In the world of businesses doing good, there are many names and terms. These terms are often used interchangeably and paired with other words that can make for a real alphabet soup in regards to understanding the movement. There are even many names for “doing good” business.
- purpose-driven
- conscious capitalism
- stakeholder capitalism
- good business
- ESG (Environmental Social Governance)
So here’s a glossary that should help make some sense of it all. If you see a term or terms we should add let us know. If you’re looking for ways to decide how your business is executing on it’s purpose check out this guide for some help.
Advocacy
Every corporation or industry association should use business advocacy as a strategic management tool. Every corporation or industry group should prioritize business advocacy. A firm’s or a collection of firms’ business strategies is the match between all their other internal capabilities and external relationships. It illustrates how the business or industry should respond to suppliers, customers, competitors, and the social and economic environment in which they operate. Advocacy marketing seeks to convince your present consumers to promote your company, products, and/or services mostly on the world wide web.
Accelerator
An accelerator is a company that is geared towards helping startups achieve success by providing all the vital factors that impact growth. These include mentorship, access to funding, and connections, which are usually offered in a short-term format. Accelerators are popular for the provision of funding or the capital needed when exchanging for equity in the business. In recent years most accelerators are found in the tech industry, and they are all focused more on mission-driven organizations.
Accredited Investor
An accredited investor is an entity or person authorized by a legal designation to invest in higher-risk vehicles like providing capital to startups, but the parameters vary from one country to another. An accredited investor in the United States is required to have a net worth that’s not less than $1 million without including an annual income of $200,000, or the value of their primary residence.
Authentic Leadership
Authentic leadership is practically a leadership approach that focused on vulnerability, and honesty. This approach to leadership was advocated in the book “Authentic Leadership” by Bill George in 2003. According to the book, most practitioners are in agreement that authentic leadership is about being aware, heart-centered, genuine, and geared towards achieving results pertaining to an ethical mission, rather than their own personal gain.
B CORPORATION
B Corporation development of a strategy that a company has met stringent verifiable performance, accountability, and integrity requirements of verifiable performance, accountability, and integrity in areas ranging from incentives and charitable contributions via supply chain policies and input materials. B Corporations are a corporate entity that has already been certified by the Better Business Bureau.
Belonging
Acceptance as part of, or a member of a particular group. Belonging is considered to be one of the basic human needs in several theories in psychology. Creating a conducive working environment that fosters a sense of belonging among your workforce goes a long way in creating a diverse and inclusive workplace culture. These are the ingredients for a high-functioning commercial space and motivate employees to give their best and feel part of the success of the company.
Biomimicry
Biomimicry is an approach to innovation that is adopted and developed by various conscious organizations, seeking sustainable solutions to the challenges humans face by emulating strategies and patterns. The primary goal of the approach is to come up with materials, products, and systems that are adapted to life on earth over a long period.
Benefit Corporation
A legal structure for businesses that have passed legislation in 33 states in the U.S and one country in Europe: Italy. The primary goal of a benefit corporation is to expand the legal mandate of corporate boards, with the aim of making them reconsider their stand on issues like social and environmental factors, and the financial interests of the shareholders. It basically gives businesses the chance to stand up for the changes they want, rather than waiting for others to create change.
Blended Value
Blended value is a conceptual framework that emphasizes the need to associate an organization’s investment, economic and financial value with environmental and social value. The framework was developed by the impact investor Jed Emerson, stating that it doesn’t matter whether the organization is for-profit or a non-profit, blended value applies to all.
Business
An established economic system where organizations offer services, produce various products or sell goods with the aim of turning a profit or making money. The main idea behind a business is to add value to the process, which is measured in financial profit, or other forms of metrics linked to environmental and human well-being. A business also refers to individual organizations that are playing their part in the economic system.
Bottom of the Pyramid
The poorest and largest social-economic group consists of approximately 2.7 billion people globally who survive on less than $2.50 every day. This untapped market has attracted many social entrepreneurs, forcing them to harness the necessary market forces needed for positive change in creating services and goods specifically for this market. The term “Bottom of the Pyramid” became popular in 2004 after the release of C.K. Prahalad, “The Fortune at the Bottom of the Pyramid.”
C.
Cause marketing
An extremely prevalent marketing ploy in which a company partners with a nonprofit or social cause to generate money and raise consciousness about a problem while also profiting from the “feel-good factor” of being connected with that cause or issue.
