As people and the planet bear the strain of human choices and actions, the responsibilities of governments, companies, and individuals will come under greater scrutiny. It is clear that businesses must adapt to reflect new needs and desires in an age of climate change and a renewed focus on responsible trading. Note: this is the second article in our series on responsible business (see here for the first).
What is certain in the 2020s: Forward-looking businesses will have a positive impact on people, the planet, and profit. The leaders across sectors will become resilient to what the future holds.
There are countless ways in which businesses can approach socially responsible value creation. To give you a flavour, we’ve selected three actionable approaches, which we are currently exploring at Kin + Carta.
Three actionable approaches to building sustainable, profitable growth
1) Customer experiences: Designing with empathy
At Kin + Carta we embrace the ethos of designing with empathy to ensure everyone that could interact with a product or service can do so, regardless of age, gender, or ability. With social distancing limiting face-to-face contact, the imperative for this type of design for digital platforms has never been so important. By actively watching, learning, and listening to all user’s experiences we can move from compliance to compassion; removing the barriers that create undue effort and separation.
Designing with empathy is not only a commercial opportunity (the Purple Pound equates to £249 billion a year to UK businesses) and avoids reputational risk, but it drives innovation and a great customer experience for all. As Kevin Mar-Molinero, Director of Experience Technologies at Kin + Carta, rightly pointed out at our FWD event:
“If you solve a problem for somebody who has one arm, you're also solving a problem for somebody with a broken arm, as well as somebody who is looking at a phone whilst carrying a cup of coffee”.
Kin + Carta took this approach when redesigning the new online store for Tesco and the results have been telling; average basket value has increased and positive reviews have increased by 1,000%. Companies need to create digital experiences with empathy, rather than retrofitting with sympathy.
2) Operations: Sustainable digital twin
Organisations are becoming adept at reaping the benefits of the digital twin - a computerised model of a business, which can be subjected to changing variables in order to measure the subsequent effects. What businesses are less adept at, however, is utilising digital twins’ modeling capabilities to assess and improve their impact on the environment.
There is no reason that digital twin technology shouldn’t allow companies to improve their environmental footprint, as well as their commercial performance. An early example of this comes from the Glasgow Riverside Museum who utilised a sustainable digital twin to tackle their energy problems. This resulted in a 26% reduction in their gas usage and an annual saving of £52.3k, with a break-even period of fewer than six months.
As companies search for ways to improve profits and fight climate change, the sustainable digital twin offers them the chance to feed two birds with one stone.
“Every one of us is susceptible to impairment. This isn't 'their' problem. This is our problem.”
Richard Neish Managing Director, Kin + Carta
3) Business Model: Circular Product & Service Design
Embracing circularity enables new forms of value creation that can be realised through better design and the adoption of new business models. Circos, for example, is a subscription model for baby clothing where members pay a monthly fee to access a range of high-quality clothing. Once babies outgrow the clothing, it is returned, cleaned, and redistributed to another customer – eliminating waste and capitalising on the clothing value, all while creating convenience for customers.
This socially responsible business model has reaped rewards for Bridges Fund Management who acquired World of Books in 2016. The company is the epitome of the circular business model, and has delivered significant growth while also supporting the environment and it’s partner charity shops:
“One of our investments is a circular economy business called World of Books, which re-sells or recycles used books that might otherwise end up in landfill. So the more books we can re-sell or recycle, the more CO2 we abate.”
Stefanie Kneer, Bridges Fund Management
As we witness a rise in ethical consumption and more environmentally-conscious millennials gaining spending power, companies that design products that no longer have a life-cycle will have a key competitive advantage.
Conclusion
It is a mammoth task at hand to shift our collective mindset and approach of the business community, and the only way to tackle it is through collaboration. That’s why we invite anyone to reach out for a chat, formally or informally, on the topic. We are passionate about the topic and are on a path to B Corp accreditation, so will share our experience, learnings, and digital expertise to help you deliver purpose-driven innovation.
For an overview of how responsible business is becoming fundamental to profitability and talent-attract, see part one of this series.
Appendix - initiatives we’ve come across, which are inspiring us and might also inspire you:
Organic Basics - Organic Basics have built a low impact website, which reduces carbon emissions by 70%, in comparison to regular websites. They have not only shared their Low Carbon Manifesto for website design (which includes minimising the power consumption on the user’s devices and storing data locally) but have made the source code of the Low Impact Website publicly available for companies wanting to make their website greener.
Ecologi - Ecologi helps businesses easily offset their employee’s carbon footprint (including emissions from their home, personal travel, holidays, food, hobbies, and more). Businesses fund the planting of trees on behalf of each employee in their “company forest”, and finance carbon reduction projects from around the world.
CrEdit - Kin + Carta agency Edit partnered with TV and print partners during the pandemic to offer heavily discounted media space to businesses that have been hit by the coronavirus pandemic. Under the scheme dubbed CrEdit, Salvation Army secured £32,000 of media space for just £15,500, saving the charity 52% of its budget.
Globalance - An investment platform that engages and empowers investors to make sustainable investment decisions by visualising the influence of portfolio investments on the economy, society, and environment.
Tech Nation’s Net Zero Programme - Tech Nation has launched a mission-driven programme to support the growth of companies who are striving to achieve the net-zero target. The programme enables the very best early-stage scaleup to partner with the other cohort, build relationships, and share advice in order to scale their journeys.
Impact Management Project - IMP has built an enterprise and investor community of over 2,000 organisations that want to better manage environmental, social, and governance (ESG) risks. The forum allows for organisations to share best-practice and build consensus on how to measure and report impacts on sustainability.
B-Corp - B Lab is pursuing the goal of verifying credible socially responsible leaders in the business community through their B Corp certification. They have created standards, policies, and supportive infrastructure for business to better their social and environmental performance, public transparency, and legal accountability to balance profit and purpose.
IKEA - Swedish furniture retailer IKEA recently announced a new initiative that will see it buy back customers' unwanted IKEA products for up to 50 percent of the original price, which they will resell as second-hand furniture.
Task Force On Climate-Related Financial Disclosures (TCFD) - The TCFD is an organisation with the goal of developing a set of climate-related financial risk disclosures which can be adopted by companies to inform the public on the risks they face related to climate change. The UK Government recently announced that from 2023, all publicly listed UK companies with a premium listing will be required to “comply or explain” with the TCFD’s requirements.
Industry Pushes - becoming a signatory of the UN-supported PRI (Principles of Responsible Investment) is becoming a requirement for investors as non-signatory status is a clear sign to the community that you are not responsible enough. The PRI network works together to implement it’s six aspiration ESG principles.