At the UN Global Compact Summit earlier this year, Goldman Sachs issued a report that found companies which are considered leaders in environmental, social, and governance (ESG) policies are also leading the pack in stock performance—by an average of 25 percent.

As human beings, each one of us has an ethical responsibility to the people, communities, and environment around us. As a business made up of people, each company should also have a responsibility toward its employees, communities, and environment that it is a part of. We firmly believe that businesses have a higher purpose beyond bottom line and top line growths.

Looking around the world of businesses today, we find many organizations that do not actively focus adequate attention or take responsibility for the communities where they operate. These businesses often neglect the employees, and societal and environmental issues in their own backyard, while thinking that their sole responsibility is to provide value to the company’s investors. In my opinion, businesses operating in India should provide more tangible support for the most pressing community issues such as illiteracy, poverty, or the enhancement of the status of women (to name a few), while companies in the U.S. could help out with environmental, educational, and healthcare issues. Organizations should decide on which issues they want to support and then find ways in which they as a company, and their employees can contribute to the improvement of those areas in their respective communities. This participation might include financial aid; but it must also be an integral part of the psyche of an organization—its values and culture, including its strategy and policies. And its employees should proactively dedicate time and effort, whether as part of the business or on an individual basis, for these honorable causes within their communities.

Once the business sets its objectives and properly manages a good balance between its operations, employees, and the community, the organization will notice an impact and see profitable growth in its business as well. For instance, a survey conducted for the 1999 Cone/Roper Cause Trends Report revealed that 76 percent of consumers indicated they would switch brands or retailers to one associated with a good cause, when price and quality are equal, while 87 percent of employees at companies with philanthropic programs feel a stronger sense of loyalty to their employer. This same attitude holds true today.

Timberland and SAS are two good examples of companies that foster values and objectives beyond that of just business growth. Not only have these companies won numerous awards for their community involvement and employee care, they also boast a loyal employee base and lower than average attrition. At UST Global, our experience is similar.