In a recent recording session for a business podcast, the host looked at me and asked, “Be honest, isn’t it all just social washing?”.
It was a blunt question, posed while I was passionately describing the impact work of a corporate partner. And honestly? It triggered me. Because the question highlights a frustrating reality: All of us, especially those working in the impact sector, have become rather cynical about corporate intent. Unfortunately, rightly so.
Today, too many leaders still believe that financing charitable projects is enough to offset unsustainable choices and harmful behavior or prevent reputational risk. A recent study published in Nature found a greenwashing indicator at 96% of over 3500 companies, suggesting greenwashing risks are becoming normalised.
At the same time, too many critics will dismiss a project without even engaging with the fundamentals of what it means to start to rethink the way the world does business. This piece is about why both approaches are shortsighted, for both the critics and the corporations who keep proving them right.
The risk is real. And quantifiable.
For years, “social washing” was treated as a soft, vague concern compared to “greenwashing”. Making misleading claims about their social impact wasn’t a real risk to companies. That era is over.
According to RepRisk’s analysis of over 1000 incidents, social washing is now an acute financial and reputational risk for any organisation. And the data is stark: Misleading communication surrounding social issues has consequences 12% more severe than misleading environmental claims. And where there’s smoke, there’s fire, with 55% of greenwashing incidents directly linked to a social component.
But like the society these initiatives are hoping to improve, implementing, tracking and evaluating the S pillar in a company’s ESG reporting is messy. Unlike environmental data, which can be measured in stable scientific units (like tons of CO2), social impact is rarely captured by standardised measures. Instead, it can be quantified across company policy statements, self-reported numbers (like diversity quotas or training hours) and external perception surveys. This not only makes these initiatives vulnerable to strategic manipulation, but leaves social impact to be evaluated in the eye of the beholder.
So if we believe, as we do at Yunus Social Innovation, that corporations possess a unique power for rapid innovation and financial mobilisation that has the potential for impact beyond charitable donations, then we need to address the cynicism head on. Right now, trillions of dollars in corporate spending flow through supply chains that determine who gets paid fairly and who gets locked out. If that money isn’t guided by rigorous standards, it perpetuates harm. If it is guided well, it can drive systemic change faster than any policy mandate.
At the end of the day, making that happen is not only about the projects that do proceed, but also drawing the line when the factors do not stack up.
When we walk away
Recently, we passed on a pitch that sounded promising on paper. A large corporation wanted to launch a community development program. On the surface, it aligned perfectly with our values. But when we dug deeper, the red flags lined up:
- Instead of a clear impact ambition, the corporate team operated on a bold purpose statement and prioritised their desire for brand visibility.
- The team showed no desire to understand what the target communities they wished to work with actually needed. The only priority was to execute an existing idea, put together by an executive team over dinner.
- An ‘impact advisory board’ designed to make the project mission resilient consisted solely of people representing the company’s own interests.
- Most tellingly, there was no willingness to confront the company’s own negative externalities.
What this experience shows is that it’s not enough to set an ambitious impact goal, write a beautiful mission statement, or conceptualise a new “partner to society” project. What matters most is building the infrastructure that underlies each project and which makes a company’s social impact verifiable, to themselves, to their communities and to their critics.
Building verifiable impact infrastructure
To make corporations reliable partners to society, we must accept a hard truth: No corporation does anything ‘just because.’ Corporates act because there is a risk to mitigate, or because there is a business intent. To raise the bar on their social impact, we must help them move social impact from mere risk management to recognising the innovation potential in their role for society.
And the risk is there. Gen Z consumers will walk away from brands whose activities don’t match their words. Investors are starting to price in social risk alongside environmental risk.
If impact initiatives rely solely on goodwill, they are fragile. They disappear when budgets tighten or CEOs change. Under external scrutiny they become vague or opaque. But when impact is tied to business strategy, it becomes durable and visible. In fact, it helps corporations maintain their long-term license to operate.
How to tell the difference
So, how do we distinguish between a partner committed to long-term impact and one engaged in social washing? We look for three things:
- Intentionality: Do they want to solve a problem, or do they want a photo opportunity? Serious partners invest time in understanding the root causes of social issues, not just the symptoms. They listen deeply, accept the hard truths, and are open to pivoting their ideas to fit the actual problem.
- Measurement and transparency: Are they willing to be held accountable? Organisations making social claims need clear, transparent guidelines on how they interact with partners and suppliers. If they fail to turn bold mission statements into clear success indicators, we push for more. If they track indicators that feed only into their brand reputation instead of nurturing community value, we walk away.
- Business integration: Is the initiative integrated into the core business model, or is it a side project managed by a remote team with no executive attention? Does its success matter to the business? The most resilient corporate impact projects are those where social value creation drives business value creation.
I am optimistic, but critically so. I believe corporations can do much better. Not by pretending to be NGOs, not by hiding the truth behind statements of selflessness, but by leveraging their unique strengths: scale, capital and innovation.
Because in the end, the line between social washing and social impact isn’t drawn by a press release. It’s drawn by procurement decisions, innovation strategies, and the willingness to collaborate with the communities most impacted by your work.
