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Economy

21st century leadership: from business as usual to business as a force for good

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Michael Solomon explains why ‘business as usual’ is a self-perpetuating, systemic failure, how business can become a force for good in the world, and the conditions and tools required to transition from one to the other.

Business is not evil per se. But it sure as hell acts like it with depressing regularity.

This is because of how businesses are programmed and the failures of market capitalism. Consider the following: it is often legal to offload costs onto society and the environment; it is often legal to take advantage of stakeholders (such as consumers, employees, suppliers); it is often highly profitable to offload costs and take advantage of stakeholders; there are always businesses with fewer scruples which will happily operate in these ways to increase their market share.

These four statements are neither controversial nor far-fetched. They are observations, perhaps even self-evident truths. They are the reasons why, inevitably, profit always comes first and the interests of people and planet come second.

This ‘business as usual’ is a systemic failure for which no single entity is to blame. Nonetheless, it is difficult to acknowledge. It is certainly easier for businesses to focus on good news stories and on the positive impacts they may have, rather than on the negatives.

However, by selectively highlighting its positive impacts while failing to acknowledge or discuss the whole picture, business has lost public trust. Too often, businesses appear to say one thing but do another. They give the impression of arrogance, duplicity or of simply not caring. It makes the public cynical of business and sceptical of its willingness and ability to change. It also removes critical incentives for the public to seek out and support responsible businesses and thus for companies to seek to be that choice.

The world is rapidly changing

In reality, many companies do care and are aware of how far and how fast the world is changing. Against a backdrop of climate change, the depletion of natural resources, faltering prosperity and a widening wealth gap, impetus is building. Real change is now possible through the emergence and interplay of powerful forces.

For example, in the internet age, business behaviours are more visible and challengeable than ever; trust, brand and reputation are increasingly critical and are determined by how a business behaves; new tools (including Responsible 100) provide new opportunities for businesses to have more positive impacts, and fewer negative impacts, on the world around us; and people’s expectations are changing – they expect business to provide solutions to the challenges we face, not remain part of the problem.

These forces are changing old paradigms and rewriting old rules. Today, business as usual is still the main game in town. But make no mistake, the revolution has started and leading businesses are beginning to redefine success for the 21st century.

Business as a force for good

Business will reprogramme itself to do good, to serve people and planet, when remaining profitable demands it.

The pursuit of profit influences business, and the world around us, like nothing else. And as profitability and responsibility become increasingly aligned, business will realise its huge potential to make the world a better place.

Responsible 100 is a simple, powerful, flexible tool for any business that is committed to balancing its own interests with everyone else’s. It defines responsibility in terms of a business’s willingness and ability to demonstrate transparency and accountability on a range of social, environmental and ethical issues. It does not publish a checklist of required attributes or values nor require a minimum Responsible 100 score. Instead, it simply requires openness and honesty, that a business can publicly justify all its actions.

Listing on www.responsible 100.com and offering up policy and practice details – guaranteed as accurate, complete and verifiable – for public scrutiny, comment and rating requires businesses to balance their pursuit of profit with the interests of society. It is a challenging ask, but both reasonable and achievable.

We foresee – and are working to help create – a race to the top. That is, conditions by which businesses can compete on the ambition and impact of their social and environmental innovations as well as on price and quality. Responsible 100 enables and showcases companies making the transition from business as usual. Those companies that recognise and welcome an opportunity to prove their commitment to serve and to help people live better lives in a better world.

Michael Solomon is the founder and CEO of Responsible 100, a unique initiative and a growing movement made up of businesses, civil society organisations and individuals.

Further reading:

Success means seeing ourselves as part of the bigger system

Has CSR reached its sell-by date?

The business case for sustainability – an exceptional Forum for the Future event

What gets measured gets managed: sustainability in 21st century business

The Guide to Corporate Social Responsibility 2013

Michael Solomon is the director of Responsible 100. With a background in publishing, Michael hit upon the basic Responsible 100 concept when asked to launch a new CSR magazine and website. Troubled by the motives for large corporates to engage in CSR and the quality of their CSR outputs, he saw the need for an alternative approach which guaranteed credible information from businesses. Responsible 100 is a management tool, a business ranking, a public internet platform, an identification mark and a growing social movement. It includes leading businesses as well as NGO and campaign group partners.

