Beyond the Bottom Line: How Businesses are Changing the World for Good

Management

Mokshita P.
Management
Published:

Beyond the Bottom Line: How Businesses are Changing the World for Good

The role of business in society is undergoing a transformative shift, as CEOs worldwide recognise the urgency of addressing social issues. A Bain & Company survey of 300 global CEOs reveals that 85 percent consider social concerns as vital to their companies. Notably, 60 percent view their primary role as creating positive societal outcomes or balancing stakeholder needs.

The expectations surrounding the role of businesses in society are undergoing a profound transformation, with a significant shift towards addressing social concerns. A recent survey conducted by Bain & Company sheds light on this evolving landscape, revealing that 85 percent of CEOs consider social issues as “urgent” matters for their companies.

In the survey, which covered nearly 300 CEOs worldwide, a notable 60 percent of respondents emphasised the importance of creating "positive outcomes for society" or "balancing the needs of all stakeholders" as the primary role of their businesses. This shift reflects a growing recognition that businesses play a pivotal role in shaping social progress.

Sara Minelli, an associate partner at Bain & Company Middle East, highlighted the strategic link between addressing social issues and business success. She stated, "Companies that lead in addressing diversity, equity, and inclusion (DEI) and adopt socially responsible supply chain practices are not only mitigating risks but also creating new opportunities that add value to all stakeholders. These companies recognise the direct correlation between making a positive impact and achieving long-term success."

Customers, a powerful stakeholder group, are wielding their influence to drive change. A Bain survey underscored the significance of social considerations in consumer preferences. Half of global consumers indicated a stronger inclination to support brands committed to combatting racism, with a similar sentiment towards brands that uphold human rights. Notably, 82 percent of consumers in Europe, the Middle East, and Africa indicated a greater likelihood of recommending a brand that supports a social cause, while 86 percent of consumers in Latin America stressed the importance of companies contributing to societal improvement. The survey also revealed that a significant portion of Gen Z consumers in the US would consider boycotting brands associated with unfavourable labour practices.

According to the surveyed executives, prioritising social performance yields tangible business benefits. Self-assessment by executives leading in social initiatives revealed higher revenue growth and EBIT growth compared to their peers who lag behind. These leaders also perceived better results in customer attraction, talent acquisition, and capital raising.

Jenny Davis-Peccoud, a partner at Bain and the global head of the firm’s Sustainability & Responsibility practice, emphasised the challenge of translating social action into sustainable economic performance. She recommended focusing on four critical stakeholder groups—local communities, customers, employees, and suppliers—as a starting point for driving positive change while ensuring business success.

Bain's study identifies four key areas of opportunity to bridge the gap between social issues and business performance:

  1. Elevating Local Communities: Businesses are recognising the vital role of the communities where they operate and exploring ways to enhance conditions in these locales, thereby bolstering business outcomes.

  2. Unveiling New Customer Value: Adopting a social perspective toward customers uncovers opportunities to create value for underserved customer segments and previously untapped markets.

  3. Investing in Workforces: Companies can shift from being "talent takers" to "talent makers" by investing in employee learning and development, thereby nurturing a skilled and loyal workforce.

  4. Strengthening Supply Chain Resilience: A social lens on supply chains enables companies to collaborate effectively with suppliers, fostering equitable practices and enhancing overall supply chain resilience.

As the business landscape continues to evolve, CEOs and corporations are increasingly recognising the symbiotic relationship between addressing social concerns and achieving sustainable business growth. This shift towards responsible and purpose-driven business practices is not only reshaping industries but also contributing to positive societal change.