Over the past few weeks we have seen very clearly that business and corporations large and small are not separate from society and certainly not immune to societal problems. Every company exists within a community and affects that environment. Even global tech majors that don’t pay tax in any one country impact on the lives of people in the countries in which they operate. If we want clear evidence of this we can see it and hear about it every day as the pandemic unfolds and the issues that affect business, people and wider society are brought into focus.
There is inevitably a real mix of behaviour from companies at the moment; those who are supporting their staff and community 100% and showing a duty of care to them and their families that goes far beyond just a pay packet. Then there are those who are panicking, taking a short-term view and laying off staff in droves.
Of course these are tough times, and there is no hiding from the brutal economics we are facing. But there is also no hiding in a world where social media can make or break you in short order. Reputation can never be overestimated and many businesses have fallen from grace in the past few weeks because they have utterly failed to show decency and basic care for their workforce, and they may suffer long-term damage to their reputation as a result.
We are seeing something we have never seen before, an accurate snapshot of how companies treat their staff and take responsibility for them in much wider societal terms; some investing in them, treating them as their most precious asset (which they are) and planning for their future, while others instigate a workforce cull.
This is why I started Vzir, because I know there is a need to improve the way companies, people and society work together — and I have called it ‘social impact integration’; a sustainable and carefully managed system to help companies find the most effective way to achieve positive impacts or mitigate negative ones.
This is not the same as CSR and marketing, which often goes no further than sponsoring a local football team to get PR coverage! Social impact integration means bringing together the management of social and economic risks and opportunities with the wider corporate governance mechanisms of a company. In other words, it’s an integral part of the business and not an add-on.
I believe that companies should incorporate social impact and sustainability concerns into their business plans not because of political diktats, but because it makes business sense in the long run. International guidelines and standards like the United Nations’ Sustainable Development Goals (SDG) are praiseworthy initiatives, but meaningless if they are not in line with the ethos of the company.
Many CEOs are recognising that this level of social impact integration can bring huge long-term benefits for everyone involved. But just as many are woefully shortsighted and the measures they put in place merely superficial — with a ‘profit before people’ attitude that is just not sustainable. This is evident in the fashion industry; producers in Bangladesh abandoned, and energy companies in Africa lowering environmental standards as a cost cutting measure.
Of course a business, by its very definition, needs to make money, but profit can no longer be the only goal. A change in mind-set is essential, from considering competing corporate social responsibility approaches, to concerted action on social impact integration. We must stop seeing it as a superficial marketing tool and realise it’s a business critical issue.
But businesses can’t do it alone. We need Policy in place to take this forward, and robust business infrastructure to support companies that want to take the long-term view. There is a dire need for concerted action to move this debate forward now, and I hope the current crisis will put it under a very bright spotlight.