Even if you decided to live a simpler life after lockdown, or if you are trying to unplug yourself from social media, you would probably be aware that the world is facing turbulent times: from the war in Ukraine and conflict in the Middle East to the continued climate related events from floods to droughts. You may be frustrated with the state of the wild world, and you may feel powerless to bring about change. But do these difficult times offer business leaders a real opportunity to be a force for good? We would argue: yes.
Researchers, such as Shalom Schwartz, who study societal values and cultures suggest that periods of global crisis (such as COVID and the advent of war in Europe) result in us collectively reassessing our values, resetting our behavioural norms and acting differently. Without such inflection points, cultures and collective behaviours are very slow to change. In turbulence, individuals learn new coping skills and how to be resilient, while existing skills are enhanced.
As a global society we have seen the impact of COVID and are more ready for action that will prevent future crises. It seems that this readiness extends to changing habits and action on climate change. For example, recent research from Ethical Consumer, suggests that households became more sustainable after lockdown, with more people now aiming to reduce plastic and energy consumption, buying more organic, Fairtrade and local products, and cycling or walking instead of jumping into a car.
Organisations such as Tesla have also shown us that there are now technological solutions that we were told were decades away. Increasing energy prices and the global shortage of natural gas have further focused the minds of the citizens to move away from our dependence on fossil fuels, which are not only harmful to the environment, but are also very expensive and put at risk by a volatile political environment.
All this leads to a situation where citizens are ready for change, and the most effective way for this to happen is through bold action on the part of businesses and governments. Citizens want business leaders to make changes that will prevent future crises, create jobs and bring more stability to the world.
The brands that are embedding societal purpose have grown 50 percent faster than other comparable brands.
One thing getting in the way of such bold action is that business leaders may feel a tension between creating shareholder value and focussing on long-term sustainability. Leaders often lack the metrics to demonstrate that sustainable action can bring about support from customers, employees, citizens and shareholders alike and can thus be linked to future financial performance of businesses too.
This is where research fits in: if a business can measure the impacts of its actions on stakeholder support and bring this together in a multistakeholder dashboard: leaders can make decisions that better balance the needs of shareholders and society. There are several examples of companies doing this: By embedding a sense of societal purpose into some of their brands, Unilever has been able to not only benefit the society but also drive financial performance for shareholders. The brands that are embedding societal purpose have grown 50 percent faster than other comparable brands that are not engaging in this process and have been responsible for 30 percent of Unilever’s growth. Another example is McDonald’s, who have engaged in a programme of increasing their range of plant-based foods. In doing so, they have not only increased consumer choice, but have also built the brand value of their business with investors and regulators alike.
We believe that there has never been a better opportunity for business leaders to be bold in their approach to creating sustainable future, and with the right metrics and data they can do so with confidence. We think that business leaders will be rewarded for being bold, not only in terms of reducing climate impacts and creating jobs but also in terms of generating trust and support from citizens.
