OPINION: How responsible corporate behaviour can help during a pandemic

by Mary Martin | London School of Economics (LSE)
Thursday, 2 April 2020 08:30 GMT

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

There are lessons in this crisis for how to contribute to create societies that are economically, socially and environmentally healthy, stable and resilient

Mary Martin is a senior policy fellow at LSE and director at UN Business and Human Security Initiative, LSE IDEAS

The coronavirus pandemic is many things – a health emergency, an economic crisis, but also a fresh test of what constitutes responsible corporate behaviour. Those calling for a change in company attitudes from platforms like the World Economic Forum, now have to demonstrate that boardroom speeches about sustainability and responsibility are not empty talk. Surveys and business school research confirm the perception of global business as more interested in its own goals than the good of society. Over half the British public believe that capitalism does more harm than good and the profit motive is ‘an actively-malevolent force’. Talk of sustainability risks exposing a credibility gap.

Closing it requires targeted action at the grass roots, by companies and financial investors, to understand the needs of communities and partnering with them in ‘smart’ ways that pool resources and share responsibility for building resilience. Companies and investors have to recognise and tackle explicitly the threats, hopes and expectations people have as part of their everyday lives: fears about uncertain livelihoods, the need for work with dignity, the desire for strong communities and wanting to preserve the natural environment. Otherwise sustainability programmes look like another example of business elites disconnected from daily life. The corporate challenge is to forge partnerships with local society, organisations and government.

One way of thinking about sustainability is delivering ‘human security’, meaning working with people to protect them from harm, and help them to lead tolerable lives. Whether the challenge is adapting to climate change, transforming the local economy or helping stem a health crisis, close, constructive and continuous relationships between business and communities help to navigate those changes.  In a ‘human security contract’, business and the community support each other and achieve results which benefit both.

This requires rethinking core business approaches in order to align business and community interests and capacities. Mars Inc has been pioneering an economics of mutuality model and providing ‘win-win-win’ solutions, rather than just targeting a financial return. The same kind of approach is behind the framework of human security business partnership developed by LSE IDEAS and the United Nations, which guides companies to establish alliances with community and local government partners, that identify and address each partner’s needs and mutualise any risks they face.

Companies such as Unilever, Coca Cola and Mastercard are transforming marketing opportunities by building inclusive economies, particularly through promoting the economic participation of women.

Five years ago corporate headquarters might have regarded such programmes as philanthropy. Now companies see women even in poor societies as customers with unique purchasing power, future employees, or essential to expanding in new markets.

Companies are also finding that sustainability also means addressing crises and shocks that destabilise society. In Colombia with up to 2 million displaced Venezuelans companies are tackling not only  a humanitarian crisis, but also catering to a new market of displaced people. A triangular relationship between companies, government and communities has seen food companies adapting product ranges to serve the tastes of Venezuelan consumers. The largest bank in Ecuador, Banco del Pinchincha is working with UNHCR, the United Nations refugee agency, to tailor financial services to this highly mobile consumer group. Discovering new possibilities at ground level, companies are approaching displaced people as allies in expanding business, not passive victims.

There is a positive agenda for sustainable business, which translates to capitalism of care that defines corporate purpose and responsibility. This is different to philanthropy or traditional corporate social responsibility because it involves business and people working together as equals to find mutual benefit, and it links business to the future of local society. There are lessons in this crisis for how to contribute to create societies that are economically, socially and environmentally healthy, stable and resilient.