Across the globe, people trust business more than government. The 2018 Edelman Trust Barometer reported that people worldwide place 52 percent trust in business “to do what is right,” versus just 43 percent in government.
In the United States, in particular, trust in government has hit a four-year low, at just 33 percent. There is a widespread perception that political systems are growing more and more polarized and less and less effective at meeting social challenges.
Citizens are looking to business to fill the void on critical issues such as income inequality, health care, diversity, and cybersecurity to help make the world more equal and fair. This expectation is placing immense pressure on companies, but it is also creating opportunities.
Organisations that engage with people and demonstrate that they are worthy of trust are burnishing their reputation, winning allies, and influencing or supplanting traditional public policy mechanisms.
An organisation’s track record of corporate citizenship and social impact now has a direct bearing on its core identity and strategy. Engagement with other stakeholders on topics such as diversity, gender pay equity, income inequality, immigration, and climate change can lift financial performance and create lasting brand differentiation. Clearly it's never been more important to put consumers and staff at the centre of corporate strategy.
Increased transparency and heightened political awareness have drawn widespread attention to business’s role in society as a driver of change. Organizations find they are increasingly expected to exercise their ability to do social good, both externally for customers, communities and society, as well as internally for their employees. True social enterprises must take a total stakeholder approach to pressing public issues to maintain reputation and relevancy. Among the many factors contributing to the rise of the social enterprise, we see three powerful macro forces driving the urgency of this change.