Be the Change: Growing Small Businesses Through Social Impact
In a time of increasing social awareness and activism, individuals are desperate to see tangible change in society. From Greta Thunberg, the environmental activist who inspired millions of people, to Emma Gonzalez, the co-creator of the March for Our Lives protest and survivor of the Marjory Stoneman Douglas High School shooting, social responsibility and action amongst teenagers and young adults is unprecedented. With this in mind, small businesses can imitate the sentiment of these young activists while also boosting profits by engaging in social impact initiatives through their brands.
What is Social Impact?
Social impact can be defined in a variety of ways. One commonly known definition of social impact is “a significant, positive change that addresses a pressing social challenge.” Following this definition, efforts toward issues such as unemployment, climate change, childhood homelessness, racial discrimination, and gender inequality all constitute social impact.
As individuals, we can support social impact in society by contributing to related initiatives. Simple actions such as volunteering in one's community or sharing relevant information on social media can make concrete changes.
Why Should Small Businesses Get Involved?
In addition to individual activism, consumers have increasingly demanded a rise in corporate social responsibility. According to The Center for Social Impact Strategy at the University of Pennsylvania, 90% of millennials reported that, when choosing between brands of equal quality and price, they would choose a cause-branded product over a non-cause-branded product. Moreover, 51% of consumers reported that they would pay extra for brands that are “committed to positive social and environmental impact.”
There are a variety of brands that have demonstrated this idea by incorporating philinathropic initiatives into their brand. Founded in 2018, PANGAIA began as the first “hybrid” company aspiring to use their research to create fashion collections that are better for people and the planet as compared to available alternatives. In just a few years, PANGAIA has packaged itself as a sustainable, environmentally conscious brand that has had tremendous success; in fact, in 2020 alone, PANGAIA generated over $75 million in revenue. PANGAIA is committed to Earth positivity and making their supply chain more visible. At the conclusion of 2020, PANGAIA published the 2020 Impact Report, which details PANGAIA’s most notable victories of the year. In 2020, this included a collaboration with the United Nations, over $100,000 in donations to organizations such as Doctors without Borders and COVID-19 relief funds, the planting of over 400,000 mangrove trees, and other highlighted actions that PANGAIA took. Without this environmental focus on PANGAIA’s brand, it is likely that they wouldn’t be nearly as successful. A research study conducted by Forbes revealed that consumers are four to six times more likely to purchase items from cause-driven brands. This data demonstrates PANGAIA’s tremendous profitability from being a purpose-driven brand.
One of the most prominent social impact issues being actively combated across society today is gender inequality. ABLE, an ethical fashion brand, is determined to address this issue. Concentrated on combating female poverty, ABLE is designed to “invest in, train, and educate women.” ABLE began selling hand-made scarves and has now expanded into a prosperous lifestyle brand that is committed to helping women across the country. This issue has been exacerbated by the pandemic, as women are losing their jobs at significantly higher rates than males. With a staff that is over 95% female, ABLE is providing an opportunity for impoverished females while also growing their employee base and their revenue. Undoubtedly, a large part of ABLE’s success is due to its commitment to social change, more specifically, to helping impoverished women. More broadly, small businesses can take a stance on social issues to create brands that inspire customers, positively impact the world, and provide consumers with a feel-good reason to purchase from their brand.
Another cause-driven brand, Everlane, focuses on finding ethical factories to manufacture their products. Through social media and a branding campaign focused on #KnowYourFactories, Everlane promotes the idea that each factory has its own story. Their website even has an interactive map in which the factories they work with are pinned and you can click on a given factory to learn more about their owners, employees, and how Everlane found the factory. Similar to PANGAIA, Everlane also has a commitment to environmentalism. Part of this mission is that Everlane become entirely virgin plastic free in the supply chain by 2021 and to use solely certified organic cotton by 2023. In addition to these goals, Everlane uses recycled materials – in fact, the swim collection was produced from almost 14,000 pounds of recycled plastic.
Ultimately, the collaboration between social impact and small businesses is a win-win situation – as the data reflects, small businesses monetarily benefit from taking a stance on social issues and the world simultaneously becomes a better place. It is undeniable that small businesses should monetize this opportunity in whatever way they are most passionate about, whether that be through a racial injustice campaign, a donation to homelessness nonprofits, or an environmentally friendly manufacturing system.
As a social impact initiative, Rem and Company also offers free consulting services and resources to small businesses and nonprofits impacted by COVID-19. Our pro-bono consulting teams provide small businesses with the opportunity to identify and prioritize issues facing their business, propose innovative strategies, and facilitate execution. If you are a small business or nonprofit in need of assistance, learn more about how we can help.