Entrepreneurs of small and medium-size businesses are increasingly embracing the dual focus that considers not only financial performance but also social impact – despite the competing priorities.
This approach of considering financial and social impacts is called the double bottom line:
Financial profit
Generating revenue and ensuring the economic sustainability of the business
Social impact
Contributing to societal goals such as community development, ethical labour practices or supply chain management
While measuring financial success might be easier, there are tried and tested ways to demonstrate your social contribution through your business as well. The challenge for entrepreneurs is how to approach social impact: focusing inwards to create an inclusive workplace, incorporating it into a business strategy, or focusing outwards by supporting community development or vulnerable groups.
Whatever your approach, leveraging this double bottom line will help with:
- Enhanced brand loyalty: Consumers are increasingly drawn to brands that demonstrate a commitment for social responsibility
- Attraction and retention of talent: Employees, especially millennials and Gen Z (who are make up 50% of the current workforce) prefer to work for companies that align with their values
- Risk mitigation: Socially responsible businesses often face fewer regulatory and reputational risks, because they address them before they become issues.
- Long-term sustainability: Considering financial and social impacts attracts talent and customers and also increases the long-term viability of businesses.
Now let’s look at some strategies to achieve this double bottom line:
Integrate social goals into the core business model
If your commitment to social impact is genuine, you will start by looking at your activities and operations as a business to identify how you can integrate social goals into your missions and operations. Reflecting your values in mission statements and potentially business models, demonstrate your commitment to making a difference. A very simple example is to revamp your HR processes, and maybe incorporate AI to screen candidates, thus eliminating human bias and providing equal opportunities to candidates.
Leverage voluntary certification standards
Voluntary certification standards are a great way for your company to demonstrate commitment to social impacts. There are hundreds of different industry and impact specific voluntary standards, so you will most certainly find the most suitable one for your business. Even if you don’t get certified immediately, you can use the guidance, checklists and information material to improve your practices and achieve certification over time.
Measure and report impact
Demonstrating your social impact, whether through numbers or qualitative indicators is crucial for transparency and accountability. Tools under the Global Reporting Initiative (GRI), social return on investment (SROI) and other frameworks can provide inspiration and guidance on how to formulate your narrative around your impact initiatives and results. Regular reporting ensures that businesses remain committed and accountable to achieving the targeted social goals and allows stakeholders to track progress. My pro-tip is to actually engage with external stakeholders, such as your target communities or beneficiaries. Getting their feedback on your initiatives can greatly improve and increase your positive social contribution and allow for more efficient use of resources that focus on the issues that really matter to them.
Engage stakeholders
Building strong relationships with stakeholders – including employees, customers, investors, and the community- enhances social impact efforts. Stakeholder engagement is an often-misunderstood term that is largely used to describe the annual reporting to shareholders. In reality, it is much more than that. Involving your employees and other key partners in decision-making processes can ensure that your initiatives are well-positioned and address the needs of your stakeholders. Remember, this should be a two-way street, where your stakeholders are free to share their concerns, issues and feedback with you. What I always tell my clients is that when people have the chance, they will complain. But would you not rather hear some hard truths that can improve your business? I would!
Innovate sustainably
Innovation is key to maintaining a competitive edge for every business. Sustainable innovation might involve developing products, services and processes that minimise environmental impact and enhance social value. Think of green HR practices, where you conduct online interviews and use AI to shortlist candidates.
Whatever the size of your budget and business, you can find ideas to boost your profits and your social impact.
