LGM Financial Services and the United Way’s Social Purpose Institute are clearly demonstrating a better way to do business.
In March, LGM Financial Services announced its commitment to Responsible Mobility for All, a social purpose initiative designed to promote responsibility and sustainability in the personal transportation sector, reflecting LGM’s core values as a purpose-driven company.
As part of this strategy, LGM has set objectives to engage its customers and dealers that it works with to look at their own social purpose, look at B Corp certification and move some of their invested assets into an Environmental, Social and Governance (ESG) investment model.
Additionally, LGM has also been working with the United Way’s Social Purpose Institute to define and grow the idea of Social Purpose within its framework, ultimately defining what the business is, what it represents and how it contributes collectively to society and the overall greater good.
It’s a fascinating concept and as we see more and more of these kinds of initiatives emerging, Autosphere thought it would be great to sit down with Drew Collier, President of LGM Financial Services and Mary Ellen Schaafsma, Director, Social Purpose Institute, United Way to see where this exciting development ultimately might lead.
Background on LGM Financial Services
Autosphere: Can you provide a little background on LGM Financial Services, how it’s evolved and some of the key drivers for the company today as it relates to the automotive F&I space?
Drew Collier: LGM has been in the F&I business for approximately 20 years. We have our own brand of products under our own Secure Drive label, our proprietary brand, but most of our business actually comes through our partner brands—the automotive OEMs we work with. They entrust us to administer via their own F&I programs on their behalf.
At LGM, some of the drivers of our success revolve around the relentless focus on the consumer experience. We all know that a great consumer experience drives loyalty and loyalty is key to success for our OEM partners and dealers.
United Way evolution and initiatives
How has the United Way evolved as a charity over the years and can you tell us about some of the initiatives you’re currently working on such as SPI?
Mary Ellen Schaafsma: United Way has been able to establish some great relationships within the corporate sector for decades. In British Columbia, we’ve been helping them engage their employees in philanthropy and volunteering for around 90 years, but this new trend is something we’ve been seeing over the last five years or so.
As businesses start moving more and more towards social purpose by adopting a societal reason for being, everything they do from that point is focused on making progress in that area. We’re seeing more and more businesses, especially larger ones moving towards social purpose and adapting on their own and starting to demonstrate the value of social purpose and business. We also recognize that a lot of companies are inspired to do it, but often, don’t really know-how.
With that in mind, we thought about how the United Way could help businesses create social purpose mandates because we see that as a way to increase the good flowing into our communities to create thriving, caring, inclusive environments.
We investigated and we found leading expert Coro Strandberg who already had a past connection to United Way. Together we created a pilot workshop just to see if this social purpose idea had legs. After a day-long workshop, we discovered that social purpose is indeed on the rise and businesses were seeing it. From that, we saw a good role for United Way, and so the Social Purpose Institute was born.
Since then, we’ve developed a lot of valuable services that help businesses understand, define and clearly articulate who they are. And by integrating their social purpose into everything they do; we can help social purpose businesses who have done the work to start collaborating with others to co-create innovations to help strengthen society and help grow their business. From that perspective, the social purpose really is a win-win for everybody.
LGM & United Way partnership
It’s often said that a meeting of minds can result in great things. Can you provide a little info about how LGM and United Way’s SPI joined forces and what objectives they had in mind?
MES: It was a few years ago now that we met LGM and it was actually Coro Strandberg—the social purpose expert we’ve been working with—who introduced us. She sat down with them and discovered that what they were really looking for wasn’t corporate social responsibility but rather, social purpose, but they didn’t have a term for it.
A few years ago we invited them into our inaugural program—our very first cohort of eight businesses, working with the Social Purpose Institute to define their social purpose and again, we were looking for companies that already had their values and ethos deeply embedded—they just needed to tweak and clearly define and articulate what their societal reason for being would be. It’s been a beautiful relationship, even though I think at the beginning they were a bit skeptical.
By the end of completing the program, however, LGM had become one of the biggest champions of social purpose in working with us. They’re already feeling the benefits of being a social purpose company and we’ve worked together to develop a professional development program—one that helps employees within a social purpose company understand what that purpose is and what they bring to the workplace that helps the company achieve their social purpose.
And without businesses like LGM working with us, the social purpose would not be taking off the way it is. We’re really appreciative of LGM, especially in taking the chance on a brand-new program to help us hone it and make it a really valuable service to companies who want to define their social purpose.
DC: At LGM, we have a long history of giving back. It’s rooted in our core values as an organization and was established very early on in our history. In 2019 we started to work on developing a new three-year plan, a new strategic plan, and we wanted to figure out how corporate responsibility or at the time, giving back as we knew it, fit with our strategic priorities.
We knew it was a good and right thing to do but at the time, we weren’t entirely sure how to articulate how it was important to the business model of the organization and how it could drive our economic engine.
