Society’s needs and our economic needs must define markets

Pay packets remain thin for many. Picture: Jon Savage

We all know that 2014 is a critical year for Scotland, and it is in the relationship between business and society where we will find the framework for a more successful and a fairer Scotland.

Every piece of research I see indicates that trust in business has never been at such a low ebb. The corporate sector, in particular, is increasingly seen as being out of touch with the concerns of ordinary people. Bashing big business is rife, while small and medium-sized businesses work hard to stay afloat. Meanwhile, pay packets remain thin for many, and we still have one in nine children growing up in poverty. This is unacceptable in modern-day Scotland.

Across the country, people are struggling with the rising cost of living and in-work poverty is rife; zero hours contracts, the increase in part-time work and the huge rise in self-employment all contribute. Put simply, many people are struggling to make ends meet, increasing pressure on services within our communities.

I believe we are missing a trick. There is so much more we can do collaboratively to make the future in Scotland fairer and more prosperous for all, and business can play a key role. Profit doesn’t need to be seen as a dirty word. Profit should mean jobs, growth and investment. The principle of shared value recognises that societal needs as well as economic needs define our markets. It’s about expanding the combined pull of social and economic value. It’s about being relevant locally – switched on to the needs of the communities that businesses operate in and serve – and the one area where people are increasingly putting their hope for the future is in their local communities.

This is where the opportunity for a new contract with business and society sits. The old Corporate Social Responsibility (CSR) model of the past two decades did not provide the business transformation needed, and it is time to admit this and look hard at the role of businesses as creators of wealth and social capital and stewards of our environment. There’s a danger that the “corporate” in “corporate social responsibility” is now the dominant force at play: that CSR has grown to mean a head office function and not a dynamic process; that CSR has lost its way and isn’t being shaped by shared values and a sense of moral responsibility.

We can bring together the private, public and not-for-profit sectors to find solutions to the problems that blight business and hold back our communities. Leadership is required; we must bring business, community and political leaders together alongside citizens to work together to make this happen.

We need to provide the structures that enable businesses to engage and collaborate. At Scottish Business in the Community our Hub Network is where business meets community for collective aims, focus and impact and it’s expanding throughout the country. Our hubs empower businesses and their employees to embrace new ideas of working together by sharing best practice, skills, knowledge and confidence.

We need to harness the commitment of business leaders in Scotland to engage more with their communities and customers on key social, environmental and economic issues – the triple bottom line. Promoting longer-term business thinking and investment is vital too. From the pensions we invest in, to shareholder value, we all need communities to thrive in the long term.

Scottish Business in the Community’s call to action is twofold: firstly, to be a truly responsible business; a business in the future without a social purpose will not survive. A truly responsible business is plugged into the needs of the communities, and it defines the way business is done. Secondly, we would urge the Scottish Government to recognise the role that responsible business behaviour plays in contributing to Scotland’s economic recovery and commit to producing a National Action Plan on Business and Social Responsibility. This will help make Scotland an exemplar, globally recognising and demonstrating the value of sustainable business practices in boosting employment, fostering social cohesion and protecting the environment. Scottish Business in the Community will work with all like-minded firms to deliver this new contract with our communities. It’s in all our interests to make Scotland a better place to live and work – a Better place to do Better Business.

• Jane Wood is CEO of Scottish Business in the Community www.sbcscot.com