In the 21st century, making the biggest profit isn’t necessarily everything.
In a world where business scandals seem to hit the media every week, people demand more from the private sector. In the 21st century, many successful brands look beyond profit to social impact and being a positive force in society. For many reasons, it pays to take that responsibility seriously.
Businesses have big potential.
We face many challenges in the world, from climate change to corruption. Governments and citizens can only do so much.
Businesses are big players in the global economy and their involvement is essential to driving meaningful solutions to societal problems.
With annual revenue of over $254.7 billion (2017), Toyota Motor would be among the top 45 largest economies by GDP if it were a country. Private companies are big employers as well. According to the European Commission, the private sector accounts for 90% of jobs and 84% of GDP in developing countries.
When businesses make having a positive impact on society a priority alongside maximising profit, the affects can be huge. Companies can make a difference in many areas, including fighting the fraud and corruption that reduces confidence in business. They can also provide fairly priced and sustainable products and minimise negative environmental impacts by, for example, committing to reduce carbon emissions or reducing the use of plastic.
Customers are demanding more.
It pays to be a responsible business. Customers have huge power over businesses by choosing where they spend, and millennials demands more than previous generations.
With greater access to company information and this information spreading on social media, today’s consumers can see beyond the carefully written adverts and judge companies’ values for themselves.
The Deloitte Millennial Survey 2019 found that 42% of millennials chose a brand or product because they identify with the values and actions of the company. There are many examples of forward looking companies building a strong and loyal following in part by taking stances on issues that resonate with their customers and other key stakeholders. UK-based cosmetics company Lush, for example, has a line of plastic-free products and has opened a number of plastic-free stores in Europe. Through doing so, the company has attracted a strong following of socially-conscious consumers.
Employees value ethics.
Twenty-first century employees no longer seek the employer that pays the most but increasingly want to work for a company with values that align to their own. According to LinkedIn research in 2018, 65% of U.S. professionals would take lower pay over working for a company with a negative culture.
It is easier for businesses that offer a good work-life balance, prioritise employee development and empower their people to attract and retain employees. This gives them a competitive edge over companies that don’t.
How can you demonstrate your commitment to responsible business?
There are many advantages to being a socially conscious and responsible business. But how can you show stakeholders that you are serious about having a positive impact on the world?
One clear way is to sign up to the United Nations Global Compact (UNGC). Over 13,000 organisations worldwide have signed, committing to support 10 key principles relating to human rights, labour, sustainability and anti-corruption. The UNGC is for every organisation, regardless of size, industry or location.
We recently published CIMA’s latest Communication on Engagement with the UNGC, which demonstrates the steps we have taken to support these principles. We have continued to highlight ethics in our curriculum, worked to reduce single-use plastic in our offices and produced thought leadership on corruption, sustainability and ethics.
Find out more at the UNGC website.