Social Performance vs Fiscal Performance
According to a tweet from Matthew Bishop, Head of the New York bureau of The Economist, a Chevron spokesperson at Davos said that social performance is becoming much more important than financial performance for companies. The tweet attracted some derision, but I agree with it. The reasons are at the core both of how I see my role working in BT’s Better Future team, and the difference I see between traditional Corporate Social Responsibility (CSR) and BT’s Better Future Strategy.
Traditional CSR, accompanied by vernacular like ‘philanthropy’ and ‘giving back to the community’ positions the societal impact of a company as separate from the fiscal impact; a company makes money from its core competencies, and then gives some away to make nice with society. ‘Giving back to the community’ implies that in the course of doing business we have somehow taken away. I agree that if that is how you view social performance, then it is not more important than fiscal performance. Never will be.
I see things very differently though. Doing good business and contributing to society and the environment are not mutually exclusive. In fact they are mutually reinforcing. At BT, one of our six strategic objectives as a company is to be a responsible and sustainable business leader. This immediately brings together the idea of combining business and societal success. At BT we help society through products and services that underpin critical societal services, support knowledge, education and communication and help improve utilization of natural resources. Our philanthropy is a strategic addition designed to leverage additional benefit adjacent to our core capabilities.
We have a world of opportunity to increase our business while increasing the good we contribute to society. A key part of my role and that of my colleagues is to act as a catalyst to optimise the benefit we bring to society and to the environment through being in business. My particular focus is on the environment, where there is ample scope to help our customers address their environmental sustainability challenges through profitable business. Our new net good programme aspires to show how the environmental improvement we effect through our business, significantly exceeds the environmental burden of our end to end operations.
But, the cynic might say, even if I agree with all that, your financial performance is still more important than your social performance. I say no. That is only the case if you view financial performance as an end in itself – which I do not. I view our financial performance as a societal contribution too; to the successful business of our suppliers, the salary of our employees, income of pensioners and other shareholders. Some of this is captured in our annual report “The Economic Impact of BT”.
Our value to society as a company is not in the bland numerism of fiscal results. Those results are not an end in themselves. They simply serve to represent a part of our value to society – a value that is also delivered through our products and services, our people and our traditional CSR. By this measure, social performance is already more important than fiscal performance, because it encompasses it.
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