Robert F. Kennedy famously said “Gross National Product measures everything in short, except that which makes life worthwhile.” Yet Gross Domestic Product (GDP) was, and still is, the traditional measure for judging whether or not government interventions have delivered a successful economy.
Last year, we built the Vibrant Economy Index to create a new way of understanding progress in local authority areas in England. It took into account not only economic factors, but also the big issues that are currently being talked about: inclusiveness, the environment, infrastructure, health and wellbeing and community.
The subsequent analysis correlating those different components shows definitively that economic success is not a guarantee that the benefit will be felt across all parts of our society. If a successful economy now requires more than simply increasing wealth and jobs, this raises a fundamental question about the role of business in our communities.
We can no longer compartmentalise economic growth from society. We’re witnessing a time where the separation of these has contributed to a collapse of public trust in established institutions. We face ever greater societal change including the transformation of jobs and work by technology, an ageing population and climate change – at a time when public finances remain weak.
We can only rise to these challenges if we all – public, not-for-profit and private sector – work towards the same goals. We need to be smarter and more collaborative; looking at ways to simultaneously tackle multiple goals – achieving wider social impact through the core activities of every one of our organisations.
Creating social impact is no longer just a business nice-to-have. It’s seen by many as the key to meeting the expectations of investors, customers and employers, as well as delivering sustainable profits and public services, and managing long-term risk. This shift towards a more long-term and responsible form of capitalism and a better way of doing business now has widespread support in the business and investor communities we work with.
Mechanisms to focus priorities
In contrast to using the single, retrospective measure of GDP, the goals and benchmarks being created to support businesses deliver social impact provide proactive measures which lead to delivering financial value.
The Future-Fit Business Benchmark helps organisations make credible contributions towards the United Nations’ Sustainable Development Goals (UN SDGs). It provides 23 comparable, measurable goals for becoming a truly sustainable business. This enables organisations to assess their current status, identify priorities and develop actionable plans to creating long-term value for the whole system. The benchmark also seeks to enable investors to identify systemic risks and opportunities in both company engagement and portfolio analysis.
The Vibrant Economy Index – the build of which took into account the UN SDGs – is a tool that can help businesses start on that journey of better understanding their communities. It emphasises the local over the national, and recognises that different places will have different dynamics between the indicators measured and can reflect local priorities. It helps organisations explore the specific needs and challenges facing their area. For example the number of young people not in education, employment or training (NEETs) or with access to community assets. With this knowledge, the index can help identify meaningful contributions to improve their neighbourhood. It may inform an organisations’ strategy, their operations or investment decisions, their recruitment and retention, and their engagement with their community.
We have signed up to Future-Fit’s development council, a group of corporates and investors (including Novo Nordisk, The Body Shop and DeBeers) leading on shaping the development of the benchmark as early adopters and critical challengers. As the only professional services firm on the council we are working alongside Future-Fit to develop a robust global process to assure a company’s reported future-fit data. Our shared values and commitment to robust measurement make Future-Fit a natural partner for us and we are using the benchmark to assess our own performance.
We also know from our work with dynamic smaller businesses that there is an appetite for a simple tool to enable the development of a strategy and action plan around social and environmental impact – and signposting to other more detailed advice and help. So we are now developing the concept of a ‘charter for good growth’. We are at an early development stage – and discussing with other organisations what this might look like.