“Inactivity is criminal”: Calls to focus on profits, not purpose, rejected by Aussie business
Monday, September 16, 2019/
The chief executive of the Business Council of Australia (BCA) has called on entrepreneurs to balance championing social causes with focusing on their businesses, just days before the Global Climate Strike, which is incidentally supported by thousands of Aussie businesses.
In a report from The Australian, BCA chief Jennifer Westacott said the key is “to get the right balance between those things that people who work in companies expect their CEOs to talk about”, while also “making sure we never take our eye off the real virtue of business”.
We should “make a virtue of being profitable companies”, she reportedly said.
The comments follow a speech Westacott delivered at the Australian-British Chamber of Commerce business lunch in Perth last month.
Here, she said while companies are “absolutely entitled to run on social issues”, and often expected by employees to stand for something, that should not overshadow “our true social licence to operate”.
The “virtue we should signal” is in job creation, supply chains, tax revenue and productivity growth, she argued.
“The virtuous circle is governments, businesses, civil society coming together now, once and for all, to get our productivity back on track,” she said.
In a statement given to SmartCompany, Westacott pointed out the BCA has been focused on tax cuts and driving wage growth.
“The Business Council has been a tireless and vocal advocate for economic reform, including the government’s proposed company tax cuts.
“We continue to work constructively with the government on practical measures to drive wages growth and higher living standards for all Australians such as attacking productivity sapping red tape,” she said.
“We have travelled to regional Australia with our member CEOs for the past two years, and we know the only virtue people want signalled is how business is making their communities stronger by providing jobs, training, and opportunities so they can get ahead.”
The report follows a recent speech from Ben Morton, Assistant Minister to the Prime Minister, who suggested corporates can be too easily swayed.
“Too often I see corporate Australia succumb or pander to similar pressures from noisy, highly orchestrated campaigns of elites,” Morton said.
He went on to suggest they were too active in some conversations, and not active enough in others.
“Too often big businesses have been in the frontline on social issues, but missing in action when arguing for policies which would grow jobs and the economy.”
Both sets of remarks come within a week of the student-led Global Climate Strike, which has gained the support of small and big businesses alike.
The Not Business as Usual movement has seen more than 1,100 Australian businesses pledge to support worker participation in the strike on September 20.
High-profile supporters include tech companies Canva and Atlassian, as well as Oxfam Australia, Readings and Stone & Wood.
M8 Ventures founder Alan Jones tells SmartCompany his business will be joining the strike simply because he feels it’s the right thing to do, “not because we feel pressured by elitists, shareholder activists or the federal government’s new favourite bogeyman GetUp”.
It’s not even about influencing others or influencing the government, he says, it’s because “if we don’t, we’d be condoning the inaction and obfuscation currently practised by our government”.
Jones suggests that what the government is concerned about is not businesses taking a moral position on an issue. It’s the fact that position “differs so markedly from the government’s own”, he says.
“But what’s really wrong with a company, a brand, or a business leader taking a moral stance on any issue? Does it really affect the jobs of employees, revenue, profitability and shareholder returns the government says it will?
“No, of course it doesn’t. This isn’t a zero-sum game. We can have both.”
Melbourne startup Mentorloop is one of 36 Aussie Certified B Corporations that collectively funded full-page ads in major metro papers on Friday, calling on both big and small companies to play their part in tackling climate change.
The group also includes the likes of KeepCup, FutureSuper, Intrepid Group and Who Gives a Crap.
“Just because you run a business doesn’t mean you abandon your beliefs. Or that you’re no longer eligible to hold those beliefs,” Mentorloop co-founder Lucy Lloyd tells SmartCompany.
“You might worry about appearances — that we’ll look like we’re cynically hitching our wagon to a popular cause. But those worries fade into the background when you look at the cost of doing nothing,” she adds.
“Our government’s response to the climate emergency is characterised by inaction and denial. The opposition’s not much better, and abdication of responsibility on the part of the majority of this nation’s media is pretty outrageous too.
“So we can’t sit on the sidelines and do nothing — this is an emergency. Hurricanes, drought, unprecedented bushfires in actual rainforests. Inactivity is criminal, and we’ve had enough.”
Lloyd stresses that every business is different, and should do what works for them. She also notes that Mentorloop employees are under no obligation to strike.
However, she says taking a stand on social issues helps attract “awesome people”, and therefore helps create value.
“We want proactive, passionate and inspiring people on this journey with us,” she says.
“Taking a stand, having a voice and being transparent about our beliefs helps us attract the best and brightest. Who wouldn’t want to work for a company that takes a stand on the things that matter?”
Westacott’s comments also appear to contradict findings from the Committee for Economic Development of Australia (CEDA). The committee’s 2019 Company Pulse report, released today, found 70% of the 3,000 people surveyed said large companies should place equal importance on economic, environmental and social performance.
More than 75% said they support business leaders speaking out on ‘issues of national importance’, including social and environmental issues.
“While there has been much debate on the appropriateness of corporate leaders speaking on issues outside their core business, it is clear from these results the community consider this to be acceptable,” CEDA chief Melinda Cilento said in a statement.
“This acceptance of a business voice on social and environmental issues was consistent across gender, age groups and locations from rural and regional Australia to our cities.”
According to Jones, what is of concern to the government is that “morally led-businesses are less susceptible to the taxation and subsidy tools that governments use to try to influence them”.
And, in some cases, we have seen businesses step in to take action where the government has not.
“This isn’t really about business leaders taking a moral stance, it’s about government leaders not taking a moral stance and being caught off-balance by the change,” Jones says.
“It’s short-term ends-justify-the-means thinking that has created the climate crisis we find ourselves in, and we need business to take a moral stance if we’re to find a way out of this.”
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