Why doing good could be good for your business!

10 Reasons why we might have hope.

In a world that’s more disconnected and polarised than ever before, it’s always interesting to come back to the fundamentals of being a human being. Bear with me…If I was to ask you one question today,

“What do you hope for - for yourself, your family, your career, your environment and more?”

No matter what side of the ‘divide’ you may sit, I think there’s a very good chance that we’d all pretty much agree on the same things. We hope to be healthy, live peacefully, enjoy and protect our environment, and ensure our children live by similar values so life as we know it continues.

So, given that we all share the one planet and all yearn for something similar, how did everything become so HOPE-LESS? And, how can we counter this so that we all feel energised, inspired, and hopeful?

Greta Thunberg first appeared on our screens over 12 months ago. Since then, governments around the world have continued to dither whilst businesses and communities have begun to step up. At a corporate level, the smart advanced leaders are recognising that this ‘threat’ could actually be an ‘opportunity’.

In a recent interview with Bloomberg, Woodside CEO, Peter Coleman, revealed that climate change had soared to top spot on the business risk list and was putting pressure on public perceptions, long term financing, and talent acquisition. If a company like Woodside sees a major shift happening, I’m sensing a stampede is potentially underway.

With the environment in mind, here are ten big reasons for true leaders to step out, be bold, and share a vision. Doing good and being good for your long-term business success:

Opportunity #1 – Differentiation for customers

In a crowded market with companies offering similar propositions, how do we stand out? Can what we stand for, care about, and hope for be an asset?

Bob Moritz, chair of PwC International believes it can. This is backed up in their latest business survey. “We actually saw the CEOs saying: ‘It’s an opportunity for differentiation.’ If, in fact, we can build in climate-related initiatives into our supply chain management, into our customer experience, into the production of our goods and services, that creates opportunity compared to others. Because the stakeholders, those who are purchasing, are actually trying to differentiate themselves right now.”

The secret here is to set a new direction that aligns with your customer’s values. To actively show intent. And then live by it as your guiding light. Rewards will follow.

Opportunity #2 – Differentiation for employees

The other group that’s differentiating themselves is the employees. They want to be seen to be doing the right thing, working for a company that is on the right side of history. One that cares passionately about more than the bottom line. “We see much more employee activism. So, if an organisation is not focused on climate, it’s less likely that they’re going to get the people wanting to join those organisations”, said Moritz.

Employees are looking to feel proud of where they work; if they don’t want to tell their peers what they do, the sense of work pride is missing and, worse yet, they may be feeling shame. This is when we know a shift is coming. Only a few weeks ago, thousands of employees at Amazon were out in numbers protesting about the lack of action being taken in this space and demanding their company do better.

Schneiders Electric CEO, Jean-Pascal Tricoire, sums up the importance of taking such a direction when recruiting future talent, “If you want to deal with the most advanced customers, if you want to attract the best talent, there’s no way you can do it if you are not going in that direction, because the world is becoming unforgiving for that and that’s good, especially with the youth.”

In 2016, a Kohn communications survey found that 64% of millennials wouldn’t work for a company that didn’t have strong social or environmental commitments. And in 2019, Deloitte found that 37% of millennials believe that business leaders have a positive impact on the world. So, a company with an appealing image can attract the best and the brightest. The war for talent is on.

“Our purpose is to make a positive difference in the lives of the millions of people we serve every day,” says ISS CEO, Jeff Gravenhorst. “This overall purpose motivates a stronger customer engagement, and leads to lower employee churn and higher margins.” It’s also driving success: ISS achieved nearly four percent growth in 2018 and anticipated medium-term growth of up to six percent.

Opportunity #3 – It makes sound economic sense

Moving away from Milton Friedman’s premise that business is all about maximising shareholder return, evidence today suggests that if you focus on ‘social licence,’ companies make higher returns not lower returns. Schneider Electric’s Tricoire told CNBC that the movement for change is “really expanding. “I think people do it for many, many reasons — the first one is that it makes sense in terms of economics, because somewhere, carbon emissions are a direct reflection of your waste and your inefficiency. So if you can curb them it means you are becoming a more efficient company and therefore you make more money!”

In August 2019, the Business Roundtable – a group that includes CEOs from leading U.S. companies – committed to modernising the purpose of a corporation. Whilst shareholders are vital, the executives agreed that companies must also protect the environment “by embracing sustainable practices” and consider stakeholders like customers, suppliers, and broader society.

Opportunity #4 – It’s good for YOU

When your business starts doing good, it defines the organisation. Instead of the perceived notion of adding more to the daily to-do list, it shifts the trajectory of the business, transforming the culture of the team, and ultimately your own life as well. You start to have an influence out of the office too; family and community take an active interest in the transformation. Other organisations become curious and want to know more about the journey you embarked upon and WHY! A study by Edelman, Young, and Rubicam reveals that 87% of UK consumers expect businesses to care about their impact on society as much as they care about their own businesses. And, more than 70% of them intentionally purchase from businesses whose perspectives are similar to their own. You open up a new ecosystem.