At the same time as we were doing some research on this, we also saw what was happening in the automotive industry. One of our OEM partners, Volvo, had a vision of zero road deaths by 2020, and GM was developing their mandate for zero emissions, zero congestion and zero injuries. With these kinds of initiatives, we were starting to see an industry that was embracing mandates that were a lot greater than profitability.
From this, we started to think a lot more about how a similar social purpose mandate could work at LGM and how we could make it as part of our three-year plan. It was kind of serendipitous at that time, since Coro reached out and talked about this program at United Way and asked if we would be interested in participating. The timing proved perfect and it allowed us to develop the concept and bring it into our three-year plan.
Social responsibility and sustainability
We talk a lot today about social responsibility and sustainability, from your perspective what does that mean?
DC: I think we’re seeing an evolution of terminology and thinking. The actual concept has been going on for a while and in 2019 we saw a Statement of Purpose signed by leading CEOs from around the world. Now, we have got this ESG (environmental, social and governance) movement around investments and a lot of companies are committing to using their resources for good.
I think it’s all part of an evolution of looking at the purpose and the role of business in society, and it’s partly driven by expectations society has on good businesses, good brand reputation and the ability to innovate and constantly strive to do better. It can sometimes be hard to exactly put a finger on what that means, but it is a concept we are seeing more and more of. And, while it is difficult to predict how the future will be, it is certainly exciting to see it happening.
MES: For me, social responsibility and sustainability are two really significant precursors to social purpose, and they have really taught businesses a lot about their own capacity to show up in new ways and serve their community and society.
Customers are demanding more today, and businesses are really starting to embrace that—the whole Milton Friedman mentality that businesses are more than just about job creation and economics. They have so much more to bring to the world, to create thriving societies, and within the thriving society, they will benefit as well. It’s about taking things to a whole new level.
And while it does encapsulate sustainability and social responsibility, social purpose takes it to a deeper level by getting to the real reason a company exists and its goals for societal good that can really drive business outcomes. COVID has really highlighted that for us, that business does need to show up differently in the world and see itself as not only a key part of society but being able to reach a new level of engagement within that society.
And, although it is still early days, we are seeing more and more companies adopt a social purpose, so there’s definitely a business case for it and things are moving forward.
Biggest challenges to sustainable mobility
Where do you see some of the biggest challenges currently existing in terms of achieving a future where we have truly sustainable mobility in our society?
DC: Most people equate sustainability mobility with environmental concerns like fuel consumption and emissions. Automobiles and transportation are responsible for about 15% of global emissions, so it’s a big number and a big problem.
Moving forward, battery electrics and hydrogen fuel cells are great options. I drive a battery electric vehicle and I love it—it’s fantastic, but when you look at the bigger picture, there are about 36 million cars currently on the road in Canada.
We replaced less than 5% of that fleet each year and battery electrics and hybrids are only around 4% of those sales, so when you look at the math, it is going to be more than 30 years before we can actually replace the internal combustion engine fleet.
Within the industry, we hear a lot about the challenges in achieving that and working with dealers and our business partners and even the public. We currently see a lot of support for a 30-year transition to EVs but in reality, the infrastructure isn’t there, the availability isn’t there yet and neither is consumer demand, even with government incentives.
These are real challenges we’re going to need to work on as a society to achieve that goal, but as an industry, the interesting thing is we keep looking at this as a problem when instead we should probably be looking at it as a massive opportunity—quite possibly the biggest since the birth of the automobile over 100 years ago.
Once we hit a tipping point regarding EV adoption (and we might be getting close, since a recent study by KPMG cited that 60% of consumers are thinking about an EV as their next vehicle), it could well become socially unacceptable to drive an internal combustion engine.
And when that happens, we could witness one of the biggest sales cycles our industry has ever seen, not just in Canada, but globally as well. So that’s pretty exciting but we also have to remember that responsible mobility is about more than just EV sales. There are also things to consider like the 1.3 million who die every year and a further 50 million that are injured on our roads and how we can take steps to reduce or even eliminate that.
There’s also the issue of millions of vehicles being scrapped every year and 25% of them ending up in landfills. So how do we address problems like that? There’s also the question of usage. There is no denying the socio-economic benefits that cars create but there are also issues such as the fact that a vehicle is the second biggest expense for most people and is only used for about 5% of the day, so then it becomes a question of how can we turn these problems into opportunities?
I think for us as an industry, to get our head around it we need to think differently about where things are going and how we look at responsible mobility as an industry and create success starting from that.
MES: I think LGM has recognized the value of purpose to propel sustainable mobility. And so, it feels like a real opportunity for the automotive industry to rally together and make this shift as a group. LGM is a pioneer and a leader in this but they can’t do it alone.
Therefore, I would definitely say the more companies and businesses in the automotive industry that join in the social purpose business movement, the more we will accelerate responsible mobility for all, and so I really encourage others to get involved.
