Can business be part of the solution to our major challenges?
In February I took advantage of the latest lockdown to attend an online conference at The British Academy. The title of the conference was Purposeful Business for an Inclusive and Sustainable Economy. Not my usual kind of conference, but I was intrigued by this as it seemed to chime with IBEX’s vision to actively apply the Christian message to create a just, compassionate economy and society.
The starting point for the conference was a new definition of the purpose of business, which highlighted the need to move from the concentration on stakeholder return on investment and profit which creates some of the major problems that the societies face such as climate change. The new business purpose is to create solutions to the problems of people and the planet which are also commercially viable.
Profit is not a dirty word, but dirty profit creates a problem for us all.
But what about shareholders, what do they think?
The current investor model is short term and simply for financial return so maybe a shift to long term more sustainable investment is not an easy change to make. A couple of speakers tackled this by reminding us that stakeholders are workers and live in society and on this planet for that matter. They can see the social and climate impact of short-term financial decisions and see that this can hit the financial return on their investment – it doesn’t make sustainable or economic sense in the long run. The issue is whether they do anything about it, or should I say we – as we are all shareholders in some way – do you know what your pension scheme is investing in?
The other key ingredient is the customer; and there was a lot of discussion about the impact of millennials (those born between 1981 and 1996) and Generation Z (those born between 1995 and 2010) who it is claimed are more challenging of businesses that do not support sustainability, social justice and a carbon neutral world.
We are told that they are looking for sustainable products and businesses to support and are prepared to pay extra for products and services from businesses that are committed to a positive social and environmental impact - but it is difficult to know what and where to look for this.
The conference heard from speakers about PBs (Purposeful Businesses) which aim to be commercially viable, profitable, sustainable, inclusive and social enterprises as the future of business. These are a growing area of the economy. A collection of current PBs can be found here, with some names you may recognise from your local high street.
However, the speakers were clear that the growth is not fast enough... that PBs need a social supply chain and more social enterprises to provide this.
The standout session for me the joint CEO of Belu Water, a bottled water company that is rooted in a purpose perspective which is commercially ambitious with an environment first approach. Their employers and supply chains are bought into the purpose to change the way we think about water as a resource – not just aiming to create profit for stakeholders. A truly inspiring session but also grounded in the reality that lots of companies, especially bigger ones are not purposeful. Some claim to be and aren’t (this is called purpose washing) and that there is a lack of knowledge within business and in society generally.
So did the conference live up to my expectations? Did it truly chime with the IBEX vision about a just, compassionate economy and society?
I think it did. Though, at the end of the day, it is just a conference and the real challenge is to make this change of purpose move through the economic and business world. Government support will be needed to give teeth to regulations and standards.
As a Christian working within the economy and the churches, I was heartened by the reference to the concept of good in business reflecting the good within people who want to do the right thing but are not sure how to do it. This conference certainly raised lots of questions for me but also some possible solutions and a belief that change of purpose is possible.
If you are interested in business purpose, or you are already a PB or social enterprise please contact us so we can share your experiences, ideas and hopes.