"Civil society and business: a two-way street"
Amanda Mackenzie OBE
CEO, Business in the Community
Business has played a significant role in supporting society and delivering social aims throughout history. Of course, not all business has considered its responsibility and not all leaders have been good ones. In the third decade of the 21st century, the realisation that a healthy business, successful over the long term, can only exist if it takes its responsibility to provide good work, an inclusive workplace and a sustainable environment seriously, is at last taking root. In fact, a business that will thrive in the future needs to make its responsibility to society and its ability to deliver social aims intrinsic to the way it operates.
150 years ago, some of our British ancestors created companies with the realisation that their success and the success of the community around them were inseparable. The enlightened ones – Salt, Lever and Cadbury – looked after their employees. They gave them free health and dental care, housing and schools. Lever even gave his workers shares in his company and created a clawback system for inappropriate behaviour (it took more than 100 years for the capital markets to catch up).
They were the enlightened of their day. It was, of course, at a time when many men, let alone women, did not have a vote by virtue of not owning a home and very few rights were shared by all. The nature of their leadership was visionary for its time but paternal in the extreme. Nonetheless, it recognised that support for society was necessary and that loyal, healthy workers would ultimately deliver value back to the company over the longer term. They really understood doing well by doing good.
Then the era of Corporate Social Responsibility (CSR) dawned. Companies began to be owned by several stakeholders, not just the founder, and as the number of owners of a company increased so did the pressure to make profit and returns in the shorter term. Good leaders realised that there was a corporate and social responsibility that every company should have, but it was somewhat ‘side-of-desk’ rather than at the heart of a company and its operations. Of course, at the start of the 20th century the impact of industrialisation on society had not been conceived, let alone the internet – which was three generations away from conception!
“I do feel the pioneers in sustainability are to be lauded. It was tough promoting a subject that many in business didn’t get, didn’t really care about and certainly didn’t spend the time to understand. Their early efforts have led to the mainstream emergence of responsible business.”
As time went on, CSR became more sophisticated as companies thought about their employees, their consumers, their communities or the environment. Yet their CSR departments were segregated and distant from the core business. In essence, it was a giant offset that the majority of the company could ignore. It was only 10 years ago that we saw companies such as Unilever taking bold steps with their ambitious ‘Sustainable Living Plan’ and showing that CSR, purpose and profit should go hand-in-hand. In fact, it is only in the last five years that we have seen the shift from CSR to Environmental, Social, and Corporate Governance (ESG), allowing investors to ask the tough questions and make investment choices based on companies’ credentials in these areas. Why are investors doing this? They do not want to have stranded assets.
Having said that, even if you want to be cynical and you really only believe that the stakeholder that matters is your shareholder, then surely enlightened self-interest makes you consider your supply chain, your employees and your customers.
Of course, some companies didn’t need a prompt from investors, like Accenture using a data-driven approach to support women to progress in the workplace, Heathrow Airport Group using their academy to put almost 8,000 candidates through pre-employment training and over 6,000 people into work, or Jacobs outlining their ‘Climate Action Plan’ to maintain and achieve net-zero carbon and 100% renewable energy in 2020 and be carbon negative by 2030. Yet this is really only just beginning. I do feel the pioneers in sustainability are to be lauded. It was tough promoting a subject that many in business didn’t get, didn’t really care about and certainly didn’t spend the time to understand. Their early efforts have led to the mainstream emergence of responsible business.
You could argue business has now come full circle, right back to the Cadbury and Unilever model minus some of the patriarchy. Even ownership of companies is being democratised through campaigns like ‘Make My Money Matter’; as a future pensioner, your invested funds can have a positive or a negative effect on society and you should have a say in where your money is invested.
In its rosiest terms, in 200 years or so we have gone from individual owners – the best of whom cared for their workers and acted as a substitute for civil society, which yet didn’t exist – to 2021, when multiple owners can now use the inherent power in that ownership to ensure society is supported and social aims are achieved.
Business in the Community (BITC) – founded almost 40 years ago by the ever-visionary Prince of Wales and the brilliant Stephen O’Brien – was designed to ensure that there was a link back into the community from business. This was at a time when the world was ‘globalising’ by the day: call centres were moving to India, manufacturing was ramping up in China and, in the UK, the Brixton and Toxteth riots demonstrated that society was neither integrated or fair. BITC’s original purpose was to encourage companies of all sizes to become more fully involved in the life of the communities in which they operated and to foster partnerships that could improve the quality of life in those local communities. It had considerable success and impact. As the community involvement of a company increased, they also realised that a responsible business is one that considers a healthy environment and a healthy community to be inextricable. Good work, an inclusive workplace, wellbeing, sustainability and responsible sourcing and production were all ingredients of a responsible business.
