As we enter the new year, there is no doubt to any business owner that the world is changing rapidly. Businesses are dealing with the after-effects of the global pandemic, Russia’s invasion of Ukraine, economic challenges, as well as an ever-accelerating development of technologies. Consumers no longer see online and offline shopping as distinct experiences, and expect everything to be connected all the time — with many options available to them, including how they connect and interact with the businesses involved in the supply chain. Businesses must figure out how to do all this, and adapt to new technology, all while dealing with inflation and a talent shortage.
And there’s another issue looming. Savvy companies are quickly trying to determine what their strategies should consist of around sustainability. The world is increasingly waking up to the fact that climate change will pose a much bigger challenge than anything we have experienced in recent decades and will be significantly larger than the challenges posed by the pandemic. In response, investors and consumers prefer businesses with the right environmental and social credentials, and buying trends are increasingly being driven by purpose-driven consumers — those among us who prioritize factors such as ecological impact and sustainability when choosing who to buy from or do business with.
New research from earlier this year shows that conscious consumers are on the rise, with the purpose-driven consumers taking over as the No. 1 consumer segment in the United States. It is important to note that this is the first time this has ever happened. Purpose-driven consumers expect companies to cater to their needs while providing a great service or product and still live up to their claims of social and environmental responsibility. That is a lot for any business to balance — but as consumer sentiment changes, businesses must respond to this requirement.
In 2023, companies need to make sure that their social impact goals are moved to the center of their strategy. This should start with measuring the impact any business is having on society and the environment and then move to increasing transparency, reporting, and accountability to all their stakeholders. Every business needs a plan with clear goals and timeframes of how to reduce any negative impacts, and then the plan needs to be followed with solid action. The assessment and plans should also go beyond the company should include the entire supply chain and the social impact credentials of suppliers.
Combining attributes of traditional for-profit businesses and nonprofit organizations, Social Impact Businesses are hybrid business structures whose higher purpose is delivering social and environmental benefit while making a profit. This Purpose and Profit minded business constitutes an emerging fourth sector of the economy, which has been growing at the intersection of the traditional private, public, and nonprofit sectors for decades. This innovation is evolving capitalism and traditional business models alike, all while broadening the current business definition of success. The pandemic has ushered in a new economic age, and we need to be prepared to grab hold of the opportunity to update the underlying architecture of our aging economic system.
Better Business Bureau recognizes
that these trends in business are changing, which is why the Colorado Springs BBB office has led the charge to create a new Trustmark program called BBB4Good. BBB4Good empowers consumers to choose purpose-driven businesses and allows “Verified BBB4Good Businesses” to display the BBB4Good Trustmark and promote the good work they’re doing on the bbb.org website. BBB is building a comprehensive list of purpose-driven businesses in the United States and Canada. Similar to the BBB Standards of Trust, which set standards for BBB Accreditation, BBB4Good has adopted standards for BBB4Good Verified Businesses. Learn more about these new standards for your business at bbb.org/bbb4good.
We need to unleash the power of purpose-driven organizations to build a better economy. By strengthening the supportive ecosystem for this fourth sector, we can rise to the challenge that the post-COVID world has created, and build a more resilient, inclusive, and sustainable world. This is a transformative journey, transitioning from what has been a shareholder supremacy paradigm to one that is inclusive of all stakeholders and is intentional and strategic in serving communities while creating jobs. This journey requires new ideas, new voices and massive collaboration at every level. In the coming months we will have to continue to work together and be more strategic than ever before. As we seize this opportunity in 2023, I believe it will be a year of rebuilding, innovation and hope.
Jonathan A. Liebert is CEO of BBB of Southern Colorado, and CEO and cofounder of the National Institute for Social Impact — NI4SI.org.