Cause washing
Cause washing campaigns are subtle, clever, and deceitful marketing ploys, but they can backfire. When a company’s exhibited practices don’t match the principles it’s pretending to preserve or promote by aligning itself with a nonprofit or charitable movement, it’s known as illegitimate cause marketing. On the other hand, ethical businesses include social issues not just in their marketing methods but also in their overall corporate strategy. You’ll need to develop and implement a sound strategic plan that distinguishes your firm as authentic if you want your brand to stand out in a sea of cause-washers.
Coalition
Because conscious businesses are generally formed to address social issues larger than themselves, they frequently collaborate with other like-minded businesses to achieve goals such as policy advocacy. A temporary and specific partnership is created between entities or groups. Members can pool their resources and grow more powerful by forming coalitions with other organizations with similar beliefs, interests, and goals.
Collective impact
Collective impact happens when companies from many sectors agree to address a societal problem by working together on a similar goal, synchronizing their efforts, and utilizing common success measurements. Moreover, the name of a particular, systematic approach to such participation.
Community interest company
A community interest company is a legal category established by the United Kingdom in 2005, defines a company entity that is halfway between a nonprofit and a for-profit. It allows for investment returns, but only if they are “rational and fair,” The company must remain in business to support and benefit the public.
Conscious
This refers to the state of being completely aware of, responsive to, and sympathetic to one’s environment and self; behaving consciously and purposefully as a result of that understanding.
Conscious capitalism
Conscious capitalism is a company model that balances profit with social responsibility. It’s a branded word for a purpose-driven corporate concept promoted by the natural foods industry. It’s reawakening the courageous spirit of a company. Under conscious capitalism, the necessity of profit-making for businesses is not overlooked. Instead, it enhances and complements this purpose. The Aware Capitalism paradigm focuses on four interconnected specialties: mission, ethos, shareholders, and management, and argues that building a fully conscious firm necessitates a strong commitment to each.
Conscious business
A conscious business is an organization that takes a comprehensive approach to sustainability, which includes the individual, the workspace, and the company’s impact on the environment.
Conscious consumerism
Consumers are exercising their purchasing power to influence the world by purchasing ethically created items and services increasingly prevalent and impactful.
Conscious leadership
This refers to the art of leading a group of people from a condition of enhanced internal and exterior awareness. Conscious leaders understand the importance of and are in control of their ideas, emotions, attitudes, preconceptions, and habits, as well as the implications and outcomes of their conduct.
Cooperative
It is a type of proprietorship in which a company (or other institution) is possessed by and managed for the benefit of all other members. It is normally classified by a democratic governance model in which each user-owner has one vote.
Core values
These are the essential and most significant moral ideas of a person or organization, guiding all choices, conduct, and objectives. A key component of doing conscious business is clarifying and implementing a company’s basic principles.
Corporate social responsibility (CSR)
The efforts of a company to evaluate and manage its impact on the environment and environment within which it operates. The phrase refers to work that goes above and beyond what is compulsory by law, and it dates back to the 1950s as a modern idea. Ecological sustainability initiatives, charity, ethical labor standards, and volunteerism are the key categories of CSR practices. If the business’s basic operations contradict or undermine its professed mission and vision, CSR practices risk being perceived as insincere, slapped on, or an afterthought.
Co-working
Refers to the notion of self-employed people or working for multiple employers exchanging gear, opinions, skills, and expertise in a shared office or another workplace atmosphere.
Cradle to cradle
A concept coined in the 1970s by Walter R. Stahel and promoted by William McDonough and Michael Braungart in their book cradle to cradle, published in 2002. This paradigm aims to develop manufacturing methods that are cost-effective and waste-free. All resource inputs and outputs are classified as either technological or physiological resources in cradle-to-cradle production. As per sustainabilitydictionary.com, “technical resources can be reprocessed without losing quality, whereas biological resources can be decomposed or ingested.”
Cradle to grave
This refers to assuming responsibility for the disposal of products produced after consumers have finished with them.
D.
Deliberately developmental organization (DDO)
Researchers from Harvard University Lisa Laskow Lahey and Robert Kegan came up with the word to describe Organizations that go above and above what they are legally obligated to do to create circumstances that will assist employees in overcoming their internal obstacles. It allows them to look at the potential for change, take stock of blind spots they have created for themselves, and identify flaws and faults as excellent prospects for growth. The report claims that intentionally developing organizations enjoy greater profits. They also have a higher level of contentment and teams that work together. Companies that use this approach are more innovative than those that don’t.
