Is having a social conscience good for business?

What doing the right thing does for the bottom line.

Updated 26 August 2016

It seems fairly obvious that having a social conscience should be a good thing. After all, it means helping others, driving wider awareness of issues and potentially bringing about reform. But is it good for business?

Logic suggests it might be, as surely people are more inclined to consume a product that "makes a difference" than something which – although perhaps comparable – has no impact on the social good.

Daniel Flynn, co-founder and managing director of Thankyou Group, a company founded on the idea of providing a month's worth of clean water to the developing world for every bottle of drinking water it sells, has no doubt whatsoever that a social conscience is an absolutely positive for business.

"I think it's a powerful idea around, 'I can make a choice' and, as a consumer, 'I can make an impact'," he says. Indeed, Thankyou Group has now expanded its concept to food, bodycare and baby essentials, and as of May 2016 had given over 4.1 million to the cause of alleviating world poverty.

For Flynn, the real challenge lies in making consumers aware of the tangible differences they can make – and distinguishing Thankyou Group from the abundance of so-called "good causes" out there.

"I'm a bit funny on brands that aren't genuine about making a difference," he says, suggesting that for some companies, the "good cause" is merely about driving sales.

"I get that it sells and causes sell," he  adds, "but I also think that consumers are becoming more and more switched on to where they can make a real difference." 

Hence the success of Thankyou Group, which by giving 100 per cent of profits from its products to people in need, has certainly helped it to stand out in an arguably saturated bottled water market.

"Everyone wants to support businesses that have the same values they do." – Joe Huff. 

Dr Cristina Neesham, senior lecturer in ethics in management and organisation at Swinburne University of Technology, notes that businesses should do the right thing because it benefits their bottom line, not because demonstrating a social conscience makes them money.

"What matters to us as consumers is that the business is not trying to capture more value than it creates, because that's when it becomes hypocritical and unethical," Neesham says. She cites "green" hotels that ask patrons to save water by reusing towels and linen as an example of business using corporate social responsibility (CSR) well.

"They save money on washing, recycling and materials. These are all good, sensible practices. Everybody knows that the company is saving money doing this, but it pays for them to do [these initiatives]."

Joe Huff, co-founder and director of positivity at US-based LSTN Headphones, is a big believer that "what's good for business should be good for the world".

"Everyone wants to support businesses that have the same values they do," Huff says. "Most people want to do something that matters, but they don't know how."

LSTN Headphones works in partnership with the Starkey Hearing Foundation. Each pair of headphones it sells goes towards funding hearing restoration and increasing awareness for the global problem of hearing loss and hearing impairment. According to Huff, 360 million people worldwide suffer from severe hearing impairment, 95 per cent of which can be helped with a simple hearing aid.

So far, LSTN has helped over 20,000 people to hear in the US and throughout the developing world.

"Will people buy our headphones over a competitor because of what we do? Yes, but only if we truly have an equal or better product and it does some good in the world," Huff says.

For Flynn, differentiating Thankyou Water needed in a crowded market the was Thankyou's biggest challenge he faced when trying to obtain distribution through Australia's two biggest supermarket chains, Coles and Woolworths.

"For five years we had the same cause and [still] didn't get in," he says. Eventually, he realised that to be successful, Thankyou Water needed more than just "a good cause" – it needed to prove its ability to generate.

"You cannot think about your idea or business based on what you think will work," he maintains. "It's all got to go through the filter of what's going to meet a retailer's goals and what they care about is the product selling and the bottom line. These are key commercial questions, and we had to answer every single one of them."

However, LSTN took a different approach. "When we first started, people would ask us who we thought our customer was, what type of music they listened to, what kind of car they drove,” Huff explains. “We would always say that LSTN isn't about that. LSTN is for anyone who cares about themselves, the world and quality of life."

Unfortunately, it seems that for every truly good cause, there is a less honourable perhaps even unethical one – many of which make claims through misleading, snappy taglines. It pays for socially aware consumers to be savvy, to read the small print and to question companies, as a consumer. 

Neesham suggests consumers start by asking as many questions as they can about how products are made.

"Understand the practices that contributed to the creation of those products," she says. "The bottom line is that, when exploitation of human beings happens down the chain, we are all responsible."

Of course, "getting to the bottom of a production process is not necessarily without obstacle. 

"Some businesses will invoke commercial confidence laws," Neesham warns. But there can be some level of disclosure and in the end, unethical practices get found out."

Suspending reality

Is having a social conscience good for business?Though the concept is still hitting its straps, the advance purchase of a cup of coffee for someone who needs it – no matter why – reportedly started in Naples more than 100 years ago. Revival of the idea - called "Suspended Coffee" - is credited to occurring in the Ukraine around the time of the global financial crisis in 2008. 

In Australia, coffee drinkers with a social conscience can find participating outlets through www.suspendedcoffee.com.au, although the concept is rapidly gaining acceptance in places such as Bulgaria, Russia, Germany, Japan, the UK, Spain and, of course, Italy.


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