Social Responsibility Didn’t Just Pay Off For These 3 Companies – It Paid More
Being sustainable is not only better for the environment, it makes perfect business sense.
Consumers, especially Millennials, are more informed than they’ve ever been. They don’t just want the most up-to-date technology and fashion; they want to buy eco-friendly products and be loyal to companies that live up to their ecological and social responsibilities.
According to a global 2015 corporate social responsibility study, 84 percent of consumers look for responsible products whenever possible, 88 percent are more loyal to companies that take their social responsibility seriously and 71 percent are willing to pay more for a product that’s more environmentally responsible. And it’s not just consumers. When choosing where to work, 79 percent of people consider this as well.
Corporate social responsibility is something that positively affects your bottom line. It increases employee recruitment and retention, fosters positive consumer relations, improves company image, saves companies money, grows profitability and boosts business competitiveness.
Today’s consumers want to feel good about the products they buy and the companies they buy them from. Are you living up to your ecological and social responsibilities to make that possible?
Still though, some companies, mainly senior leadership, know this and don’t want to make sustainable changes. The challenge of combining corporate with social and environmental–taking the time, spending the money, training employees, adhering to legal compliance, etc.–is more than they want to take on.
But as these three companies and many others out there have proven, taking on the challenge will help you meet your business goals to leveraging your business capabilities, supporting social causes and improving your competitiveness:
Three companies taking social responsibility seriously.
As the following three companies demonstrate, being sustainable is not only better for the environment–it makes perfect business sense.
Fair-trade clothing manufacturer Fair Indigo has been able to attract and retain loyal customers and employees and, according to the company about page, “promote a culture of sustainability from dirt to shirt” that’s allowed them to successfully grow their business year over year. However, when they first opened their doors in 2005, they couldn’t even claim they were certified as a fair-trade organization because back then, standardized fair-trade certifications for clothes didn’t exist.
Today, without having taken any outside funding, they have a screen-printing facility that’s solar and wind powered, and their Peru farms use natural irrigation techniques via melted snow from the Andes Mountains to reduce the water needed to grow cotton for their clothing. The latest reports of their yearly revenue from 2013 indicate a growing small operation of around $10 million.
Patagonia is an outdoor clothing and gear company started by a group of surfers and climbers–people who care about the environment they spend their free time out enjoying. Their mission isn’t just to create fun and useful gear for outdoor enthusiasts, though. Their mission is to “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
When Patagonia decided to switch to organic cotton, they knew it wasn’t going to be a quick switch over. In fact, their sales dropped 20 percent and they were losing money for about three years, but they stuck with it. They took the time and money to train farmers how to farm organically, and even when their sales dropped for a few years, they stayed true to their social responsibility because they knew this was the sustainably responsible choice that was better for the environment and their customers.
Cariloha started as a company that sold island-leisure products made from traditional materials like cotton. In 2008, they opened their first three stores; unfortunately, sales numbers were nowhere near where they wanted or needed them to be. Cariloha’s CEO decided to switch to sustainable bamboo for manufacturing their shirts; which meant spending more money with this material and losing money by getting rid of all their other products in their stores. Cariloha first tested selling 5,000 bamboo shirts in three stores, and in two weeks, they were completely sold out. From three stores and below-expected sales, to 60 stores in 14 countries, Cariloha has been on the Inc. 5000 list now for the last several years.
Knowing the challenge is half the battle.
Businesses and their executives need to remember that the biggest sustainable challenge is balancing the needs of every constituent involved–customers, employees, shareholders, suppliers and the community–now and in the future, while still ensuring long-term financial success. How can you do that? You understand what each of those needs are and take the necessary steps to meet them. You remember that needs can change over time, so be ready and willing to adjust parts of your business strategy accordingly.
And while you’re doing this, be up to the challenge and confident in your abilities. Because as you can see, living up to your social responsibility will grow employee and customer loyalty and boost long-term business success.
See full Inc. article by Melissa Thompson here.