Five pillars of responsible business
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In 2022, the centre launched Urgent Business, an award-winning book covering the five common myths that trap businesses in an unsustainable black-hole and offering a manifesto for change. This book outlines the five pillars of responsible business.
Responsible governance
Responsible governance
The conventional idea about the purpose of a business is that it should look to maximise profits and continuously grow. But experience and research suggest a responsible business and their employees exist to do far more than that, whether it’s looking after the wants and needs of their local communities or sustainably managing the planet’s resources for future generations.
Making profits responsibly, minimising the social damage of expansion and balancing the interests of all stakeholders – not just those of the owners – are all good principles of responsible governance.
Our research at the Centre recommends the following first steps for businesses wanting to begin or continue their journey in this area:
- A shared vision of a sustainable world – Based upon the Global Goals
- Aligned purpose – Identity which Global Goals to prioritise
- Embedded social value – Put people and planet at the heart of business strategy
- Responsible mindset – Promote sustainability among all staff and operations
Responsible accountability
Responsible accountability
Formal scorecards and financial accounting systems aren’t set in stone. They represent past choices as to what and how to measure things in business – past choices that may be steering us in the wrong direction. Moreover, once we measure something and rank it in a league table, we wrongly tend to think we’ve mastered it.
From carbon emissions to social inequalities, responsible businesses need to manage even what they can’t measure easily and stop obscuring and omitting these socio-ecological costs from their accounts. A new world of purpose-led metrics, open reporting and precautionary principle accounting are all innovative ways of meeting this accountability challenge.
Our research at the Centre recommends the following first steps for businesses wanting to begin or continue their journey in this area:
- Blindspot removal – Assess your impact on all 17 Global Goals
- Purpose-linked metrics – Measure social contributions as keenly as finances
- Open reporting – Use Global Goals-based monitoring to encourage stakeholder transparency
- Ambitious sustainability targets – Go beyond compliance and follow the latest science
Responsible leadership
Responsible leadership
Even business leaders who are proudly committed to sustainability can unwittingly find themselves making irresponsible decisions. But a new model of inclusive, teams-based leadership can help mitigate against these oversights and improve decision-making by encouraging more methodical processes that listen to all stakeholders and employees.
The latest behavioural psychology brutally exposes how the way our brains work makes it impossible for individuals to make decisions uncorrupted by bias and self-interest. So responsible leaders must become more aware of these flaws in themselves and others if they’re going to properly grapple with the sustainability of their business.
- Team Leadership – Build diverse teams that lead on key sustainability issues
- Inclusive decision-making – Treat stakeholders as strategic partners
- Trust monitoring – Measure trust as a core KPI for the business
- Systemic thinking – Be always aware of how the firm contributes to the planet’s sustainability
Responsible production
Responsible production
Responsible businesses already recognise that an extractive, ‘Take-Make-Waste’ approach to production is reckless and unsustainable, and that circular, ‘closed loop’ strategies which seek to reuse, recover, and recycle resources are the way forward. But this more holistic viewpoint needs to expand further if companies want to be truly sustainable and avoid any unintended consequences.
They must understand how businesses are rooted in and dependent upon wider social and ecological systems, whose resilience should be the ultimate aim of any sustainability strategy. These ideas of systems thinking and resilience-based stewardship offer exciting new ways of understanding sustainability, and the power businesses have to work with others to bring about change far beyond just their operations.
Our research at the Centre recommends the following first steps for businesses wanting to begin or continue their journey in this area:
- Product life-cycle responsibility: Own your products' impacts, from raw materials to disposal.
- Net zero strategy: Measure and mitigate carbon emissions across entire value chains.
- Social resilience-building: Pay fair taxes and wages, and help enhance the natural environment.
- Partnership working: Work with others to tackle big, systemic issues.
You'll find the practical tools, resources and rationale for how to do these things, together with many more research-based ideas and inspiring case studies on this fundamental part of responsible business.
Responsible consumption
Responsible consumption
Responsible consumption is reflected in the Sustainable Development Goals. It is about shopping for, possessing, using and disposing of products and services in ways that consider their social, environmental and economic impacts. It also involves attempting to reduce or eliminate the negative social and environmental impacts of resource use and related waste.
Responsible consumption requires us to understand the lived experiences, challenges and socio-cultural practices of consumers, but also how consumption is organised and shaped by various systemic, institutional and marketplace factors. This means that responsible consumption is not just a matter of consumer responsibility, as it is inevitably interconnected to the other pillars of responsible business.
Given the importance of consumption to people’s lives and the economy, but also the detrimental effects it can have on the environment, responsible consumption has become a central focus of national and international policy.
An example of research in this area is Jennifer’s work, which examines the consumption behaviours of urban consumers in developed markets in the context of sustainability. Among consumers, there is a growing awareness of, and concern about, the harmful environmental and social impacts of worldwide consumption and production.
This concern influences how people think about their individual consumption choices, how they participate in markets, including their attitudes toward firms and products, and how they perceive the global economy. At a firm or industry level, companies are increasingly offering sustainable options to consumers and differentiating themselves on the basis of sustainable practices.
This research, which explores whether and how consumers engage with sustainability, is essential to the future agenda of responsible business, as consumers are not only shaped by markets, but they can also shape markets through their purchasing power and ability to collectively advocate for systemic change.
Jennifer’s research focuses on urban consumers living in the United Kingdom (London and Birmingham) and the United States (San Francisco and Sacramento) and highlights sustainable consumption trends, urban consumption practices, the needs and goals of urban consumers, and the barriers and tensions facing urban consumers as they try to live sustainably.