Society is demanding more from companies and chief executives than ever before. The new standard for success goes beyond financial performance; businesses must have a positive impact on the world.
As pressure mounts from all sides for companies to think bigger, Palladium Directors Christina Shim and Eduardo Tugendhat anticipate some key trends we can expect to see in 2020.
Less Talk, More Action
In 2019, the biggest news in corporate sustainability came with Business Roundtable’s announcement that a corporation should benefit all stakeholders – from employees and customers to communities and the environment – and not only focus on maximising profits for shareholders.
“This was a potential watershed moment,” says Christina Shim, Director of Palladium’s Commercial Innovation Practice, “but we haven’t yet seen it translate into real action or tangible results.” Shim expects the ethos to gain more momentum in 2020, “especially as consumers, including the increasingly conscious Gen Z, begin to hold corporations directly accountable for their public promises.”
Delivering on these commitments will take more than traditional CSR. According to Palladium Director of Thought Leadership Eduardo Tugendhat, companies need to be far more ambitious, transforming their business models and developing a deep understanding of their stakeholders.
“The real question is whether companies will go for cosmetic changes,” he explains, “or really commit to rethinking their products, services, and supply chains in ways that integrate the communities who’ve been left behind by their success.”
Companies will need to understand the broader ecosystem in which they operate in order to start identifying new opportunities and business models.
In all cases – whether businesses are looking to address their workforce, climate change, supply chains, or even health needs – they won’t be able to do it alone.
“We’re going to see new types of partnerships,” Tugendhat predicts. “In particular, we’ll see more of those that can attract and repay capital, at scale, while achieving the outcomes desired by both the business and communities.”
This may mean partnering with government agencies, local stakeholder groups, impact investors, and even a “catalyst” to bring it all together.