Purpose pays – the evidence is clear

The number of purpose-led businesses is growing,  and with it the evidence of a pay-back for business and society.

News breaks this week that the smoothie drinks company, innocent, has become a B Corp.  With its iconic products on most supermarket shelves, this feels like a breakthrough moment for the B Corp movement in the UK.  Innocent joins a roster of some 150 British firms – including Cook, Pukka Herbs, Divine Chocolate and (probably the largest) Danone UK – alongside some 2,500 worldwide.

But isn’t innocent part of Coca-Cola, asked a sceptical colleague in the office; how can they be a B Corp?  While the technical answer to that question lies in the detail of the certification process, the implication is that this has now become a proxy for an all round ‘good’ company – which only adds to expectations about the validation process.

In summary, you can get the accolade if you meet three tests.  Details vary in different jurisdictions, here’s the UK procedure.  Continue reading

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Careless talk hinders progress

When talking about the social purpose of business, loose language results in a loss of focus on the end goal – so here’s a solution.

The proposition is simple: that purpose-led businesses and brands outperform the average.  Surveys abound with data from consumers saying that, price and quality being equal, they’ll switch to cause related brands.  Unilever has become the poster-child for the proposition, reporting that last year its ‘sustainable living’ brands grew 46% faster than the rest of the business and delivered 70% of its revenue growth.

Now a group of ten stewardship investors, collectively managing $8 trillion worth of assets, have taken the question to company boards, using eight agreed questions to uncover the extent to which a company is genuinely and effectively being purpose-led.  Convened by Blueprint for Better Business, the group includes Schroders, Hermes and Legal & General.  Their proposition is that having a clear corporate purpose is a key part of creating long-term sustainable value.

This new focus on purpose raises an awkward question – I believe – for those of us working in this space about why we continue to speak a confusing language about CSR, ESG, corporate responsibility, citizenship and sustainability.  In fact, I’d go further and say it’s worse than that, as we can’t agree among ourselves what the words we use actually mean.  The biblical story of the Tower of Babel comes to mind, a collective endeavour thwarted by language differences.

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The race for impact from sports sponsorship

With record amount of money being spent on sports sponsorship, should we expect a social as well as commercial return?

At Corporate Citizenship this week, we assembled a premier league team to discuss whether sports sponsorship can – and should – have a lasting impact beyond the immediate commercial payback. Sustainability meets sports, you might call it.

Seb Coe – who chairs CSM, our sports and entertainment sister agency, and is best known for delivering the hugely successful London 2012 Olympics – joined Liz Nicholl, CEO of UK Sport, Martin George, customer director at Waitrose, and Justin King, ex CEO of Sainsbury’s where he set up that retailer’s ground-breaking sponsorship of the Paralympic Games.  Pitch referee and incisive compere was our new CEO at Corporate Citizenship, Neil Davy.

The prior question is why this matters at all. Well, in simple money terms, sports sponsorship is now a $65 billion dollar worldwide business – a staggeringly large number that’s nearly doubled over the last decade or so. And sport’s reach is huge, arguably the biggest human activity in all its forms, from jogging round the park and kicking a ball in the back yard to the Olympics watched by billions. Continue reading

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Climate risks – an opportunity for plain speaking, and taking action

An event I chaired this week prompts me to ask – is concern about global warming getting lost in an alphabet soup of new initiatives? 

Try and make sense of this…. The G20 has asked the FSB to look at GHG emissions, so they’ve set up the TCFD which is working with CDP, SASB and CDSB on new reporting guidance – that BEIS could make mandatory.

Full marks if you got all the acronyms right, you are well up to speed.  For everyone else, here’s a plain English translation.

Governments around the world are increasingly taking the risks posed by run-away climate change seriously. However they worry that the financial system has got its head in the sands, ignoring the likely impact of the big policy changes they are making in trying to shift the economy to a path compatible with 1.5 – 2 degrees of global warming. If so, current asset values could be massively overstated – anything upwards from $4.2 trillion according to one estimate – and a repeat of the global financial crash is possible when reality hits home. That matters to you and me because our pension savings are at risk.

So they want companies to start estimating the financial implications of their climate-related risks and opportunities and to disclose them in annual reports in a way that investors can act on. A taskforce headed up by Bank of England governor, Mark Carney, and former New York mayor and eponymous business data provider, Michael Bloomberg, has created a set of reporting guidelines.  These are voluntary for now, but the UK’s business department is said to be supportive of adding them to the existing rules about reporting greenhouse gas emissions if the uptake is slow.

Acronyms aside, the danger is this becomes just another reporting requirement, with Continue reading

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Do investors care about sustainability?

They say they do, but companies are not good at giving them what they need – or so I found out during a conference we held this week at my consultancy, Corporate Citizenship. 

Yesterday was a first for us at Corporate Citizenship.  We’ve been working with companies for over 20 years now, and for the first time we brought together in one room representatives of the investor community for a face-to-face dialogue with those in companies charged with explaining how they approach sustainability.  And a powerful discussion it was too, all part of our continuing Long Term Value Project.

