Business leaders have been urged to put more focus on their own profitability and improving economic performance by the Business Council of Australia.
The Australian has reported BCA chief executive Jennifer Westacott as saying Australian businesses should focus on the real virtues of business rather than representing social issues.
However, Westacott clarified to Inside Retail that she believes these positions can exist in tandem.
“For the business community it’s about getting the balance right,” Westacott said in a statement to Inside Retail.
“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.”
Westacott’s comments come in the wake of assistant minister to the prime minister Ben Morton stating that Australian businesses are pandering to social campaigns.
“Business should not be seduced by the noisy elites, who try to bend business to their narrow viewpoints,” Morton said last week.
“Yet too often I see corporate Australia succumb or pander to similar pressures from noisy, highly orchestrated campaigns of elites typified by groups such as GetUp or activist shareholders.”
Coles, a member of the Business Council of Australia, told Inside Retail its membership enables it to contribute to policy development to improve all communities across Australia. However, it maintains its push toward sustainable practices.
“At Coles our focus is simple – to sustainably feed all Australians to help them lead healthier, happier lives,” a Coles spokesperson told Inside Retail.
“From food waste to a sustainable food chain, we want to be sure we’re here for another century, creating jobs, supporting our suppliers and making a positive difference in our local communities.”
A Woolworths Group spokesperson said that the business has advocated in the past for reforms that benefit customers, team members and shareholders, and would continue to do so – pointing to its support of the Coalition’s previous proposal for a reduced corporate tax rate.
Similarly, Ecostore chief executive Pablo Kraus told Inside Retail that good business, and profitable business, includes understanding social issues.
“We live in an era where social issues such as diversity and sustainability should be part of everyday business,” Kraus said.
“Consumers have let their voice be heard loud and clear that they want to purchase goods and services from organisations that are genuinely connected to social issues and who care.
“Businesses that ignore that will find at some point that business is not quite so good or profitable.”
Sustainable bath-bomb business Lush maintains it is its responsibility to stand up for social issues, such as animal welfare, protecting the environment and human rights, and actively seeks out staff members who feel the same way.
“We’ve always found that if you have staff who care about environmental issues, animal welfare and human rights, then you tend to have staff who really care about people,” Lush Australia and New Zealander director Peta Granger told Inside Retail.
“The staff feel that their work has meaning, the more engaged they are, which builds rapport, trust and genuine connections with customers, and unsurprisingly leads to great sales.”
What do shareholders want?
A recent study by KPMG finds that more and more shareholders are becoming interested in business taking a stronger stand on social issues.
The Shareholder value: Shareholder values report released in early September notes that KPMG data shows that retail investors are now keenly aware of the importance of business reputation, transparency, ethical behaviour, values alignment and social responsibility.
“This is a hugely significant finding, because it reinforces just how complex the idea of ‘shareholder value’ is in the modern era,” KPMG chairman Alison Kitchen said.
In fact, survey respondents were asked to choose the top five factors that they focus on when investing: 60 per cent of survey respondents listed business to deliver positive financial returns, 51 per cent want business to be transparent and honest, while 42 per cent want business to be conducted ethically.
Not only this, but the report found that 57 per cent of shareholders would accept lower financial returns if it meant the business they invested in was behaving ethically toward its customers, employees and community.
Update: This story was updated to better reflect KPMG’s research.
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