Responsible Mobility for All initiative
One thing you recently announced was the Responsible Mobility for All initiative. Can you tell us a little about this and some of its objectives?
DC: Responsible Mobility for All is actually our vision at LGM and our social purpose is to accelerate that vision, to work with our partners and industry players to try to move faster in that direction in achieving responsible mobility for all.
We’ve also aligned our branding around being proud to be responsible in our endeavour to achieve that vision. Some of the things we’ve done to help move this forward include creating the first auto dealers against the distracted driving program for the industry and the first hydrogen-electric fueling station in Vancouver for a car share program.
We’ve also had lots of employee volunteering, so we’ve had a bit of a track record of doing some things that are aligned with our vision for Responsible Mobility for All. We’ve also been doing other things, like moving our investments to an environmental, social and governance framework. We’re also looking at paperless transactions—how do we move towards a fully digital experience with our dealers to allow for both greater consumer transparency, while also reducing the use of paper in dealerships.
We’re also looking at B Corp, an organization that provides a framework to enable us to set benchmarks for our company. For everything we do, we are looking at it through a social purpose lens and for us, it is about aligning everything so that we can honestly say we are proud to be responsible as an organization.
At the same time, it’s also important for us to be able to partner with others so that collectively, we can all move towards real, responsible mobility.
Timeline for objectives
If applicable, can you share some details about a timeline you have for achieving these objectives?
DC: Like any organization, you have to build these things, so it doesn’t all happen right away.
All those things I mentioned have been built into our three-year plan, and we’re sort of getting to them when we can. It’s been a little bit challenging over the past year due to the pandemic, particularly from a resource standpoint but also eye-opening. Nevertheless, these things do have a schedule and we’re going to get to them over the coming three years.
We also know there are going to be lots of other opportunities that we can’t even see or imagine today but will emerge. We look forward to working with others in the industry as a collaborator, leader, or playing whatever role we can to move things forward.
Purpose in Practice Case Study
Can you tell us a little about the Purpose in Practice Case Study and some of the findings from this initiative?
MES: We were really happy to collaborate with LGM to create this case study, and what we wanted to know was why did they embark on this journey? How did they get to their social purpose and, most importantly, what have been the results?
For me, the most exciting thing in the case study was that LGM has already been experiencing some of the business benefits that we already knew were part of having a social purpose, but they are truly proving it in practice. This includes things like customer acquisition and retention, innovation generation, new and stronger partnerships, staff engagement etc.—these are all parts of the social purpose business case.
And again, LGM is successfully bringing them to life, even this early on and it’s just going to continue moving forward so we’re really pleased to see that.
DC: Although we were skeptical at first when we got into our social purpose, we started to see some real benefits. Early on we started to engage our staff, and we saw a really great response from our team.
They were excited and really inspired about the positive impact that we could have together and the legacy we could create at LGM, as we started to work through some of the actual specific initiatives. We had opportunities to engage some of our partners on things like the hydrogen and Electric Vehicle program or the car share program, or even working with dealers against distracted driving.
Similarly, we saw our dealers and our OEM partners have a lot of enthusiasm about collaborating and working with us and those partnerships today are stronger because of the work that we did with them.
Today, I think almost every automaker has made some commitment around electric vehicles, eliminating internal combustion engine production by a certain date and reducing road injuries and going carbon neutral in their operations. We’re seeing this groundswell of change and new thinking in our industry and that’s incredibly exciting for us.
LGM is in a great position to be a good partner to those organizations in our quest for Responsible mobility for all and working with others to do the same. Ultimately, from a business case perspective, it resonates with employees, with our customers and hits on our value proposition, as an organization, which, at the end of the day which is pretty powerful.
Is there anything else you’d like to mention?
MES: I think there is this perception that embarking on and bringing to life a social purpose is can seem like a drain for the organization that takes more resources away from other areas of the business. What we are seeing, however, is that social purpose is a business driver for growth and innovation. It’s a driver to attract and retain employees and customers.
So, it is in fact the exact opposite of a drain on resources. It really is a way to grow your business, as well as help create a better world. We’re faced with so many issues currently, ranging from the climate debate to social division, to the pandemic, and these are the times that we really need business in all industries to show up, and, and bring all that they’ve got to the table to help create a better world.
And by doing so, the business itself succeeds, so it’s like a virtuous circle. I hope through this example of LGM and this case study, others can see that creating a social purpose is a wise business decision.
DC: On a final note, I’d just like to share a little bit of my enthusiasm for where we’re headed in the industry. I get an opportunity to talk to our new hires every few weeks and one of the things I share with our team of new people coming on board is what an awesome time it is to be joining the automotive industry.
It is so exciting to see where things are headed right now. There’s not a day where I don’t see headlines in the media about our industry. There are some really exciting things happening that will move us down the path of what we’re calling responsible mobility.
It really is exciting to be part of that change and helping leave a legacy for a better future.