Economy

Report: Green, Ethical and Socially Responsible Finance

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“The level of influence that ethical considerations have over consumer selection of financial services products and services is minimal, however, this is beginning to change. Younger consumers are more willing to pay extra for products provided by socially responsible companies.” Jessica Morley, Mintel’s Financial Services Analyst.

Consumer awareness of the impact consumerism has on society and the planet is increasing. In addition, the link between doing good and feeling good has never been clearer. Just 19% of people claim to not participate in any socially responsible activities.

As a result, the level of attention that people pay to the green and ethical claims made by products and providers is also increasing, meaning that such considerations play a greater role in the purchasing decision making process.

However, this is less true in the context of financial services, where people are much more concerned about the performance of a product rather than green and ethical factors. This is not to say, however, that they are not interested in the behaviour of financial service providers or in gaining more information about how firms behave responsibly.

This report focuses on why these consumer attitudes towards financial services providers exist and how they are changing. This includes examination of the wider economy and the current structure of the financial services sector.

Mintel’s exclusive consumer research looks at consumer participation in socially responsible activities, trust in the behaviour of financial services companies and attitudes towards green, ethical and socially responsible financial services products and providers. The report also considers consumer attitudes towards the social responsibilities of financial services firms and the green, ethical and socially responsible nature of new entrants.

There are some elements missing from this report, such as conducting socially responsible finance with OTC trading. We will cover these other topics in more detail in the future. You can research about Ameritrade if you want to know more ..

By this report today: call: 0203 416 4502 | email: iainooson[at]mintel.com

Report contents:

OVERVIEW
What you need to know
Report definition
EXECUTIVE SUMMARY
The market
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
The consumer
For financial products, performance is more important than principle
Competition from technology companies
Financial services firms perceived to be some of the least socially responsible
Repaying the social debt
Consumer trust is built on evidence
What we think
ISSUES AND INSIGHTS
Creating a more inclusive economy
The facts
The implications
Payments innovation helps fundraising go digital
The facts
The implications
The social debt of the financial crisis
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
PUTTING FINANCIAL SERVICES IN AN ETHICAL CONTEXT
An ethical economy
An ethical financial sector
Ethical financial services providers
GREEN, ETHICAL AND SOCIALLY RESPONSIBLE ISSUES IN FINANCIAL SERVICES
The role of investing
Divestment
The change potential of pensions
The role of trust
Greater transparency informs decisions
Learning from past mistakes
The role of innovation
Payments innovation: Improving financial inclusion
Competition from new entrants
The power of new money
The role of the consumer
Consumers empowered to make a change
Aligning products with self
THE CONSUMER – WHAT YOU NEED TO KNOW
For financial products, performance is more important than ethics
Financial services firms perceived to be some of the least socially responsible
Competition from technology companies
Repaying the social debt
Consumer trust is built on evidence
Overall trust levels are high
THE ETHICAL CONSUMER – SOCIALLY RESPONSIBLE ACTIVITIES
Payments innovation can boost charitable donations
Consumer engagement in socially responsible activities is high
Healthier finances make it easier to go green
SOCIALLY RESPONSIBLE COMPANIES
37% unable to identify socially responsible companies
Building societies seen to be more responsible than banks….
….whilst short-term loan companies are at the bottom of the pile
CONSUMER TRUST IN THE BEHAVIOUR OF FINANCIAL SERVICES COMPANIES
Overall trust levels are high
Tax avoidance remains a major concern
The divestment movement
Nationwide significantly more trusted
Trust levels remain high
CONSUMER ATTITUDES TOWARDS GREEN AND ETHICAL FINANCIAL PRODUCTS
For financial products, performance is more important than principle
Socially conscious consumers are more concerned
CONSUMER ATTITUDES TOWARDS TRANSPARENCY
Strategy reports provide little insight for consumers
Lack of clarity regarding corporate culture causes concern
Consumers want more information
THE ROLE OF FINANCIAL SERVICES FIRMS IN SOCIETY
The social debt of the financial crisis
THE SOCIAL RESPONSIBILITIES OF FINANCIAL SERVICES FIRMS
For consumers, financial services firms play larger economic role
Promoting financial responsibility
CHALLENGER COMPANIES AND SOCIAL RESPONSIBILITY
Consumer trust is built on evidence
The alternative opportunity
The target customer

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Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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