Conscious consumerism is rising, bringing the actions, intentions and morals of all businesses into the public spotlight. Whether it’s pursuing carbon-neutrality, producing ethically-sourced, sustainable products, or achieving diversity and exclusivity in the workplace, businesses realise, to stand out today, they must stand for more.
Environmental, Social and Corporate Governance (ESG) is the framework used by investors when analysing a company’s business model and the risks and rewards of investing in it. A more recognised term is Corporate Social Responsibility (CSR). These frameworks and what they stand for could help your small business stand out; whether you’re seeking investment or simply to build more meaningful connections with your customers.
Few businesses tie CSR or ESG into the core of their operations, practice it for years, or make commitments in this area that impact their day-to-day strategy. Embracing it takes a long term approach – often with immediate costs and minimal short-term returns. However, treat it as an investment in your culture and customers.
For environmental criteria, consider how your business performs as a steward of nature. For social criteria, examine how you manage relationships with employees, suppliers, customers, and the communities in which you operate. And for governance, think about how you and your business deal with your company’s leadership, executive pay, etc.
Climate change is the defining issue of our generation, and consumers today prefer to interact with businesses that strive to minimise environmental impact. A few small actions can make a world of difference. For example, minimise any single-use plastics and packaging, use renewable energy providers, issue receipts and invoices digitally, and even donate a small amount of your profit to green initiatives or charities.
As a small business, given your inherent ties to the community, it’s more straightforward than you might think to build a social strategy. Sponsoring the local sports team, hosting a small-business networking event, or offering work placements or internships to local juniors are great ways to ingrain yourself deeper into your community. Actions speak louder than words; if you’re serious about the bigger picture and commit wholeheartedly, you’ll likely see your staff and customers’ affinity to your business grow.
At Zoho, for example, our culture, and our autonomy to pursue the right path rather than the fastest or most lucrative path, is, and always has been, our priority. We’ve never sought or accepted external funding, but what ESG represents matters greatly to us. While we’re no longer a small business, we once were. As we grew, every decision we made was with not only our staff and customers, but our social and environmental responsibilities in mind.
For example, we base ourselves away from traditional tech hubs to provide opportunities to those who might not have otherwise had them – on the Gold Coast rather than Sydney or Melbourne – or building solar farms in India to ease our burden on the environment.
It has served our business well, and could do so for yours, too. While it may sound like a daunting task, it needn’t be. An integrated technology stack can help you devise and execute your strategy, communicate your actions with key people and monitor the impact of your approach and how it resonates with customers and other stakeholders.
So, think about not only what you do, but why and how you do it. Consumers today are spoilt for choice, and while many are willing to compromise on cost, they’re less willing to compromise when it comes to their ideals and the businesses that best represent them. You don’t have to change the world, but if you’re seeking a competitive edge, a bigger commitment on your part could result in a bigger commitment on their part.