There is no part of this that should be on the side of a desk. It is intrinsic responsibility. And the work of BITC continues today, helping companies to be the best they can at doing this and coming together to support the quality of life in our communities. I am in awe of some of the successful case histories of business working together with the local community that have been created over the years, such as the regeneration of places like Wisbech and Blackpool. Business can and should be doing this. Rather like keeping fit, the segmentation seems to be some people who do it without much prompting, others who get there with encouragement and, inevitably, ‘the couch potatoes’. And then…
Covid came crashing in.
“Business has realised that, unless it develops and supports all its people equally, it will not have an employee franchise in the future. It will not have a thriving community for its goods or services.”
Suddenly, the world shrank and everyone noticed who lived on their street. The problems that society were facing could no longer be ignored as they were literally on our doorsteps. The nation had to protect the elderly and the vulnerable. All at once, we were the community again. We were all part of it, business had to think rapidly about how it could play its part. The supermarkets were possibly the first to think ‘super local’ with special shopping times, extra care for the vulnerable, bonuses for their people on the ground for their extra hard work and expedited wellbeing programmes. BITC created the National Business Response Network (NBRN), which links community need with business support like goods, services and logistics. The business response was extraordinary. 10,000 sandwiches a week, a shipping container and a half of Greggs produce and 40 industrial freezers from Iceland were all given and delivered to food banks. BP gave over their IT department to repurpose physical technology that could then go to very deprived children who were home learning on mum’s smart phone (if they were lucky). Suddenly, every employee in a company could see the impact their company was having, good and bad: what was its response to furlough, how thoughtful was it about the wellbeing of its people, and was it wholehearted in its deeds and not just words about inclusivity?
In terms of the role of business in supporting society and delivering social aims, I would say six words: business is back in the community.
Its relationship with society has proved to be profoundly interrelated. Like so many things, we only believe it when confronted by the empirical evidence. And that is what I think has happened throughout 2020.
For example, business has realised it does not need the resources it thought it did and the barriers to a dramatic reduction in carbon are being dismantled. Companies understand that they can do their business from anywhere so why not recruit where the need is greatest: in the left-behind communities that need the most support? Business has realised that, unless it develops and supports all its people equally, it will not have an employee franchise in the future. It will not have a thriving community for its goods or services.
Covid has magnified the efforts of those businesses supporting civil society and delivering social aims. This year has demonstrated that – even for those metaphoric ‘couch potatoes’ – it is time to get fit and ensure that business is back in the community to stay.
If business is back in the community, we need to make that permanent. We must ensure that this intrinsicality is as deep and genuine as it needs to be.
“Covid has shown us that, without a healthy community or a healthy environment, you can’t have a healthy business.”
BITC have carried out a significant piece of research over the summer about ‘building back responsibly’. Our research outlined four ways in which business can play a significant part in achieving and accelerating social aims. There is nothing radical here, but achieving it will require determination, honesty, vulnerability and vision:
Using business influence and power in recruitment and training:
Using business leadership:
We will be working alongside business to share best practice, convene leaders and expedite efforts to achieve these social aims. It will be a giant collaborative exercise. There are so many great experts who can help achieve this; we must work together. But this cannot be great lofty words and no action.
Covid has shown us that, without a healthy community or a healthy environment, you can’t have a healthy business. This is far from new. Businesses have been debating the notion of a broader definition of stakeholder for years. But anyone who has run a successful business surely will know there is no debate. I would rather like to emphasise the famous Nike phrase ‘Just Do It’. And if you do, you cannot avoid considering the community around your business and that its health and success is inextricably linked to yours.
Perhaps it is time to draw those connections more boldly. Over the years, we have found that businesses often don’t recognise the practical role they can play in being more responsible. Yet some of the greatest impact I have seen has been from companies that focused their attention on a particular place. An extraordinary example of this is how Anglian Water reshaped the fortunes of Wisbech – a single Fens town – with the help of civil society. We asked every company at our awards dinner to nominate a town or city they were prepared to partner: ‘where was their Wisbech?’ Should we twin businesses with places across the UK, giving each of them a home they can invest in? Could it be as simple as funding a business partner, a ‘connector’ for a town, who can bring together local business, government and community groups around a single vision for a place. BITC’s years of proven success in this field has shown that such people are uniquely able to break down the barriers that often hold places back.
While business holds this uniquely powerful position, it can and must play a central, collaborative role in supporting civil society and delivering social aims. For this to happen, we need that old pioneering spirit, the power of democratised ownership and today’s ingenuity rolled into one, with responsible business not just embedded firmly at our heart but running through our veins.