THE BLOG

Is Your Company Social Responsible?

01/20/2015 05:02 EST | Updated 03/22/2015 05:59 EDT

I believe the only large successful companies of the future will be those perceived as "net positive." By that I mean organizations that add more value to the world than they extract.

Given the current dire environment impact on the planet, a greater and greater percentage of a company's reputation is going to be attached to whether they're perceived by consumers and employees as doing more good in the world than they take away.

I believe this trend is coming because stats show that in USA alone, over 83 per cent of consumers say that all things being equal, they would rather buy products and services from a company that is socially responsible. Globally 28 per cent of consumers say they regularly feel guilty about their consumption because they fear that the products and services they buy are harming either themselves, society or the planet. And research shows that 2.5 billion people -- over one third of the human race -- are what are known as "aspirational consumers." These are not hippies or "greenies", they are people who like to consume but are conscientious about wanting to do good at the same time.

The way corporate reputation is measured has radically shifted over the past two decades. In the latest studies, only about 58 per cent of our reputation as a brand or company comes from the traditional measures of our brand's success -- how innovative and interesting the products and services are, and the size of the company and its financial stability.

But 42 per cent of a company's reputation is now based on three other more intangible things.

1) Does it have transparent corporate governance? Are they perceived as telling the truth and being honest with the public?

2) Do they treat their employees in a way that is noble and good so that they've created a great workplace?

3) Are they green and socially responsible? Are they doing good in the world?

Even though 83 per cent of us say we want to buy from companies that are "doing good,"70 per cent of us say we are incredibly confused about whether any particular company we buy from are actually socially responsible. Only a small percentage of companies have an actual certified rating as being net positive, and only 10-15 per cent believe the advertising messages that they send out to their consumers. Given these statistics, it would seem there is a major opportunity to not only move in the direction of being a net positive organization, but also authentically tell their story to their consumers.

A perfect illustration is when you ask people about the reputation of the two companies DuPont and Disney. Disney consistently rates higher as being a good corporate citizen as perceived by the public. Yet if you look at objectively, other than making interesting films and cartoons, DuPont is doing a lot more aggressive good in the world than Disney. For example, they have created 1000 new products for sustainable energy and sustainable chemicals, making a goal of going to zero emissions in terms of their carbon footprint. Yet DuPont like so many companies has a problem. While they are becoming increasingly net positive, they have not yet found a way to communicate and connect to consumers so they can see just how good they are.

Ten years from now, or even just five years from now, I believe the only successful companies will be those that are perceived as being net positive. So ask yourself, is your organization adding more value than it extracts? And what are you to effectively communicate that message to your consumers in an authentic manner so you are believed and heard?