Why you should care?
Because we need to understand what it really means to be a Social Good Business.
With more and more businesses and brands self-identifying as socially conscious, ethical or sustainable, we need to understand better what this means. How do we best define an overarching social good business?
At Hey Social Good, we examined the growing market gaps between consumer desires, available goods and services offered, and assessed the data needs of purpose driven businesses. Consistent with many survey studies, we observed growing consumer demands for businesses to address social and environmental problems. And businesses that outline and report their social good activities outperform the growth and sales of conventional products.
Social Good Business vs Corporate Social Responsibility
It is important and necessary for any business to self-assess and ensure its operations are efficient and responsible. Consequently, Corporate Social Responsibility (CSR) Reports and some certifications are completed to evaluate how a business conducts its manufacturing and financial operations. Many large corporations complete these assessments annually and make improvements or decisions that better meet their business goals. However, less than 1% of all businesses in the US complete such a report, and there are no set standards on how a company self-reports or self-evaluates, leaving lots of room for interpretation. Often, CSR reports are completed for investors and shareholders, and may or may not include worker, social and environmental practices that support a better society or planet.
In contrast, the B Corp Certification offers an accessible and targeted social responsible certification that evaluates a company’s governance, worker treatment, impact on community and environment. Although any company can take the B Impact Assessment, the certification requires an extensive review process and third party audit to confirm the company assessment results.
Certifications
As a social impact tech company, Hey Social Good has spent an enormous amount of time evaluating what can be better for business owners and consumers as they embark on a social good journey of improving business operations and purchasing choices. Companies getting certified themselves is important (e.g., USDA Organic, Leaping Bunny, etc.), but the challenges for businesses to get assessments are potentially huge. Most certifications or seals of approval require significant time and resources. In fact, our review of approximately 100 commonly used certifications in the US showed approximately 60-70% of them require a fee or cost of some kind. This additional fee becomes another cost consideration for businesses and feeds into the hard to balance decision between maintaining consistent business growth and social good business actions.
Do Customers Understand?
Communicating to customers your social good spend, activity and certifications is another challenge for businesses. People may not recognize, understand or have the time to research the hundreds of certifications, labels or seals of approval, and its significance. It’s not uncommon to pick up a box of tea and see 5-8 different certifications and seals of approvals, including three “bunny” seals communicating the effort to not harm animals during the manufacturing of the product (i.e. Is there a difference between the three?).
It is very specifically for these reasons that we designed our Social Good Optimization Data Assessment Tool to help simplify the evaluation process for consumers and businesses. We wanted to clearly define what it means for a business to do good for people, community and the planet. We considered thousands of key attributes of a purpose-driven business and evaluated the many diverse ways these businesses make a positive impact in the world. These are delivered in domain expert and data-driven results rapidly to better evaluate the a business’ social good efforts. After reviewing over 12,000 businesses, we discovered that social good businesses work on two big areas: implement sustainable practices to reduce pollutant emissions and give back to its community.
What is a Sustainable Business?
A sustainable business is one that adopts socially and environmentally friendly practices to minimize harm and/or improve the state of our natural resources, which would directly benefit our profits, planet and people.
What is a Give Back Business?
A give back business is one that adopts a practice of giving back to the local or global community in some way. This can include dedicating a portion of the profits to a charitable or local community organization. The overarching goal of giving back to the community is to fill an observed gap in our society and ensure we grow and thrive across all sectors, such as education, hunger, health, job opportunities, advocacy, and so much more.
Three Principles of a Social Good Business
In fact, in our extensive review of businesses and their positive impact beyond normal business operations, we discovered businesses have unique purpose-driven goals centered around three primary principles.
(1) Incorporates social responsibility in its DNA (i.e. mission, vision, strategy, business design);
(2) Connects its purpose-driven goals into concrete practices (e.g. gives back to the community, adopts sustainable practices, partners with organizations working directly to address a social challenge); and
(3) Translates its positive social or environmental impact into metrics and/or impact stories transparently.
Companies large and small must make these three principles a fundamental part of doing business for all the good reasons, and most critically because their customers are demanding it.
Hey Social Good is committed to empowering businesses by using data to guide, assess, verify and communicate their positive sustainable business impacts. Dr. Cindy J Lin is the founder and CEO of Hey Social Good. She previously worked at the US Environmental Protection Agency solving tough environmental and scientific problems encountered on national and international projects. For questions or more information, please contact hello@heysocialgood.com