Although technology has helped companies stay ahead of the game…the real game is played out in the minds of the consumers, and consumers have started rooting for businesses that are not just about profits but also impact the society and environment.
Not long ago, social causes were led by volunteers and not-for-profit organizations. Slowly, social causes were integrated into the company’s marketing campaign which served the dual purpose of meeting its marketing objectives while doing its bit for society.
The next wave belongs to businesses that have social causes as part of their DNA. The future will be about ‘Socially Conscious Businesses’.
What are socially conscious businesses?
Socially conscious companies operate on a business model where their responsibility of having a positive impact on society is integrated into their business. The social commitment is tied into the very essence of the company. They go beyond just creating awareness of the social cause and get into the action phase. It is both about maximizing profits and being socially responsible.
Is it possible for businesses to create a social but also profitable company?
The answer is YES!
Doodlage is one such socially conscious business brand. It is a sustainable clothing brand that makes circular fashion mainstream. They use the fabric scraps thrown away by large manufacturing units in India to design clothes, accessories, and home products. They ensure that these fabrics don’t land up in the landfills but find their way into our wardrobes and homes. They also repair or alter Doodlage products to help extend the life of each of their products.
But, it’s not an easy ride!
The journey of a for-profit business is quite a challenge. Add a social cause to the business model and the ride gets bumpier and more challenging. And not everyone has the appetite for such a ride.
What drives the ‘socially conscious businesses’?
Change in consumer expectations
Times have changed with the millennials and Gen Zs becoming the driving force of the economy. There is social awakening amongst the consumers who have become conscientious about the source of the products they consume and the impact the products have on different economies. According to Accenture’s Covid-19 Consumer Research, ‘conscious consumption is likely to accelerate further in the future.
At the heart of the business is a laser focussed purpose to do something meaningful that is also good for society and the environment. The will to tackle social issues head-on and generate positive change drives their sense of responsibility towards society.
The entire business is built around the socially responsible behavior, attitude, and action taken by the brand which is a unique story. Therefore, it is easier for business brands to differentiate themselves and gain a competitive advantage in the market.
Consumers’ willingness to pay a premium
Today, consumers are willing to pay a higher price for products that are sourced responsibly, and when they know their purchases contribute to a positive impact on the environment and society, at large. In fact, as per a KPMG report, a whopping 90% of customers are willing to pay more for ethical retailers.
What this means is that there is a huge opportunity for businesses to tap into this mindset of people.
How do we know which of the socially conscious businesses is the real deal?
Just like we have the ISO certification for Quality, there are certifications that highlight the legitimacy of a company’s efforts of being socially responsible. Climate Neutral Certification, 1% for the Planet alliance etc. to name a few. But the most stringent among them is the B Corp certification. B Corp certified companies are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.
Now, that’s a tall ask which very few companies will be able to adhere to. In fact, there are only 5 companies in India that are B Corp certified.
India’s first company to become B Corp™ certified. A for-profit social enterprise that is fuelling job creation, prosperity and livelihoods amongst India’s poorest communities. eKutir’s technology-enabled ecosystem offers SaaS, MbaaS and PaaS solutions together with a Micro-entrepreneurship business model to address complex problems such as rural poverty in developing countries.
For eg. In agriculture, eKutir addresses the needs of smallholder farmers by working with field partners to replace their existing practices which are neither economically viable nor environmentally sustainable.
Another B Corp™ certified company uses the latest technology to deliver timely and relevant financial services (working capital loans, life, and health insurance) to underserved rural geographies in India. The first to use tablet banking in rural India, they have added other state-of-the-art technologies to aid in providing their services. Vaya trains their customers and helps them understand the loan terms, interest rates, joint liability, etc., thereby bolstering trust and strengthening the credit culture in rural India.
The future is in the hands of Gen Zs and the Gen Z-ers are on the quest for brands that deliver value to society as a whole. This behavior will gather momentum and intensify in the future. So much so that in the coming years it will become a norm rather than the exception that it is today.
Businesses that marry purpose and profit are the ones who will find the greatest success, and they are the ones who are going to drive the next business wave.
Authored article by Artthi Ponnuswamy, Head – Brand Strategy, Origami Creative.