Business as a force for good – are we at a tipping point?
On 19 August, the Business Roundtable, a group of leading CEOs of the largest corporations in the USA, agreed a new purpose beyond creating value for shareholders. The ‘Statement on the purpose of a corporation’ was signed by almost 200 members, including Jeff Bezos (Amazon) and Tim Cook (Apple). This move signals a significant shift away from the short term thinking fuelled by quarterly reporting in the capital markets. It enables CEOs to balance the interests of all stakeholders with those of shareholders. This means that employees, suppliers, the wider community, the environment and society at large can be factored into board-level decision-making. What’s interesting is that among all of the brands tuned into consumer pressure, the Round Table is currently led by Jamie Dimon, CEO of the financial institution, JPMorgan Chase.
The founders of B Lab penned a response in FastCompany inviting the Roundtable CEOs to become B Corps, pointing out that the movement they founded a decade ago offers CEOs a tried, trusted and practical route to achieving these goals, aligned with the SDGs. In order to be certified as a B Corp, organisations complete the B Impact Assessment (BIA). This free online tool is available to view at www.bimpactassessment.net. It helps build more balanced businesses by asking questions about 5 key areas of operation: Governance, workers, supply chain, community, and the environment, moving beyond certifying products, to certifying the ethics and actions of entire organisations.
These events are playing out against a dramatic backdrop. From 20 -27 September businesses are being encouraged to down tools and take to the streets to protest for the accelerated end of fossil fuels in a Global Climate Strike. The web site features young activist, Greta Thunberg with the line ‘If not you, who, If not now, when?’
Visit the Extinction Rebellion web site and you are greeted with ‘International Rebellion begins Monday 7 October’ In the year since Greta Thunberg stopped going to school to protest against the lack of Government action on the Climate Emergency, different groups have mobilised 1.6 million students across the world to strike for the same cause. #FridaysForFutures has become a globally active movement.
The actions of the Business Roundtable, B Lab’s response, the press coverage it has generated and the many events that are planned (eg. B Inspired in London in October) plus all of the communication about the Global Climate Strike are still just a handful of initiatives among so many that are underway around the world. It really does feel as though we are set for a new order of business. But what does that mean for corporate reputation?
The comments on the Business Roundtable statement and the resulting press coverage have focused on the need for deeds not only words. Anyone who works in corporate communications will understand that for a company and its CEO, signing up to something as significant as the end of shareholder value creation primacy is, in fact, a big deal. Companies know that their stakeholders are listening and will hold them to account. It feels wrong to characterize this move in terms of winners and losers because the stakes are high for everyone. But there is nevertheless a sense of expectation in the air that it is time for companies who want to be out in front to do more than advocate for change. It’s time for businesses to take action and be the change that the world needs.