Why it makes commercial sense for the private sector to take the lead in making the world a better place.
By Sarah Stone, January 2019
Image: Consumers aren't prepared to wait for legislation to tackle society's biggest challenges, such as obesity, they expect manufacturers and the private sector to lead the way.
Humanity is facing some significant problems and although it may be uncomfortable for the politicians to hear, the solutions don’t lie with them; they lie with the private sector.
If we really want less salt and sugar in our food, cleaner air and reduced plastics in our oceans, it’s the private sector which needs to deliver many of these changes. All of which puts business leaders in a difficult position.
They control a powerful set of tools and mechanisms which have the ability to change and shape the world for the better, and they know their customers want them to take action, but they are still waiting for the politicians to tell them what to do.
Waiting for politicians to take action is a dangerous business. The public sector might control the framework the private sector operates within, but the framework is outdated and the mechanisms and tools available to business leaders to influence it are limited.
Legislation is clunky, slow, difficult to implement, and rarely works in the way policy makers envisaged. The reputational risk when things blow up whilst companies are waiting for the government to tell them what to do, is enormous.
Pret a Manger’s reputation has taken a sizeable hit because of its failure to implement correct food labelling which led to the deaths of two customers – blaming it on poor legislation simply doesn’t wash with consumers.
Traditionally, one of the ways businesses try to protect and improve their reputation is by implementing a Corporate Social Responsibility (CSR) programme – but these are now surely an outdated concept. Criticism like that heaped on fast food giants Nando’s, Domino’s Pizza and McDonalds over their animal welfare policies recently, is devastating to these brands, many of whom spend millions on CSR policies, which mean nothing in the face of this kind of criticism.
Sticking strictly to the letter of the law and continuing with ‘business as usual’ while covering your poor activities with a thin veneer of corporate social responsibility paint is brand suicide in today’s information-centred world. Consumers want better behaviour from companies and they’re not prepared to wait for government to legislate for it.
The best thing the private sector can do in the face of overwhelming calls for action on an issue is to take the genuine action that is needed, without waiting for government to legislate and force through change. Why wait for a tax to force you to reduce the amount of plastic you use in your packaging? Or the amount of sugar, salt and chemical ingredients in your food? Why wait to be told to stop advertising your products to children if they are blatantly unsuitable, or be forced to manufacture products that can be repaired when they break?
"The public affairs industry is worth £2 billion a year in the UK."
Think of all the money companies would save lobbying against change if, instead of fighting it, they implemented the change that was needed, under their own terms.
Some companies are taking action and not waiting for changes in the law. Iceland recently successfully trialled a plastic bottle deposit return scheme in its stores – proving that it could successfully introduce such a scheme years before the government could.
Sky Sports recently announced it would act unilaterally to reduce the number of gambling ads it shows in a bid to tackle betting addiction. And, after it faced extensive criticism, the UK hospitality industry took action to implement a voluntary code of practice to ensure waiting staff received all their tips paid by card in restaurants, well in advance of government legislation which then followed.
My advice to business leaders in industries that are facing legislative challenges is to follow these examples and demonstrate the leadership consumers want. Rethink your products and services, embed social enterprises in your supply chain, and your business will benefit. Scandinavian companies are particularly leading the way in this, including companies like Interface, one of the world’s largest flooring manufacturers, which is redesigning its products and manufacturing processes in order to help fight climate change.
Lego will make all its bricks from sustainable sources by 2030 and Ikea also plans to use only renewable and recycled materials in all its products by 2030. So here’s my clear message to companies of all shapes and sizes, in all sectors: if there’s a challenge coming down the line, don’t wait for the public sector to solve it for you.
By putting genuine social value at the heart of your business, you can win the hearts and minds of consumers – while also creating truly sustainable businesses that will deliver both immediate and long-term value to shareholders.
As one of the UK’s most ambitious social value agencies, we’re helping businesses place social value at the heart of their commercial strategy.