On October 26-27, 2020 the B20 Summit Saudi Arabia is taking place. This annual gathering marks the closing of the current G20 Presidency’s Business20 (“B20”) engagement group, an engagement group comprised of the G20’s largest trade associations and interest representatives of the business community. In these most challenging times, where the Covid-19 pandemic is putting economy and business under severe strain, the B20 Summit and the B20’s final policy recommendations are subject to special attention.
In the past months, business initiatives, organizations and companies have indicated that radical change is not only needed, but already happening: „Now more than ever, we need to rethink the role of business in society and take a new perspective on value creation.”, said BASF-board member Saori Dubourg. “The purpose of the economy is to support the needs of society.”, stressed PwC Chairman Bob Moritz. Businesses and investors are changing their perspective. The old maxim “the business of business is business” is becoming replaced by the growing recognition, that businesses have a responsibility for their employees, society, and the environment.
The sense of urgency is palpable, and the guiding question becomes: What does the repurposing of business actually mean? The ideology of short-term-oriented shareholder value, pure economic efficiency and the belief in the invisible hand of the markets have to be replaced by virtues needed in times of Covid-19. Climate change, increasing wealth disparity and a disruptive data age require long-term orientation, resilience of the economic, societal, and political systems, the recoupling of economic progress with social progress, the care-taking of employees, empowerment of people and the acceptance that thwarting climate change and shrinking biodiversity needs to be the number one priority for all stakeholders in society alike. However, none of the challenges of the 21st century can be solved on the regional or national level alone, but require a strengthened multilateralism. This new multilateralism needs to be understood as international cooperation between civil societies, local entities, parliaments and governments – and, naturally, business.
In their policy recommendations, the B20 demand the “deepening [of] public, private, and citizen cooperation […] within a multilateral framework,” a “socially inclusive and environmentally sustainable” economy, the empowerment of women in business, technological advances, a resilient digital infrastructure and the strengthening of skills and education as a precondition for innovation.
But the critical point remains: As long as we do not recognize and comprehensively redefine prosperity beyond pure wealth, we will not solve any of the challenges in the 21st century. Here, the B20 policy recommendations only scratch the surface. They are stuck on GDP growth as a measurement of success within the G20 countries. But success in the 21st century will not be defined in terms of growth, profit and market share. Instead, the impact of business on the environment, on society and on human beings is as relevant as growth – if not much more important.
A year ago, the Business Roundtable, an association of CEOs of the largest companies in the USA, published an appeal by 181 CEOs recognizing business responsibility for society and the environment. The Value Balancing Alliance, which unites international companies, is working on concrete new ways of including sustainability and the SDGs into reporting and impact measurement standards. Initiatives like these indicate that many companies have learned their lesson. It is now in the hands of the decisionmakers of international trade associations, interest groups, and business federations to understand that their members have developed sustainable strategies that define success as a long-term success for the society, not only for a few – and bring those strategies into the international policy arena.
Dr. Markus Engels
Markus Engels, Secretary General of the Global Solutions Initiative, is a social scientist with a background in politics and international affairs. He worked as senior scientific advisor at the German Federal Parliament, the European Parliament and the Executive Board of the Social Democratic Party of Germany (SPD). He headed the office of Deputy Party Chairman Frank-Walter Steinmeier and served as spokesman and campaign manager for Martin Schulz, during his tenure as President of the European Parliament and as SPD Chairman. Furthermore, he participated in the drafting of the European Charter of Fundamental Rights and the charter of fundamental rights for the digital age, initiated by charitable foundations.