Social Value Brand (SVB)
Businesses today are increasingly expected to deliver some sort of social value in addition to shareholder value, or, at the very least, to not create harm to society.
Whether they realize it or not, whether they actively manage it or not, pretty much all companies with market, financial or human resource connections to Europe and North America have a Social Value Brand or SVB
This is true whether they are a mining company operating in remote jungles, a high performing Consumer Goods Company, a globally recognized service sector brand or even a professional sports league. It is also true for entire industries.
You might ask, what is a Social Value Brand? It is simply how your company or industry is perceived in relation to creating value for society as well as value for shareholders.
You might also ask, how important is a Social Value Brand? For some it is quite important actually.
For all it is more important today than it was ten years ago, and will be more important in five years than it is today.
If attracting top talent to your company is important, the fact that 73% of Americans want to work for a company that is doing social good should move SVB up your priority list.
If you are a mining company your SVB can be the difference between being able to operate and being shut down through loss of permits, or even by direct community activism. Some jurisdictions actually require a community vote to support development of a mine. Are you ready for that?
If you are a consumer goods company your global supply chain is likely fraught with labour force, human rights, environment, health and safety and other potential issues that you are working hard to manage. Complex issues in long and complex supply chains.
Sudden events like fires, factory collapses, sub-contractor screw-ups, or something out of the blue can suddenly put negative pressure on your SVB and impact sales and relationships. A carefully nurtured SVB can provide a reputational capital reserve that can give your market facing brand some resilience to these inevitable situations.
If you are a globally recognized service brand your Social Value Brand can give you a strategic edge in attracting and retaining talent. And, SVB development activities can provide valuable professional development opportunities for your team.
And professional sports leagues? Yes, social value brand is an emerging issue there too. Look at the heat football has taken over how it managed domestic violence issues with players, or how concussions and other safety issues are becoming increasingly important, or violence in hockey, or environmental impact of sporting events. SVB issues are increasing in importance, and catching the attention of key leaders and decision makers.
With the growing importance of social value brands you would think that management of them would also be of increasing importance. You would be right, but you would likely be surprised at some low-hanging opportunities that are there for the taking.
Here are some examples that I think are ripe for action…
Nike’s SVB Opportunity
Take a company like Nike, a clear global leader in athletic apparel and athletic performance gear. Nike actually creates a lot of social value every day.
Nike is a huge supporter of community sports and youth sports. Nike also supports aspiring and accomplished athletes who themselves provide incredible amounts of volunteer support to youth and sports and charitable causes.
Together these actions create a lot of latent social brand value, but little seems to be invested in developing it so that Nike’s publics and constituencies recognize the social value that Nike helps foster.
You may ask, why is this important? People buy Nike for athletic performance and the star power of its athletes. True. On the margins a strong SVB may help drive some sales, but likely not much.
But, what about when a supply chain issue develops and suddenly global attention is focused on labour, or safety or human rights practices of some obscure contractor in Nike’s supply chain (remember Nike and the child labour issues of the 90s). When the sh*t hits the fan a strong SVB can provide the reputational capital that will limit market impact and facilitate speedy recovery.
What is ironic is that with all the social good that Nike is creating already it would likely take little additional effort and cost to develop a robust SVB.
NHL’s SVB Opportunity
The National Hockey League has taken a global leadership position in sustainability management and reporting. The league and its franchises are actively and progressively managing their environmental footprint. The league recently produced a strong sustainability report. (see a short analysis of it here)
At the same time the league, its franchises and players are producing social value in many ways.
Whether it is the league’s work with Cancer, LGT issues or a range of other important social causes and issues, or the individual franchises support to a range of community causes and charities, or the work of individual players and their support to youth, minor hockey, charity and development, there are many valuable social impacts emanating from the NHL and its teams and players.
Yet, despite the success of its sustainability report and the significant societal impacts, the League and its franchises are doing little to develop a strong social value brand from all the social value creation work it is doing.
Extractive sector SVB opportunities
The mining and petroleum industries were actually early achievers in social value creation!
Yes, they do have a legacy of negative social value impacts (and some continue to this day). But, today companies and major industry associations are making major progress on social value creation.
Examples abound of progressive community engagement and development, whether it is Uranium emining giant Cameco and it’s leadership to facilitate a half billion dollar annual business activity Indigenous Peoples in northern Saskatchewan, or Golden Star’s efforts to support family level palm oil businesses in Ghana, or Placer Dome’s leadership that ‘changed the social face of the South African mining industry’ (see Analysis and Stanford Case Study here).
For the most part the extractive sector is quite accomplished at maximizing local/project level social value brand impacts from its investments and operations. On an industry level organizations like ICMM (website), CIM, PDAC and others are working to create industry wide SVB.
A closer examination though will reveal that few companies are proactively building their SVB at the corporate level where it could provide increasing value in financing, employee recruitment and retention and other key areas.
Similar stories can be told for other industries. There are many social value brand opportunities where much of the work is already done and paid for.
As societal pressure for social value creation increases you can expect businesses and industries to pay increasing attention to their Social Value Brand.
Some will use it as a differentiator in markets, others for employee recruitment and retention and others will use it more like an insurance against impacts of mistakes that are pretty much inevitable.