What role must businesses play in today’s volatile world? Business leaders cannot continue to act as if financial performance is their only report card without also being concerned about the impact of their decisions on their company’s contribution to society.

150 years after the start of the industrial revolution, we have learned a bit about business’s impact on the world. Global GDP has grown dramatically to more than US$100 trillion today, strengthening economies, building a stronger middle class, and creating innovations that have improved our quality of life.

But there’s been a cost, including worsening environmental damage, widening economic inequality, and deepening social injustice. Where is the rule book describing how to do this while also confronting these larger crises?

I’ve spent the past 20 years working with companies in 40 countries and the most successful ones offer lessons on what businesses can do to improve. The best view their enduring contribution to society through four value filters: Reputational, Organizational, Societal, Financial.

Reputational value

Lead by example. Your company’s reputation in society depends on how successfully you galvanize the interests of stakeholders while ensuring the financial health of the business. You earn trust by delivering on the promises you make and the values you espouse. When society trusts you, you are given temporary permission to continue operating. But if you violate trust, society can revoke that permission, devastating your reputation. As Warren Buffet said, “it takes 20 years to build a reputation and 5 minutes to ruin it.” If you think about that, you’ll do things differently. When leaders truly lead by example, reputational value improveshttps://competentboards.com/.

Organizational value

Company cultures have deeply rooted orthodoxies, relationships, and unwritten rules. Anything that upsets these comfortable routines spurs resistance, so how do you know where to even begin the change effort? There are likely people in your company who have been part of highly collaborative projects. They understand the sense of purposeful accomplishment that animates such work.

Tap into their wisdom and experience to help inspire a workplace and company culture that feels more like a cause. When people believe their work matters, they will increase their discretionary effort with others beyond what is expected because of the greater good they perceive they are pursuing, and organizational value will be strengthened.

Societal value

This is a set of actions designed to enhance the quality of life and wellbeing of the communities you serve. The people within want to know what your company is doing to contribute to the health of the community dynamic, beyond providing jobs. Are you part of the social fabric, or are you simply occupying space because of financial convenience? Are the business leaders seen as community energizers, or de-energizers?

When your company is absent from the local community’s life, “us-vs-them” tensions are exacerbated, making reputation building far harder, and damaging your relationships with stakeholders. A laser focus on societal value is good for investors. 73% say being socially responsible positively contributes to their ROI. However, only 36% of consumers trust business leaders to do what is right. This is both a problem and opportunity. The problem is evident: you aren’t trusted. The opportunity is also clear: get deeply engaged in the community by demonstrating that you care.

Financial value

Business health is measured by its financial condition, which is a function of how successfully it embraces the three values described above. The blind pursuit of financial gain absent a deliberate emphasis on the three values above may lead to short-term success, but the business won’t survive for long if profits and shareholder wealth are the only measures of value. In short, financial value is the result of success in strengthening the first three values. Furthermore, sources of capital are changing, and you would be well served to pay careful attention to these shifts.

The factors shaping what is considered valuable in society have been underway for years. The risks associated with investments once considered safe are increasingly risky, and opportunities that were once considered risky are now central to your company’s market relevance and survival. Younger investors favor companies with credible ESG initiatives. The question is not if change is needed, but how quickly can you be part of it. Consider climate change. A Swiss Re study forecasted the financial impact of climate change on the economies of 48 countries (90% of global economy).

• 18% reduction in global GDP if no actions are taken (3.2°C increase)
• 14% reduction if some actions are taken (2.6°C increase)
• 11% reduction if further actions are taken (2°C increase)
• 4% reduction if Paris targets are met (below 2°C increase)

If you choose not to act, then you are helping accelerate future climate disasters, worsening human and financial costs, and contributing to GDP reductions, certainly not a reputation-enhancing decision. So why not decide instead to change by being part of the solution?

In short, all four of these values matter, but it is critical that you build your business around the first three. Only then will sustained financial value occur.

John A Davis is an award winning academic, business leader and author of Radical Business: How to Transform Your Organization in the Age of Global Crisis published by Emerald.