With the Millennial generation pushing it forward, Corporate Social Responsibility could become the standard instead of the exception.
In 2013, 50 percent of global consumers surveyed said they were willing to pay more for products from socially responsible companies. Respondents under age 30—millennials—were the most likely to say they would spend more for goods and services from companies who give back to society. The success of Tom’s Shoes is a great example of this concept in action: millennials are happy to pay a premium for Tom’s Shoes and accessory products because they know their money is being used to give back.
Because I’m a millennial (a.k.a. Generation Y), it makes sense to talk in the “first person.” There is a lot of discussion about our generation: our buying power, ideals, work ethic, and social influence. Every week there is a new article about how lazy and entitled millennials are (often called the “Me, Me, Me” generation). Then on the next page of that same publication, there’s an article about how our generation is going to “save us all” and has “taken over the American work force.”
Whatever the case may be, it’s obvious that millennials wield significant buying power—expected to reach $200 billion in spending by 2017 as the largest generation in US History. While small and large companies alike are fumbling to make this massive segment happy, one overarching theme keeps coming to the surface over, and over again: millennials demand social responsibility from business. In a Washington Post article, writer Michelle Nunn said that social responsibility “isn’t optional” to millennials. Andrew Swinand of Chicago Business said that “corporate social responsibility is millennials’ new religion.”
Corporate Social Responsibility (CSR) can be loosely defined as a business management concept that integrates social and environmental concerns into everyday business operations. It’s an incredibly broad topic—covering everything from sustainable manufacturing methods, to safe ingredients, to ethical treatment of employees and members of the supply chain.
With all this buzz about CSR and the growing, charitable hearts of millennial consumers, you would think that it would be easy to locate and support organizations who give back. But it’s not. In a 2015 Consumer Consciousness study performed by Good Must Grow, only 28 percent of people surveyed were able to name a socially responsible company.
Participants in this same study cited “knowledge” as the number one obstacle that prevents them from doing more good. It seems that even though buzzwords like “millennial” and “corporate social responsibility” are being tossed around every business news publication, there is a lack of access and information about which brands to support, and how to support them. While there is definitely evidence of consumers factoring social responsibility into their purchasing decisions, there is room to improve how sellers, buyers, and brand participants of social causes come together to drive change.
Two other ways that millennials are influencing CSR business trends is through employment and investment decisions. A study conducted by Cone Millennial Cause group found that 80 percent of 13-25 year olds (in an 1800 person sample) wanted to work for a socially responsible company. Also, more than half said they would refuse to work for an irresponsible company. This is substantial—and even more so when you consider that millennials will account for 50 percent of the workforce by 2020, according to a study by The 2020 Workplace.
From a recruiting standpoint, it makes good sense for companies to build a CSR strategy in order to attract top millennial talent, but the influence doesn’t stop there. Impact Investing refers to investments made into organizations with the intent of producing a beneficial societal or environmental impact, alongside a financial return. With companies like Jessica Alba’s The Honest Company leading the way, investors are taking cause-centric companies seriously. The Honest Company, a baby and personal care products company that contributes to multiple societal and environmental causes, was valued at $1 billion in early 2015.
Millennials are dramatically accelerating the growth of this industry, and experts in the field are taking note of it. In a study conducted by the Spectrem Group, 45 percent of wealthy millennials said they consider social responsibility a major factor when considering investment decisions. And despite a skeptical approach to the stock market, millennials are willing to accept more risk and receive lower returns if the companies they invest in are creating a positive impact.
I joined SanaSana as Director of Ecommerce in late 2013. At that time there was no website, vendor relationships, or even a defined business model—only a mission, and a vision. Our Mission of helping orphanages in Latin America and creating a socially responsible market place was in existence BEFORE the actual business model. It was our guiding light in developing our initial business plan, and evolving the model to have a greater impact.
After seeing the evolution of SanaSana, the value of this structure is clear to me: every decision we have made since the conception of SanaSana has been based on the mission—not the business model or revenue streams. For example, after partnering with Wix.com to donate websites for orphanages in Latin America, we recognized another problem: online shoppers were often unable to find ways to give back that didn’t require their time or money. While staying grounded in our original mission of helping orphanages in Latin America, we created the Crowd Cause Shopping model—effectively involving our shoppers in the donation process without asking them for donations. The innovation of Crowd Cause Shopping was not in spite of our charitable mission, but was inspired by our mission.
In order to capitalize on the growing trends of CSR in business and gain access to millennials, companies must have a visible social responsibility strategy. While it’s important now, it will be even more vital to thriving in the millennial market in years to come. Having a Corporate Social Responsibility strategy is a good idea from a recruiting, customer acquisition/retention, and investment standpoint. In the near future, it will be more than just a “good idea” and a savvy marketing strategy. It will be necessary for survival.
References and Further Reading
- http://www.smithsonianmag.com/arts-culture/a-decade-in-food-trends-76395204/?no-ist .
Photo: Flickr/Florida Memory