Societal Impact: Moving From “Nice-To-Consider” To “Business Imperative”
Author: David Cruickshank
Over the past few years, societal impact has been growing as an area of interest for businesses. Business leaders, myself included, have voiced the belief that businesses should have a purpose beyond profits, and uphold a responsibility to society and the environment. Although this school of thought is sometimes met with skepticism from those who doubt the commitment of businesses to do good, there is new research suggesting that businesses are actually taking significant action to improve their impact on society and the environment.
According to a new report from Deloitte Global, societal impact has become the most important factor organizations use to evaluate their annual performances, outranking financial performance and employee satisfaction. These findings are based on a survey of more than 2,000 C-suite executives across 19 countries. This shows a shift, even just from last year’s survey report, in which executives expressed uncertainty about how they could influence the direction of Industry 4.0 and its impact on society.
What is driving this change? There is no one answer. Almost half of executives surveyed (46 percent) reported that their efforts have been motivated by the quest to create new revenue streams, and a similar percentage said that initiatives that have a positive societal impact are necessary for sustaining or growing their businesses. An organization’s cultures and policies were also cited as motivation (43 percent).
External pressure continues to be a major driver as well. According to Deloitte Global’s series of inclusive growth surveys, some of this drive comes more from public sentiment, which is increasingly influencing business leaders’ decisions related to societal impact by encouraging them to reevaluate their strategies.
Purpose in action
When it comes to societal impact, businesses are beginning to put actions behind their words. Seventy-three percent of surveyed CXOs report having changed or developed products or services in the past year to generate positive societal impact. What’s more, 53 percent say they successfully generated new revenue streams from these socially conscious offerings.
While some leaders have started to see profits from positive societal goods and services, there is disagreement over the question of whether initiatives meant to benefit society also benefit bottom lines. Fifty-two percent see societal initiatives as generally reducing profitability; 48 percent said that such initiatives boost the bottom line. Despite these concerns, leaders report a commitment to initiatives that benefit society. There’s probably a short term vs longer term element in this regarding the sustainability of business which may have influenced the answers.
Beyond products, services, and new revenue streams, leaders are integrating societal impact into their core strategies. Executives say they have been particularly effective preparing for the impact that Industry 4.0 solutions will have on society. They’re also building external partnerships and joint ventures, and strengthening ecosystem relationships to make a greater impact.
Whether driven by finding new sources of revenue, or the need to respond to external pressures, businesses across all industries seem to be moving towards improving their societal impact. It is heartening to see that leaders are incorporating these considerations into their strategies, as well as operations. When societal impact is seen to be an integral part of a business’s makeup, the most meaningful results can be achieved.