Diversity
In business management, this phrase refers to diverse characteristics within a workforce, such as sexual identity, ethnicity, age, background, and training. According to extensive studies, improved diversity inside an organization has been shown to enhance invention, innovation, and flexibility.
E.
ESG (Environmental, social, and governance)
Three elements that socially conscious investors employ to examine and filter assets for an ethical impact are environmental sustainability practices, social responsibility obligations, and governance regulations. According to growing data, organizations with strong ESG metrics might operate better in the long run and have greater business models.
Employee engagement
Refers to the participation of a worker and employee satisfaction and motivation — or, another way, an employee’s emotional attachment to their workplace. Greater staff engagement is beneficial to conscious organizations. Employees that are fully motivated outshine their counterparts, and businesses that excel in cultivating a high level of motivation across their staff reap multiple benefits, including growth and profitability, improved efficiency, and enhanced customer ratings.
Employee stock ownership plan (ESOP)
Employee stock ownership plans provide employees with shares in a company they work for, usually through a third-party trust and at no expense to the employee. Staff does not hold shares and often does not have voting rights in a corporation, unlike in a cooperative. When they leave the workforce, they usually receive the cash value of their shares in their account.
Equity crowdfunding
A method of generating money to fund a venture by soliciting small contributions from many people, with each supporter receiving a portion of the company’s ownership. In 2016, non-accredited investors could participate in this sort of crowdfunding in the United States.
Evergreen business
The Tugboat Institute invented this word to describe a mission-driven organization that intends to stay privately owned, focuses on long-term goals, and avoids obtaining finance that puts profit before its goal.
Externality
A non-monetary expense of delivering connected goods or services is a side effect or consequence of company activity. Nitrogen overflow into streams and rivers, for example, is a detrimental externality of some animal farming practices.
Extractive
Tending to use resources without making plans to replenish them. Taking groundwater for agricultural or manufacturing purposes faster than the aquifer recharges, for example, or not providing enough rest when scheduling employee work hours are examples. The word can refer to entire economies or business models. It’s a big part of what conscious businesses try to refrain from.
Fairtrade
Refers to various certificates that confirm that suppliers, particularly in developing nations, are paid above-market rates for their goods (typically materials) and that certain social and environmental criteria manufacture those commodities. Fair Trade USA and Fair Trade International are two examples of certification organizations.
For benefit
Fourth sector
A model of business where an organization uses earned income to maximize social benefits is located at the junction of the public, private, and public dimensions.
Global reporting initiative (GRI)
An independent worldwide organization that establishes sustainable development reporting standards that consider both social and environmental problems. Nearly 11,000 organizations adopted these guidelines in their reporting as of 2017.
Green business
A colloquial phrase for a corp that prioritizes ecological sustainability in its practices and regulations.
H.
Holocracy
Holocracy is a peer-to-peer system of management structures that distributes leadership and decision-making through a matrix of self-organizing “circles.” Former programmer Brian Robertson designed it, and when Zappos, led by CEO Tony Hseih, implemented the strategy in 2013, it gained traction. Focusing on roles rather than job descriptions, distributed authority, and transparent rules are among the system’s features, which HolacracyOne LLC patents.
Hybrid organization
A firm that employs both nonprofit and for-profit principles and legal systems to exploit the potential of both models — for example, a nonprofit’s ability to receive tax-exempt charity and a for-ability maximum profit to solicit funding in exchange for shares. The nonprofit and for-profit arms can have various relationships; for example, a nonprofit corporation may possess equity in a connected for-profit corporation.
Impact investing
Investing in companies, institutions, or investments to use the power of business to produce great social and environmental outcomes while also earning a profit. As per the Global Impact Investment Network, there was $114 billion in asset management companies in investment in the financial market in 2016.
Inclusion
In occupational culture, inclusion entails maximizing the value of diversity through a variety of methods. Establishing an inviting environment, a supportive, connected, and respectful atmosphere where people from various walks of life come together. Backgrounds can contribute to the fullest extent possible.
Incubator
An initiative, commonly administered by a nonprofit, aims to assist entrepreneurs to succeed in their startups by supplying them with resources, connections, and services. Many people are interested in purpose-driven businesses. In distinction to accelerators, incubators typically do not have stringent timetables and do not take a stake in a company’s equity.
