In my article for aPolitical back in 2017, “How SME’s can be the true drivers of an inclusive economy” I asked the following question: is inclusive growth a luxury reserved only for big businesses with larger margins and more publicity?
Much of our work at Zano has been to try and figure that answer out and identify what support SME’s (not the big companies) need to create transformative social and environmental change at a local level that collectively creates much larger change at a systems level (i.e. start to positively impact on the UN’s SDG’s).
Back in 2017 I talked about how businesses of all sizes were under increasing pressure to rise to stakeholder expectations, increase transparency and identify new sources of growth. However, that list has become much longer and it’s now imperative that all business regardless of size think about how they achieve a truly sustainable business model through what John Elkington calls the “Triple Bottom Line.” Businesses now need to consider new issues such as attitudinal changes in the next generation of employees who are more focused on leading a purposeful life as well as changes to how government regulation, procurement and corporate supply chain buying patterns.
However, there’s nothing new about business striving for both economic and social impact. Many of the great Victorian enterprises such as Cadbury’s and Unilever were set up precisely to achieve this. However, by the end of the 20th century shareholder primacy came to dominate thinking and many companies had lost their social edge, focusing instead solely on the financial bottom line, as opposed to the triple bottom line.
Thankfully that myopic view of shareholder value has changed and in reality, companies can no longer afford to monitor only the obvious social and environmental impacts of today and need to start taking a longer-term approach. In 2017 and still valid today, I stated that without a careful process for identifying the evolving social effects of tomorrow, firms may risk their very survival.
When I wrote this article for aPolitical I was at the Young Foundation and investigating how business can help to tackle inequality and develop a more inclusive economy. From my work I developed the original “Social Jam” model which I wrote about in my last blog and that work has evolved into the development of a new social tech solution “Karma” which SME’s can use to better understand their role in creating social and environmental impact. At Zano we are very much more about the S in the ESG (Environmental, Social Governance) conversation and believe that this is an area that many businesses should be identifying as a key area of their social responsibility agendas since their negative environmental footprint will not be as large as some. On a recent Thomas Reuters webinar the late Professor John Ruggie explained how some companies such as technology firms should be focusing more on social issues that environmental issues.
Globally today there are many businesses that are socially outward looking and have focused for a long time on delivering a wider social agenda alongside their bottom line. From Victorian pioneers to millennial start-up companies there has been acknowledgement that an organisation needs a “purpose”. Yet many find that the greatest impediments are the internal barriers and lack of permission to innovate that prevent companies from taking action.
We’re working to enable business, government and local communities to harness the power of social innovation and create a more inclusive and sustainable economy embedding new ideas and processes that will build this new thinking into all levels of an organisation.
Over the past few decades, big businesses have taken to corporate social responsibility (CSR), and now that focus has turned to ESG and growing involvement in the inclusive growth agenda alongside governments. But it’s still not clear how our SME’s, whose margins are much smaller, are meant to take greater social and environmental responsibility while also staying competitive. Globally there are 400 million SME’s and in Europe they represent 99% of all businesses and provide two-thirds of all private sector employment. Additional to this is new EU Corporate Sustainability Reporting Directive (CSRD) which will eventually trickle down to SME’s, so there is a need for those SME’s to start planning now.
We are working with SME’s user testing Karma and if you’re keen to collaborate, test the platform in your organisation, have ideas that might help develop our thinking or just want to have a chat, then please get in touch.