‘IR meets CR’, we called it.  Speakers came from Schroders, MSCI, Aberdeen Standard Investments, Royal Bank of Scotland, Total, Stora Enso and more.  You can get a tweet-by-tweet account of how it went here. Some 150 people participated, kindly hosted at Chartered Accountants Hall in London by the ICAEW and run in partnership with the Investor Relations Society. It was especially pleasing for me to be back at the ICAEW: when I was training to get my accountancy qualification, these topics were not on the syllabus at all.

Our proposition was that there’s a disconnect between corporate responsibility

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’Tis the season of… too much consumption, and year end predictions

 As the year 2017 draws to a close, I’ll hazard a prediction about a rising trend for 2018 – a backlash by consumers about how companies use their data.

As I write, here in London the shops are full. Households are preparing for the Christmas season, when Christians astutely adopt the pagan winter solstice festival to mark new beginnings and everyone settles in against the cold for an excess of consumption.

If the advertisements are to be believed, high on Santa’s list of presents this year will be smart speakers – with Amazon Echo battling it out with Google Home, since Apple has announced that its HomePod will not be shipped until early 2018. New on the scene is the Echo Dot, small enough to slip into anyone’s Christmas stocking.

If you’ve not yet joined the fun (and I’m firmly resisting so far) these devices harness voice controlled AI assistants – Amazon Alexa joining iPhone’s Siri, Microsoft Cortana and Google Now out in the cloud – to give you a hands-free way to play music, control your ‘smart home’ devices, tell you the weather forecast, and much more.

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The impact potential – next steps on corporate community investment

Two decades ago, a few pioneering companies came together in London to form a benchmarking group and that has now gone worldwide.  So what’s next for community investment?

 Last week I spent an energising day in the company of 70 corporates from our LBG network and came away with three thoughts on how business/community partnerships should change if they are to remain relevant to the challenges of our times.

LBG started out with just six companies 20 years ago and has today grown into the global standard for measuring corporate community investment.  That’s why companies committed to increasing their social impact use it, over a thousand now, large and small, across all sectors.  Last week’s participants included not just the usual UK blue-chips, but firms as diverse as Nokia from Finland, EDP from Portugal, DP World out of Dubai and the Australian retailer Myers. Continue reading

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Dull but important – why corporate governance matters

We’re starting to see a new approach to how our major corporations are governed and held to account. However few are getting excited about it.

Talk about corporate governance and most people’s eyes glaze over. When the Financial Reporting Council earlier this year announced a fundamental review of the UK Corporate Governance Code – 25 years on from the original Cadbury Report – not everyone cancelled their holidays to await developments.

That proved wise, as true to form, this will be a slow-burn. However some elements are starting to come together. Last week the government announced its approach to some hot topics that featured in political debate around the new prime minister and the general election.

The outcome is less than the hype, also true to form. Mandatory worker representatives on Continue reading

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Responsible business and the dogs that didn’t bark

With the UK election over and the government up and running, what are the prospects for responsible business now, and how will the recently released Taylor Review of employment status change expectations.

On the face of it, normal politics in the UK has now resumed: the minority government has reached an agreement with the Northern Ireland’s 10 DUP MPs and the Queen has made her annual journey to Parliament to announce the legislative programme, albeit shorn of the usually flummery of crowns and gowns (tacit recognition of the existential nightmare underway in Brussels with the start of Brexit negotiations).

As if to underline the attempt at normality, the long awaited Taylor Review of Modern Employment Practices was published on July 11 , and – I think significantly – Theresa May used the opportunity for a big speech, trailed in the media as a relaunch of her premiership. That same day my colleagues and I at Corporate Citizenship convened our clients and partners to review the post-election prospects for those engaged in the journey towards responsible and sustainable business. I got to kick off the debate with an extended version of my previous two-part analysis (here).

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Steady as she goes

With the UK general election over, what did it tell us about the continued relevance of corporate responsibility and sustainability? Four things at least, despite the lack of debate.

Prediction is a mug’s game.  In guessing numbers of seats in the House of Commons, mine were as flawed as most.  Now attention switches to the drama of the outcome and the interplay of personalities – a damaged prime minister, speculation about leadership bids, peace apparently breaking out in the civil war that was the Parliamentary Labour party.

As I write, a new government is being formed, looking remarkably like the outgoing one, save for its Orange underpinnings (an association that will surely undermine the 15 year project – author one T. May – to detoxify the nasty party).

Looking ahead to possible policy changes, what is likely to happen now?  Are the manifestos any guide at all?  Actually the pre-election analysis of the major parties’ offerings that I prepared for Corporate Citizenship is still relevant, I think, though that might not be obvious since so little was debated or contested during the campaign.

Ostensibly all about Brexit and strengthening the negotiating hand, in fact the election Continue reading

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