Anna Sofat: Social responsibility
Social responsibility describes our duty, corporate or individual, to act for the benefit of society at large, supporting the balance between the economy and our ecosystems. It’s a constantly evolving area and we’re discussing it more frequently with clients and our wider community as its importance grows.
In business and corporate life, the concept of social responsibility really came to the fore in the 1950s. In recent years there has been a move away from the traditional CSR (corporate social responsibility) approach of charitable donations and philanthropy to a strategic approach where a company’s values and culture, as well as its operations, are integrated with the CSR agenda.
As environmental and social sciences have improved and we are more able to see the result of our actions on society and our planet’s ecosystems, we are asking more from business and rightly so. Companies and individuals are increasingly called to account for the impact their activities and behaviours have on society and the planet, negative and positive.
It’s a subject that is close to Addidi’s heart. We know how important making a positive impact in society and the environment is for changing the culture of wealth and ensuring a better, more equal and sustainable future for us all. We have seen the powerful ripple effect of positive social responsibility in action and so have many of our clients.
Doing good business
Putting social responsibility at the heart of enterprise is good for business in so many ways. Socially responsible businesses are sustainable, future focused businesses. Companies that take steps to reduce air, land and water pollution increase their standing as good corporate citizens while benefiting society as a whole. Values-led businesses with a strong social contract and positive relationship to the society in which they operate are more likely to have a workplace culture in which women thrive. They are usually better companies to work for.
It used to be the case that investing in ‘ethical’ companies meant compromised financial performance. This was always a short-sighted view in our opinion and certainly isn’t the case anymore. A number of companies including Sports Direct, Uber and Ryanair, have demonstrated poor social performance, and specifically poor employment practices. This has led to share volatility and weaker performance. These sharp practices lead to operational, legal, reputational and financial risks that create uncertainty for investors, and other significant, negative financial impacts.
Money is neutral – what you do with it isn’t
Clients who want to invest ethically, start a values-led business or make a contribution to wider social change are to be supported. This starts by acknowledging our individual power to make a difference.
We can use our economic power to drive change. We have the power to choose what we invest in and what we purchase. By deciding to invest in socially responsible businesses and by choosing to purchase from value-led companies we can create demand for higher ethical standards and shine a light on businesses that are making a positive difference.
If you have savings, a pension or stocks and shares, you can choose to invest ethically.
It can be tricky navigating the funds on offer – which range from ‘sustainable and impact funds’ which are ‘positively screened’ and which invest in companies that have a positive effect on the world, to ‘passive funds’ which are ethical trackers that follow the performance of an index but filter out certain industries, like oil, gas and armaments.
If you can’t find funds you like, you can also invest in individual companies through shares. If you want to create a values-based investment portfolio, it is best to get advice and a bespoke approach.
Investing in women
We can support each other. Evidence suggests that investing in women makes good financial sense and that female entrepreneurs often build their businesses around a strong social purpose. That’s why we started Addidi Angels to invest in female entrepreneurs.
It’s also possible to choose to invest in female run businesses through your portfolio and of course it’s a good idea to buy products and services from women – we certainly support that!
One of the most important things we can do is one of the simplest: we can keep asking questions about how our wealth is created, invested and enjoyed. We can all play a part in changing the culture of wealth and as responsible human beings, it is our duty to look after the triple bottom line: people, planet, profit.