Almost 50 years ago, the economist Milton Friedman, in a New York Times article famously stated: “The business of business is business”, and that a business’ only social responsibility is “. . . to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game”.
A cursory look at the international business community suggests many companies no longer subscribe to this view. Research carried out in early 2017 found that 82% of Fortune 500 companies publish annual Corporate Social Responsibility (CSR) or sustainability reports. In January of this year, Larry Fink – the CEO of BlackRock, the world’s largest asset manager with more than US$6 trillion under management – sent a letter to the CEOs of all companies BlackRock invests in, stating “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
The winds of change are blowing. It seems inevitable they will make their way to our shores.
The local story
It is news to no one that Trinidad and Tobago faces a maelstrom of economic, social and environmental challenges. No company or individual is completely immune to these challenges. The corollary of this however, is that each of us can gain from solving them. Government, the private sector, NGOs and individuals all have roles to play.
The model of CSR that prevails in our country, focused as it is on philanthropy and charity, is inadequate for making meaningful impacts on our systemic and pervasive challenges. Indeed, if it were, we wouldn’t find ourselves in the situation that we do.
While the private sector cannot solve all of Trinidad and Tobago’s challenges, it can play a more influential role than it currently is.
The solution is a win-win
Across the world there is a wealth of evidence that companies which strive to help solve society’s challenges, often through their core products and services, create shared social and business value. The businesses themselves benefit in both monetary and intangible ways! BASF, Coca Cola, Nestle, Unilever and Verizon are just a handful of examples of companies publicly reporting such benefits.
Recent research by Kantar Consulting, a leading global data and insights company, found that brands with a high sense of purpose have experienced a brand valuation increase of 175% over the past 12 years, compared to the median growth rate of 86% and the 70% growth rate for brands with a low sense of purpose. The research also found that almost two-thirds of millennials and Gen Z express a preference for brands that have a point of view and stand for something.
Great! But, what does this mean for me?
Referencing international good practice is easy. Understanding how it applies to local operating realities is not. This is why the Trinidad and Tobago Chamber of Industry and Commerce’s Responsible Business Committee (formerly the CSR Committee), will host another of its Business Insights series, entitled “Caring for Your Bottom Line – The business case for corporate responsibility”, at the Chamber’s Conference Hall on June 5th, 2018 from 7:30am – 10:30am.
The event will include presentations from two expert CSR consultants, Melanie Richards of Corporate Social Responsibility (CSR) Solutions Ltd. and Kyle Santos of Kyle Santos Consulting Ltd (who is also the Chair of the Chamber’s Responsible Business Committee). Taken together, these presenters spent over 20 years advising companies on this agenda. Melanie and Kyle will outline the business case for corporate responsibility, while also dispelling common myths and misunderstandings about corporate responsibility. Attendees will then get the opportunity to hear practical actions and lessons learned from industry practitioners from both SMEs and large corporations, in a panel discussion.
Given the strategic nature of the discussion, the event is ideally suited to company leaders and senior management, as well as those with responsibility for implementing corporate responsibility initiatives. NGOs who attend will benefit from a better understanding of companies’ needs and limitations, while providing their own unique perspectives of the challenges facing our society. The event is open to Chamber members and non-member companies.
The Responsible Business Committee is a group of volunteers from leading local companies who are passionate about responsible business. The Committee’s mission is to build a platform for capacity building and advocacy that enables every business to be an active partner in helping to solve Trinidad and Tobago’s socio-economic and environmental challenges.