Compiled by Khushi Tekwani
Emergence of Do Well Do Good Companies
For a very long time, the primary focus and the major concern of the for-profit world has been bottom line, shareholder value. Various contributions have been made in the community sector through donations, or establishing separate foundations, but mainly by NGOs or social enterprises that are not for profit organisations. Hence, there hasn’t been a very strong relationship between making profit and doing good for society. But the lines are beginning to blur. Over the past 15 years, particularly, questions about the responsibility of the for profit sector to the greater community, about the role and capability of government to address societal issues, and about the capacity of non-profits to achieve sustainability and scale have arised and led to a concept of “Do Well Do Good” in various corporations.
Much of what we see today in the businesses that do good for society can be traced back to Ben Franklin’s work as a businessman, inventor, civic leader, and philanthropist. Some have argued that business and philanthropy should be balanced in society ever since Benjamin Franklin advised Americans to “do well by doing good.” Last year’s Business Roundtable weighed in, saying that corporations should be concerned about servicing all of their stakeholders—customers and employees and suppliers and their communities, as well as shareholders—instead of just focusing on their bottom line.
New wealth held by young and more activist donors is forcing established foundations to rethink their approaches. They are looking for ways to “invest” capital in organisations that are both sustainable and impactful, as well as instruments that generate at least a return on the initial capital provided.
So what exactly is a “Do Well Do Good” company?
Companies that display this pattern are exceptional because they exemplify capitalism’s fundamental principles in an evolved form. While making a quick buck and building sustainable businesses is still a core tenet of their startup ethos, these companies define missions and create products and services that bind their core values of doing good with their profit-driven goals from the very beginning, demonstrating that growth and positive impact are not mutually exclusive. In other words, these businesses have the direct impact of a nonprofit while retaining the DNA of a for-profit enterprise.
Companies that produce products and solutions with a purpose in mind are springing up all over the place. This group of companies has a clear stakeholder and shareholder objective, and they’re dedicated to achieving it. They’re as diverse as you could possibly imagine… Health and wellness, energy efficiency, clean technology, food production, instructional software, digital health, and the sharing economy are just some of the fields that fall under this umbrella. Obviously, as a for-profit enterprise, profit is returned to investors and shareholders, but because the company offers a product or service that aids in addressing a basic societal issue, it has contributed to creating a tangible change just by conducting its everyday operations. If these enterprises are able to develop a healthy business, they will be able to maintain their societal influence regardless of the economic climate.
Some of the examples are mentioned below and received global recognition. We are elated as MANTRAA to be associated with them:
New York–based clothing and handbag label behno was born from a desire to improve the way the fashion industry approaches manufacturing. Shivam Punjya, its founder and creative director, established the company to champion both top-tier craftsmanship and India’s garment workers—the majority of whom are women and can make less than a dollar a day. To that end, the brand laid out its philosophy in “The behno Standard,” a set of six operating tenets dedicated to advancing the livelihood of its artisans. At its factories, each female colleague is addressed by the surname behn (“sister” in Hindi), symbolizing the sisterhood of empowered employees the brand strives to create.
It is a flower recycling technology startup and India’s first biomaterial startup. It uses floral waste—collected from dumping temple waste in rivers—to make patented organic fertilizer and charcoal-free luxury incense products. It currently accumulates floral waste from three Indian cities, which includes one of the biggest temples (Kashi Vishwanath), averting 13 tonnes of waste flowers and toxic chemicals from reaching into the river every day. Self-help women groups handcraft the waste into patented charcoal free incense sticks and essential oils through the ‘flower cycling’ technology. Alia Bhatt was encouraged by mantraa’s due diligence and valuation to invest in the company. She proceeded to invest in the company. “Phool incense stands out for its fine natural fragrances and amazing packaging. I admire the founder’s vision of making incense and bio-leather from recycled flowers that contribute to keeping our rivers clean, creating a humane alternative to leather and providing employment to women in India’s heartland”, said Alia Bhatt.
Profit with purpose is set to become the new norm. Until now, social enterprise and impact investing have been the driving forces behind this concept, which has remained somewhat niche. Not any longer. Now, everything is about to change: future CEOs will want their companies to be recognised as forces for good.
Image Source: Deloitte Millennial Survey 2018
With the increasing trend of investors and consumers to invest in firms that bring beneficial social change in addition to financial benefits, the trend of large corporations adopting effective social missions is likely to continue. Companies that create strong roots in their communities not only via philanthropy but also by integrating their business into workforce development and making core civic investments are going to stand the test of time in markets.