by Linda Chang
Matthew Bishop, U.S. Business Editor for The Economist and author of a new book, The Road from Ruin: How to Revive Capitalism and Put America Back on Top, believes that a handful of evident and emerging trends in the global economic landscape are pointing towards a single, one way direction that capitalism, meeting up with socially motivated efforts like philanthropy, can go. And that means the nature of business is changing and must continue to change.
Speaking at the recent 2010 Communicating Sustainability Conference in Santa Clara (September 23, 2010), Bishop presented his overview of economic trends that bode well for a more promising future on the sustainability front.
Here is a summary of his list:
- The future of growth must come from the developing world
- It’s harder to run sweat shops when your future customers will come from these formerly erstwhile sweat shop employees
- Developing countries are becoming more stable and more democratic
- The demand for transparency is becoming greater, for both governments and businesses, because of increased and widespread communication capabilities
- Supply chains are becoming more integrated in the minds of consumers in the developed world, placing pressures on companies to mind their back ends
- As people become more affluent, they are more interested in the intangible experiences of economic activity, rather than the tangible, which translates into demand for greater meaning (intangible values being met by goods and services consumed, environmental responsibility a factor in consumption)
- The battle for talent within companies who need to perform on a global scale will continue to intensify, as people want jobs with purpose and fulfillment, and this demand will feed the need for transparency
- Demands for transparency, authenticity and accuracy mean the focus is turning toward measuring social impacts, not just profit
Bishop pointed to PepsiCo.’s new CEO Indra Nooyi’s declaration of allegiance on the war against obesity and desire to align the company on the side of human health as an example of a business recognizing they need to make some radical shifts within this new global economic climate. PepsiCo. now has an impressive line up of NGO partners and seem to be carving out a path to make their juice line Naked the company’s premier product.
Bishop also stressed the importance of journalists holding these leaders accountable to their claims with the need to be relentless in their reporting and demands for proof. When challenged whether it was possible to come to any alignment on the clarity or precision with which metrics might be designed for social impacts and matched to socially responsible investment strategies, Bishop was optimistic: “The reason we don’t have good metrics is because we haven’t applied our minds seriously enough into creating them… it’s going to require serious engagement and serious debate.”
He pointed to the Global Impact Investing Rating System (GIIRS) as an example of a project that was taking on this serious level of engagement to develop meaningful metrics. Although they are making slow progress, he commented that it was a project for which we, the concerned public, ought to demand that it gets done.
The bottom line for Bishop was that business leaders must apply a truly long-term vision towards their strategies. If they want to be in business 10, 20, or 30 years from now, they need to look ahead and follow the logic of trends already evident right now, right in front of them. That’s good news for sustainability proponents, but questionable for the future of American businesses should leadership in both government and the private sector fail to align accordingly.