2019 was a banner year for purpose and shared value. Global influencers from the US Business Roundtable to BlackRock’s Larry Fink and the Global Economic Forum galvanised their thinking around the interplay between social and economic prosperity, and took action. Purpose was the buzzword of the global business world, corporate activism reached the national political agenda and, at the Shared Value Project, we delivered our largest-ever annual Shared Value Summit Asia Pacific under the theme Business on Purpose.
In a healthy economy, purpose-led business had taken its biggest step forward; but 2020 had barely begun before the landscape changed dramatically. The worst bushfire season in Australia’s history and now COVID-19 have put corporate purpose to the test, as companies turn their attention to short-term survival and business continuity. Will purpose still resonate in an environment of such uncertainty and volatility? Could the greatest emergencies of our lifetimes be the lever for long-term systemic change?
Ahead of this year’s Summit – themed The Climate for Change, and supported by co-major sponsors IAG and NAB – I have reflected on what we can learn from 2020; to consider the role of business in accelerating socio-economic resilience.
Human problems are economic problems
It has never been more evident that customer problems are business problems. In the face of an ongoing health crisis, rising unemployment and drastic changes to our social freedoms; economic participation has suffered. Add to this a strict regulatory backdrop, and business has encountered its biggest hurdle since the global financial crisis. The resounding message is that issues from a global pandemic, to climate change and mental ill-health cannot be seen as just environmental and humanitarian issues. They must be recognised as economic issues, which make all business planning and projections futile if not addressed.
Climate progress is within reach
When people and business must change, they can change. COVID-19 has proven this with our quick response and adaptation in a time of crisis. Restrictions imposed as a result of the pandemic have seen global emissions fall by 17%; demonstrating how rapidly business and governments can create change when they need to. Ultimately, we must apply the same sense of immediacy, investment and commitment to climate change if we are to make urgent progress.
A new kind of capitalism
Whilst purpose-led business has grown, capitalism is often labelled as ‘bad,’ if not ‘broken.’ My view is that capitalism is the system we have, and we have to learn to leverage it. Shared value, a business strategy designed to solve social issues profitably, provides a framework for this to occur. By addressing the issues that intersect with its bottom line, business can emerge from these challenges with new thinking, new innovation and market opportunities. Its skills and assets can tackle societal problems at speed and scale, while providing jobs and wealth creation opportunities for citizens. Capitalism should not be seen as the antithesis for social change, but a critical tool.
Investing in human capital and job creation
Globally, our workforce continues to evolve. But never more so than in the past few months; as we dramatically transform how we work, and rethink the skills and talents required. Organisations can achieve greater competitiveness by putting human capital at the heart of their strategies; from upskilling and redeploying staff to generating employment and local procurement opportunities in the wake of global supply chain disruption. Federal Government’s new Job Maker program can play an important role in overhauling the vocational education system and creating new jobs.
Now is the Climate for Change
Defining the issues is no longer the issue. Society’s most prevalent problems are now all too familiar. The job now is to harness this moment to turn our shared challenges into shared opportunities, to innovate for socio-economic sustainability. To move forward together; because that’s the only way how. To question long-held norms, systems and benchmarks for success, to ask: Now that we know what’s possible, what kind of world do we want to create for ourselves and the next generation? In this climate for change, it is my belief that business analysts of the future will look back on this time as the moment the private sector achieved unprecedented resilience, or missed its chance to reset our economy.
Join the region’s pre-eminent purpose-led business event, the 2020 Shared Value Summit Asia Pacific, from Wednesday 10 June.