Is what you stand for more important than what you sell?

Those who need help in society have traditionally been supported by charitable giving. Registered charities receive and make grants, create endowments from which grants are made, and meet social and environmental needs through direct activity and donations.

Over the years as funding has tightened, the need for businesses to behave socially has become more important and expected. Some have risen to this challenge, transforming lives, taking control and leading the way. Others have seen it as a route to more funding and never really believed it to be self-sustaining. A fine example of a modern social enterprise is with TOMS, a comfortable footwear brand for men and women. Their promise is that for every pair of shoes sold, they would give away another pair to a child in need. Since it was founded in 2006 TOMS have given away over 2 million pairs of shoes in 51 countries.

Businesses that generate large profits should take more accountability in addressing social issues. Especially when these profitable businesses play a significant role in creating the issues in the first place. Having a Corporate Social Responsibility policy is not enough.

Louis Gartner, former CEO of IBM pushes for businesses to do more than just their ‘responsibility’, and move towards corporate Social Innovation as way to reshape the future of helping those less fortunate than ourselves. (Who Says Elephants Can’t Dance, 2002).

An example of a business prioritising social innovation is Ex-MilitaryCareers.com. We are a social entreprise with a strict focus on helping men and women who leave our Armed Forces in the UK find relevant and meaningful employment. Since launching in July 2014, we’ve partnered with over 400 different UK and International Businesses, currently advertising over 3,000 vacancies. From Children for Action, Mitie Group and Virgin, to the UN, Royal British Legion and Buckingham Palace, our clients want to hire Armed Forces leavers and can target them through job placements on our website.

We are social enterprise with a strict focus on our social cause ‘Bridging the gap from Military to Civvy Street’. We are not a charity and do not behave as one. A charity sees a need, fundraises to meet that need, and then will often repeat that cycle. A social enterprise on the other hand wants to meet the social need in a way that is economically viable and sustainable. Our candidates and clients need us to be profitable so we survive and are successful in achieving our collective long-term goal, 100% employment amongst leavers from Her Majesty’s Forces. You will see how our model follows suit with the shifting focus from traditional donor V giver relationship to one of a respectful partnership. We empower servicemen and women through meaningful employment when they leave the military.

In ‘Screw Business As Usual’ by Sir Richard Branson, he profiles key examples of businesses from around the world that also take social impact, doing good and sustainability to the heart of their business model. One he highlights and worth exploring in more detail is Marks and Spencer.

M&S has over ￡10 billion in annual revenue, they have set out to become the world’s most sustainable retailer by 2015. In 2007, they launched Plan A. This plan is not just a simple advertising campaign; it includes a dizzying and ambitious 180 commitments focusing on every aspect of their business, from decreasing waste through to the health and well-being of their staff and communities. With over twenty-one million customers visiting their stores each week and a supply chain consisting of tens of thousands of farms and factories, even a small shift can have a dramatic impact.

M&S also put even more weight behind plan A by allocating ￡50 million for an innovation fund. All of these efforts are already paying off. According to Richard Branson’s, ‘Screw business as usual’ they have achieved 95 of their 180 commitments and are on track for most of the others, including 94% of the waste generated by there stores, reducing carbon emissions by over 13%, shifting to sustainable supply stores such as 90% of the wild fish they sell. And the list goes on…

M&S did not see this as a one off marketing campaign; they saw it as a platform to deliver business outcomes and an opportunity to improve their bottom line – which it has done. Plan A was cost-neutral in its second year, made ￡50 million in 2009 and ￡70 million is 2010. CEO of M&S said ‘people are now getting the mindset that says, we are not as the top of this little hill called Corporate Social Responsibility, we’re at the bottom of this big mountain called Sustainability’.

Unfortunately most social enterprises cannot survive solely on trading profits. This can often be attributed to the way in which their operate. For example, their social ambition may take priority over operating in a profitable way. As result, they are less profitable and apparently less sustainable than their purely for profit rivals.

However, it would be a fairer barometer of a successful business if we weren’t just simply taking into account bottom line profit. What we need to consider more is the triple bottom line; profit, people and planet. For example, what if huge multinational companies were forced to be directly responsible for the impact they have socially on the community and the environment?

The best way to assess a businesses longer-term impact in our communities is through social return on investment (SROI). SROI was developed purely as a tool to help charities and social enterprises show the financial impact of their work. Today we can apply the same methodologies to demonstrate the return a commercial sponsor may gain. This is ever important as we are all becoming far more interested in the ethical, environmental and economic impact of the companies we deal with. Consumers are starting to listen too. For the corporate business, being good at what you do is no longer good enough; you have to be good at what you do without the detriment to others.

Those in the private sector might regard SROI as being soft and fluffy. Politicians might argue the same, if casting doubt will reduce the expenditure for now. The fact is though, that using SROI to support and justify claims for funding is going to increase. The majority of social enterprises need and deserve a share of the money they are saving the environment and helping address social issues such unemployment, homelessness and alcoholism.

After meeting with the Social Stock Exchange last week to consider creating a social impact report for Ex-MilitaryCareers.com, it begs the question, should every FTSE 250 business commit to this type social accountability? It would be interesting to see how that might change their ranking on the global exchanges. There is much more empathy than ever has been towards socially responsible businesses, Ex-MilitaryCareers.com is proud to be a finalist at The National Business Awards 2015 in the Social Enterprise of the Year category. We hope it goes some way to demonstrate our commitment in finding relevant career opportunities and development course for all servicemen and women.

It is shortsighted to believe that profitability is the best indicator of success, every business should be held accountable for social footprints they leave behind.