Social Impact – It’s Everyone’s Responsibility

Social impact is a term that is getting more attention, particularly in the business world, with increased pressure on companies to evaluate their impact on their environment and the wider community and take action to make positive changes.

Creating social impact has become a no-brainer for businesses in the last few years, as it has become increasingly obvious that consumers care. Not only do socially responsible companies gain more positive brand recognition, but they can increase profitability simultaneously. Businesses that implement social responsibility initiatives can boost customer retention and loyalty and stand out from the competition by cultivating superior and positive brand recognition. In fact, as far back as 2014 there was evidence to support that those brands that built sustainability into their core values and action plans secured a significantly higher ROI than those who did not.

There is no denying that social responsibility empowers both employers and employees to leverage the corporate resources at their disposal to do good. By initiating more productive and meaningful progress towards a sustainable business model, businesses large and small can contribute to positive change for themselves, their customers, and the wider world. This is not about partaking in one big event and then shouting about it, but rather making social impact an integral part of business operations.

Measuring social impact in business

While it can be easy to identify the social impact of any given company, measuring it is altogether more challenging. However, achieving sustainability is impossible without a thorough and measurable understanding of how companies affect the communities in which they operate. Sustainability considers people, the planet, and profit, and all three are inextricably interlinked.

While many companies state their social or sustainability goals, taking action to achieve them is often lacking. Greenwashing attempts to mislead the public about environmental practices or how eco-friendly their products and services may be. New terms have also shed light on other underhand practices some businesses are following to appear more concerned with social impact and sustainability than they actually are. Bluewashing is a term used to describe a company’s supposed commitment to responsible social practices, particularly around socio-economic factors. Pinkwashing is a term for businesses that pertain to be LBGTQ – friendly where there is no evidence of any action (other than statements to the effect from the company themselves) to back these claims up.

Should CSR reporting be mandatory?

Corporate social responsibility (CSR) reporting has been shown to benefit businesses across environmental, social, and financial areas. However, without set criteria to measure against and enforcement of these standards across all industries, its success is undeterminable. Apple, Pepsi, and Walmart’s 2019 statement of purpose committed to an ‘economy that serves all Americans.’ This opened up a new way of thinking in the corporate world, paving a path for companies to do business better be that through tackling carbon emissions, paying fair wages, or sponsoring events or initiatives in their local communities.

There is no doubt that there is a growing interest in CSR in society in general and with it comes growing pressure for companies to be more transparent and accountable. So much so that according to KPMG’s Survey of Sustainability Reporting, 96% of the largest 250 companies worldwide, in addition to 80% of large firms worldwide, reported on their sustainability performance in 2020.

Of course, many businesses are hesitant to share their CSR reporting with the broader world or, indeed, commit to collecting the data in the first place. There is debate about what businesses should report on, what the risks could be, and whether reporting on CSR activities actually makes a difference in sustainability improvement regardless.

Some initial research, however, indicates that mandatory CSR reporting would benefit a business’s capital and its social and environmental impact. However, this will only ring true if standardised reporting rules exist. If this does not happen, it is all too easy for a business to report on those factors that reflect positively on them and ignore those that don’t. It’s all well and good having an ethnically diverse workforce, but not if your total greenhouse gases are way beyond what’s considered acceptable, and you plan to do absolutely nothing about it.

Another benefit to mandatory CSR reporting is that it could increase competition among businesses to prove and improve their social impact year after year. In 2013 the UK introduced a carbon reporting mandate for listed companies and, in doing so, saw emissions drop by 10-18% thanks to pressure from investors and business peers.

Mandatory CSR reporting, are there downsides?

There are potentially some negatives to introducing mandatory CSR reporting. Forcing firms to do so could harm their competitiveness and thus make innovation or investment in new technologies less appealing. It’s also possible that some businesses will try to work around any potential adverse reporting by outsourcing certain businesses’ operations overseas.

Striving for positive social impact is, of course, admirable in any business. However, simply stating this is a corporate mission without any actionable, measurable steps in place to support this is akin to a beauty pageant contestant claiming their life’s goal is to eliminate world poverty. Grand statements and lofty aims should always have answers to questions like, ‘but how?’

Social Impact and how we’re doing

Social impact is vital to LOWE’s business practice, particularly to support and involvement with the local community. We have partnered with arts charity SET to provide artists, musicians, and charitable groups with the space to create local, stimulating environments and help the community to flourish.

Affordable studio spaces mean vacant properties can drive positive impact and change within local communities, giving artists creative spaces and a community for collaborating and networking. Landlords also benefit from creating social impact by providing their vacant space for such purposes.

We also strive to make use of buildings that are not suitable for conventional living spaces through charitable occupation. Rather than leave these spaces sitting empty, we convert them into safe, usable spaces for artists.

While vacant properties are subject to business rates, registered charities are eligible for a mandatory 80% business rates relief – we can help to manage the process and ensure that the rates relief is successfully applied for. Find out more about charitable occupation today!