Total Societal Impact – A New Approach to CSR?
Total societal impact or TSI is a new approach to socially responsible business. According to Boston Consulting Group, who coined the term, TSI is “the total benefit to society from a company’s products, services, operations, core capabilities, and activities.” BCG argues that TSI is distinguished from the corporate social responsibility approach because instead of treating social impact as a goal pursued in addition to business longevity and shareholder returns, TSI treats positive social impact as an integral part of achieving these objectives. Essentially, it’s thinking about how to make a positive impact through business, as opposed to an afterthought once the profits are in.
Unilever: A Case Study
Of course this kind of thinking is much harder to incorporate into a business than, for instance, annual charitable donations. It can require a business-wide change in priorities and some creative problem-solving, but the good news is it isn’t impossible, even for big companies with lots of moving parts.
Let’s take Unilever’s Sustainable Living Plan as an example. This is a wide ranging package of business reforms which Unilever describes as “our blueprint for achieving our vision to grow our business, whilst decoupling our environmental footprint from our growth and increasing our positive social impact”. To take one part of the plan, Unilever says all the raw agricultural materials it uses will be sustainably-sourced by the year 2020. Not only will this reduce their environmental footprint and benefit agricultural communities, but it will also ensure the long-term stability of Unilever’s supply chain – allowing them to continue growing their business in the knowledge that there are no weak links.
This encapsulates the key aspect of the TSI approach, namely that by investing time into reducing their negative impact on the world around them businesses are also helping themselves. In a time of increasing resource scarcity, Unilever is taking sensible steps to ensure its long-term viability, and creating a world where it can continue to thrive. There’s nothing counterintuitive about it.
Interested?
The bad news is there’s no one-size-fits-all roadmap for implementing a TSI approach. Every business is unique, and that’s reflected in the impact it has on the world as well as the ways this impact is or can be measured. Even when you know what you want to measure, actually doing so can be another thing entirely.
To use Unilever’s example from earlier: whilst it is fairly easy to chart a rise in the proportion of raw materials which are coming from sustainable sources, measuring the effect this has on the lives of agricultural workers (an important aspect of the initiative’s societal impact) will be trickier.
This isn’t to say that measuring TSI is impossible, just that it requires some careful thought as to how your company can ensure it has the most complete and accurate data to work with. BCG emphasises that there is no single metric for measuring TSI, and nor should there be. Different businesses use different measurements according to what works best for their aims and purpose, and all will need to use several different measures at once in order to get the most ‘total’ picture. The message seems to be that measurement is entirely possible and beneficial in the long term, but a teething period is likely.
Thinking Long-Term
Long-term considerations are key to the TSI approach. Businesses have often been criticised for focusing too much on short-term profits and shareholder benefit as opposed to their continuing prosperity, and it’s possible that implementing this approach will require something of a change in business attitudes and goals.
Done properly however, the benefits are massive. We’ve already seen how Unilever’s focus on sustainability is only helpful in terms of the company’s long-term prospects. TSI also has the potential to reduce conflict between a company’s business and charitable goals, reducing the PR difficulties created by this kind of doublethink and allowing employees and the public to see the direct impact of a company’s social responsibility initiatives. There also can’t be any harm in demonstrating to both existing and prospective employees that your organisation is one that has a positive impact on the world. In fact, research has shown that companies which demonstrate a strong sense of purpose are more profitable.
Arguably, the most attractive thing about the TSI approach is that it can provide a roadmap for businesses to create a world in which they can continue to thrive in the midst of considerable uncertainty.
Helen Bates
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