{"id":31656,"date":"2020-12-03T17:16:06","date_gmt":"2020-12-03T17:16:06","guid":{"rendered":"https:\/\/digileaders.com\/?p=31656"},"modified":"2020-12-14T22:02:38","modified_gmt":"2020-12-14T22:02:38","slug":"purpose-over-profit","status":"publish","type":"post","link":"https:\/\/digileaders.com\/purpose-over-profit\/","title":{"rendered":"Purpose over profit"},"content":{"rendered":"
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The current pandemic has highlighted worker exploitation and deepened existing inequalities. Meanwhile \u2013 as the crisis shakes the stability of our economy \u2013 the rise in environmental, social and governance (ESG) strategies shows how\u00a0being a good employer is becoming an asset<\/a>.<\/strong><\/p>\n<\/div>\n

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In 2019 alone, more than\u00a05 million people<\/a>\u00a0were in low-paid and insecure work,\u00a01.4 million<\/a>\u00a0people suffered from a work-related illness and\u00a0a quarter of UK employees<\/a>\u00a0reported being bullied at work. Since the start of lockdown in the UK,\u00a07.6 million<\/a>\u00a0people are reported to be at risk of permanent layoffs, temporary furloughs, and reductions in hours and pay, with low-income workers likely to experience the impact more acutely.\u00a0Boohoo\u2019s centres in Leicester<\/a>\u00a0and\u00a0Sports Direct<\/a>\u00a0are only two amongst many retail giants who have been accused of exploiting workers and failing to safeguard its employees against COVID-19.<\/p>\n

Although Boohoo and Sports Direct may still dominate the online marketplace, there has been a major shift in individuals and investors alike to\u00a0prioritise purpose over profit<\/a>. ESG (Environmental, Social, Governance) investing skyrocketed to USD$1 trillion during the pandemic whilst ethical consumer spending hit a record \u00a341 billion at the end of 2019. Moreover, data-driven solutions generated by, for example, recruitment and ratings platforms, product labels and workers\u2019 rights apps, could help prompt companies to improve working conditions. Here’s why:<\/p>\n<\/div>\n

1. Consumers want access to transparent information<\/h2>\n
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More and more consumers are using their purchasing power to choose ethical products and services \u2013 and by doing so, they expose exploitative practices. Studies show that the majority of young people are\u00a0willing to pay up to 17.5 per cent more<\/a>\u00a0for ethically made goods and about\u00a080 per cent refuse to buy goods from companies involved in scandals<\/a>.<\/p>\n

Labelling can provide consumers with a helpful cue to what they\u2019re buying into. However, the lack of clear and trustworthy information<\/a>\u00a0makes it challenging to navigate multiple packaging messaging and prevents consumers from buying ethically. The abundance of labels \u2013 ranging from voluntary certifications like\u00a0Ecolabels<\/a>\u00a0or multi-stakeholder initiatives such as\u00a0Fairtrade International<\/a>\u00a0\u2013 make it incredibly difficult for consumers to understand who and what to trust.<\/p>\n

Data-driven solutions are key. Innovation in product labelling shows promise with\u00a0new technologies such as microscopic electronic devices, genetic markers for agricultural products, and a new generation of barcodes.<\/a>\u00a0Ethical rating apps, such as\u00a0Good On You<\/a>\u00a0and\u00a0CoGo<\/a>, are also a great solution to answer the needs of a growingly\u00a0conscious generation of consumers<\/a>. According to a\u00a0Behavioural Insights Team study<\/a>, rating systems are in fact much more effective at nudging consumers than product-based labels as they capture the overall company\u2019s performance.<\/p>\n<\/div>\n

2. Businesses are shifting the paradigm from greed to good<\/h2>\n
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For the past 50 years,\u00a0companies have been told to put profit first<\/a>, prioritising shareholders\u2019 interests above their employees, the environment or communities. This behaviour has provoked backlashes during the COVID-19 crisis, where companies put profits before the welfare of their workers.<\/p>\n<\/div>\n

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\u201cThe COVID-19 pandemic and consequential economic crisis have proven that our economic system is not as resilient as we need it to be. To get there, we must reimagine and rebuild an inclusive, equitable, regenerative economy that works for all and for the long term.\u201d<\/p>\n

Andrew Kassoy, B Lab Co-Founder and Global CEO<\/cite><\/p><\/blockquote>\n<\/div>\n<\/div>\n

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Despite chronic job losses and business closures, the pandemic has prompted\u00a0a surge in companies wanting to demonstrate that they are doing the right thing by their staff and supply chains<\/a>. The\u00a0Certified B Corporation<\/a>\u00a0(B Corps) has enlisted 3,500 companies and is now targeting multinationals in an effort to advance more sustainable and resilient business models. Similarly, investors are changing their tune as they become more concerned about putting money into companies that have clear sustainability and social goals; ESG investing reached $USD 1 trillion globally in 2020.<\/p>\n

