Each emerging generation establishes Its own unique set of principles about what constitutes acceptable behaviors within society. Perceived injustices and abuses by those individuals and organizations considered by many to have a powerful impact over others has spawned significant shifts in purpose for corporations throughout history. “The robber baron era” of the 19th century brought about critical change in the practices of many of America’s major corporations. Consumers and financial investors today are insisting that businesses include “Environmental, Social and Corporate Governance” (ESG) factors as an integral part of their mission. Numerous surveys have consistently shown that support for the health of the environment, equal access and equal rights are issues that gain favorable support from the vast majority of consumers.
Social responsibility is becoming an increasingly important aspect of marketing strategies and tactics for any business in America. Consumers are commanding that businesses adopt behaviors and practices that mirror individual concerns. While successful niche players are mastering performance, many brands are struggling to adjust to the trends. Unsupported platitudes, claims, and buzzwords are common among those organizations who fail to understand the emerging dynamics of the new marketplace. How can brands establish credibility as sustainable, socially responsible players?
The approach to measuring ESG performance has, until recently, been fragmented and often undefined and unmeasurable. But an emerging non-profit company is establishing definable criteria to identify companies who are meeting the challenge of ESG. B Lab Corporation (the “B” stands for benefit) is a network of standards and measurable factors that is promising to transform the global economy to benefit all people, communities, and the planet. With revenues of $41 million and more than 100 employees worldwide, B Corporation has established a numeric scoring system focused on a 200 point environmental, social, and legal set of standards, which include measuring transparency and accountability. A minimum score of 80 is required for a company to become a certified “B corporation”. More than 4,000 companies have been certified as B Corporations worldwide, spanning 74 countries and 150 industries.
The process of becoming certified can often take years, requires considerable resources, and commands an organization to perform an impact assessment: meet the requirements of the “Legal Test”; submit numerous supporting documents; sign a declaration of interdependence and pay an annual fee that is aligned with a participant’s annual revenue. Certification requires that a company make statements in charters and bylaws that amount to a legally binding commitment to maintain the B certification. But elevating ESG certification to the primary mission of any organization can dilute the importance of being consumer centric and performing responsibly to stockholder interests.
While trending, an over-commitment to ESG may adversely challenge a marketer’s primary objective to create a product or service that delivers a desired solution to a customer’s needs. And while primary corporate mission statements like; “stockholder’s equity”, “market share” and “profitability” may be considered crass and out of vogue, they remain fundamental to a brand’s survival in a competitive, capitalistic environment.
It is certainly desirable for a brand to be recognized as responsible and sustainable in today’s dynamic marketplace, but in the end, consumers’ primary reason to make a purchase decision can often evolve around things like does the shoe fit, is the color right, and can I afford them?