Individuals and businesses will lead in response to societal challenges
Today’s consumers are discerning and demanding on a broad range of social issues and will do what they understand to be the right thing when they sense regulation is moving too slowly.
‘THE NEW CLIMATE FOR BUSINESS’ Conference #BSR19, recently convened in San Jose, CA by the BSR non-profit organisation (its name derived from its purpose in promoting ‘Business for Social Responsibility’), gathered an eclectic group of C-suite leaders, especially CSR and sustainability professionals, enriched by Board Chairs and CEOs. There seemed to be a greater number of Environmental Social and Governance (ESG) and Investor Relations professionals in attendance this year – perhaps a measure of increased consumer and investor activism.
Despite the current geopolitical climate and widespread frustration over perceived government inaction on actual climate issues, a number of positive themes emerged from the conference: 1) the sense that consumers and companies are increasingly taking positive action for the good of society; 2) a narrative is emerging focussed on new forms of caring, notably conscious capitalism; and 3) there was a pervading spirit of collaboration and sharing of experiences to benefit the common good, particularly around renewable energy and waste.
1. Parents lead the way on stronger gun laws, quickly supported by business action
Shannon Watts, Founder of Moms Demand Action, described parents’ fight for public safety measures, and a campaign to pass stronger gun laws and work to close the loopholes that jeopardize the safety of families. Watt’s applauded the CEO of Dick’s Sporting Goods – whose leadership and ‘innovator’ action reportedly cost the company a quarter of a billion dollars in sales - and Levi Strauss & Co. for their positive response. The San Francisco based company, whose denim jeans are ‘required uniform’ for many workers in the American heartlands - where Second Amendment rights to bear arms are so vehemently defended - has pledged more than $1 million to support nonprofits and youth activists who are working to end gun violence.
2. The rise of ‘Conscious Capitalism’; and consideration of corporate and individual purpose
A recurring theme from the ‘get-go’ was the need for companies to “refound”, reframe and represent a new form of caring or conscious capitalism, as articulated by Hubert Joly, Executive Chairman of BEST BUY, INC . Joly proffered that the purpose of a company is not to make money but rather “to enrich lives through serving customers”, and that making money is “an outcome, not the purpose”, and, from his experience, “in doing a [corporate] ‘turn-around’ there was no need to lose your soul” or for “trade-offs between [the 5 groups of] stakeholders”. Joly noted the importance of individual in saying “purposeful leadership is about being clear about your purposes as an individual” and challenged the audience saying, “if you feel the meaning of your life and the purpose of the company that you work at are not aligned, just leave”. His final observation was that “the role of leaders is to create the environment in which this human magic is unleashed”.
3. ‘Inclusive Capitalism’ and Collaboration in Climate Action
Representing a different type of company ownership, Stephen Badger, Chairman of Mars Inc. was clear about the role of business to lead on the climate agenda and stated that “at Mars we share the belief that this is a decisive decade and that we need a more inclusive form of capitalism and that we need to remake what we are doing and how we do it.” "We need governments to do their part to put equitable policies in place to make sure that companies, not our children, are paying for their emissions." The contribution that business can play in climate action by transitioning to renewable energy was stated by Badger and echoed by many participants. Notably. Miranda Ballentine CEO of the Renewable Energy Buyers Alliance (REBA) vivaciously represented the collaborative spirit in the room by highlighting the tools and resources offered by REBA and the importance of science-based greenhouse gas goals.
4. Humans will survive in the age of A.I., but require social interaction
Focusing on the impact of AI on employment, Kevin Roose, NY Times columnist and author of The Shift, gave a Practical guide to “human survival in the age of AI” and outlined the result of his research and forthcoming book about the future and what will happen to the world after the current AI wave reaches its peak. Roose described what humans can do to make sure that AI is a force for good and suggested that jobs best done by a machine are ‘structured’, ‘servile’ and ‘scaled’, versus those best undertaken by a human which are ‘surprising’, ‘social’ and ‘scarce’ (requiring a unique blend of skills). The ‘social’ component suggests the apparent reversal of the trend that brought us remote and home working with the recognition that people are more creative when working with and around other people, rather than at home – because they miss what John Sullivan, a Management Professor in San Francisco, calls “serendipitous interactions”. In closing, Roose cautioned employers to use AI to empower people not control or surveil them.
5. Consumers Demands; and democratizing healthy products
The customers’ need to know-and-understand exactly how their food was made, who made it, and what happened to the people involved in the supply chain has led to the “undoing of food”, so said Seth Goldman, Co-Founder of Honest Tea; Executive Chair at Beyond Meat, who opined that “redoing food” is when innovative companies like Beyond Meat respond to consumers’ concerns about health, the environment and animal welfare – leading to the recreation of a product that leaves out some of the aspects that consumers have rejected.
Goldman cited the United States as one of the least healthy countries in the world, noting that it has inspired him to find ways to make help make products more accessible. He talked of democratizing healthy products and the benefit of partnering with large corporations – like Coca-Cola which massively scales distribution efforts as “best evidenced by what we’ve done with McDonald’s - so Honest Kids is the first organic product to be carried in McDonald’s and then we went in there and we replaced an 80 calorie drink with a 35 calorie drink, we sold over 200 million units. Together Honest Tea, Coca-Cola and McDonald’s removed over 1 billion calories from the American diet. That is impactful.”
The message communicated by the organisers and many participants at #BSR19 is that consumers are discerning and demanding on a broad range of social issues and will do what they understand to be the right thing when they sense regulation is moving too slowly or that there is a refusal to act e.g. the United States withdrawal from the Paris Agreement.
Many municipal and business leaders, sensing this mood, are performing as ‘early adopters’ e.g. the 438 ‘Climate Mayors’ of US cities that are home to 70 million Americans committed to ‘implementing’ the Agreement. Clearly corporate action can come at a considerable cost as so graphically demonstrated by Dick’s Sporting Goods, while Levi Strauss & Co. CEO Chip Bergh is reportedly braced for a backlash and other prominent corporations are amending policy at the same time as they are ‘calling for cover’ by asking the US Congress to debate the issue(s) and legislate accordingly.
Just as many corporate leaders are grappling with complex issues, perhaps seeking to appease some and placate others, political leaders are starting to raise public debate and socialise ideas that broadly echo some of the themes being raised at #BSR19. For example, Senator Marco Rubio, a former Republican Party Presidential Candidate, has been heard regularly delivering remarks about ‘Common good capitalism’ that echo many of the themes represented by Hubert Joly of BEST BUY at #BSR19. Likewise, more and more organizations including The Business Roundtable , and mainstream platforms such as the Financial Time’s Moral Money, are creating space for ideas to be aired and policies debated regarding what is ‘the right thing’.
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