In recent years, the term social impact has been gaining prominence within business strategies and companies have more and more power to influence the shaping of society.
But what does social impact actually mean and why is it so important for companies? In this article, you’ll learn all about the subject and how to adopt practices to generate social impact in your company.
What is social impact?
In the corporate context, social impact can be defined as the set of practices and initiatives adopted by a company with the aim of promoting positive and significant changes in society.
These practices aim far beyond financial profit, as they seek to contribute to transformations that promote social well-being, improvements in people’s living conditions and the propagation of values of social responsibility.
The social impact generated by a company can be manifested through actions that cover various aspects, such as diversity and inclusion in the job market, humanized relations between companies and employees, among others.
Despite being based on practices that contribute to transformations in society, promoting social impact goes beyond isolated practices and involves a deeper commitment to social responsibility and sustainable development in the market.
Why is it so important to work on this factor today?
Today, more than ever, companies can be agents of great change in society and influence people and other businesses to also contribute to these transformations.
As social, environmental and governance issues become more relevant to consumers and investors, companies have the opportunity to stand out and play a more significant role in the market through social impact.
In addition, companies that work on social and sustainability issues also have a better chance of staying afloat in the market in the long term.
This is because research has already shown that consumer awareness and demand for socially responsible companies is on the rise.
According to Nielsen’s Global Corporate Social Responsibility Survey report, more than 73% of consumers worldwide are willing to pay more for products and services from socially responsible companies.
The PwC report also shows that 77% of institutional investors planned to stop buying products from companies that don’t apply sustainable practices by the end of 2022.
For investors, companies that follow social, governmental and environmental sustainability practices are less prone to instability and more flexible to changes in consumption and production patterns.
What are the pillars of social impact in companies?
The social impact of companies can cover many different aspects. Among them, we can highlight some of the main pillars that a company should have to guide its strategies and promote social impact. Get to know the main ones:
- Taking care of employees
Caring for employees is essential to promoting a healthy and sustainable working environment, which is part of what we define as a company’s social impact.
This involves adopting practices that ensure the safety, well-being and professional development of employees.
- Customer care
Promoting social impact is also linked to the relationship the company builds with its public.
This pillar covers everything from the first interactions with the customer to after-sales service, and must be based on transparency, respect and humanization. In this way, the company demonstrates its commitment to the needs of its consumers and the human aspect of commercial relations.
- Commitment to society’s challenges
Commitment to social challenges such as racial and gender issues is also one of the main pillars of social impact in companies.
This is because it reflects the company’s commitment to resolving issues that are relevant to society. This commitment may involve adopting practices that promote diversity and inclusion or even participating in projects that contribute to this and other social causes.
- Transparency in relations
Transparency in relationships is also essential for promoting a positive social impact.
Companies must be transparent in their commercial and internal relations. This strengthens trust with consumers and investors, and demonstrates true commitment to social impact.
These pillars not only serve as guidelines for the company’s social impact strategies, but also form the basis for an organizational culture that values social responsibility and making a positive contribution to society.
What is the ESG?
Still in the context of social impact, understanding what ESG is is also fundamental to drawing up strategies with the aim of having a positive impact on society.
Created in 2004, in a publication by the UN Global Compact in partnership with the World Bank, the acronym stands for Environmental, Social and Governance (ESG), has come to signify the relationship between the generation of economic value and concern for environmental, social and governance issues in companies, and to measure the impact that sustainability actions have on their results.
The ESG has the following three fundamental principles :
Environmental: the environmental principle, as the name suggests, focuses on practices related to the environment.
Responsible management of resources, reduction of polluting gas emissions, energy efficiency and preservation of biodiversity are some of the practices that fall under this pillar.
Social: ESG’s social criteria focus on companies’ relations with their employees, customers and the community in general.
This includes issues of diversity and inclusion, gender equity, safety and well-being at work, respect for human rights, among other social responsibility practices.
Governance: the principle of governance refers to the company’s relationship with the management and control structure.
This pillar focuses on transparency in operations, the quality of leadership, accountability, the independence of the board of directors and business ethics.
Read more: ESG: what are the principles and advantages
What are the benefits of generating social impact?
- Positive reputation: one of the main advantages of generating social impact is a positive reputation in the market.
Companies that adopt social responsibility practices are perceived as leaders in ethics and sustainability, which can result in a much more positive brand image.
- Greater attractiveness to investors and talent: as a consequence of the improved reputation and positive brand image, the company also becomes much more attractive to potential investors and qualified talent, who are aware of the principles of social, environmental and governmental sustainability.
- Innovation: social impact also drives innovation within companies. By committing to socially responsible practices, organizations are motivated to seek creative solutions to social and environmental challenges.
Innovation is not limited to the creation of new products or services, but also extends to more sustainable and efficient business models.
- Business resilience: companies that adopt practices to generate social impact also tend to be more resilient in the face of challenges. This is because social responsibility often involves taking environmental, social and governance risk factors into account.
By anticipating and mitigating these risks, companies strengthen their resilience, reducing their vulnerability to crises.
Meet companies that generate social impact
- B2Mamy: B2Mamy is an example of a company that stands out for the impact its operations have on the lives of women with children and on the labor market.
The company’s mission is to connect mothers in the community, making them leaders and economically free through education, employability and belonging.
In its six years of existence, B2Mamy has trained and developed more than 100,000 women. As a result of the company’s work, it has generated an economic impact of R$27 million, through the creation of new startups, job placements and career development.
- Nestlé: Nestlé is a multinational that has made efforts to generate social impact on several fronts over the last few years.
In addition to its initiatives involved in social responsibility programs aimed at underprivileged communities around the world, which include projects to improve food security, promote education and support economic development, the company is also involved in environmental causes.
- Scooto: Scooto is a remote customer relationship center whose mission is to generate a positive impact on the lives of women by generating income and providing space for professional development.
In addition to being made up exclusively of women, around 44% of service providers declare themselves to be black or brown, and among them there are women in leadership positions, which contributes to reducing gender and racial inequality in the labor market.
Tips for promoting social impact in your company
Promoting social impact is not only an ethical responsibility, but also a smart strategy for building a brand’s success.
If your company is committed to generating positive change, these tips will help promote social impact in your company:
- Start with the culture: build an organizational culture that values and encourages social responsibility.
This approach must always start from the inside out, so that the commitment to generating social impact is aligned with the company’s mission.
- Commit to social challenges: identify and commit your company to social challenges that are relevant to your sector or community.
This can include issues such as education, health, gender equality, the environment, among others.
- Involve employees: promote the active participation of employees in social initiatives. Encourage participation in volunteer programs, community events or social projects.
By involving employees in these activities, you not only contribute to the well-being of the community, but also strengthen team spirit and a sense of purpose.
- Develop strategic partnerships: an excellent way to generate social impact is also through strategic partnerships that are aligned with the company’s objectives.
This can be done by collaborating with NGOs and working together on practices and initiatives to generate positive changes in society.
These are some tips that can help your company put into practice actions that aim to generate social impact.
Thinking about these strategies is essential for your company to have greater relevance in the market and long-term success.
Consumers and investors are increasingly looking for companies that are aligned with the pillars of sustainability and the trend is for this agenda to take on greater proportions in the market.
