Since the Business Roundtable announced that they were redefining the “purpose of a corporation,” some skepticism has permeated the surrounding public dialog. In August, more than 180 global industry leaders, from the heads of Apple to PepsiCo to Amazon, issued a joint statement asserting that companies should no longer focus exclusively on shareholder profits, but also invest in their employees, protect the environment and support the communities in which they work.
What does this mean in practice? In response to the Business Roundtable’s announcement, 33 certified B Corporations — companies formally assessed for their social and environmental performance — urged members to put their words into action, pointing to the proven power of stakeholder capitalism.
I believe the Business Roundtable’s call is an important first step, and I also suggest a road map: If industry titans are truly committed to a broadened definition of “value,” they should look to social enterprises for direction.
Today, more and more consumers want to engage with companies that align with their conscience. Brands see real market impact when they promote philanthropy, green practices and fair trade, and are challenged when their policies are behind the curve. Meanwhile, impact investing, which promises the double bottom line of both doing well and doing good, continues to gain in popularity.
From the office to the consumer marketplace to the capital markets, these are more than just trends; they are cultural forces driving business investment and social change in tandem. For businesses looking to meet these movements, social enterprises provide a powerful guide.