Historically, most private companies have been focusing solely on TSR (Total Shareholder Returns). This, has prompted a sense of short-termism where profits are all that shareholders have cared for, while societal issues, often created by these companies in the first place are dealt by the government or non-profit firms. This trend is changing due to increased societal awareness, and shareholder pressures. Shareholders are now more ware of the ESG (Environmental, Social, Governance) concept than earlier. Private companies are also to play a part in meeting the UN’s SDGs (Sustainable Development Goals). TSR has thus been replaced by TSI (Total Societal Impact). SRI (Socially Responsible Investing) has also increased in scope. One of the major benefits of this TSI approach is the opening up of new markets, to underserved communities often leveraging partnerships. Costs can be reduced and risks mitigated within the supply chain. Due to a better company image, talent recruitment and further retention will be boosted. This will further enhance the brand value, which will allow for premium pricing. It will also spur business innovations as rampant use of resources will no longer be possible, so improvised solutions will be needed. Eventually, the company will find a place within the overall social and economic fabric.

Source:https://www.bcg.com/publications/2017/total-societal-impact-new-lens-strategy.aspx

Uploaded Date:03 March 2018