Business initiatives to improve society

Scots are generous folk. Research published in October showed that two-thirds of people (65 per cent) in Scotland gave money to charity last year. The report by the Charities Aid Foundation suggested that there is a culture of giving deeply embedded in Scotland.That generosity of spirit has crossed over into business, where the desire to have a positive social impact is becoming in some cases just as important as the profit margin.

Bank of Scotland has joined forces with Macmillan Cancer Support to help people living with cancer manage their finances
Bank of Scotland has joined forces with Macmillan Cancer Support to help people living with cancer manage their finances

It is not just social enterprises, such as the Social Bite chain of sandwich shops, which are building philanthropy into their business strategy.

Earlier this year the Bank of Scotland joined forces with a cancer charity to help people living with cancer manage their finances.

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The bank, which has 2.8 million customers in Scotland, and Macmillan Cancer Support have set up a specialist team of staff to help customers cope with the financial impact of their diagnosis.

Alan Mahon, co-founder of social enterprise Brewgooder.

According to Macmillan, four in five 
(80 per cent) of Scots living with cancer are, on average, £420 a month worse off than when they were well and a third of cancer patients struggle to cope financially, with almost one in ten saying they had missed a mortgage or rent payment.

Robin Bulloch, Lloyds Bank and Bank of Scotland managing director, believes the service has the potential to make a real difference to people’s wellbeing.

“We have developed a cancer support team, a confidential free phone service with specialist trained staff, to help customers manage their finances from the point of diagnosis and throughout their treatment,” he says.

“Customers can also be referred directly to Macmillan’s financial guidance service where they will be able to access additional financial guidance, welfare benefits advice, medical support and grants.”

Alan Mahon, co-founder of social enterprise Brewgooder.

Bulloch says customer feedback across the Lloyds Banking Group has been heartwarming.

“So far we have assisted over 1,450 customers across Bank of Scotland, Lloyds Bank and Halifax and over 900 referrals have been made between Macmillan and Lloyds Banking Group.

“With an ageing population and the number of people living with cancer growing, it’s vital that financial support is made more easily accessible.

“We hope to make money one less worry for people, so they can devote more time to the things that matter most in life.”

Cancer is only one focus for Lloyds Banking Group. It launched its Helping Britain Prosper Plan in 2014, and recently updated it. It sets out ambitious targets to help tackle some of the most pressing challenges in the country.

Bulloch says: “We are committed to helping people, business and communities prosper.

“We want to go beyond business as usual and help address systemic social and economic challenges such as Britain’s housing shortage, the skills gap in key industries, social mobility and social disadvantage.

“As a responsible business and as part of this ambition we want to provide the right support to our customers in vulnerable circumstances.”

Alan Thornburrow, Scotland director of Business in the Community, believes that there has been a real shift in attitudes, with businesses moving away from the traditional corporate social responsibility (CSR) model, which was seen as a distinct activity, to responsible business where social purpose is embedded in the organisation.

“We think a number of forces are driving this change in focus: profound social change, which at its heart has been driven by rising social inequality,” he says.

“A greater public and political focus on climate change, with wider recognition of the UN’s Sustainable Development Goals, the need for business to act as a force for good in achieving these essential goals.”

He suggests that the millennial generation is largely behind this shift in focus.

“There’s a bottom-up push from new generations entering work with the expectation of a different ‘social contract’ with brands demonstrating purpose.

“In Scotland specifically, the Scottish Government’s commitment to inclusive growth as a pillar of its economic strategy and its support for fair work provide the context in which businesses recognise the need for more responsible, sustainable operating models.

“Together, these factors compel business leaders to think about the fundamental sustainability of their organisations and change to ensure they remain relevant.”

His assertion that it is the under-30s staff, and customers, who are the catalyst for profit with purpose is borne out by research.

According to the Deloitte Millennial Survey 2016, almost nine in 10 (87 per cent) of millennials believe that “the success of a business should be measured in terms of more than just its financial performance”.

One Scottish millennial who is determined that his business will be judged by its positive impact is Alan Mahon, 27, founder of Brewgooder.

He launched his business in March with the dual purpose of selling great craft beer while providing clean water for 1 million people in poor countries.

A nasty encounter with dirty water when travelling in Nepal six years ago ignited Mahon’s interest in access to clean water.

“I was lucky, I could go home and get treatment from the NHS,” he says. “Millions of people have no choice.”

The Water Aid charity says that 844m people – one in ten of the world’s population – still drink water from an unprotected source.

“The craft beer industry in Scotland is an exciting, collaborative industry and I saw a way I could combine my twin passions of craft beer and clean water,” says Mahon.

Clean Water lager, which is brewed at zero margin by Brewdog, the Aberdeenshire brewery, is now sold in more than 1,000 outlets across the UK.

The profit from those sales has already provided 38,000 people in Malawi with access to clean water.

Mahon puts his early success down to two things – a great product and people’s desire to put something back.

