Redirecting Business Performance

That is the question that must be answered to achieve the wellbeing we seek and avoid the catastrophes we face. That is the question that holds the key to unlocking successful policy initiatives in Europe and around the world. That is the question that the new partnership between the Global Solutions Initiative (GSI) and the Oxford Rethinking Performance Initiative (ORP) at the University of Oxford will answer.

The reason why it is the key to resolving current dilemmas is simple. So long as the financial profit of business is not aligned with environmental and social flourishing, then no amount of government intervention, inspiring business leadership, or international collaboration will stop business creating as well as solving problems. There will remain a fundamental defect in our capitalist systems.

Critical to addressing this defect is an alignment of interests and objectives between government and business. To date those interests are often seen to be in conflict – the public sector in social wellbeing and human flourishing, and the private sector in financial gain and profit.

The Global Solutions Initiative and the ORP have together developed a framework for achieving alignment of public and private interests. It ensures that the financial gain of commercial organizations derives from enhancing, not detracting from, social wellbeing and human flourishing. It involves “profit without harm” – financial gain and profit that come from producing solutions not problems for individuals, societies, the natural world and the environment.

It is a very simple but powerful idea that has the potential to transform the nature and functioning of business and government. It will address current environmental and social concerns, alleviate political divisions, reduce regulatory burdens, enhance economic performance and create greater financial value for business. It therefore has the potential to act as a unifying force in our currently divisive economic, political and social systems.

The purpose of the “Redirecting Business Performance” initiative can be summarized as follows:

• Many global problems, such as climate change, involve environmental and social dysfunctions. These cannot be overcome through disjoint initiatives of businesses, policymakers and civil society within existing policy and governance frameworks.
• Under the current system, businesses are compelled commercially and legally to prioritize financial performance over minimizing their climate footprint or “leaving no one behind”. Therein lies a major systemic failure of modern capitalism: the “rules of the game” are not designed to promote environmentally sustainable and socially inclusive outcomes.
• Voluntary contributions by businesses to environmental and social causes cannot address the underlying problem, since such promises cannot be kept when they endanger business viability.
• It is for this reason that new policy and governance frameworks need to be developed that establish “rules of the game” which align business objectives with wider social and environmental goals. The new rules of the game aim to allow businesses to fulfil their intended purpose, namely, to benefit people and planet.
• The requisite policy and governance framework needs to be developed in collaboration between business, policy and civil society, powered by relevant experts. The framework will include laws and regulations, tax-subsidy incentives, government targets, government procurement conditions, and licenses to operate.
• The framework will define general international and regional rules as well as specific national rules that set incentives and constrain business behavior, thereby creating a level playing field for business competition.

The program on Redirecting Business Performance will establish a permanent “Global Sustainability Alliance” (GSA) of representatives from business, policy and civil society, together with additional experts from science, auditing and other relevant domains within a secretariat at a working level. The GSA aims to develop distinctive pathways for different countries, regions and sectors to approach the common goal of aligning business performance with environmental sustainability and social welfare.

The GSA will identify best practices and new insights. The results will be tested and further developed by the GSI and the ORP in various formats, including a global workshop series and policy dialogues. The annual Global Solutions Summit will create a special space for this initiative.

The GSA will meet regularly to identify:

• problems to be addressed in different countries, regions and sectors,
• the role of business, government and civil society in addressing those problems,
• how to align the interests of different parties,
• the experimentation, learning and implementation that are required to solve problems,
• the measures of performance that will be used to set targets and evaluate progress, and
• the form in which knowledge will be disseminated and methods adopted.

The work of the GSA will be disseminated by GSI and Oxford University communication channels, including blogs and podcasts, as well as papers and articles. These publications will identify:

• inhibitors to business delivering socially and environmentally desirable performance,
• policies and governance changes to overcome the inhibitors,
• consistent measures of social and environmental as well as business performance,
• reporting simplifications to create a level competitive playing field,
• needs of different countries to pursue distinctive pathways to common goals.