Key levers for long-term change include a more harmonious regulatory environment and robust data. The regulation of banks forced better behaviour in an aggressively\u00a0profit-driven industry<\/a>. Sometimes, however, regulation can remove the onus on companies to willingly be or become better. Two years ago, large companies were mandated by the government to\u00a0publish salary data in a bid to reduce the gender pay gap<\/a>\u00a0\u2013 yet the UK still has one. Collaboration between regulators and businesses is key and helps\u00a0to move beyond a culture of blame, instead fostering an open, learning one<\/a>\u00a0that improves not only the ethics of a company but its performance, compliance and innovation.<\/p>\n

Linked to this is an urgent and moral necessity of getting companies to publish transparent data. Rather than\u00a0hiding behind positive public declarations about how companies value their employees, suppliers and communities<\/a>, data would show who really is behaving ethically \u2013 and who\u2019s not.<\/p>\n<\/div>\n

3. Workers can be given a greater voice by harnessing data<\/h2>\n
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Innovation requires trust and transparency, but if you\u2019re a precarious worker, speaking out about your employers\u2019\u00a0unethical behaviour<\/a>\u00a0isn’t always an option. A further challenge is that many certifications or labelling schemes\u00a0aren’t devised or co-created with the input of the affected people<\/a>. This can lead to odd outcomes, such as product boycotts that the workers themselves don’t actually want. Whilst some labels offer indicators about how \u2018good\u2019 a company is, a new study defined schemes, such as Fairtrade International, as a \u2018flawed concept\u2019. According to the study, these fail\u00a0to improve the ethical conduct of large corporations and are serving to entrench abusive business practices<\/a>. Unfortunately, as most initiatives are voluntary, companies often disclose more about their policies than how they implement them.<\/p>\n

Accreditation systems need to put people at the centre of their solutions by co-designing them with the workers themselves. For instance,\u00a0Investors in People<\/a>\u00a0assess companies based on a \u2018people framework\u2019. By working closely with employees, the framework rates indicators like trust in leadership teams, how people are rewarded and supported if struggling as well as opportunities to develop and thrive at work. Companies are then certified (standard, silver, gold or platinum) and supported with tools and strategies to help them improve people practices.<\/p>\n

Technological innovation can also play a positive role where collective bargaining has declined. The growth of\u00a0workers\u2019 rights platforms<\/a>\u00a0has proved this to be the case. These innovations use collective action, data-driven campaigning and crowdsourcing to hold companies accountable in a safer, often anonymous way.\u00a0Organise<\/a>\u00a0successfully mobilised tens of thousands of people to petition Amazon so that employees working through the pandemic got a bonus.\u00a0Workerbird<\/a>\u00a0allows users to track their hours and pay, recommending action to be taken if workers are not paid the legal minimum. Another app,\u00a0Earwig<\/a>\u00a0(the \u2018Trip Advisor for Construction\u2019) allows construction workers to review recruitment agencies, identifying which jobs are good and which aren\u2019t.<\/p>\n

The aggregation of data is a powerful tool for improving work culture. Job boards such as Indeed and Glassdoor allow companies’ behaviour to be rated and tracked directly through the lived experiences of affected workers.\u00a0Analysis of 1.4 million reviews on Glassdoor revealed that employees rated leadership highly for communication and integrity during the pandemic<\/a>.<\/p>\n<\/div>\n

A UK recovery that is ethical and data-driven<\/h2>\n
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The COVID-19 pandemic\u00a0has made us value essential workers more<\/a>. It has also promoted widespread action for calling for business models that are purpose-driven. Increasingly, we are seeing\u00a0investors<\/a>\u00a0who value care for staff and suppliers and are willing to lead positive change through their decisions. The key to unlocking this potential is data; making it transparent and readily available to businesses, government and workers in precarious work. Each one of us plays an important role in the UK\u2019s recovery and ensuring we really do \u2018build back\u2019 much, much better.<\/p>\n

Nesta has previously urged for a labour market that provides people with\u00a0good-quality, meaningful work<\/a>. Find out\u00a0more about our projects and research<\/a>.<\/p>\n

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Originally posted here<\/a><\/p>\n

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More thought leadership <\/i><\/a><\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The current pandemic has highlighted worker exploitation and deepened existing inequalities. Meanwhile \u2013 as the crisis shakes the stability of our economy \u2013 the rise in environmental, social and governance (ESG) strategies shows how\u00a0being a good employer is becoming an asset. In 2019 alone, more […]<\/p>\n","protected":false},"author":13,"featured_media":31658,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"class_list":["post-31656","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","topic-innovation","topic-digital-skills","topic-tech-for-good"],"acf":[],"yoast_head":"\nPurpose over profit | Digital Leaders<\/title>\n<meta name=\"description\" content=\"As the crisis shakes the stability of our economy \u2013 the rise in environmental, social and governance strategies shows being a good employer is an asset.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/digileaders.com\/purpose-over-profit\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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