How Top Companies are Catalyzing Social Change while Being Profitable
(3BL Media/Justmeans) – The traditional notion that profit and social impact do not go hand in hand is now nothing more than a fossilized relic of the past. A growing number of companies are now taking on society’s biggest problems – and making money doing so. Creating social impact is no longer a reputation-building exercise for these companies, but a part of their core business strategy.
Fortune has released a Change the World list that recognizes 50 leading companies that are bringing social transformation through activities that are intrinsic to their business strategy. The list, which includes global companies with annual revenues of at least $1 billion, has been compiled with inputs from social impact consulting organizations and experts, including Professor Michael Porter of Harvard Business School and Mark Kramer, founders of the Foundation Strategy Group and originators of the “shared value” concept.
Some of the companies that have made the top 50 include GlaxoSmithKline, Gilead, Nestle, Walmart, Siemens, CVS Health, Accenture, PepsiCo, Heineken, IBM, IDE Technologies, GE, Nike, MasterCard, United Technologies, Paypal, Novozymes, Coca-Cola, Intel, Munich ReInsurance, Bank of America, Schneider Electric, McDonald’s, Unilever, J&J, Gap, Starbucks, Olam International, Salesforce, Panasonic, and Tesla Motors.
GSK has announced that it will no longer file drug patents in the lowest-income regions of the world – an integral part of its patient access strategy. The company reinvests 20 percent of any profits it makes in the least developed countries into training health workers and building medical infrastructure. GSK has strengthened its commitment to vaccine development, including the world’s first malaria vaccine, which could curb a disease that kills more than half a million people a year.
The Israeli company builds and operates some of the biggest desalination plants in about 40 countries. In the U.S., IDE recently opened the largest such plant in the Western hemisphere, located in Southern California. The site, a $1 billion undertaking, transforms seawater into potable water in just 45 minutes and provides some eight percent of San Diego County’s water. IDE has developed a range of energy- and cost-efficient desalination processes, resulting in a cost of less than 0.5 cents to produce a gallon of drinking water at the plant in Southern California.
It has been more than a decade since GE launched its massive renewable business strategy, Ecomagination, with a pledge to double down on clean tech and generate $20 billion in annual revenue from green products. The ensuing 11 years have proved Ecomagination was more than just a PR exercise. Through the end of 2015, GE had invested $17 billion in clean tech R&D through Ecomagination while generating $232 billion in revenue from its products.
Gilead Sciences has been questioned for the high list price of its game-changing hepatitis C cure, Sovaldi, in the U.S. But in India, a 28-day supply of a generic version of the drug now costs just $100. That’s because Gilead has struck deals with 11 different Indian generic drugmakers to supply affordable versions of its hep C drugs to patients in 101 developing countries. In Egypt, the nation with the highest incidence of hepatitis C in the world, Gilead slashed the price of branded Sovaldi by 99 percent.
Nestlé focuses on local sourcing, which helps to boost developing economies and the livelihood of smallholder farmers in more than 50 countries. The company has worked to purge slavery and child labor from its supply chains. In its 16-year quest to become a “Nutrition, Health and Wellness” company, it has made concerted progress: cutting fat, sugar and sodium from thousands of products, while fortifying many otherswith essential minerals and nutrients that are in especially short supply in low- and middle-income countries.
Image Credit: Mark Mawson/Fortune