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August 22, 2019

How Companies, Governments, and Nonprofits Can Create Social Change Together

Source: Harvard Business Review | Re-Post Fight for Life Foundation 8/21/2019 –

Profit and purpose are converging. Over 80% of millennials report that making a positive difference in the world is more important to them than professional recognition. They no longer believe the primary purpose of business should be to make profit, but rather to create social value. On the investor side, more and more shareholders demand tracking and reporting of both positive and negative externalities, compelling some of the largest corporations on earth into action. Customers overwhelmingly prefer products tied to a social cause. A significant majority of citizens want changes to how society governs itself—and therefore how problems get solved—and also changes to the corporate status quo. Not surprisingly, more and more businesses are becoming certified for their social responsibility practices.

Capital markets, as a whole, are also moving in this direction. In 2016, socially responsible investing made up more than one out of every four invested dollars under professional management. And recently, the head of BlackRock, the world’s largest asset manager, called on all companies to explain how their businesses make “a positive contribution to society” beyond just financial performance. “To prosper over time,” he argued, “companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

When we talk with corporate executives around the country, they almost always ask the same question: Can managers and CEOs really accomplish their business goals while also advancing society’s goals? We believe the answer is yes. In fact, this sort of thinking is something of a return to the norm. In his Theory of Moral Sentiments, Adam Smith argues that duty and sympathy are part of our very nature, and that because of our innate morality, we can live collaboratively in a just and harmonious society. We hear similar ideas in Peter Drucker’s bestseller, The Age of Discontinuity, where he argues that all sectors of society are “affected with the public interest” but must operate in symbiosis, like an orchestra—each playing its own part in collaboration with other institutions. More recently, Nobel laureate Joseph Stiglitz argued that we have the capacity, if we choose to collaborate across and among the sectors of our society, to grow the economy and move toward equality, “creating a shared prosperity.”

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