Every few years, innovation disrupts what we understand about the way to do business. These innovations are mostly technological, but every now and then, social change reinvents what's important to consumers.
In the video shown: Audrey Choi - CEO of Impact Investment at Morgan Stanley, speaks on the commercial viability of socially conscious enterprise.
Here she outlines how the companies which have driven forward with a moral efficacy and social consciousness have outperformed conventional enterprises focusing solely on profitability.
These findings are also not exclusive to Morgan Stanley's books of business or Al Gore's clever investment portfolios. There is definite evidence to support the claim that ethically grounded and socially conscious enterprise succeeds in the modern market.
Castlefield is an investment management group based in the UK, specialising in "responsible and sustainable investments". They have found in their market research that investors are beginning to recognise sustainable funds with long term vision are likely to do well. 51% of investors think that companies which are trying to make a positive contribution to society and the environment are more likely to succeed long-term and in turn their investments are likely to perform better over the long term too.
Consumers are concerned with the social and environmental impact of the products they purchase and this consumer behaviour is only increasing.
The Nielsen market study "Consumers Who Care" takes a sample across 58 countries. Between 2011 and 2013, the amount of customers in the sample group willing to spend more on products which are ethically sound and socially conscious increased by 5%. To some, this may seem like a relatively small segment, but this would mean that the amount of customers with a socially conscious spend increased by 9% in just 2 years. If this rate of growth is sustained year on year and truly representative of a global market, the world could be facing a very different type of average consumer by as early as 2018.
But what does this mean for the way we do business?
Essentially, in the same way we have seen technological and social innovations change the way business has been conducted and marketing employed in the past. This new social dynamic will change the way that companies large and small interact with their customers and their value chain. Companies are now going to be required to go beyond the box-ticking exercise of Corporate Social Responsibility and begin the re-engineering of their culture, procurement and manufacturing processes, or face the reality of their customers taking their business elsewhere.
With concepts such as Fair-Trade, Responsibly Sourced and Living Wage becoming an increasing part of the contemporary dialogue, this new social dynamic of modern consumerism presents an opportunity for acknowledgement and appropriate response from leaders across industries. Who may either create a marketing message to appease the shift in consumer concerns, or capitalise on this innovation by engaging with its disruption, strategising for change.
Past innovation, such as the rise of e-commerce has forced companies to rethink marketing strategy and discover new consumer behaviour previously. In a business environment that can quickly become change-or-die, socially conscious consumerism is not a shift that can be ignored or absorbed without change.
The inevitability of disruptive innovation presents a challenge to be understood and surmounted by enterprises that find themselves able to embrace the dawn of a progressive capitalist economy.