In today’s world, huge companies dominate the market. They’re seen as the big bad, the shadows that loom over everything and care only about how much money they make. However, if you ignore their bad reputations and consider their potential, you will actually notice that many of these organizations have the ability to solve many of the world’s problems.
For too long we have looked to the government and non-profits to find ways to alleviate the effects of poverty, a rapidly increasing population and decreasing interest in education. These large companies have the potential to solve these problems with their incredible wealth and reach. In addition, helping others can have a huge benefit to the company as it improves their image and can also result in monetary savings.
In this book summary readers will discover:
- The limits of NGOs and governments
- Why global companies are better positioned to help
- What companies should consider when deciding on whether to help
- Why a sustainability committee and Stakeholder Advisory Council is important for companies
Key lesson one: The limits of NGOs and governments
The problem that most NGOs face in their work is their lack of resources. Firstly, they rely on volunteers to help staff their organizations. These volunteers, although they mean well, often do not have the skills needed to best help the organization. NGOs need to have people with exceptional fundraising, finance and marketing skills. Without the proper staff, they often find themselves lacking the funds to truly help those in need. Some NGOs have successfully partnered with companies to help with this problem. For example, Pfizer helped out NGO mothers2mothers by providing not only funds but with technology and human resources.
But it’s not just NGOs that battle. Governments also have their own issues to contend with – usually conflicts of interest. This can be easily seen when you consider all the international conferences that fail to make any real changes in the world. The governments of most countries consider their own country’s interest first, leading them to disagree with suggestions made by others. They also battle because it’s hard for them to set long-term goals. The government in charge of a country right now might change drastically in a few years. Thus, politicians aim to work toward satisfying the immediate needs of their voters and fail to concentrate on the long-term. Citizens, as well, don’t see the benefits of long-term projects when they are battling poverty and high unemployment rates. Therefore, they also offer resistance when governments try to solve problems with long-term planning.
Key lesson two: Why global companies are better positioned to help
It might seem hard to fathom at first, but global companies are in the best position to help. The influence they have in our world is truly astounding and if used properly, the results can be equally astounding. Not only do global corporations reach millions of people through their products and services, but they also can influence political decisions. In addition, if companies really take the initiative to think and work in this way, they actually benefit.
The business issues of many companies now overlap with the world’s economic and environmental issues. Thus, helping the world is in its best interest. Customers are even taking a stand to help the environment, preferring sustainable and eco-friendly products. Therefore, companies that contribute to this have a step up from their competitors who don’t. This increases a company’s overall profits and helps them save money. For example, Ecolab created a dishwasher that uses half the water of other models and Kimberly-Clark changed its source of fibre from the Canadian boreal forest to Forest Stewardship Certified fibers instead. These moves made the companies more popular amongst customers and saved them millions.
Key lesson three: What companies should consider when deciding on whether to help
We know that companies can increase their popularity and wealth if they help with environmental and economic issues but it goes deeper than that. There are a few factors that they take into consideration when they are helping out. Firstly, if they ensure that people are healthy it will lead to a more stable economy for everyone. Research conducted by the World Health Organization showed that in low-income countries only 17 per cent of the population live beyond 70 years of age. This is the complete opposite for high-income countries where the number is 71 per cent! Countries that have lower incomes have lower life expectancies and inevitable unstable economies. Therefore, global companies understand that an effective healthcare system is important.
People cannot work if they are ill all the time nor can customers make purchases if they need to spend their money on doctors and medication. Thus, companies have an incentive to help with health care systems. It creates new market opportunities in the future when people become healthier and their country’s economy grows. If people are healthier, they tend to seek out a higher quality of life, purchasing more goods. This money flows back to companies who once again benefit and can help more with healthcare systems. It is a beneficial cycle that just keeps giving.
Secondly, companies can also benefit by becoming more environmentally friendly. By a reduction in energy consumption and resources, companies can increase their productivity and save money. Consulting firm McKinsey estimates that companies can save up to 30 per cent of the energy they use if they become more environmentally friendly. Investing in renewable energy sources like Intel, for example, is a major move to save the millions that companies spend on expensive fossil fuels.
Thirdly, contributing to solving the world’s problems provide companies with a competitive edge. Everyone wants to contribute to a company that is doing good in the world. This means that customers, employees and investors will be interested in companies. Surveys have shown that companies that practice transparent social responsibility are 39 per cent more preferred by customers, have 27 per cent greater customer loyalty and have 33 per cent greater usage. Those are percentages that give companies a huge step up from their competitors.
Lastly, climate change and poverty is a global problem. Often wealthier nations tend not to worry about it but they affect everyone. Climate change, for example, is a threat to company profits if you really think about it. Extreme weather conditions and natural disasters like hurricanes, flooding and wildfires cause damage to companies and their customers. When there is so much damage to infrastructure, homes and food supplies, no one is focused on purchasing goods and companies further suffer. The need to provide shelter and care for people in these situations is a costly affair. In addition, people in this situation may resort to violence as conditions deteriorate. Predictions of future weather patterns show that extreme weather patterns will become more frequent. Therefore, it is important to start thinking now about the future and how to prevent irrevocable damage.
Key lesson four: Why a sustainability committee and Stakeholder Advisory Council is important for companies
So, if a company wants to start helping out and want to implement practices that are sustainable, there are certain steps they need to follow. Firstly, a sustainability committee is needed. It should be closely linked to the company’s board of directors as it is just as important as maintaining the company’s legal and financial success. In fact, in today’s world, a company’s social responsibility contributes just as much to profits, brand exposure and legal standing as any other company activity. The purpose of the sustainability committee is to guide the board of directors to develop, act on and monitor their sustainable strategy. There should be regular reports regarding this so that progress can be monitored and further changes made if need be.
To further help your company achieve its sustainability goals, is to speak to your stakeholders. It does take some effort, but the more interested stakeholders a company engages with, the more valuable input you will obtain. The best approach is to set up a Stakeholder Advisory Committee that maintains the communication channels between stakeholders and companies. With this committee, not only can a company work towards its goals but they can also pick up any problems that may arise. Stakeholder-related risks can cost a company billions. So getting ahead of them is crucial. Engaging with stakeholders has the ability to increase sales and increase productivity. Employees are more motivated, customers feel valued and investors are reassured.
In addition, companies should always aim to work with other companies to achieve common goals. Collaboration enables both organisations to do so much more than they ever could alone. NGOs often lack resources but that does not mean that they don’t have anything to offer. They can easily provide networking opportunities, expertise and make your company look good simply by their association. NGOs can also provide valuable input when it comes to strategies for tackling problems. Companies can also collaborate with other large companies in order to share their knowledge and approaches to social, economic and environmental problems.
The key takeaway from A Better World, Inc is:
We face many problems as a society and as much as we look to the government, NGOs and nonprofits for help, global companies may be the better option. They are already in a better position to help given their reach and influence in multiple countries alone. However, they also have the benefit of having billions of dollars to contribute to their causes. In fact, more companies are realising the benefits of maintaining social responsibility and taking a stand against some of the world’s major problems. If more organizations were to join forces towards the common well-being of the world’s population, there’s no telling how much good it would do. It is definitely possible, we just have to work towards it.
How can I implement the lesson learned in A Better World, Inc:
As an individual, don’t be afraid to voice your suggestions about sustainable strategies to your company. The more a company hears from their stakeholders, the better. As a company, don’t be hesitant to collaborate. Everyone wants to make the world a better place and some organizations are just better at it. You can learn from them and achieve more than you ever could alone.