There are various problems that exist in the society. Key among the most common problems affecting billions of people in the world is financial access. Overcoming social problems, including financial access, can be achieved with innovative solutions. Behind many of the current innovative ideas aimed at solving social problems are developed by B Corps, Impact Investment, and Fintech corporations. B Corps are profit-oriented companies that have been certified by the not-for-profit B Lab. Their certification suggests that the companies have met rigorous standards of environmental as well as social performance, public transparency, and legal accountability. The certified companies use their influence of markets to create innovative solutions for social and ecological problems. In order words, B Corps comprise people who utilize business concepts for the good of the society. B Corp companies are not only better for workers but also for the people and the environment. For example, 68% of B Corp companies are more likely to donate a minimum of 10% to charity while 47% are more likely to utilize on-site renewable energy. Additionally, 18% of them are more likely to use suppliers from low-income communities. On the side of workers, 55% of B Corp companies are more likely to cover substantial cost of insurance for their employees while 45% are more likely to award bonuses to non-executive members. A further 28% of them are more likely to have minorities and women on the management level (B Corporation, 2017). Donating to charities, using renewable energy, sourcing supplies from poor communities, covering insurance costs for employees, paying bonuses, and including the minority are activities that demand a lot of financial input. They are activities that do not contribute to profits but are carried out by companies alongside their quest for profits. This demonstrates that they not only care for the workers but also the environment and solving social problems.
B Corporations make impact investments in the community. They inject financial investments into non-profit organizations, other companies, and funds with the aim of generating social and environmental impact in addition to financial return. Examples of these corporations include Seattle Foundation, Bill & Melina Gates, Unitus Seed Fund, and Fledge. Unitus Seed Fund, based in Seattle and Bangalore, funds Indian-based Technology startups engaged in financial, education, and healthcare sectors during their early stages. At the forefront of innovations that have a great impact on societies are FinTech companies. Financial Technology companies help more people in communities to access financial products that have been traditionally expensive and predatory. For example, using their innovative solutions, the companies have managed to bring more than 88 million Americans who were underbanked into the mainstream economy. One example is helping Americans to pay bills, check accounts before making payments, and find the best prices of goods in the market using mobile apps. Through their application of business influence, Fintech companies have resulted in improvement in the contribution of small businesses to the American economy which now accounts for 54% of the total sales (Edwards, 2016). Some of the most well-known B Corps include Patagonia, Ben & Jerrys, and Etsy. In their mission statement, Ben & Jerrys stated that their overall mission is to make the best product they can, become economically sustainable, and at the same time, create positive social change. They intend to advance new models of economic justice that are not only sustainable but also replicable.
Looking at what B Corporations are doing to the communities, their social responsibilities can result in a positive impact on the triple bottom line. People will develop a positive attitude toward companies that care for them, and they are more likely to buy their products. In the long run, this might influence consumer loyalty. The benefits earned by companies might be more than what they are giving out. The objective of every business is to make profits. It is therefore contrary to the primary purpose to start engaging in activities that do not contribute toward the original goal of a company. Social welfare demands the use of the company's resources, and this will have a great impact on the profits and what the shareholders will eventually get. Companies have no responsibilities to the whole society. Instead, they should concentrate on making profits, pay shareholders their dividends so that each shareholder can decide whether to donate to a charity or not. The best strategy might be to share profits among shareholders so that each shareholder can take socially responsible activities they see as fit. Some activities that are meant to improve the public image may end up contributing negatively toward the company such as investing in expensive charitable events which fail to translate into customer loyalty. However, some responsible social activities such as employee volunteerism come with benefits such as increased employee engagement that reduces job turnover, develop professional skills, strengthen relationships, and promote teamwork. Companies that have been successful in implementing local and international employee volunteerism include IBM, Pfizer, Cisco, and Microsoft. These are leading global players in their respective fields, and they have huge resources to finance invest in projects that have a great impact on communities. They also happen to be companies where employee retention is key to their survival. But rather than engage whole on charitable donations, companies can best serve communities through a public-private partnership. Firms such as Unilever aims to create social and economic values through technology, products, relationships, employees, and financial contributions. Corporations may use CSR to mislead the public while the underlying objective is to make a profit and contribute little to the communities. For example, a company might use $1 million in CSR but profits earned could be $1 billion. These are not proportional.
Corporations discussed in the case studies aim to create a win-win situation where they not only make profits but also ensures that the profits reach out to help communities. Microsoft Corporation develops software, hardware, and other products which they sell to millions of consumers at a profit. From the profits they generate, they donate it to charity. One of the charitable organizations, Melinda & Gates Foundation, was found by the Microsoft founder, Bill Gates. Microsoft is also engaged in philanthropic contributions regarding technology, investments, employees, voice, and money. IBM is a company whose core business is to offer business solutions to other companies at a profit. Additionally, they engage in CSR activities that benefit the community including donations to charity that addresses safe food, clean water, smarter work, vibrant and sustainable cities, community economic development, education, healthcare, language, literacy, environment, and culture (IBM, n.d.). FinTech companies include FAFSA, Altura Credit Union, Starbuck Card, and PayPal. Their focus is financial inclusion and banking the unbanked. For example, PayPal offers a global online payment system that is faster, safer, and cheaper and serves as an electronic version of the traditional paper methods like money orders and checks.
Business organizations pursue profits as their core objective. In addition to making profits, they also use their influence to causes that are beneficial to the society, employees, and the environment. Overall, they strategies have been effective in creating social and environmental benefits. Many people who were previously unbanked have been brought to the mainstream economy while people who previously have no access to clean water, a source of income, healthcare, education, and so forth have benefited from CSR. However, there is a need to ensure that the CSR activities are sustainable so that they do not collapse as soon as the sponsoring agency collapses or withdraw support.
B Corporation. (2017). B Corp Community. Retrieved from: https://www.bcorporation.net/b-corp-community
Edwards, E. (2016). Financial Technology Startups Are Bringing the Underbanked into the Economy. Village Capital, May 16, 2016. Retrieved from: https://medium.com/village-capital/financial-technology-startups-are-bringing-the-underbanked-into-the-economy-24978561b9ea
IBM. (n.d.). Grant Information. Retrieved from: https://www.ibm.com/ibm/responsibility/grant_information.shtml
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