The Business Case for Social Sustainability: Building Shared Values and Economic Prosperity

In the ever-evolving landscape of corporate responsibility, the spotlight on sustainability has traditionally shone brightest on the environmental aspect of the ESG (environmental, social, and governance) equation. However, the business world is undergoing a transformation, and today more than one-third of C-level executives recognize the imperative for organizations to take a stand on social sustainability and convey it in a manner that resonates with their brand identity.??

This paradigm shift stems from the profound realization that issues surrounding social sustainability have far-reaching consequences, impacting not only businesses but also the local economies in which they operate.??

These were key findings from a new research survey conducted by ThoughtLab for NTT in February of 2023. ThoughtLab reached out to 250 senior executives from companies in eight regions to examine how firms foster social sustainability—and the benefits they gain and challenges they face. The full report can be found here.

Unlocking new horizons?

Social sustainability represents a powerful lever for businesses, capable of opening doors to new markets, fostering customer loyalty, driving innovation, and enhancing brand trustworthiness and credibility. Our survey underscores the growing significance of social sustainability on the corporate agenda. More than 40% of respondents assert that social sustainability ranks as a top priority for both the C-suite and the board of directors. This heightened prominence can be largely attributed to the profound impact of the COVID-19 pandemic, which underscored the urgency of addressing social sustainability.?

Companies are not merely paying lip service to this cause; they are committing substantial financial resources. Those in the early stages of their social sustainability journey, labeled as "beginners," invest an average of $5.3 million in social sustainability initiatives. In contrast, the more advanced "leaders" channel a formidable $19.5 million into these efforts, nearly four times the amount. The average investment across the study participants stood at $12.3 million, with over 60% planning to increase their expenditure over the next two years.?

Tangible progress and strategic alignment?

As a result of these substantial investments, companies are making tangible strides towards achieving their social sustainability goals. Over half of those surveyed have developed a social sustainability plan, with a similar proportion actively communicating these objectives to employees, customers, and other stakeholders. Importantly, these efforts are underpinned by active engagement from management teams and boards of directors.?

Approximately four in ten organizations are going a step further by integrating social sustainability goals into their products, services, and business models. The dividends of these endeavors are substantial, encompassing financial, strategic, and operational benefits. The research suggests that these benefits grow commensurately with a company's progress in its social sustainability journey.?

Demonstrable impact on revenue and productivity?

Social sustainability leaders report an average revenue increase of 9.6% attributable to their social sustainability initiatives, compared to 6.4% for beginners. Productivity, too, registers significant gains, with leaders reporting an 11.4% rise vs. 9.42% among beginners. The connection between social sustainability and enhanced company performance is vividly illustrated by a UK technology company's chief technology officer, who noted, "By establishing a secure and healthy workplace, we were able to increase employee productivity and motivation."?

Boosting local economies?

Beyond its direct impact on businesses, social sustainability initiatives have the potential to invigorate the economies in which these companies operate. Over the next two years, more than half of the surveyed executives anticipate their social sustainability initiatives to generate economic growth through increased productivity, job creation, and improved education quality.?

One respondent, the chief information officer of a US technology firm, emphasized the effectiveness of offering training and apprenticeship programs to local citizens, citing it as a potent means to achieve social objectives by providing diverse opportunities and reducing unemployment rates.?

The road ahead?

In conclusion, the paradigm shift towards social sustainability is clear and irreversible. Forward-thinking enterprises recognize the alignment of social and business values as a strategic imperative. The journey toward social sustainability leadership is not without its challenges, but the rewards are substantial.??

In a world where businesses increasingly understand the interplay between social responsibility and profitability, embracing social sustainability is not just a choice—it's a strategic necessity that paves the way for shared values and economic prosperity.?