Reaction or Long-Term Action? Actually, it’s both…
As we approach Q4, business leaders find themselves in a paradox. They must knuckle down to meet 2020 targets and, concurrently, they must submit their 2021 business plans. All this at a time when forecasting is almost impossible, budgets have been cut, and markets are in disarray.
Having worked in large corporates, I remember this period well. The relentless scrutiny of sales figures and financial reports for the current year AND the endless planning meetings and budget submissions for the following year. Department heads will put forward their best business case – usually a prediction of return on investment – to secure budget for the next twelve months. This is how the tensions between short-term interest and long-term value play out in our [zoom] boardrooms.
There is an ever-increasing need for organisations to look beyond pure profit. This is even more important as we try to navigate our way through the global pandemic. Businesses can define their place in society and take action for a more sustainable future for all.
This is not a new argument, but could it be that voices are getting louder? The ” How do Companies Act?” Campaign, comprising 50 individuals and organisations, has called on political leaders to rethink legislation so there are stronger frameworks for businesses post-covid. They argue that businesses should “take the lead in building a stronger, more resilient and fairer economy”.
Many businesses responded quickly and decisively during the pandemic. They introduced new initiatives for colleagues, for customers and for the communities they serve.
Take, for instance, the telecomms companies who were among the first to react. BT, EE, Vodafone, O2, Virgin Media, Sky and others removed data caps and introduced steps to help their more vulnerable customers.
Meanwhile, manufacturers adept at building cars or planes switched their production lines over to ensure a supply of ventilators for Covid-19 patients. Luxury brand, Louis Vuitton, switched its perfume production lines to make hand sanitiser when the crisis resulted in shortfalls in shops.
These quick actions supported the country in a time of need, resulting in relief for many.
Whilst these actions should be applauded, the impacts may be limited to 2020.
All organisations can embed long-term responsible business practices and they should ensure these are at the very heart of the organisation in order to drive sustainable business success.
Back in June, business leaders, the UKSSD (UK Stakeholders for Sustainable Development) and the UN Global Network UK called on the government to “build back better”. Shifting the conversation from a “return to normal”, instead they urged the Prime minister to “create a socially just and green recovery from the Covid-19 pandemic”. Their letter recommends that the UN SDGs (United Nations Sustainable Development Goals) are used to
- Prioritise the most vulnerable in our society and level-up regional and societal inequalities
- Build coherent policies for a healthy planet and to aid the transition to net zero
- Unite all sectors behind a plan to build a stronger and more resilient economy
Better for business. Driving financial returns.
The Edelman Trust Barometer tells us that now is the time for brands to act. Over 80% of those surveyed want “brands to solve society’s problems”.
Not only is this right thing for business to do, it makes commercial success. A report by Black Rock tells us that sustainable companies are more resilient during downturns. They attribute this outperformance of ESG (environmental, social and governance) investments to satisfied employees, strong relations with customers and an effective board.
For businesses now working on their future plans, it makes sense to start with a materiality assessment – identifying the issues that are most important to your organisation and to your stakeholders. Materiality provides an opportunity to investigate corporate risks and opportunities; helps to plan resources; and encourages business leaders to consider trends and emerging issues.
Simply Sustainable’s Guide to Improving your ESG Performance provides a logical, step-by-step guide for businesses to effectively integrate ESG into strategy and disclosure. Nicola Stopps, CEO of Simply Sustainable reminds us that:
“it’s not enough for companies to put in place reactive measures which have a short-term impact. As demonstrated in recent months, companies with strong ESG credentials are typically better run and more resilient, and better equipped to ride out a downturn and quickly get back up to speed.”
What next for professionals?
There is help, also, for individuals in the ICRS competency framework. This lists the skills and behaviours required of Corporate Responsibility and Sustainability professionals and can help at all career stages. The elements are inter-related because together they are more than the sum of their parts.
As we bury ourselves in 2021 planning, it is clear that we need long term, practical and sustainable solutions that drive commercial success AND deliver benefit to people and planet.
How are you planning differently this year? What are the tools and resources you are using to build back better?