The next phase for business is to find new ways to successfully combine profitability and purpose
Joe Franses is Director of Corporate Responsibility and Sustainability at Coca-Cola Enterprises
The business landscape of today is very different from when I started my career in the field of sustainability over 15 years ago. Today, companies are expected to create a profit whilst also defining their broader purpose in society and playing a central role in addressing the serious environmental and social challenges we face.
Despite the best intentions, the pace of change can, at times, be frustratingly slow. I recall working on a New Statesman supplement on ‘Profit and Ethics’ for the Corporate Responsibility Group back in 2000. However, what is clear is that sustainability has evolved from a compliance and ethics issue to a core business concern that can create value and mitigate risk.
At Coca-Cola Enterprises (CCE) we have integrated sustainability into our operating framework and core business strategy, and have an ambitious sustainability plan that was launched as a result of significant collaboration with stakeholders across our territories in Western Europe. We’ve made some strong progress as a result of our approach, both within the context of our own business and across our wider value chain. Since launching our sustainability plan in 2011, we’ve learned a lot about the role of innovation and technology in accelerating the pace of change. However, we also recognise that we don’t have all the answers ourselves and have benefited first hand from collaboration with private, public, academic and non-governmental organisations, including WWF, the Corporate Leaders Group on Climate Change and OpenIDEO.com.
For the past two years, we’ve convened a Sustainability Summit to bring together suppliers, customers, thought leaders, academics and industry experts to focus on how business can broaden the positive impact that it delivers for society as a whole. Our 2014 Future for Sustainability Summit, was the next chapter in this collaboration – looking to the future and bringing the voice of the next generation of business leaders – the millennial generation – to the table.
As part of this approach, we wanted to explore the expectations, both from current leaders and the millennial generation (future leaders) about the role of business in society. We partnered with The Doughty Centre for Corporate Responsibility at Cranfield University, Net Impact and the Financial Times’ FT Remark, to understand current and future business leaders’ perception of the relationship between economic, social and environmental value. Interestingly, the research revealed a stark contrast between the CEOs of today and those who will be running our businesses in the future.
Our research indicated a strong alignment on the topic of profit and purpose – with 88 per cent of current leaders and 90 per cent of future leaders believing that business should have a social purpose. Yet only one in five future leaders think companies already have a clear social purpose today, compared to four in five current business leaders. We are facing a radical change in mindset beyond anything we have experienced before. What is already clear is that, in future leaders’ minds, business is just not doing enough.
Among many of the future leaders, there was also a frustration at the apparent reluctance of business to embrace a wider concept of ‘value’ beyond a financial return. One MBA student from Sweden said, “It’s going in the right direction but for many businesses, the rate of progress is nowhere near as fast as it should be.” This sentiment was echoed by Rajeeb Dey, Founder of Enternships.com, who called on businesses to not only improve employee engagement but to improve the entire employee recruitment process in order to prevent potential future leaders becoming disengaged – attracting and working with forward-thinking millennials was recognised as critical to the momentum of change.
At CCE, we believe we should help young people build a brighter future by supporting them to acquire the skills, knowledge and understanding of the workplace that will allow them to make the difference they are striving for. We’re taking an active role in inspiring future leaders by providing several points of entry for young people into our organisation through apprenticeships, work placements, internships and our graduate training programme.
We all face many obstacles on the journey towards combining profit and purpose in our businesses. The market system in which we operate will continue to look for and reward outstanding financial performance – we need to better define and communicate the benefits of integrating social and environmental impacts into core business strategy. Future leaders also identify management attitudes as a major barrier to defining and agreeing a social purpose. We must advocate for the partnership of profit with purpose both within the boardroom and beyond.
At CCE, sustainability remains a key decision factor in our investments and we’ve made strong progress on this journey, with a sustainability platform that we are proud of. However we have a lot more to learn if we are to overcome the challenges we face. The next phase of this journey is about finding new ways for all of our businesses to successfully combine profitability and purpose, and we are confident that these two elements don’t need to be at odds.coca-cola comment purpose sustainable business strategy