In 1970, Milton Friedman, a titan of 20th-century economic thought, famously declared that the sole social responsibility of business is to increase its profits. For half a century, this doctrine reigned supreme, shaping corporate strategy and defining the very purpose of the firm. But as we navigate the turbulent landscape of 2026, it is clear that Friedman’s world is a relic.
A new paradigm has taken hold, not through a sudden revolution, but through a steady, inexorable evolution. The age of the social capitalist has arrived, and with it, the realisation that doing good is no longer a philanthropic luxury but a strategic imperative for survival and growth.
This is not the soft-hearted idealism of a bygone era; it is a pragmatic response to a world grappling with a polycrisis. The lingering economic scars of the pandemic, coupled with escalating climate-related disasters and deepening geopolitical chaos, have fundamentally altered the expectations placed on corporations.
Consumers, employees, and investors are no longer content with a singular focus on shareholder returns. They demand that companies act as responsible citizens, contributing to the well-being of society and the planet.
The message from the C-suite confirms this shift is seismic. Recent studies conducted in late 2025 revealed that a remarkable 76 percent of business leaders are planning to increase their investment in social-impact initiatives.
Even more telling, a landmark KPMG report on the “ESG Revolution” found that 94 percent of chief financial officers—the traditional guardians of the bottom line—now expect social issues to be a key corporate priority by 2030. Profit and purpose are no longer seen as mutually exclusive; their fusion is now the core of competitive strategy.
Forward-thinking companies are discovering that this fusion delivers a powerful “purpose dividend.” The most immediate return is on brand reputation.
In an era of hyper-transparency, where a company’s ethical missteps can go viral in an instant, a genuine commitment to social and environmental goals builds a deep reservoir of customer loyalty.
This is not about superficial “greenwashing,” but about embedding sustainable practices into the core of the business model. Consumers are increasingly sophisticated, rewarding brands that demonstrate authentic, measurable impact with their purchasing power and their advocacy.
This dividend extends directly to the war for talent. The brightest minds of the emerging generation are not merely seeking a paycheque; they are seeking meaning. They want to work for organisations that align with their values and are making a positive contribution to the world.
A robust social-impact programme, therefore, becomes a critical tool for attracting, retaining, and motivating a high-calibre workforce. When employees are proud of where they work, they become more engaged, more innovative, and more committed to the company’s long-term success.
Beyond the crucial assets of brand and talent, social impact is a powerful catalyst for operational excellence and innovation. The discipline required to track and reduce a company’s carbon footprint, for example, often reveals inefficiencies in the supply chain that can be eliminated, leading to significant cost savings.
The quest for social solutions—such as developing products for underserved communities or creating circular economy models—sparks innovation, opening up new markets and revenue streams that were previously unimaginable.
Despite the growing momentum, the social-impact movement faces a critical hurdle: measurement. While most large companies now produce glossy sustainability reports, the metrics are often inconsistent, self-serving, and lack independent verification.
A recent analysis of corporate disclosures revealed that while 98 percent of major firms report on internal diversity metrics, the broader, more complex impact on communities and ecosystems remains largely ignored.
For social impact to be taken seriously in the boardroom, it must be measured with the same rigour as financial performance. Without credible, standardised data, the purpose dividend risks being dismissed as a marketing gimmick rather than a core driver of value.
The tectonic plates of capitalism are shifting. The model of shareholder primacy that defined the post-war era is yielding to a more inclusive and resilient model of stakeholder capitalism.
This new model recognises that the long-term health of a company is inextricably linked to the health of its employees, customers, suppliers, and the communities it serves. The transition requires more than just a new set of metrics; it demands a fundamental rewiring of corporate strategy and a new kind of leadership.
The companies that embrace this reality will not only be on the right side of history—they will be the ones that thrive in the globally interconnected, complex, challenging, and opportunity-rich landscape of the 21st century.
Prudence Zoe Glorious is an author and Chief Purpose Officer at PZG PR www.pzg.co.tz
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