Every company generates an impact on society, regardless of the sector in which it operates and the service or product it sells. Companies that are more locally intensive, such as mining, chemical, or energy generation companies, have historically been held more accountable and have therefore made progress in assessing and managing the impacts of their operations, since the damage caused to the local community is visible. Other sectors, on the other hand, are unable to identify and assess this impact with the same depth; a company in the beverage sector, for example, may have a societal impact related to the consumption of its product, potentially causing childhood obesity or drunk driving due to improper use. The fact is that every company should be concerned with understanding how people are affected by its operations, because if society is against its business, it will not prosper.
Historically, the social interface of the business sector, one of the three pillars of sustainability, It was treated as philanthropy or private social investment, as something almost independent of the company's core business. Until the 1990s and 2000s, the company's relationship with society was conducted through corporate foundations or partnerships with NGOs, under the mission of "giving back" its value to society.
However, it has become increasingly clear how important it is to adopt a business strategy that is truly linked to the populations it affects, with financial returns, but also with the social and environmental returns of its actions.
Foundations and NGOs are already reinventing themselves. Either a company manages to align its actions with its true social impact, or its social action will become increasingly hollow, turning into just an appendage. In times of crisis, the appendage is the first thing to be cut.
The business sector is rethinking how it acts socially and how companies are evaluated by society. The company's behavior should involve identifying its positive and negative impacts and inviting the affected population to jointly develop a strategy for action.
Some leading companies are already adopting social relationship and shared value strategies because they believe it makes no sense to produce something that does not generate value for both the company and society.
Currently in Brazil, there is a social demand for greater engagement and visible, tangible social return. A group of companies already active in this sector wants to broaden the debate on new practices for social impact and increase knowledge on the subject, bringing actors such as the government and representatives of society into the dialogue in order to jointly build new strategies. Reaching a consensus on what constitutes social impact is a first step towards advancing ways of evaluating it. It will also be necessary to discuss and define better tools, methodologies, and actions to measure social impact and disseminate best practices.
Cooperation with public authorities and the financial sector helps create an environment of alignment between corporate strategies, their financing, and legislation regarding relations with communities impacted by the business.
All businesses should have a social purpose that goes beyond financial return, and measuring social impact is fundamental to moving towards a more sustainable and therefore fairer world. This concept, although still in its early stages, makes it clear that businesses that do not adopt these practices will lose competitiveness. It is necessary to believe in value beyond profit.