He explains: “If the beer was just OK, then people would buy it once and feel they had done their bit, but they are coming back for more because it is a really good beer.

“People have the satisfaction of enjoying a nice cold beer with friends at the end of the working week, and at the same time they are helping with something much bigger.”

Mahon believes he is part of a new generation of entrepreneurs who want to build successful businesses and at the same time make a difference to society.

“We have grown up in a globalised world and we want to be responsible citizens. There are going to be more and more businesses coming through like ours, where social impact is built into the fabric, rather than the older notion of philanthropy where you make a lot of money then choose to give it back.”

He cites the business culture in Scotland as one of the reasons for Brewgooder’s success.

“I am really proud of the environment in Scotland, it speaks to people’s values, and the social enterprise support we get is world class.”

He has a message for traditional businesses: “The new generation of consumers want choice, and if given it, will choose the social brand.”

The Scottish Government is determined to do its bit to support the growth of responsible businesses. Its nine-point Scottish Business Pledge is designed to encourage businesses to make their contribution to a fairer, more equal Scotland, while creating sustainable growth.

Since its launch in May 2015, more than 400 Scottish companies have signed up. They range from global corporations like Coca-Cola to small businesses such as Jerba Campervans of North Berwick in East Lothian.

To qualify, businesses must promise to pay their staff the real living wage, meet at least two of the other elements, such as making progress on gender balance and investing in young people, and make a commitment to sign up to all nine in the future.

Keith Brown, the Economy Secretary, sees the business pledge and the living wage as being at the heart of responsible business.

“The Scottish Business Pledge is a shared mission between government and business, which recognises companies which voluntarily agree to adopt a challenging set of progressive business and employment practices.

“We have also made great progress in developing our approach to fair work.

“In 2014 we had around 50 living wage accredited employers in Scotland – and now there are more than 1,000.

“We now have proportionately more than five times as many accredited employers in Scotland as in the rest of the UK.

“Scotland also remains the best performing of all four UK countries, with the highest proportion of employees paid the living wage or more, at 81.6 per cent of employees.”

Mackie’s of Scotland, one of the country’s top food brands, has been a responsible business since it was established more than 30 years ago by Maitland Mackie on his family farm in Aberdeenshire.

Its 70 staff are all paid at least the living wage, and the company was an early signatory to the business pledge.

Mackie’s is also determined to become the UK’s greenest company. In 2015, it launched what was then Scotland’s largest solar farm, which produces enough power to make 3.3 million litres of ice-cream.

Mac Mackie, managing director and one of three sibling owners, believes that a successful business has a wider responsibility to its staff than simply paying a wage.

He says: “Mackie’s is an evolution of a farm business and we’ve always believed that the team are much more than employees. You have to provide the basis for a happy, healthy and fulfilled life.”

The success of social start-ups such as Brewgooder and campaigns such as Lloyds’ Make Britain Prosper do suggest at least the start of a trend towards a more responsible business culture. Greed, it seems, is no longer good.

But there is still some way to go. The Scottish Government estimates that in March there were 365,600 private sector enterprises in Scotland. So far only 423 – or 0.1 per cent – have signed its business pledge. Research by the Scottish Parliament shows that in 2016 there were 467,000 employees earning less than the real living wage.

Hugh Aitken, CBI Scotland director, says the majority of businesses are a force for good, but that they still have a job to do persuading people that their heart is in the right place.

“Firms of all sizes and sectors up and down the country can be proud about their role in powering our economy and providing fantastic goods and services that make a really positive difference to people’s lives,” he says.

“People tell us they recognise the importance of business – particularly in providing jobs – but there is still a reputation challenge and a clear disconnect between what businesses do and what people believe. 

“To tackle this, businesses need to improve the way they interact with employees and customers, to show they are motivated by more than profit.

“Treating employees and customers well is the starting point for improving people’s relationship with business and the clearest sign of what responsible business looks like.”

Tackling homelessness

Social Bite is one of Scotland’s new breed of businesses with a heart. Its website boasts that every single penny of its profit goes towards solving social problems.

The chain of five sandwich shops was founded by Josh Littlejohn and Alice Thompson when they opened their first one in Edinburgh’s Rose Street in 2012. At least a quarter of their staff come from homeless backgrounds.

Littlejohn is now determined to help end rough sleeping in Scotland with a five-year plan to provide homeless people with housing, rehabilitation and a job.

Social Bite is building a 1.5-acre community of 11 eco-friendly homes for up to 20 homeless people in the Granton area of the capital.

The houses, right, have been designed by architect Jonathan Avery, of Tiny House Scotland, and are based on his innovative NestHouse model.

To raise money for Social Bite’s £4 million End Homelessness plan, it hosted the world’s largest – and most high profile – sleep-out, top, in Princes Street Gardens this month.

This article appears in the WINTER 2017 edition of Vision Scotland. Further information about Vision Scotland here.