It is high time we merge social impact and commerce to enable new-age stakeholders to be connected, collaborative and civic. It is only when you can measure empathy, kindness, altruism, righteousness, mindfulness and authenticity with specific metrics can you be assured of sustainable growth – whether it be of your individual business or of society at large.
What is civic-empathy? Civic stands for duties or activities of people as citizens – of a city, community or country. And in today’s shrinking world individuals are more global citizens than ever before – digital natives and geographically liberated. Empathy, though defined as understanding, being aware of, being sensitive to the feelings, thoughts, and experience of another, is no longer applicable just in the individual contexts… Put together, the two words encourage you to view the larger picture.
How often have you heard – ‘Oh, the economy/ society/world is in such a terrible shape’?! Too often, would be my guess. But who makes up the economy or the society? And what comes after all the complaints regarding the terrible state of affairs? A big attitudinal change in civic purpose and action.
With the advent of social media everyone is under the microscope and a single slip-up can cost you billions of dollars. Take for example a renowned US business-magnate and investor announced he would buy one of the world’s largest social media platforms. The said businessman has a reputation of being a new-age businessman who is liberal, progressive and transparent. But then he went on to say something perceived along the lines of wanting to control information on this social media platform and was immediately made to bear the consequences. Similarly, an Indian high-profile fashion technology startup based out of Singapore has fallen in valuation dramatically over the last one year. The founder started out with a great social vision and ‘cause’, in the course of operations she not only has lost that vision but the company itself. New-age stakeholders whether internal or external are watching closely, and expecting much more than ‘business-as-usual’ from leaders and companies.
As the sagas unfold, we have all learnt that the public is watching and is very aware. There is a growing need for businesses to take into account stakeholders’ sentiments to survive. Along with profitability, the biggest concern for any business is to ensure its sustainability. And to be able to achieve a lasting profitable business model, one has to be empathetic to all ecosystemic stakeholders – whether they be the investors or the employees.
The changing times have already shown us the need for thinking beyond self-gain. The pandemic has brought into focus a number of systemic problems and urgent need for change. Often questions around business impact on society and the ‘why’ and ‘how’ of work override the commercial gains for both the investors and employees. No longer are businesses just simply transactional – like ‘I work for you and you give me money to buy x, y and z commodities and pay my bills’. Or the simple return on investment (ROI) expectations from investors – they want more. They want to know how their investment is impacting society and if it will continue to do so in the long run.
A case in point is the recent Morgan Stanley report, which found that close to 80% of individual investors want to put money in sustainable businesses. The pandemic triggered a global public health crisis while disrupting every aspect of daily life and crippling economies across the board. It has brought into focus the systemic vulnerabilities like climate change and socio-economic inequalities. The report, by Morgan Stanley’s Institute for Sustainable Investing, shows that 79% of the 800 individual investors surveyed, are interested in sustainable investing. Investor demand has risen to support public health, small businesses and racial and social justice issues.
Authentic social impact is critical to business – a truth that government agencies are adapting as well and at a fast pace. For instance, just last month the Securities and Exchange Board of India (SEBI) released a detailed framework for a Social Stock Exchange (SSE). This novel concept is aimed at providing a fresh avenue of funds for those involved in the social development sector. Those eligible to be part of SSE include both non-profit organisations and for-profit enterprises, whose primary goal is social impact. The initiative was first mentioned by Finance Minister Nirmala Sitaraman in her 2019-2020 budget speech. She stated, “It is time to take our capital markets closer to the masses and meet various social welfare objectives related to inclusive growth and financial inclusion. I propose to initiate steps towards creating an electronic fund raising platform- a social stock exchange-under the regulatory ambit of Securities and Exchange Board of India for listing social enterprises and voluntary organizations working for the realization of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund.”
The pandemic was a catalyst to make people start questioning “why”. A recent study by the US based consultancy firm Gartner states, “The decision to leave or stay in a job is only one of the things that people are questioning now as part of the larger human story we are living.” The firm surveyed more than 3,500 employees around the world and found that 65% felt that the pandemic had made them rethink the place that work has in their life while 56% said it has made them want to contribute more to society.
Now that we know the urgent need for civic-empathy, can we also put metrics on this? World-over efforts are being made to measure social impact. It is high time it becomes the norm to be able to measure kindness, altruism, righteousness, mindfulness and authenticity. A course-correction is underway, let us create models that can bring back focus to the larger ROI – beyond the P&L statements of a business enterprise. Let us reward those who are able to create workspaces that are more empathetic, create communities embedded with humanity to engage with new-age stakeholders for purpose-led impact.
New-age stakeholders need new-age leadership. Administrative models that take into account these aspects are the only ones that will ensure sustainable growth – not just of their commerce but also the human-race as a whole.
Disclaimer: As published on The Times Of India online edition on 14th November, 2022.