Change is a constant phenomenon that has disrupted the global business landscape. This unstoppable wave of change has triggered conversations in boardrooms and has forced a re-evaluation of supply chains. This change is inevitable and there is no way of avoiding it which leaves businesses with the option of catching the wave of change or risk of being left behind. Businesses are therefore left to navigate the unpredictable landscape for many factors such as geopolitical instability and the rise of social justice movements have made businesses shift its outlook from the present and have a focus on being more responsible, and sustainable as well as built on environmental, social, and governance principles. Operating in a volatile, uncertain, complex, and ambiguous (VUCA) environment has made businesses responsive to trends and pressures such as the emerging climate crisis which has driven the need for change in the way businesses operate.
There is a growing expectation for businesses to be socially responsible by customers which goes beyond incorporating environmentally friendly practices within its supply chain and how businesses treat their employees. Customers have put a company’s ethics under the spotlight to determine if it has the ‘social license to operate’ which significantly affects the purchasing power of a customer. Companies can leverage being socially sustainable to their advantage by incorporating social sustainability into their core business practices which can be used to differentiate themselves from their competitors and appeal to their conscious customers. Therefore, companies that focus on taking care of their employees and uplifting communities around them will be remembered hence leading to goodwill. Businesses that promote their reputation by doing what is right in terms of providing safe working conditions and growth opportunities not only earn loyal customers but also foster employee loyalty and productivity due to the positive environment created thus reducing employee turnover and absenteeism rates. Additionally, companies that value and support their employees are able to attract top talent.
Apart from the increasing demand for businesses to be socially responsible, the line between social performance and the financial performance of a business has become a blur. Investors are no longer primarily focusing on how the business makes profit rather, they are also focusing on how profit-making affects the community and the environment as society becomes more sensitive towards social and environmental issues this has led to a shift in the definition of success. Prior to investing in a business, investors need assurance of the long-term plans for managing the skills, knowledge, and experience that are integral to a sustainable business model. This form of assurance requires other metrics that cannot be expressed in financial metrics alone. Social sustainability is a driving force for companies to operate ethically and have a positive impact on the communities around them. Hence companies have integrated universal principles such as the United Nations Social
Developmental Goals (UN SDGs) into their business operations to take action to advance societal goals.
The goal of social sustainability is to build resilient communities that can overcome and recover from challenges. Businesses that actively engage with their surrounding communities through education and healthcare initiatives as well as contribute to infrastructure development play a vital role in developing community resilience. Not only do these initiatives benefit the community but also enable companies to establish long-term relationships, gain community support and reduce the risks associated with social instability.
Businesses that set high standards in the proper treatment of their employees and communities enjoy the benefits of strong performance and growth. In order to achieve these benefits, social sustainability begins with the company’s value system and the principles adopted in doing business. For instance, incorporating the ten principles of the UN Global Compact ensures that every organization commits to the fundamental responsibilities in the key areas of human rights, labor, environment, and anti – corruption. Integrating principle-based approaches such as the UNGC into a company’s strategy, policies, and procedures established a culture of integrity and accountability for they are being upheld to a standard that requires to be responsible to the people and planet hence setting the company up for the long-term success.
The significance of social sustainability in business cannot be emphasized. Companies that recognize the necessity of addressing social issues and incorporating sustainability into their strategies and core value systems, can create a long-lasting impact on their people and communities around them. Businesses can create a better future for all their stakeholders by prioritizing employee well-being, partnering with stakeholders, catering to customers’ preferences as well as investing in surrounding communities. Social sustainability goes beyond being an ethical obligation rather, it serves as a source of competitive advantage allowing businesses to succeed in a more environmentally conscious and interconnected world. Unless businesses prioritize the people and planet, they will miss out on opportunities to unlock and unleash the significant value that lies within the business.