Why is this important to us?
Across the world, companies are increasingly expected to make more than a financial contribution – our stakeholders and communities want us to play a wider social role locally, nationally, and internationally. For all these reasons, it’s vital that companies develop better measures of the real long-term value they create.
The commercial imperative
What kind of challenges do we face?
Our social licence to operate depends on the perceived value we deliver to our stakeholders: economic, social and environmental. Where this is deemed to be negative, not positive enough, or simply where we do not have the data, we can lose the trust of governments and communities. We have to be aware that this could cost our business – whether through changes in policy or taxation, or in disruptions to our everyday operations. Unless we have a well-founded reputation, we risk losing customers or potential recruits too.
What do we need to do?
We need to be able to measure the different types of value we create accurately, make this information open to scrutiny, and communicate it meaningfully. We need to consider not only salaries and dividends, tax contributions and payments to suppliers, but the skills training we provide, the investments we make in local infrastructure and to prevent pollution, the impact we have on the sustainability of other industries, and the value our products bring to both consumers and society at large.
What is the potential to create value?
We already make a significant contribution to society, but we need to demonstrate it better. This will help build trust not only in our communities, but among our investors, and our employees will be proud to say they work for us. It will also help prevent disruptions. As our local operations take responsibility for measuring and valuing their own impact, they will make better decisions, and form more resilient business strategies. We will become a partner of choice for governments, and an employer of choice for the talent of the future.