'Doing Well by Doing Good' is more than a feel good byproduct of a company's corporate social responsibility endeavours. It is a fundamental business precept that lies at the core of sound management practice.
Finding creative business solutions to address any of the pressing social or economic problems of today's increasingly complex world is as important to the overall bottom line performance of the enterprise that brings the solution on line as it is to the wellbeing of those who benefit from such solutions.
As noted in a recent blog posting in Nasdaq.com by Evan A. Tylenda, the belief that corporate sustainability policies create a damper on earnings, provide distractions amongst management when it comes to focusing on core competencies of the business, and have no economic foundation, has never been more prevalent amongst shareholders as it is today, and has never been more wrong. (See Planet vs. Profit: Doing Well by Doing Good).
Citing a Harvard University study that examined 180 enterprises that ranked either 'high' or 'low' on sustainability, researchers found a substantial character difference between them.
'Most significantly, they found in high sustainability companies the board of directors is much more likely to have responsibility for sustainability, and top executive incentives are more likely linked to sustainability metrics.'
Notes Tylenda 'these companies also exhibit better organization of stakeholder engagement, tend to be more long-term oriented, display better measurement and disclosure of non-financial information, and even outperform their low sustainability counterparts.'
But developing and delivering successful corporate responsibility initiatives is not an easy task, particularly for executives well trained in every other discipline but social outreach. Help is needed to bridge the gap and solid metrics of success are a must.
The latter point is doubly significant. Most corporate leaders that become truly engaged in such initiatives soon discover that the very skills that have made them successful in their respective disciplines - financial probity, investment planning, results measurement and reporting - are the same tools required to do well by doing good.
Gloria Nelund (pictured left), Chairman and CEO of TriLinc Global, LLC-a private investment company dedicated to creating a global platform for impact investing through alternative investment funds, discussed this fact in a recent interview published in Forbes.
Nelund was the former Deutsche Bank CEO of their $50 billion North America Private Wealth Management division. After retirement she co-founded TriLinc Global; a private investment company dedicated to creating a global platform for impact investment products.
After retirement and getting involved in some private philanthropy investments she realized that she want to do more. 'I then focused on trying to figure out a way that I could use all of my experience, skills and contacts to do something good,' she said.
She discovered that to build a team and to attract investors it was important to have a purpose, '… and TriLinc's purpose is to 'change the world through impact investing.'
With the launch of a $1.25 billion Global Impact Fund for retail investors, TriLinc helps 'responsible' businesses in developing countries create jobs, grow the middle class, and further drive the tax base for the communities and improve infrastructure (energy, water, roads, transportation) education and healthcare systems, all while generating market rate financial returns and positive measureable impact.
Nelund concludes that this gets her other investment friends' attention, '… because after all - who wouldn't want to be able to utilize their same experience, talent and skills and 'do good.'
There are a broad range of examples of doing well by doing good and the teams that can be built to rally around it. One such example is the Itasca Project, profiled recently in an article in McKinsey Quarterly by Mary Brainerd and Richard Davis.
The Itasca Project has experimented for more than a decade with innovative collaborative approaches to boosting the economic and social health of the Minneapolis - Saint Paul region of the United States, the nation's 16th largest metropolitan area with 3.4 million people.
The Itasca Project is an employer-led civic alliance that forged links between the business community and the region's largest university. It is credited with improving the financial fitness of the region through educational programs and highlighting the growing socioeconomic disparities nationwide.
As noted by the article authors 'while our working groups may be hypothesis driven, before any recommendation is contemplated they spend weeks or even months examining best practices in the United States and around the world, gathering data via interviews, surveys, and other approaches. Because every recommendation is firmly grounded in fact, this approach underpins our credibility with partners and the broader community.'
This example shows that corporate sustainability polices can have strong impacts that are economically driven but serve a wider social purpose. 'Doing Well by Doing Good' is not the antithesis of sound business practice, but a clear example of corporate leadership that exemplifies how business and society can work together.
Doing Well by Doing Good is at the core of the GLOBE Group vision for the business of the environment. You can see this principle in real time at GLOBE 2014, the next in the celebrated GLOBE Series of Conferences and Trade Fairs taking place in Vancouver, Canada March 26-28, 2014. Check here for more details.