Doing good should be on every company's to-do list
7 min read
31 May 2017
Ice cream chain Ben & Jerry's won't serve two scoops of the same flavour in Australia until same-sex marriage is made legal. Creative moves such as this has garnered the company a fabulous reputation for doing good.
The past few years has seen a slew of scandals and ethical controversies highlight the ease with which a business can go from hero to villain, landing CSR – otherwise known as doing good – a more prominent spot on the corporate agenda. But are companies doing enough?
If anything, recent events show failing to take CSR into account can have a profound and lasting impact. John Browne, the former CEO of BP, said as much in a book he wrote, entitled Connect: How Companies Succeed By Engaging Radically With Society.
In its prologue he relays how he walked through a hotel lobby, catching a glimpse of the Deep Horizon oil spill on TV. “For a second,” he wrote, “I felt relieved to no longer to be in charge. Quickly though, these images and the scathing commentary made me angry. How had this happened? BP was going to be torn apart.”
His initial thoughts were right, and numerous bosses, Browne said, could soon find themselves asking the same question. This conjecture was based off the 70 interviews he did for the book, which unveiled a perception that doing good was purely for boosting staff morale. A few bake sales for a chosen charity would thus do the trick.
No, he later wrote in a Harvard Business Review, admitting to being surprised by the results, “30 per cent of corporate earnings are at stake when it comes to relationships with society. Just look at Volkswagen. When accusations of it cheating emissions standards tests hit the news, share prices fell by almost 35 per cent in two days of trading.”
Trust is notoriously difficult to regain once lost, so it may be some time until the car company finds its way back into consumers’ good graces, but it’s not impossible. As was stressed by Browne, embedding social responsibility into both corporate culture and strategies will help you turn that tide.
Just look at Nike. It had to embrace CSR and become one of the first companies to publish a list of all its contract factories to rid itself of the reputational damage child labour accusations inflicted in the 1990s.
While implementing a CSR strategy is sound advice, Browne’s best quote involves going above and beyond for mankind: “Your business will do well when you understand your place in the world and the global situations around you. Your company doesn’t control the world. It’s the other way around. Business is there as a servant, and the winners of the future will successfully redefine organisational purposes in pursuit of great social and environmental challenges.”
He’s not the first to praise the values of doing good. Michael Porter, a Harvard professor, suggested in the below TED talk video that businesses can profit from solving the world’s problems – and should strive to tackle them for more than monetary purposes.
Read on to see why tackling issues and championing human rights will become the rule rather than the exception.
There’s certainly no shortage of global issues. Just glancing at a report from the World Economic Forum eliminates the perception we’ve tackled any global challenges.
By 2050 some 9bn people will need to be fed. At the same time demand for food will be 60 per cent greater than today. Based on the current pace of change, it would take 118 years to close the gender gap – a topic in the lime light after actress Jessica Chastain, a judge at the Cannes festival, cited the portrayal of female characters as “disturbing”. Fellow judge and actor Will Smith added appalling ethnic diversity to the list.
Meanwhile, almost 500m new jobs will need to be created by 2020 to get those currently unemployed to join the workforce. And, according to the forum, “the Earth’s average land temperature has warmed nearly 1°C in the past 50 years, resulting in frequent and intense droughts and storms.”
The point here is that the companies we remember most attempt solving such issues. Let’s just say the age of judging companies on longevity and product alone is in the past. But you don’t need to be a big firm to tackle global problems, nor do you need a large amount of resources. Entrepreneurs are showing exactly how creative they are at fighting for rights and solving issues, and so can you.
One of the most recent examples is Ben & Jerry’s, which refuses to sell two scoops of the same flavour until Australia allows people of the same sex to marry. Ikea also made the news for banning sellers providing illegally harvested wood.
In the words of Paul Klein, founder of Impakt: “We will see a shift that will start with an acknowledgment that despite years of initiatives designed to make companies more ‘responsible,’ real progress on global issues and peoples’ rights has remained incremental. The new imperative for business leaders will be to embrace how the viability of their businesses depend on solving the world’s most pressing societal issues.
“Corporations that connect the dots between doing good and business solutions will be seen as leaders. And for millennials, who will make up the next wave of business leaders, this degree of commitment will be the rule rather than the exception.”
By Shané Schutte