Integrated reporting
A means of conveying the value that a company provides that combines both standard financial measures and information on non-financial sources, including human and social capital and ecological quality.
Intrapreneur
An employee acts as an entrepreneur by putting in the effort to innovate a company.
While the focus of innovation varies, the phrase is frequently used to characterize changemakers who aim to steer a company toward more conscientious practices.
L.
L3C (low-profit limited liability company)
Eight US states and two Native American tribes have legalized the term. Unlike a traditional LLC, an L3C has a stated philanthropic purpose, but unlike a nonprofit, this can allocate profits to its members or owners.
Living wage
A rate of pay that is sufficient to maintain a reasonable standard of living in the community where it is earned. Having paid all employees a living wage is significant among conscious businesses.
Mission statement
It is a phrase that outlines a company’s mission and what it will take to accomplish it now and in the future. In characterizing a corporation that prioritizes accomplishing self-transcendent aims, the term is frequently alternatively used with purpose.
Mission-driven business
A for-profit company that includes a social mission into its strategies and processes.
Natural capital
The globe’s stockpiles of environmental assets such as water, sun, soil, and air from which humans draw the circumstances and systems that enable life and commerce.
New economy
A concept used by the consciousness and economically sustainable company movements to represent a long-term economic system that serves all people, especially those who have typically been left out of economic prosperity, and promotes human and natural system regeneration.
Nonprofit
Nonprofit organizations are normally exempt from paying payroll taxes and are authorized to accept tax-free contributions. These organizations, often known as “not-for-profit,” operate for the benefit of the general public and are required by law to reinvest any profits that exceed typical operating expenditures back into the cause or mission they serve. Private owners or shareholders are not permitted under the law.
Open hiring
Greyston Bakery in New York spearheaded human resources and community development strategy. Certain job openings in the business are offered to the next individual on a waitlist without background checks or interviews. The approach indicates that, with the right support, many people who would not have been hired otherwise may be good employees.
Open-book management
A business strategy in which a corporation shares all of its financial data with its employees to inspire and enable them to make smarter business decisions. This level of trust and transparency can also help people feel more connected and engaged.
Organic (food)
Refers to foods cultivated and processed according to strict criteria that ban synthetic fertilizers and pesticides, antibiotics, hormones, genetically modified organisms, and more.
Patient capital
Refers to financial investment in which there is no hope of a quick profit. When it comes to financial returns, investments connected with an organization’s social or environmental objective are often patient.
Principles for responsible investment (PRI)
We will pursue proper disclosure on ESG [environmental, social, and governance] concerns by the businesses in which we invest,” for example, is one of six volunteer, idealistic investment principles drafted in 2005 by investors in collaboration with the United Nations. Around 1,750 registrants have pledged to integrate ESG issues into investment practice, representing $70 trillion.
Purpose statement
A person or organization’s statement about why they exist and the change they want to make. According to research, people and enterprises with a strong, self-transcending purpose are more likely to succeed.
R.
Resilience
The ability to bounce back rapidly from adversity. At the individual, organizational, and societal levels, conscious businesses embrace mindsets and practices that promote resilience.
Right livelihood
A historical concept made apparent in Buddhism as part of the Eightfold Path to enlightenment/spirituality is that each individual should pick employment that leaves things in a better state than they were when they found them. While the word is only recently emerging from religious contexts, there is substantial evidence that the Millennial generation, notably in, values good livelihood ideals and seeks direction and significance through employment.
S.
Servant leadership
Refers to a concept of leading a group that avoids the traditional “power at the top” hierarchy and instead focuses on the prosperity and well-being of those being led. Servant leaders prioritize the needs of others and work to help others grow and perform to their full potential. Robert K. Greenleaf originated the concept in a 1970 essay titled “The Servant Leader.”
Shared leadership
Shared leadership refers to any of several managerial ideas and techniques that spread accountability broadly among an effective workforce.
Shared value
Mark Kramer and Harvard economist Michael Porter created the term shared value to convey the concept of exploiting the financial opportunity of tackling societal issues.
