Yes, business has responsibilities, but the entire system needs an “upgrade”
Upheaval caused by COVID-19 has brought our economic operating system into question. Now the public seek reform.
By Chris Turner, Executive Director, B Lab UK
As we cautiously look towards recovery from the COVID crisis, government, business and society are united in uncertainty: is this back to normal, a new normal, or the next normal? Will we be rebuilding, or ‘building back better’? The uncertainty we share is a product of the upheaval of this remarkable period, but this also offers us an enormous opportunity: the chance to secure previously unthinkable reform.
In the minds of many, there is a generational opportunity to make things better than they were before: to reduce the egregious inequality that blights society and to take drastic steps to safeguard the planet for future generations.
To inform this change, B Lab UK, the non-profit behind the B Corporation movement in the UK, set out to discover the attitudes of the UK public towards capitalism and the role of business in addressing environmental, societal and economic challenges in the post-COVID recovery. We commissioned a poll of 2,175 people across the UK in partnership with ReGenerate and conducted by Hanbury Strategy in May 2020.
The results are fascinating, and they reveal that despite the narrative of a divided nation, there is a broad consensus across ages, geographies and political affiliations towards capitalism and the evolving role of business.
Business responsibility: looking beyond profit
The perception of ‘big business’ has evolved from scepticism to hostility in recent years, reflected in caricatures of asset-stripping billionaires or tax-dodging multinationals. Now this crisis has put every business in the spotlight, testing their reflexes against a common threat and revealing those that care for their people and planet, and those that only look to the bottom line. Our research reveals that public expectations increasingly reflect this distinction, demanding more from business.
72%* of the UK population believe that businesses should have a legal responsibility to the planet and people alongside maximising profits…
…while only 16% believe that businesses should have a responsibility solely to maximise profits. In the court of public opinion, those that put profit above all else, reflecting the obsolete orthodoxy of shareholder primacy, will do permanent harm to their reputations and long-term prospects.
Looking beyond the challenges of the COVID crisis to the urgent and existential climate emergency, 76% agreed with the statement that businesses have a responsibility to protect the natural environment. The threat of the climate emergency is going nowhere, and nor are the demands for businesses to play their part.
While our research shows us that the public demands an active role from each business in tackling environmental and social challenges, we also learn that there is widespread concern about the system within which our businesses operate. Negative perceptions of the current economic system span the entire political spectrum and all age groups, with our poll finding that 76%* believe that capitalism either isn’t working properly or is harmful. Only 19% feel that “capitalism is working well in the UK and does not need tinkering with”.
Our economic operating system: in need of an upgrade
As the global economy continues to reel, the supremacy of our economic operating system is open to question. While there is little doubt that this system has been responsible for generating inconceivable wealth, it has done so off the back of inexorable growth — now far-fetched as the latest Bank of England forecast expects GDP output to be 20% lower in the second quarter of 2020 than in the final quarter of 2019.
More viscerally, individuals will feel this in the form of lower wages, lost jobs, higher prices. As ever, the most vulnerable in our society will feel these effects most deeply, emerging from an already traumatic crisis into uncertainty and poverty. This is likely to further fuel disengagement and distrust of the economic system, where 54% already think that the UK economy is rigged to the advantage of the rich and powerful, and 57% agreeing with the statement that the rich get richer and the poor get poorer in a capitalist system.
Despite all this scepticism, however, we see that a majority of our respondents — 53% — do not believe that replacement with another economic system would be beneficial.
This leaves us with some crucial questions: What does better business look like within our existing system? And how can this become a model for every business to follow?
The B Corp movement has been building this model; certifying businesses that represent the highest standards of environmental and social impact. Our task now is to work together, and with our partners, to paint a vivid picture of what a reformed model of inclusive, equitable and regenerative capitalism could look like. This picture must be a collaborative work, bringing together engaged communities, energised government, and inspiring businesses. This is an elusive dialogue — a national conversation — that B Lab UK hopes to cultivate, to transform cynicism into inspiration.
*Of those who expressed an opinion
Click here to view more results from the B Lab UK and ReGenerate poll. These results will support our advocacy for legislative change to ensure businesses have a positive impact on society and the environment, alongside benefit for shareholders. Interested to hear about progress? Sign up here.