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Consumers Are Demanding Social Sustainability, and Companies Are Responding

Gen Z'ers and millennials especially want to see that the businesses they purchase from are interested in improving people's lives, too. And one company after the next is responding, demonstrating their commitment with their statements, programs, marketing, and even corporate structure, resulting in a marriage of customer approval and company profit.
August 13, 2021
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Companies are increasingly expected to take an active role in solving social problems. Indeed, consumers are becoming more aware of how businesses treat their workers, their actions on racial injustice, and what role they play in assisting underserved communities. In other words, people are concerned about the lack of compassion that many companies have exhibited, and are seeking out businesses that demonstrate a greater interest in solving social problems.
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On April 14, 2021, a statement from 500 companies and CEOs was published supporting voting rights for Americans. The timing was not-coincidentally based on the ongoing efforts to gerrymander districts that had been taking place since Republicans lost the 2020 presidential election. With the apparent structural rigging of US democracy taking place, these high-profile leaders felt obligated to organize and speak as one. This statement on social justice by such a large number of prominent leaders and major brands was unprecedented. For so many corporate voices to take a stand on a controversial, political issue would ordinarily be risky, but they obviously felt that silence was not an option. And given that the gerrymandering wasn't happening by itself—many Republicans were behind it and defending it—speaking against it took a certain bravery that hasn't always been present in corporate America. It is undeniable that a shift is taking place in the way consumers view corporate leaders and brands. There is, increasingly, an expectation that companies will speak up about social issues and take a stand. Consumers now anticipate that CEOs and brands will engage in the discussion on social problems. For millennials and Gen-Z in particular, this is becoming non-negotiable. And the data bears that out. A recent study by the consultancy firm Porter Novelli found that 66 percent of the current, younger generation of so-called Gen Z'ers—those born from 1997–2012—"believe it is no longer acceptable for companies to be silent on social justice issues." And a whopping 72 percent of Gen Z'ers "believe companies have more responsibility than ever before to address social justice issues." The Porter Novelli study specifically found that Gen Z'ers expect companies to "recognize their role in systemic racism" (71%), will "cancel brands that are not willing to address racial inequity" (45%), and expect to "see themselves represented in a company’s marketing and communications" (56%). They're also willing to use the internet for enforcement and "think social media gives their generation more of a voice than previous generations" (81%) and are even willing to "use [their] social media channels to call out brands they feel are not being authentic" (48%). Another study from The Georgetown University Center for Social Impact Communication found the same to be true for millennials—those born from 1981–1996. This generation accounts for some $1 trillion in annual consumer spending—and for them, the social responsibility of companies is top of mind. Some 81 percent said they "expect companies to make a public commitment to good corporate citizenship.” And 73 percent were even willing to pay more for sustainable products. As the authors of the Georgetown study wrote, "[b]y almost any measure, millennials place a premium on corporate social responsibility (CSR) efforts." Clearly, the threat from younger and middle-aged Americans is real—if corporations are worried, it's because they should be.
And businesses are responding by making social change part of their business model. They're coming up with programs that are good for society. And they're making those programs impactful and highly visible, so that the public is aware of the effort being made.
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A Trane Technologies video explains the company's various commitments to social sustainability.
Trane Technologies is a company that has practically made its brand about sustainability, with a huge emphasis on the social component. The company has a dedicated webpage to sustainability where they commit, as of the time of this writing, to "achieve workforce diversity reflective of our communities, gender parity in leadership roles, and create pathways to green and STEM careers." Proving their seriousness, they cite that 22% of leadership positions in the company are held by women, they have spent $11 million on "philanthropic giving which includes donations from [their] foundation, in-kind giving, employee fundraising," and they have made an 11% increase in spending "on diverse-owned businesses in 2020." Another example of a company embracing social sustainability was when, one day in October 2005, Whole Foods funded the Whole Planet Foundation, donating 5% of its nationwide store sales from that day. The foundation is “dedicated to poverty alleviation,” aiming to “empower the world’s poorest people with microcredit in places where Whole Foods Market sources products,” according to its website. As of September 2020, it had authorized $101 million in micro-loans to micro-entrepreneurs and their family members. Similarly, Whole Foods created the Whole Kids Foundation, which “since 2011, [has] provided over 8.2 million kids with opportunities to connect with nature and food through our grants and programs,” according to its website. Along the same lines, their Whole Cities Foundation, founded in 2014, aims to “improve individual and community health through collaborative partnerships, education, and broader access to nutritious food.” Whole Foods is just one example of companies realizing that behaving as if they have a responsibility to society is attractive to consumers. Indeed, it’s known as “corporate social responsibility,” or “CSR.” And as far back as 2007, it was recognized as a potential aid to a company’s image. Specifically, an article by the Society for Human Resource Management explained that “being an ethical, socially responsible company can attract investors, customers and top talent.” Even companies that might not have ongoing programs have made visible efforts during times of crisis. For example, in 2020, USA Today compiled a list of 30 companies that were aiding Americans in the global COVID-19 pandemic. Major corporations like Apple, Amazon, and 3M as well as lesser-known ones like Beyond Meat, Casetify and Fanatics all found ways to contribute. They did things like pledge food, donate masks, give to COVID-19 aid organizations, and give special services to health care workers and first responders. Another way companies have shown their interest in addressing social issues is through criminal justice reform. The NBA Milwaukee Bucks, for instance, partnered with Represent Justice to host a basketball game in 2019 at a correctional institute. The Bucks coaching staff played against incarcerated individuals, with players serving as coaches. Prior to the game, the Bucks team members, coaches, and executives, along with Represent Justice staff, had an hour-long conversation with the incarcerated individuals. The event drew attention to the issues surrounding mass incarceration, extreme sentencing, and legal system inequality. It’s clear that companies are taking social responsibility seriously. They’re organizing programs and interacting with local governments and non-profits in the communities in which they're headquartered in order to work together to address social problems. One might wonder how many more companies could capitalize on the opportunity to show their passion for a better society.
CLOSURE
Indeed, consumers have set new expectations for businesses and their role in society, and companies have realized the importance of heeding the call. And it's not wonder, responding to customers' needs is exactly what companies are supposed to do.
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