Last year, Cardiff Business School launched its Public Value Business Strategy. It aims to be the first business school in the world to seek to deliver as much ‘social value’ as it does ‘economic’. This is a significant shift in focus for a business school to take; to seek responsibility to not only deliver prosperity for organisations, but also to ensure that its students and the organisations that the school interacts with are cognizant of the grand challenges of our time and aim to do something about them. This means it will work to deliver research that directly addresses major global problems such as climate change and gender inequality. The United Nations has developed a number of sustainability goals, which are a brilliant summation of the challenges the world faces and what we need to do in order to work towards the lessening of inequality.
A somewhat daunting list, but business should not fear getting involved in the sustainability agenda. Professor Ken Peattie of the Cardiff Business School, in a CIPD report about responsible and sustainable business, discusses research by Harvard Business School and London Business School – The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance – that proves “a £1 investment in a value-weighted portfolio of high sustainability firms in 1993 would have increased to £22.60 by the end of 2010, compared with a return of £15.40 from the low sustainability performers”. Indeed, in a 2010 Accenture and UN Global Compact survey of global leaders, 93% of CEOs see issues relating to sustainability as “critical to the future success of their business”.
Innocent Drinks is one company that places equal importance on both responsible business and delivering economic value. It recently spoke at an event at the school that looked at lean and green operations. Case studies included work that it had done in Spain’s Donana National Park to reduce the water demands of strawberry farming, and also how mango farmers in India had been helped to increase their yields by 25% in the face of climate change. Sustainability is part of its DNA, and the financial profits gleaned from its work in this area were not passed on to Innocent, but were kept with the farmers, which is an almost astonishing approach within supply chain management. To ‘profit share’ would contradict its core values.
This view has been similarly shared by the Welsh Government, which has taken an unprecedented step in terms of seeking to put core sustainability values at the heart of our public services. The Well Being of Future Generations Act came into force in April 2015 and seeks to ensure that organisations work across boundaries and make decisions based on their long-term impact, improving the social, economic, environmental and cultural well-being of Wales. Too often companies make decisions based on a short-term view, driven by budgets or political election. The Act is designed to ensure that decisions made will protect and benefit future generations.
To me, it is essential that businesses use all the technological advances at their disposal to protect future generations, to seek to tackle those global goals for sustainable development compiled by the UN. Research and experience has shown that their profits can grow as a consequence of pursuing such an agenda, and that delivering social value can be as important a driver to achieving economic value as the mere pursuit of economic value alone.