Social Impact Leadership Coalition

Social Responsibility: Business Case

What does it look like to be a triple-bottom-line Business of Color, addressing the needs of people and the planet, while making a healthy profit?

Certainly one answer is that as a minority business leader you have been expected to give back to your community. Says MaryAnne Howland, President of diversity marketing firm Ibis Communications, “I learned pretty quickly that as a person of color operating a successfully business, there was no question that I was expected to support the black community through my business.”

You also need to operate a profitable enterprise with a healthy bottom line. That's a given–and a tough challenge in today's economy.

While these are traditional requirements for successful businesses of color, consumer expectations–and your opportunities–are expanding.

For one, the Green Economy is taking off. From Van Jones to Nancy Pelosi to national columnist Thomas Friedman and President Obama, “Green Jobs” is the new mantra. Today, a green approach is much more than just a means to reduce our country’s climate impact; it’s now a viable pathway to creating, in some estimates, as many as 5 million new jobs in the next several years.

Recognizing the opportunity, Congress passed the Green Jobs Act of 2007, allocating $125 million for “green-collar” job training, 20 percent of which is designated to help citizens move from poverty to gainful employment. If we do it right, green jobs will mean good jobs in a growth industry for communities of color. Yet, as black entrepreneur Ed Dugger notes, “The final—and critical—frontier is to help people of color create true wealth and not just jobs. Putting your kids through college is good, but it’s not enough to bring sustained economic success to communities of color.” So the real question is, which businesses will be creating these new green jobs? Will it be yours?

And green is far bigger than just job creation. It’s now a critical factor in how your product is produced and delivered and how you do business. Consumers increasingly expect that your products and your company are rising to meet emerging green standards. Communities of color becoming more affluent and educated about environmental issues, but to reach the "green mainstream" (a mostly white market where much of the green spending is happening), your company will have to demonstrate that you're taking a planetary perspective in both policy and practice.

Let’s look at a few of the distinct opportunities that businesses of color have in the new green economy.

Greater Preference

Preferred purchasing policies and set-asides have been a boon to businesses of color and women-owned businesses, as have preferences for local businesses.

Now preference is also being given for green products and services through municipal and federal programs like the EPA’s Environmentally Preferable Purchasing (EPP), and more and more corporations are adopting green purchasing preferences as well. As Howland notes, “It’s one thing to have preference as a women- and minority-owned business. Add green to that, and that’s a powerful advantage.” Over 62% of organizations with formal procurement policies now have a green purchasing policy and 90% include environmental factors in at least some of their purchasing decisions.

First-Mover Status

Another huge opportunity for green entrepreneurs-of-color is first-mover status. While many businesses of color have assumed positive leadership positions in their communities, only a handful have positioned themselves as recognized leaders in social responsibility.

A number of studies have shown that significant competitive advantage can be gained by leveraging intangible assets, including social capital. Consider the many firms with significant brand equity based in no small part on their leadership in social responsibility, including Ben & Jerry's, Stonyfield Farm, and Honest Tea.

Businesses of color that position themselves as authentically socially responsible have a unique opportunity for leadership. Not only can you become a leading SRB brand for your own community; you can also take the lead as a business of color in the growing green market.

Expert Status

Quick...name a black expert on green jobs. If you keep up on green trends, politices, equal rights, or if you just listen to the Tom Joiner Morning Show, you're likely to have heard of Van Jones, author of the best-seller The Green Collar Economy. Van is a black man crossing traditional lines of race and environment to create a fresh, integrated vision of a green economy that creates real opportunity for people of color.

What's your unique position and perspective on where socially and environmentally responsible business can meet the needs and interests of your community of color? Find that point, articulate it well, and you could begin to build your own expert niche based on your unique experiences and perspective.

Riding a MegaTrend

Talk to any engaged young person of any color these days and you’ll find that the traditional lines that determined one’s views on race, the environment, community and social justice are disappearing in their generations. It’s not just post-racial or post-gender; it’s about being responsible for both people and the planet, about saving communities and protecting the environment. Young people simply don’t see these as separate, unrelated issues they way older generations have. Companies that take the lead as diverse and socially responsible enterprises will be well positioned for future mega-markets.

Getting Proactive about Risks

Businesses of color face real risks if they fail to recognize and act on the increased environmental and social concerns of consumers, especially as consumers of color become more engaged in these issues. We're also seeing increased attention from law-makers and regulators around green claims and standards. Addressing your social responsibility profile proactively puts you in the leadership position rather than playing catch up later.

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While the rewards of being a socially responsible business leader of color are great, it's not without challenges. Learn about some of the challenges our panel reported in bringing green to their businesses »