By TIM FERNHOLZ via GOOD
A new survey from Edelman Public Relations, a global communications agency, examines how consumers relate to companies and brands around social purpose, and how those relationships affect their decisions to purchase products and services.
The most interesting finding in the survey is that consumers in emerging markets—which it calls Rapid Growth Economies—are much more likely than their counterparts in Europe and the United States to trust socially responsible brands, switch their business to support them, and agree that social purpose and profit can go hand in hand.
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Good Intentions =/ Good Results
Last week, I was fortunate enough to be present at an event put on by the University of Illinois at Urbana-Champaign Social Entrepreneurship Institute. The panel was informative and though-provoking. Perspectives were diverse, ranging from the corporate social responsibility viewpoint to the emerging activist non-profit angle. I especially enjoyed the lively discussion focused on the massive disconnect between good intentions and real results.
We need something better. There’s so many non-profits and NGOs out there that have been trying to solve the most pressing social problems that plague our world, but where are the results? Why are there so many different organizations competing to work on solving the same social problems? How many trillions of dollars have been donated to the developing world over the last 50 years? What happened to all this money, all these good-hearted efforts? In relation to the dollars being spent and the selfless labor being exhausted, the results are pathetic. We can do better than this.
By and large, previous efforts have lacked strategy, actionable goals and accountability. There aren’t enough tough questions being asked and it’s just really difficult to effectively measure social outcomes in a way that matters to all stakeholders involved.
This is all changing though, very rapidly. There’s this new kind of giving going on called impact investing that borrows from social entrepreneurship by marrying traditional philanthropy with business. These ‘investments’ create social and environmental impact coupled with a financial return; good for the world and good for the wallet. B Corps is doing some great work spearheading efforts to further develop and implement the GIIRS, as a tool to bring more accountability and transparency to the impact investing world.
The infrastructure is gaining momentum and robust systems are being created to augment philanthropic efforts and create more impact. Let’s start putting this infrastructure to use and really testing it in the market. The potential is infinite; the foundations for a more effective way to make our world better have been laid. Collaboration is the new competition. I imagine a world where good intentions do translate to good results and all the good-hearted, yet tragically misguided efforts of the past remain a history lesson. Let’s learn from what we’ve been doing and make it better.
Consumer Power: Vote with Your Wallet
Last week, I Tumbl’ed upon a riveting infographic labeled The Making of a Designer Tee. The graphic focused on the markups of designer clothing. When I first saw the scale of these markups, I was in disbelief, even slightly enraged. But then a few of the comments helped level my head. The proponents’ argument went something like this:
Markups exist in every business and industry out there. They exist so businesses can be businesses and turn a profit. Not to mention, so the people who do have a dog in this fight (designers, retailers etc.) can pay their bills, buy food and pay their employees. Maybe tees shouldn’t cost $15 because it generally means someone on the supply side isn’t getting paid fairly and perhaps even ethically.
This got me thinking. Surely markups are critical to a business’s success, but citing other industries or brands and their mountainous margins does not justify the act. One could argue that this follow-the-leader rationale is exactly what got us into the economic mess we’re struggling to offset today. However subsidizing clothing costs through negligent, often unethical supply side practices (cheap labor, disregard for the environment etc.) is not the answer either.
So how do we find a happy, sustainable medium here? One where the people who manufacture quality things can still earn a living and stay competitive without compromising on their supply-side activities. A medium where markups exist, but exist for proper reasons like fair pay and a safer, more conscious supply chain rather than greed.
This question of a happy, sustainable medium perplexed me for several days. I wasn’t sure I had the credentials to propose a real solution. It sounded like a problem for some of the world’s top economists and environmentalists to solve. But then it hit me.
I was reading an article on how Verizon decided to ditch its new $2 consumer fee after customer uproar. The article also noted how Verizon is the biggest U.S. wireless operator and how Bank of America recently decided to abandon a $5 fee for debit card users after considerable consumer protest as well.
My judgment was off – the problem of how we can strike a happy, sustainable medium was one that consumers could tackle. In fact, we may be the only one’s suitable to solve it. We have the credentials and momentum behind us. The Verizon and BofA cases demonstrated exactly the proactive type of consumerism we needed to continue to embrace. And how if we become loud enough, we have the power to reverse even one of America’s largest company’s decision process.
If we want to see a way of business that’s beneficial both socially and economically, we’re going to need to proactively demand it. If we don’t feel something is right, we need to speak out and act against it. If we’re going to build a culture of more positive consumerism, we’re going to need to stop supporting the brands that aren’t in line with this way of thinking and start using our wallets as a tool for positive change.
Illustration by Rachel Marshall
