By Krystal Rogers-Nelson
Do consumers' favorite brands care about equity and the environment or just the bottom line? Corporations are increasingly pursuing social responsibility initiatives, but the trend may not be completely benevolent. Millennials, the fastest-growing consumer segmentin the market, are increasingly asking more from the companies they buy from. Corporations that show a little bit of conscience stand to gain big with consumers, perhaps indicating a greener future for the economy.
The New Economy
Corporate social responsibility is principally found in CSR reports — those public documents that report a company’s sustainability initiatives. In 2014, 7,838 corporations released CSR reports, a 30% increase over the previous four years. This trend is also blossoming in the world’s top companies: roughly 80%of Fortune 500 companies released CSR reports in 2016.
In the 1970s, CSR was considered a dead end. Companies that spent resources on anything other than profit would be putting themselves at a disadvantage in the economy. The current shift in priorities for today’s companies indicates new market trends — sustainability and social responsibility are now big selling points across almost all sectors, and the millennial generation is leading the charge.
Years of Internet use, television, mass media exposure, and fake news have left most millennials more resilient to the typical marketing structures of the past half-century. Corporations are less and less able to rely on advertising, celebrity spokespeople, and heavy-handed product placement strategies in movies and television. The 2017 Millennial Impact Report indicates that millennials are even more invested in philanthropy than they were in 2016, indicating that a focus on CSR is here to stay.
Millennials have different buying habits, too. They’re very tech-friendly and have led the rapid rise of technologies like digital assistants. Amazon’s Echo line alone brought an entire segment of new technology to market, playing off of millennials’ desire for convenience with voice commands and connectivity. As the economic power of the millennial generation grows, companies are shifting towards sustainable business practices in an effort to win their trust (and their money).
Companies Leading by Example
The economic viability of CSR initiatives has put some companies ahead of their peers, both socially and economically. Millennial consumers have pushed these companies ahead of the competition, making them leaders in their respective fields and perfect examples of CSR in action.
Honda is one of the most popular brands among millennial consumers, and their CSR initiatives may be part of their recipe for success. The Honda Clarity was the 2017 Green Car of the Year, and the brand ranks second worldwide in fuel economyacross their line. Honda has several green initiatives that are aimed at consumers looking for a deeper commitment to social and environmental responsibility — its Sustainability Reporttracks their accountability across several metrics, including the social goals the company holds for its operations worldwide.
TOMS founder Blake Mycoskie’s vision for his shoe and apparel company centers on corporate responsibility, and that focus could be part of the reason his venture has been so successful. TOMS shoes uses a sizeable percentage of its profits to provide shoes for children in needacross over seventy countries. The brand has leveraged its success to begin producing eyewear, coffee beans, bags, and more, with an ethos of sustainability at the center of every new product.
Technology products are especially popular among millennials, and Microsoft’s attention to CSR may account for some of its influence in the market. Microsoft’s commitments to renewable energy and carbon offsetsare substantial — to date, the company has reduced their emissions by 9.5 metric tons, and their investments in renewable energy now total over 500 megawatts of power production. Bill Gates, the company’s founder and current technology advisor, has leveraged the company’s billion-dollar success story into one of the world’s most successful nonprofit organizations, the Bill and Melinda Gates Foundation, which tackles health inequities worldwide.
Millennials and markets
Large corporations sit in a unique position when it comes to social initiatives. Their resources and economic power make them significant catalysts for change, and their profit-driven approach places the power to direct this energy firmly with their consumers. Millennials are certainly a driving force in the market, but every individual can use their buying decisions to become an agent for positive change.
Krystal Rogers-Nelson is a freelance writer with a special interest in tech.