How do businesses measure success – and is it enough?
COVID-19 has reignited the debate on how we define business success. Can success be found on the pages of a quarterly report? Is it good business to turn around short-term profits while depleting the planet? Is it an effective long-term strategy to keep excluding the same underrepresented group? Will your employees, customers, investors, and business partners be satisfied with this?
A rethink of what good business looks like is critical to emerging from COVID-19 on the path to a more just and sustainable future.
To start, business culture needs to change to reflect a broader range of metrics and listen to a wider range of voices. If organisations used their purpose to drive greater influence and action within their business, value chain, sector, and investment decisions, the cumulative impact of this would generate the ‘bigger, bolder and faster’ action we need to meet the Global Goals. Also known as the UN’s Sustainable Development Goals, these define the urgent to-do list for creating a more inclusive, prosperous world for all.
So how does this happen in practice?
The crisis of 2020 has not deterred those businesses committed to accelerating positive change to meet the Global Goals. For example, Unilever’s new corporate strategy, building on its Sustainable Living Plan, aims to embed sustainability into every part of the business. From its three ambitions, its aim to shape consumer behaviour change is particularly exciting.
GSK has set brave environmental targets, including a net positive impact on nature by 2030. BNP Paribas UK, in consultation with its employees, has moved its pension pot to responsible funds and are signatories to Make My Money Matter, a campaign calling for pensions to be aligned to values. Unfortunately, the pandemic is slowing down progress on the Goals, so these examples are a cause for energy and hope.
The power of purpose
We interviewed hundreds of our members – from large multinationals to SMEs – on their response to the pandemic for BITC’s Build Back Responsibly report. A common theme was the increasing importance and transformative power of corporate purpose, both to deal with the pandemic and to rebuild afterwards. Companies with strongly embedded purpose and principles cited the immense value of being able to draw on these as they adapt their business models to support employees, customers, and suppliers.
Responsible investment and finance
Investors are a driving force to change how business success is understood. For three years in a row, responsible funds – Environmental, Social and Governance (ESG) – are outperforming traditional ones. We are working with corporates and investors to reduce the gap between a business approach to the Global Goals and how capital is allocated to create the right incentives for a more sustainable future. Alongside this, BITC is working in partnership with Santander and a group of UK banks to explore how the retail banking sector can support a socially inclusive and environmentally sustainable model of economic prosperity.
COVID-19 is testing everything that we took for granted. For example, the world of procurement is described in BITC’s Driving Sustainability Through Procurement guide as being ‘under more pressure than ever, dealing with enormous disruption, new financial pressures and sudden shifts in strategy.’
As we look to the recovery from COVID-19, we are working with procurement teams to support their thinking on what criteria to use beyond price to determine their purchases, as well as how this benefits the business in turn. Cheaper prices and higher margins cannot be the driving measures of success. Businesses must also consider their carbon footprint, impact on nature and impact on human rights.
How would you change the measures of success?
The pandemic has shown us that businesses can respond to times of crisis at a speed and scale not previously thought possible. Businesses now have a unique opportunity to apply this ambition to the very thing that defines them; their corporate purpose.
BITC asks that you act with us to turn ambition into actions:
- Build back responsibly with us, creating collaborative action with other businesses – talk to us and we can galvanize sector action.
- If you are a purposeful leader and want to bring your business with you – your employees, value chain, and investment decisions – we offer expertise and support.
- Share your ideas with us about how we can work together to change the measures of success and create a better world for all.
Together we thrive