The laws governing doing business have evolved.
The most flexible people will be the ones that survive. Never has the famous phrase by Charles Darwin been more applicable than it is in the modern corporate world. The way we make purchasing decisions is changing due to transparency in many spheres of life, but especially in business. In terms of how goods and services are provided, investors, stakeholders, shareholders, management, staff, and customers are calling for greater transparency and knowledge.
This is something that’s good, right? Regarding it, no one would dispute. However, expansion, margin, return on investment, and highest profit at lowest cost have been the cornerstones of modern capitalism. Based on this, the “value proposition” of big businesses and others has been based on credentials and promises that consumers have, up until now, simply accepted as true.
But over the last 20 years, a number of seismic shocks have eroded consumer trust in the way we manufacture things and services. Due to incidents like the mid-1990s BSE outbreak in cattle, the 2007–2008 financial crisis, the 2013 collapse of the Rana Plaza garment factory in Dhaka, Bangladesh, and the 2015 Volkswagen emissions scandal, both investors and consumers are now looking for companies and brands to be more transparent and honest.
The significance of ESG
Consumer spending is increasingly being facilitated by business ethics and trust, as consumers seek out companies that approach economic, social, and environmental concerns in a way that benefits individuals, groups, and society as a whole.
From phony “greenwash” declarations in the past to board-level roles and policies in the present, environmental, social, and governance (ESG) has grown in prominence over time. However, what about the times ahead? In order to demonstrate that they are providing social, environmental, or ecological, and financial benefits—also known as the “triple bottom line”—businesses require support and direction.
With the tools and frameworks now available for food and beverage firms to implement “net-good” practices across their organizations, along with frameworks for independent reporting, there is cause for optimism. With SBTi and CDP carbon impact reporting, as well as B-Corp, or Benefit Corporation, for broader ESG business metrics and behavior, we now have a shining example of carbon impact reporting.
Self-reflection questions
Although these can assist businesses in becoming more purpose-driven, how can you get started and track your progress?
Today’s firms operate in a highly complicated environment with internal matrix management and conflicting incentives. Then there are investors and stockholders from outside the company who seek both immediate and long-term profits. Making sure your company has a shared goal and direction in current climate can be quite difficult. You cannot expect your suppliers, consumers, and investors to accompany you on this trip if your business lacks clarity and confidence over its mission statement and how to achieve it.
We firmly believe that responsibility cannot exist in the absence of visibility, and that the people who are most adaptable to change will prevail. Thus, the following are some questions you might want to ask yourself and know the answers to:
At any given moment, how many tier one and above suppliers and products are there in our supply chain?
Are we conveying to them our standards of behavior and values? Are they being followed, too?
Exist supply chain sustainability issues that can jeopardize our capacity to conduct profitable trading?
What effects do the Sustainable Development Goals (SDGs) of the UN have on our business?
Does our supply chain make use of limited natural resources or assets? And without the simple and affordable availability of these assets, could our company continue to operate successfully?
Would the value of our brand be harmed by a modern slavery scandal or a failure in our responsible sourcing policies?
From where did my business originate?
Making sure the proper team has been assembled is the first step a climber must take when attempting to climb a mountain. Both adequate funding and careful planning are essential. Additionally, having a well-defined plan and knowing how it will be implemented are essential. It is also necessary to create backup plans in case something goes wrong.
corporate ESG reputation
Do you have the answers to the questions you should be asking yourself?
It’s also critical to let people who are essential to the mission know where they’re going and why. To use another mountaineering metaphor, you have to reach base camp before the snowy ascent is initiated by a single crampon. This is the familiar territory where the adventure begins. If other team members need to go back to it, they must be able to find it easily. Additionally, they’ll need the plan, which is a map that shows them exactly how to get to the summit, on hand.
So, have you taken all the necessary precautions that our climber would have taken before beginning your “ascent” into the uncharted territory of transparent and responsible sourcing?
Are you aware of the whole picture in terms of where you are starting from and how likely you are to succeed? First, let’s discuss the four Ps: partners, platforms, politics, and people.
People: Do you have the right group of people surrounding you with the necessary expertise to succeed in this new environment? Do they possess the knowledge, aptitude, and flexibility to adjust? Can they interact with non-governmental organizations and third parties, as well as take in fresh ideas and challenges? Do they possess prior experience and are they able to offer outside perspectives? Can they interact with everyone in your company and have an impact on the highest levels of management?
Politics: Does your organization’s leadership support the need for change and are all departments in line with this? Do they have concerns about practical matters in their roles, objections that need to be addressed, or unreasonable worries about the significance of all this “stuff”?
Platforms: Do you currently possess the tools, technology, and resources necessary to manage, map, and track your mission as well as track your progress? Do you have an easy-to-use platform for communicating with investors, suppliers, and customers?
Partners: Most importantly, are you traveling with your supply partners? Do they comprehend it? Furthermore, from where do they begin? Are you working with the proper strategic suppliers who see the significance of this and who take the initiative rather than hiding in the background? Can you effectively assist and mentor them, express your goals and objectives to them, and gain a thorough grasp of their commitment to responsible sourcing in all its forms?
You cannot manage something if you cannot map it.
Companies are now focusing on issues that they had not previously budgeted for, and we have not yet addressed the issues that will emerge tomorrow.
Enterprises intending to initiate or track their advancements in responsible sourcing require a shared vocabulary or structure to express the results. They also require a systematic method for gathering and standardising data. This is challenging because many businesses continue to rely on “old world” technologies to address “new world” issues that arise throughout the supply chain.
You can track these essential components of conducting “better business” with the use of digital platforms and frameworks, which can also assist your suppliers in developing their expertise. Compliance is no longer the focus in this new environment; instead, shared learning, collaboration, and continuous improvement are valued—the kind of teamwork required to climb a mountain and enjoy the view from the top. After all, accountability is impossible without visibility.