Opportunity #5 – Become an “advanced leader”

The world of leadership is changing. The world demands a new kind of business leader according to Rosabeth Moss Kanter, Harvard Business School Professor. She says so-called ‘advanced leaders’ work inside and outside their companies to tackle big issues such as climate change, public health, and social inequality.

“I do think that business leaders have a special responsibility because they’re under attack, because credibility and legitimacy are waning”. But if you’re going to do the right thing, prove it!

In Sao Paulo there was a bank that was about to take a stance on climate change, on the environment. They were going to be known as a green bank. And their leader pointed out to them that’s all very good in theory, but right next door was an alley that was full of drug dealers and rubbish. Maybe instead of taking on such a strong moral position on the environment they should start by cleaning up the alley next door. And they did. And that alley is now filled with artwork and people and street vendors. It’s a very pleasant place to go and it’s a transformation. And the people that worked on that transformation felt so empowered and so positive, they began to feel that they could do even more. That gave them the impetus required to achieve all they wanted to achieve in the environmental space. They gained (having proved) the reputation for being the green bank.

Opportunity #6 – You inspire others

We all want to be seen to be making a difference.

You lead, others follow! The moon shot – it inspires others to do the same. You act as an influencer and change behaviour across the whole supply chain. You speak, you lead, you inspire.

The bidding has started. We just mentioned Microsoft, what now for Apple, Google, and Amazon for example. They have to step up too. Pressure from an expectant public will be sustained until they see change.

End users of all stripes are keen to work with eco-conscious suppliers. In this case, not only does ‘going green’ help the planet, it can also be an effective marketing tactic. What better an example than the world of Formula One! They’ve set the target of becoming Net Zero emissions by 2030. The decision was taken, boldly delivered, and then supported across the board by all associated with the sport. If F1 can anyone can, right?

Opportunity #7 – It builds sustainable revenues

Companies really start to notice the difference when their goals are centred on doing business that works with – not against – the world around it. Only a matter of months ago, Microsoft came out with an ambitious new target: to be carbon negative by 2030. “Through this and better governance, we have the power to build a more prosperous natural environment for all. It won’t be easy but we believe it’s the right goal. And with the right commitment, it’s an achievable goal.” Brad Smith, Microsoft President.

And while Microsoft is not the first public cloud vendor to work toward carbon-negative status, it is the first to take such bold steps.

By leading and being bold, companies are making a statement. It’s not a question of if others will follow, it’s a case of when others will follow. The same applies in every sector.

Opportunity #7 – Investors will demand action

Momentum has shifted enormously over the past two years. Investors are more aware of where their dollar is going and, if they’re unsure, there’s sufficient noise in the space for more thought before action. But most importantly for investors, those with an ethical leaning outperform the sector.

Opportunity #9 - Because you’d be in good company!

All around the world (and possibly even right next door) businesses are starting to shift. Small steps in places; bigger, bolder leaps in others. But, it’s inevitable that a change is coming.

Executives interviewed for Deloitte Global’s Readiness Report shared some of the actions their organisations are taking. Adobe, for example, has set a goal to run on 100 percent renewable energy by 2035. The company is expanding its global headquarters in San Jose with an all-electric new building, powered by clean, renewable energy.

Likewise, at Toshiba Group’s business base, the company has installed 35,000 sensors to control lighting, air conditioning, and elevator operations based on the movement of people. This change is helping Toshiba reduce CO2 emissions by 50 percent.

There’s an upward trend for companies taking this seriously. As with everything, there will be leaders and followers. But for those that leap, the rewards can be great.

Opportunity #10 – Because it’s the right thing to do!

So much of our business life is measured. Numbers and data drive us. We live in a quantitative not qualitative world. But, companies are made up of people, and as humans we know there is more to life than spreadsheets!

We're moving in to a new era. What we do, how we do it, and why we do it is becoming more important than ever.

So, is doing good justified? There's always issues that pop up in business and, if a board were looking at whether taking such action stacks up, making the case is more difficult (remember we’re working against years of business-as-usual conditioning). Perhaps you wait until the mainstream starts to shift? But if you want to be a leader then sometimes you have to take those leaps of faith.

And the evidence is more compelling than ever before.

In summary, I’ll turn to Deloitte’s Global CEO, Punit Renjen, “We firmly believe that companies motivated by a greater societal purpose will be stronger, more successful businesses for the long term.”

So where do you sit?

Opportunities and rewards await those that put this front and centre as a strategy within their business. Leaders must have the vision and the courage and be fearless in the face of negativity! But, and it’s a big BUT, conviction is everything. If you fake it, if you half do it, you might as well not bother.

So, do you do good and get good, or is it business as usual? The world awaits.

James Lush, journalist, broadcaster and media adviser with a Masters in Psychology. He's passionate about helping build sustainable businesses for the future. He speaks at events on the topic and consults and trains companies looking to change course, and communicate that message internally and externally more effectively. To get in touch, email [email protected]