Would you dare question a Nobel Prize winner? Probably not, who is the handsome man to oppose the most brilliant brains on the planet? The thing is, in some cases, ideas that once won an award can become obsolete as society evolves. This is exactly what happened to the liberal economist Milton Friedman, whose mantra is that “a company’s only social responsibility is to increase profits” has aged terribly badly. And you don’t need a Nobel Prize for that, the evidence is everywhere.
“Friedman argued that the role of government is to address issues of social responsibility. He probably could not have imagined that 50 years later the United States would have a president more interested in creating needs for social responsibility than in finding solutions (…). Now, perhaps more than ever, Companies must step forward to make socially and environmentally responsible investmentsreduce their carbon footprint, improve company policies regarding worker safety and income equality, oppose discrimination, and increase volunteer opportunities and charitable contributions,” noted Neal Hartman, professor of business communication at the MIT Sloan School of Business.
A long time ago, a mission of this caliber would only be suitable for public administrations and non-profit organizations that were willing to give everything and their resources to improve the world without outside help. Fortunately, the social changes of the last 50 years have become clear fertile ground for doing good by society. Mainly because of the purely economic benefits. “Being a company that creates a positive impact on society has been proven to increase profits on the bottom line, it’s a lever to create business,” says Nacho Rivera, CEO of The Overview Effect.
This Minsait (Indra) company, which promotes innovation to support the sustainability of companies and contributes to the great social and environmental challenges of organizations, is immersed in its own challenge: to transform the Spanish economic structure so that all its agents cooperate and contribute to solve the world’s great challenges through their business. One of the ways to do this will be the Syzygy festival, which will focus on “supporting the connection between innovation, business models and positive impact,” he elaborates.
EVERYONE WINS
Who wants to make a dozen application fast deliveries, the ability to make green hydrogen economically competitive with gray hydrogen, or solve the problem of renewable energy intermittency? That this is a big prize is obvious, but the reasons why organizations of all types should already be thinking about promoting their positive impact go far beyond money and all have to do with the rest of the agents in the economic ecosystem. investors and customers and of course the planet. “Corporate social responsibility It is good for the environment, for social justice and fairness” Hartman summarizes.
In the midst of a war for talent, positive impact can become one of the main weapons for companies to expand their ranks with the best soldiers. Rivera states, “Purpose is increasingly related to preservation, young people want to work in purpose-driven companiesso companies that do not take this into account will have more difficulty attracting these professionals.” Various studies confirm this, such as this one from Cone Comunicación, which ensures that “64% of millennium he won’t take the job if the company doesn’t have strong values of social responsibility.”
“However, the positive impact is also good for the relationship with investors, who are increasingly taking it into account. They will not put money into sectors that They will lose value in the long run because they didn’t know how to adapt to reality.“continues the CEO of The Overview Effect. As we told you last year, sustainable investment grew by 15% between 2018 and 2020 alone, and by 2025, that figure could be around $50 billion globally, according to Bloomberg.
“Finally there is differentiation. Companies that succeed in making a real contribution to society will position themselves in a way that is completely different from their competition,” Rivera continues. At this point, it’s the young people who are once again changing the rules of the game. According to a Nielsen study, for 85% of millennium It is extremely important or very important for companies to implement programs that improve the environment 75% said they would definitely or probably change their shopping habits to reduce their impact in the environment.
With all this data in hand, what future would a company have without profits, talent, investors or customers? None. But society will not have it either, unless organizations begin to realize their role as engines of progress. This reality leaves a scheme of interdependence in which Like life on the planet, we need each other to thrivewhich forces us to work together to keep alive the ecosystem upon which virtually all aspects of our daily lives rest.
This is what is known as systemic innovation, which is based on the idea that all “decisions and actions that every one of us We consider how individuals, corporations, governments, and other groups or members of society combine and interact to create larger systems.” In this context, “we must change thought to understand that if we want to solve major global challenges such as climate change, biodiversity loss and social inequality, It is not possible for any company to solve this alone, we have to work together”, says Rivera.
POSITIVE IMPACT OR DEATH
It sounds complicated considering that the business structure is based on competition. However, the CEO has one more argument on the table: pure survival. Faced with short-term business models, he points to the dependence on the Earth’s natural resources as a big critical element in promoting cooperation: “The private sector has to start thinking long-term because there are many companies whose survival depends on the climate. . For example, all hotels in areas threatened by rising sea levels share the same problem“What doesn’t make sense is for everyone to try to solve it on their own.”
This case can be extrapolated to practically anything: coastal real estate companies whose properties are losing value due to rising water, agricultural companies who are increasingly having trouble farming due to the climate emergency… and so on ad infinitum. So if we all live under the same threats, wouldn’t it make sense to tackle them together? This is the philosophy that Rivera will try to convey at Syzygy. The very name of the meeting, which originates from the cosmic field and represents the union of the three celestial bodies, is a reflection of the cooperation necessary to turn all actors in the socio-economic structure towards positive impact through cooperation.
And by everyone he means everyone. The CEO says: “We will have some of the main corporate leaders, scientists and entrepreneurs focused on positive impact.” An example is the director of the Félix Rodríguez de la Fuente Foundation Odile Rodríguez de la Fuente and her privileged vision of the natural environment. In fact, Rivera’s message includes the urgent need for all companies to begin incorporating scientific rigor into their management positions, saying: “When a company needs to know whether one operation is more sustainable than another, it cannot ask an economist but a scientist.. “They have to become a core part of the organization to ensure rigor on an environmental and social level.”
And compared to companies that simply limit themselves to minimizing their negative impact, such as Alphabet with its informal slogan “don’t be evil”, the Syzygy program also includes names such as the head of communication and sustainability at Spain’s Unilever, Ana Palencia, who will share an iconic case multinationals that years ago included a motto that said something like “doing good by doing good.” “It was one of the first companies to integrate the Sustainable Development Goals into the company core their business in 2015,” says Rivera. After this step, it began to analyze its product portfolio to minimize its impact and support the most responsible ones. Thanks to this effort, In 2018, its sustainable catalog accounted for 75% of its annual growthaccording to their own data.
No matter how much respect there may be to confront a mind like Friedman’s, the company’s evolution has been sharp. 50 years ago it may have been the case that greed could be the main driving force behind any society, but now that we are all more aware of the importance of leaving no one behind, or the planet, “The only legacy companies leave behind cannot be the money they have to overcome”, concludes the CEO of The Overview Effect. Who knows, maybe in another 50 years these types of ideas will win a Nobel Prize.