more commercial reality but, unarguably, the trend line is heading in that direction. However, it does need additional reinforcement and thrust. An important way of doing this is by giving public recognition and showcasing exemplary work in this area. It is in this context that one appreciates the initiative by BW to give awards to outstanding corporate professionals for their work on social impact.
As part of the jury for these path-breaking awards, I was deeply impressed by the quality of entries and the excellent work of so many committed individuals. It is now time for all organisations to realise the importance of social impact and to mainstream it internally so that it is a core part of the company’s own performance evaluation.
