by Donald L Baker, Vermont Market President, KeyBank Today consumers want to know how corporations, as a whole, are taking a stand. In fact, customers are 43 percent more likely to purchase a product from a company they know is committed to social value. The number of companies directing corporate social responsibility from the C-Suite has increased nearly 75 percent compared to five years ago. Major financial service industry leaders, like KeyBank’s Beth Mooney and BlackRock’s Larry Fink, are challenging business owners and the C-Suite to rethink their economic impact, environmental footprint and social conscience. At KeyBank, corporate social responsibility initiatives are woven into the fabric of who we are and in whom we invest.
Rethinking a business’s social conscience isn’t confined to financial services or Fortune 500 companies. In Vermont, small businesses employed 156,243 people (59.8% of the private workforce) in 2014 - and 36.2% of businesses are owned by a woman. Small businesses are at the heart of this movement, in part because they are well-positioned to have a positive impact on society based on their unique understanding of the local communities they serve, and, because small business owners care. They want to see their town’s Main Street booming and watch other businesses thrive. They want to know they’re adding value to the community at large. In support of small business, KeyBank has committed $2.5 billion in small business/farm lending through 2022.
For business owners looking to shift their business model, consider these 3 reasons why embracing a new approach to conducting business can benefit your bottom line:
Community Vitality
It may seem like common sense, but worth repeating: small businesses are key to communities—when small businesses thrive, communities thrive. Not only are small businesses essential to the community, the community embraces the initiatives set forth by business owners like community fundraisers and profit proceeds for disaster-relief, education, youth services or medical aid. Almost two-thirds of mid-sized companies target their CSR efforts within their home state. By investing back into the community, you’re setting your business up for greater success.
Customer Loyalty
As part of running any business, customer loyalty is a must. In today’s world where consumers prioritize social awareness from the businesses they support, it is essential business owners market and express the initiatives they are most passionate about with customers. Interestingly, 55 percent of consumers said they are willing to pay more for products from socially responsible companies. And it’s not just in driving revenue, it is about building relationships and crafting the makings for customer loyalty.
Employee Recruitment & Retention
Not only does CSR benefit bottom line in terms of customer loyalty and added product value, it can aid employee recruitment and potentially reduce turnover. As the Millennial generation has shown, they are committed to doing good and supporting companies that do the same. In fact, 79 percent of millennials said they consider corporate responsibility when deciding where to work, and 74 percentsay their job is more fulfilling when they are provided opportunities to make a positive impact at work. In times when turnover is high or during the holiday season when employee demand rises, remember employees care and want their employer to, as well.
The question remains: how can businesses prove to employees they are socially responsible and authentically showcase philanthropic efforts? For for-profit organizations, consider registering as a B Corp, which can demonstrate to potential (and current) employees how the business is legally recognized as an organization with a duty to serve their community. B Corp classification can validate a business’s sustainable practices within the market.
While the added economic value of corporate social responsibility is evident, it’s also important to remember people care and businesses should, too. Think of how your business can improve their social conscience – your business, and community, will thank you!
About the author: Donald L. Baker is Vermont Market President for KeyBank. He may be reached by phone at 802-660-4273 or email at [email protected].