There is a breath of fresh air blowing, albeit rather gently, across the populist bombast and fustian economic theories. The new report estimates that mission-led businesses now number 123,000 in the UK, and generate a turnover of £165bn, with some 1.4mn employees. This number excludes community interest companies and any other organisations where there are legal restrictions on profit distribution.
Such businesses are a key part of a radical change in what used to be called CSR (corporate social responsibility). With companies like Unilever leading the way, companies have evolved their thinking about their social and environmental impact from a focus on community affairs to placing social impact at the core of all their operations. In fact social engagement becomes partly a measure of integrity (see my latest book).
At the same time, the report notes that ‘start-up businesses, especially those led by the millennial generation, are setting up businesses whose mission is focused on solving challenging social issues like climate change, food waste or educational attainment’. All of this puts the final stake through the heart of the Friedmanite mantra that only government can be responsible for social responsiveness. The truth is that the challenges of this century are much too big for government alone. We are all ‘in it’ together, and concepts such as corporate citizenship are important but not sufficient. As Appiah suggests, we are all global citizens, faced by a future we are all responsible for and generations to whom we are all accountable (Han Jonas The Imperative of Responsibility).
All of that can easily take the breath away. So have a look at the Report’s recommendations:
- Government to lead a conversation on responsible business and identify how the public, private and social sectors can work together to address societal issues.
- Starting with business schools, educators to lead the way in analysing the impact on business of having a purpose that serves society, and embedding this into curricula.
- Government to encourage and incentivise the positive social impact of mission-led business by enabling blended finance investment models and social pension funds.
- UK corporates to create social and environmental impact investment funds targeting £1 billion by 2021.
- Mainstream businesses and start-up mission-led businesses to set up talent exchange programmes.
- Advisory firms to commit to better serving mission-led businesses through increased training and extending their pro bono remit.
- Government to promote the flexibility offered under English law for companies to act with a social purpose and align shareholder and stakeholder interests.
- Government to encourage businesses to incorporate around a social purpose and commit to social impact by establishing clear entry points for entrepreneurs.
- Government to explore the introduction of a “benefit company” status in English law.
- Every business to actively communicate its social mission and progress in the form of a “transparency report”.
This begins to sound like ideas from Werhane’s or Lederach’s Moral Imagination. Where will all end. As Christmas approaches I will suggest next week how far this might go. For now we need to know where to start, and this report gives business schools a real pathway.