Updated: Feb 28
The new decade has started momentously.
The bushfires hit us hard here in Australia, but they reverberated globally.
Business leaders from around the world are publicly recognising the negative impact that business has on the environment and society and realise it is simply no longer acceptable to blindly continue "business as usual".
The 2020 Edelman Trust Barometer, a global survey of 28 countries, reflects how ordinary people feel about capitalism.
56% of people believe that capitalism “as it exists today does more harm than good”
It is stats like this that are making the corporate world increasingly nervous. They realise they’re on notice. They know they have to act to preserve capitalism in some form.
Trust in ALL of the major institutions (govt, business, media, NGOs) is low (54% globally) with Australia sitting at 47% (active distrust territory)!
This chart tells an interesting and sorry story.
Here’s the good news…
Business is the most trusted institution (58%), taking the lead role in global governance.
73% of employees say they want the opportunity to change society92% say CEOs should speak out on issues of the day.64% of consumers identify themselves as belief driven buyers.74% believe CEOs should take the lead on change instead of waiting for government to impose it.
The message is clear and so is the opportunity.
The mandate of CEOs has changed.
Change is needed and people are crying out for a new kind of leadership from business - to step into the gap left by governments and create positive change for society.
Against this backdrop here’s what we’ve seen since the start of this year:
1. Blackrock announcement
BlackRock is the world’s largest asset manager with nearly $7 trillion in investments. Every January, CEO Larry Fink writes a public letter to CEOs. This letter is highly influential to the business and finance world.
Two years ago, Larry Fink’s letter highlighted that without a Social Purpose, businesses would cease to exist in the future.
Last year’s letter built further on this theme. This year, he said that Blackrock would avoid investments in and exit companies that present a high sustainability-related risk, such as coal producers.
According to the New York Times, this move will fundamentally shift Blackrock’s investing policy. The intent of the letter is to encourage every company to rethink their carbon footprints.
2. Microsoft’s pledge to be “carbon negative” by 2030
While many companies are starting to talk about “net zero” carbon emissions, Microsoft went further.
A commitment to be carbon negative by 2030, means they plan to halve their emissions and offset more carbon than they produce.
Beyond this they’ve set a 2050 goal to offset all of the carbon emissions the company has created since its launch in 1975.
Plus they’re committing $1 billion to be invested over the next 4 years to a Climate Innovation fund.
3. Davos talks about the death of capitalism
At Davos, the World Economic Forum’s annual meeting, one of the key topics on the agenda was Stakeholder Capitalism.
According to Marc Benioff, Salesforce CEO, capitalism as we know it is dead. Stakeholder Capitalism, the idea that companies have a greater purpose beyond shareholder returns has hit a tipping point.
Bank of America CEO Brian Moynihan noted their research team have identified “moral capitalism” as one of the next decade’s 10 trends, highlighting that’s where investor money will flow.
More evidence - if you need it - that change is coming.
Is your organisation ready?
If you would like to learn more about these changes and how other organisations are meeting the growing expectations for business to have a Social Purpose, I'd like to invite you to book a 90 minute Strategy Session. Full details and booking links here.
REMEMBER, doing good is good for business. So if you're not doing any good... what are you doing?
P.S. When you're ready, here are 4 ways I can help you to build your Social Purpose strategy:
1. Book one of our 1-on-1 leadership team workshops
2. Implement our Path To Purpose Program
3. Get a copy of my Amazon #1 bestselling book Path To Purpose.
4. Take the first step and contact us to book a 90 minute Strategy Session.