3 Ways to Better Align Your Company's Financial Practices and Values
Originally Published in Conscious Company Magazine
MULTIPLY YOUR IMPACT BY PAYING CLOSER ATTENTION TO WHERE YOUR COMPANY SPENDS, INVESTS, AND DEPOSITS ITS MONEY.
The core thesis of mission-driven business is that we can use our product or service and the ways in which we lead and empower our employees to have a positive effect on the world. Yet let’s not forget about the power we also have to leverage our business assets to serve the issues we value.
Ensuring that each and every company our business engages with is working on some part of the solution is essential to acting on climate; to promoting a fair, just, and sustainable economy; and to moving all of us forward in our lives. As conscious leaders, we must align our business’s money and assets with our core missions and empower our employees to make a difference.
Here are a few ways companies can multiply their positive impact by using their financial power strategically.
1. Review your supply chains
Where are you sourcing your materials and business supplies? From paper and office products to catering and delivery to the core components of your own products, how values-aligned can you make your supply chain?
When each of us makes a conscious decision to source locally or work with businesses that embody our highest principles — such as sustainability or diversity in leadership — we are not only making a statement about our values, we are using our dollars to disrupt “business as usual.”
Interestingly enough, the importance of keeping our dollars in our local communities is something on which all sides of the political spectrum seem to agree. While distant online retailers can be incredibly convenient, shopping and sourcing locally keeps more of our dollars in the local economy, supporting our communities. And research has found that more of each dollar recirculates within the same community when we shop locally, creating a greater net impact.
Shifting our sourcing dollars from corporate spending to local spending, particularly as we scale, can make a big impact in terms of supporting the solutions we are collectively seeking. Plus, purchasing from underrepresented groups helps shape the opportunities available in our communities and ultimately leads to more widely distributed local economic growth.
2. Review your employee financial offerings
Another way to disrupt business-as-usual is to make sure we are offering values-aligned (such as green and sustainable) retirement account options to our employees. By influencing the options that are available to others, we amplify the impact we can make. Take time to make sure that these, and all of your assets, are invested in companies and teams that are working to solve issues important to both people and planet.
Practicing open-book management, so that incentives are aligned and that firm financials are transparent and understood at all levels, is another way to empower all employees. And, particularly for businesses employing low-wage workers, providing a no-interest loan fund for employees who have hit a challenging life event can help them avoid payday lenders. Sharing company ownership among employees is yet another way to incentivize everyone at the company while disrupting business as usual.
3. Review your banking practices
In a similar vein, by choosing to move our business accounts to local or values-aligned banks (often with lower fees), we benefit our bottom lines while also investing in the communities where we live. By keeping our money with banks or credit unions that have community or mission ties, we have greater leverage to prevent our dollars from supporting projects we disagree with.
Small businesses, which create the majority of new jobs, depend heavily on small, local banks for financing. Small and mid-sized banks control less than one-quarter of all bank assets, yet they account for more than half of all small-business lending. Meanwhile, the largest 20 banks, which now control 57 percent of all bank assets, devote only 18 percent of their commercial loan portfolios to small businesses.