In the Pandemic Economy, Doing Well Means Doing Good
Corporate Compassion is a Winning Strategy for the New Normal
The new normal is chaotic. Between COVID-19, the world’s growing support for Black Lives Matter, the rippling impacts of the Me Too Movement, and other massive shifts in American life, the rippling impacts of people engaged in the pandemic economy and activism 2.0 are powerful. These changes may be tough to wrap our minds around, but they are also sowing the seeds of compassion across the global economy.
Rather than single-mindedly procuring goods and services with the highest quality at the lowest cost, people are being more mindful of the well-being of workers, their loved ones, and themselves. This is triggering a re-examination of working conditions for people in all roles and industries, and compassionate corporations are coming out on top.
Coronavirus and Social Justice in the Workplace
Businesses are facing challenges to maintaining positive workplace environments in the pandemic economy and the age of activism 2.0. This is particularly true COVID-19 begins to shine new light on economic inequities that are both perpetuating systemic oppression and making the pandemic worse for us all.
The disproportionate impacts that coronavirus is having on the women and minorities who are more likely to work in essential jobs are well documented. This is partly due to the fact that many of the workers in “essential jobs” exempt from many of America’s stay-at-home orders are women and minorities. These individuals must continue to go to their workplaces, risking exposure to the coronavirus, while also being less likely to have access to important benefits like health insurance coverage. This feeds into a self-perpetuating cycle that is only making the pandemic and the social issues being challenged through activism 2.0 even worse, as workers who lack paid sick leave are not only more likely to be women and racial minorities, they are also less likely to stay home if they feel sick.
If this isn’t bad enough, the social issues arising in workplaces in the wake of the pandemic are actually running deeper than the immediate risk posed to frontline workers. In addition to allowing our colleagues to peek into our living spaces, remote work is starting to reveal certain racial, economic, and professional divides that employees at a traditional workplace may never be exposed to. As a result of these and the myriad of other pressures facing workers in the new normal in the age of activism 2.0, many workplaces are seeing increased signs of clinical anxiety or depression. These are all humanistic issues that cost businesses money, and becoming a more compassionate and socially responsible organization may prove key to weathering the storm.
Why Invest in Corporate Social Responsibility?
Investing in a socially responsible corporate culture driven by compassion pays out in several ways. Good corporate citizens enjoy greater profitability, improved efficiency, and cheaper capital. Consider the benefits of B-Corp Certification as an example.
B-Corps are businesses that have been deemed “Beneficial,” meaning that they do business with a purpose to create value for society as well as making money. B-Corp certified businesses are obligated to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. Earning a B-Corp certification requires high standards of transparency and accountability, as well as a means of creating positive social and environmental benefit. Sound like a waste of money? It’s not.
Sustainable economic growth requires workplaces to be more equitable, inclusive, and resilient. In fact, as the coronavirus pandemic continues to spread, building a compassionate corporate culture of social responsibility may help your company survive the economic recession looming over us.
Social Responsibility for Survival
We’re staring down the barrel of another major economic recession. This is putting most businesses in survival-mode, and investing in social responsibility may prove key to surviving this economic downturn while also gaining more popularity in the age of activism 2.0.
In the last financial crisis, B-Corps were 63% more likely to stay in business than their traditional counterparts. This is partially true because many investors seek out companies that have socially responsible environmental and social practices. However, there are several significant advantages to building a more ethical corporate culture, including:
- Better brand recognition and reputation,
- Increased sales and customer loyalty,
- Reduced operational costs,
- Improved financial performance,
- New opportunities for business growth and attracting better talent,
- Easier access to capital, and more.
Now and in the future, lenders and investors will be more willing to work with an ethical company. Customers also feel better about spending their money on products and services that make the world a better place. This is particularly true during the COVID-19 pandemic, which has led to a massive increase in socially responsible consumer behavior.
Coronavirus Brings Corporate Compassion to the Spotlight
Businesses with an authentic commitment to positive social purposes integrated into their corporate culture are faring far better during COVID-19 than their more traditionally profit-centered counterparts. This is the result of a number of coalescing factors, including things like a flattened hierarchy and flexible roles in workplaces initially designed to encourage agility in these types of organizations. In addition to affording higher levels of transparency and participation in the creation of workplace culture, this approach is helping businesses adapt to the demands of the new normal.
Beyond providing a more equitable and transparent structure for workers to adapt to new policies, companies that have made efforts to be socially responsible also face external pressures to keep up with their reputation for doing good. People have become more conscious of the things they buy and the companies behind them, and many customers are watching how companies react during the crisis. This perception is particularly impactful in sectors like health care, manufacturing, food service, and delivery, which have seen an uprising of support from the public at large.
How to Become a Compassionate Corporation
Becoming a compassionate corporation requires shifting from a resource-oriented view of market operations to a people-oriented perspective. Companies that have succeeded in this regard begin by honing-in on their unique abilities to contribute to their communities and the world. For example, Google is consistently rated as one of the most socially responsible corporations in the United States. However, the tech giant didn’t become a good corporate citizen by using its deep pockets to throw money at popular issues. Instead, Google has turned a critical eye towards the social and environmental issues most relevant to its operations. In many ways, the company has become engaged in activism 2.0 itself.
First, Google is a major player in an industry marred by racial and gender inequities. Rather than succumbing to the temptations of maintaining the status quo, the company has leveraged its unique position as a top employer in tech to support diversity and female leadership. Google and its parent company, Alphabet Inc., also require massive amounts of electricity to power searches, data centers, cloud-based services, and many other heavy computing demands. To meet its own surging electrical consumption, the company has become the world’s largest corporate buyer of renewable energy. And while then-candidate President Trump was making efforts to prevent Muslims from immigrating to the United States, Google CEO Sudar Pichai spoke out to protect the company he leads from the oppressive forces of nationalistic xenophobia. Speaking from the perspective of his own experience as an immigrant from India, Pichai’s voice rose above many of the other public outcries over these policies because it reflected both a deeply personal concern and a defense of Google’s globalized workforce.
Doing Well by Doing Good in the New Normal
Being a good corporate citizen means embracing social responsibility while also meeting legal and economic responsibilities. Some business leaders dismiss socially responsible investments in non-operational, pro-social goals as little more than expensive PR campaigns. However, becoming a compassionate corporation is an investment that accrues financial benefits far exceeding any short-term boost to reputation that may result from positive press coverage. In fact, building a corporate culture of compassion and social responsibility will help companies survive the looming challenges posed by the pandemic economy.
Good corporate citizens like Google help produce higher standards of living and quality of life for the communities that support their business. These companies maintain company cultures that support social, environmental, and philanthropic activities while still maintaining profitability for stakeholders. But of course, hitting the sweet spot on this double bottom line is easier said than done.
Few companies will ever amass the resources at Google’s disposal, but the company did not become a good citizen by dumping billions of dollars into philanthropy. Rather, Google has made directed, intentional investments in social responsibility that have also helped to further operational goals. As our global economic outlook continues to grow dimmer day by day, companies need to think creatively to ensure their survival. Businesses looking for ways to manage the economic impacts of COVID-19 should consider the benefits of becoming a good corporate citizen — it may prove to be the best investment companies can make in the pandemic economy and the age of activism 2.0.
Originally published at https://bedecentbook.com on July 30, 2020.