What is Social Impact? Is it the same as Sustainability?
In the past, social impact was viewed as the ‘people’ side of sustainability (employee health and safety, workers’ rights, community, diversity, equity and inclusion). Today ‘social impact’ incorporates planet-related issues like climate change, circular economy and waste reduction. This makes sense, as environmental problems are now impacting the way we live and work.
What can social impact do for my business?
Social impact can help strengthen your stakeholder relationships, improve your company reputation, and make your employees feel good about working for a business with a sense of purpose. From a consumer perspective, younger generations are increasingly opting for brands that are better-for-you or better-for-the-planet.
Businesses that develop a social impact or sustainability strategy also have the added benefit of staying ahead of the competition - often charging a premium for their product or service offering.
There’s really no downside to incorporating social impact into your business.
How can my business start its social impact journey?
We often suggest to clients to review what public companies in their industry are reporting on from an environmental, social and governance (ESG) perspective, because in a few years’ time, they’ll likely be doing the same, either because they are public companies yet to start their impact journey or, they are a supplier and form part of a listed company’s emissions and supply chain audit trail.
Another way to start your business’ impact journey is via your industry association. Look at your association’s position on social and environmental matters and align where it makes sense, but don’t be afraid to step out and lead your industry on an issue.
Just remember when promoting your business’ environmental efforts, be prepared to back up your claims as ‘greenwashing’ is easily spotted by stakeholders (including consumers). Luckily, there are many helpful online resources and we recommend ‘SME Climate Hub’ as a starting point for businesses looking to meaningfully contribute to the climate conversation.
It’s also a good idea to appoint an external social impact or sustainability expert to help you understand how and where environmental, social and governance (ESG) issues intersect with your business. For example, if you manufacture offshore, your business may be exposed to ‘modern slavery’ in the supply chain, putting it at legal, financial, and reputational risk. Another issue that will impact all businesses soon is the measurement of carbon emissions, so if you work in freight or logistics, it is essential to track this data now.
For businesses in service-oriented industries, it’s just as important to look for upstream opportunities as it is downstream. Ask your suppliers, wholesalers and distribution partners to provide evidence of environmental and social actions, as well as verified emissions data. Seek to align your business’ social impact views with organisations already on an impact or sustainability journey. This way, your business’ efforts create a multiplier effect along the value chain.
How can we avoid 'ticking a box'?
First, be sure that your business’ impact efforts are in alignment with your organisational purpose and business strategy – otherwise authenticity and connection to the cause – whatever that may be – is lost.
Second, getting directly involved with local charities and environmental non-profits is a great way to build your organisation’s social impact in a way that is meaningful to employees and community alike. Groups like OzHarvest and Conservation Volunteers Australia operate nation-wide, they have great employee volunteering initiatives and they assess the impact of their programs.
Third, if your business is getting serious about climate, the options for carbon offsetting and removals is growing every year and is now more accessible for small-medium enterprises. For the price of a coffee a week, every employee in your business can permanently offset their carbon footprint, helping your business achieve its climate targets. If you work for a large organisation, go the extra mile and certify your business’ offsetting and removals program to avoid ‘green-washing’ claims.
Fourth, alignment to third parties that certify your business’ social impact activities is a great way to avoid box-ticking claims. For example, the global initiative, 1% for the Planet, encourages businesses big and small to donate 1% of annual sales to environmental causes which they then verify. It's an accessible partnership and suits all businesses that contribute to the environment.
And last, measuring and evaluating your organisation’s impact over a period of time is key to establishing trust among your stakeholders. Without proof of impact, your business becomes vulnerable to box-ticking claims that takes away from the social and environmental work being done behind the scenes. Sadly, many businesses are leaving value on the table by not measuring their impact over time – leaving themselves open to claims of ‘blue, green and rainbow washing’.
As your business considers its next move, remember this: every social impact journey started somewhere. The earlier your business starts, the earlier you will see the rippling effects of your organisational efforts.
