Discussing the Role of Business in Society
Last week, during The General Assembly of the United Nations, I participated in a panel discussion facilitated by Erika Fry of Fortune on “The Role of Business in Society” at an event hosted by Feike Sijbesma, the CEO of Royal DSM.
I'd like to thank my panel members for a fantastic discussion: Harvard Professor Rebecca Henderson, Yara’s CEO Svein Holsether, WBCSD CEO, Peter Bakker, and Sarah Williamson, CEO of FCLTGlobal.
We covered a range of topics from how to improve crop yields and how effective collaboration across companies can accelerate this progress, and how current misalignment in incentives among asset owners, asset managers, and companies are preventing corporations from focusing on strategies to optimize long term profits rather than quarterly returns, to how a company’s purpose can positively impact its performance if it’s embedded clearly into its business strategy and is not just a rallying cry for employees.
A company’s purpose can positively impact its performance if it’s embedded clearly into its business strategy and is not just a rallying cry for employees.
As for myself, I was happy to highlight BCG’s own work with companies and investors on embedding purpose and on building positive social and environmental impact into their core business strategies – we call this “Total Societal Impact”.
Echoing the research of Professor Henderson, we have found that companies that outperform at Environmental, Social, and Governance factors also outperform the market in valuation multiples and margins. Many banks and investors – including Citibank, Bank of America, and Goldman Sachs - have released recent research finding the same positive correlations.
Companies that outperform at Environmental, Social, and Governance factors also outperform the market in valuation multiples and margins.
Overall, I found many of the discussions about the role of business in society during the UNGA week encouraging – I believe we are at a real inflection point. And, as BCG's CEO, I can say with confidence that we are committed to and working towards embedding the lens of total societal impact into more and more of our own work with clients.
Board Chair | Founder | CEO
6 年Great article Mr. Lesser. I agree especially on the importance of each company’s purpose being? embedded clearly into its business strategy. Regretfully is it common to see too much internal marketing and not enough serious operational delivery following strategic planning. The real task of CEOs is to avoid this rabbit hole I believe
International Development Consultant: Climate-smart Growth, Coastal Resilience, Just Transition, Gender, Water Diplomacy, WASH
6 年So true! You excel in social, environmental and sustainability indicators - you will outperform in core business too!
Master Certified Coach Focus Leadership - Essential Motivation - Communication - Mentor - Superviseur
6 年Indeed, the more conscious will be the business world, the more innovative and unconditioned the responses will be to contribute to a better world.
Senior Partner at Investment Bank, Member, American Bankers Association (ABA), Board Member
6 年Excellent observation Rich... if I may add to that... in order to ensure balanced societal impact as well as hard financial returns, companies should also proactively engage their key stakeholders in an ongoing dialogue related to critical success factors supporting stakeholder and shareholder goals and expectations. This will drive innovation, co-creation, risk intelligence, and growth sustainability.