Shareholder advocacy
According to US law, anybody who holds stock in a corporation has the legal power to influence its policy. Every stakeholder is given a vote at a company’s annual general meeting on various matters, such as voting on the board of directors, confirming CEO compensation, management and policy problems, and various social and environmental issues submitted by shareholders. Leveraging that right to influence a corporation’s behavior by presenting petitions or otherwise requesting conversation is known as shareholder activism. In recent times, shareholder activism has shown to be a successful tool for altering major firms’ ecological, social, and management policies.
Short-termism
Short-termism is defined as focusing on relatively brief results at the expense of future goals. Many conscious leaders are skeptical of business leaders’, investors’, and analysts’ excessive short-term attention because they believe it discourages long-term value generation and investment.
Small giants
Bo Burlingham coined the word in his 2006 book of the same name. Small giants, he defines, are “businesses that opt to be great rather than enormous” by putting purpose and the act of caring for many shareholders over expansion for the sake of growth.
Social capital
A matrix of interactions between individuals and entities that is economically beneficial. Traditional corporate practices have frequently overlooked, injured, or underestimated social capital. A scarcity of it would be as much of an obstacle to economic growth in underprivileged communities as insufficient financial capital.
Social entrepreneur
An individual creates or runs a venture or new organization to address a large social or environmental aim, such as poverty reduction, health care, organic agriculture, or conserving public lands. While the company may be non-profit, social entrepreneurs are increasingly aiming for influence by meeting a market demand while also providing a beneficial return to society. In many circumstances, the enterprise’s philanthropic objective takes precedence above substantial financial benefit or valuation, with money serving as energy to keep the service running. Some claim that a for-profit business’s greater flexibility to swivel and reallocate assets allows for more freedom and responsiveness than a non-profit, grant-based organization.
Social innovation
According to Stanford professors James A. Phills Jr., Kriss Deiglmeier, and Dale T. Miller, social innovation refer to a novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created benefits society as a whole rather than private individuals.
Social purpose corporation
Social purpose corporation in California, Florida, Texas, and Washington, a legal category of a for-profit organization that allows — but does not force — firms to weigh social or environmentally friendly practices in decision-making rather than depending solely on profit-maximizing aims.
Socially responsible investment (SRI)
SRI is similar to impact investing in that it includes putting money into specific firms or funds with a focus on the type of business the receivers do. SRI suggests a technique of weeding out investments with negative consequences, whereas impact investing is purposefully promoting specific good outcomes.
Stakeholder
An individual, party, or organization has a direct or indirect position in an organization because its activities, aims, and policies can influence or be affected by them. When making decisions, conscious businesses consider and weigh the interests of all shareholders, including consumers, investors/stakeholders, workforce, suppliers, community, and the environment, and seek win-win solutions. R. Edward Freeman’s 1984 book “Strategic Management: A Stakeholder Approach” popularized the stakeholder theory of organizational management for the first time.
Sustainable business
It is a business that strives to meet current needs and goals without jeopardizing its potential to meet future ones. While most people associate “sustainability” with environmental issues, a comprehensive understanding of “sustainable business” includes customers, workforce, social well-being, and the company’s financial viability.
Systems thinking
One of the abilities of conscious leadership is thinking in systems, and thinking about companies as systems is a crucial approach for conscious business. Systems thinking refers to a managerial approach and viewpoint concentrating on seeing the web of connections that emerge patterns among pieces of a network, business, or other institution. It’s a means of looking at how different aspects of a system interact in complicated and often unexpected ways. Causal loop diagrams, stock and flow diagrams, and simulation models are examples of systems thinking techniques that can be used to map and investigate dynamic complexity.
T.
Triple bottom line (3BL)
A business strategy in which firms measure, evaluate, and measure not just their revenue “bottom line” but also their environmental and social effect. This viewpoint recognizes that a strategic and long success is determined by its profits and how it interacts with its workforce, neighboring communities, and the natural world. The concept is often known as the “3P” concept: people, planet, and profit.
U. Upcycling
Upcycling refers to recycling or repurposing waste materials to make a worthwhile item.
V.
Vision statement
A vision statement is a written statement outlining a company’s planned future and mission.
W.
Workplace culture
The norms, practices, and rituals make up “what we do around here.” “Culture feeds on strategy for breakfast,” management guru Peter Drucker memorably said. According to Great Place to Work research, trust is the most critical factor in sustaining a high-performing corporate culture. Culture is one of the specialties of Conscious Capitalism, and it’s a vital part of building a conscious and long-term business.
