Leadership attitude rather than legal change is the route to a new era in responsible capitalism
The latest polling from UK B-Corp puts data behind what many of us have been thinking: there has been a shift in public opinion regarding corporate responsibilities post phase-one pandemic. I’ve seen a lot of recent polling recording a general mood-swing toward greater appreciation of “nature” and the importance of “local”; but it would seem there is also growing support for changing businesses for good.
At the moment, businesses are seen as the main villain – the cause of our social and environmental problem – poll after poll has told us that. In response CSR, then Sustainability policies, have become de rigueur. Sticking plasters that mask the problem. But companies are set up to make money; returning a profit is what company directors are legally obliged to do.
Public polling shows that there is now a definite majority (72%) in favour of changing business purpose to include a legal duty toward people and the environment. And a simple majority (52%) for doing so without overthrowing the system.
I’m always sceptical of research conclusions that suggest tomorrow will be radically different to today – and guess what, that future will look exactly how the commissioner of the research wants it to look – but this report is well-founded and suggests that the public are getting fed-up. They want capitalism “fixed” rather than replaced. That feels right to me. In reality, very few things will change in the new world, but this may very well be one of them.
During my lifetime, no one worth listening to has questioned capitalism – a basic building block of our economy – but now, post-Covid, this might be the cause taken up in the mainstream. Changing the law would change things enormously for company directors – but would it change the world? Taking the legal route definitely has the odour of Hollywood about it. Liberal lawyers fighting the good fight, blah-blah. I believe it will help, but the courts and the law really won’t fix this, not on their own.
Take the public sector. Public sector organisations don’t have a singular profit motive. They pledge to look after their staff – who enjoy centrally negotiated terms that give better conditions and security than practically anyone paying for them in private employment. But a duty to improve the environment – you must be joking. PPE procurement is a prime example, where huge public institutions have algorithms that always go for the cheapest, just in time and often the most polluting items. There is little regard for “locally sourced” or “environmentally friendly”. That was kind of understandable in the rush of a pandemic, but now, really? What’s the bigger threat – Covid or Climate Change? Or are both exacerbated by the same mindset – a disregard for nature and the environment we rely upon?
Changing legal responsibility is a tool that will help us address social and environmental pressures – but it will be down to leaders to adopt new responsibility-led strategies to ultimately “fix this”.
