There has been a growing focus on the relationship between business and society in the last decade.
This followed in the wake of the global financial crisis and the weak and unequal recovery from it, and is also concerned with the 21st century’s challenges. An increasing range of businesses and entrepreneurs have identified that they have both an opportunity and a societal obligation to play a leadership role in tackling priorities such as the pace of changes in technologies and business and working practices; the recovery from COVID-19 pandemic; and climate change and a just transition for workers, industries and communities affected by the transition to net zero.
There is renewed interest – often led by businesses themselves, but also from governments, civil society and academia – in how businesses can help to deal with the major challenges of the future – and in how to address the negative impacts that some businesses and business models have had.
This proposes a shift in corporate purpose and the growth model for the economy from one which strongly prioritises the interests of shareholders above other stakeholders, to one fully recognising that business activities should be to the wider benefit of individuals, societies and the natural world.
Some examples of this global momentum and initiatives on which Scotland can build include:
The British Academy’s Future of the Corporation project, including its reports:
The Big Innovation Centre’s Purposeful Companies Taskforce
The Enacting Purpose Initiative from the University of Oxford, the University of California Berkeley, BCG BrightHouse, EOS at Federated Hermes and The British Academy
The US Business Roundtable’s new Statement on the Purpose of a Corporation
A range of publications and commentary from international institutions, prominent academics and private sector consultancies/organisations (e.g. Purpose: Shifting from Why to How)
The actions and changing behaviours of a range of companies large and small, and the emergence of Environmental, Social and Governance (‘ESG’) investing and analysis.
The Commission will also complement a range of current activity in which the Scottish Government is working with business and other stakeholders in pursuit of shared goals. Such initiatives include the Fair Work Convention, the Scottish Business Pledge, the Just Transition Commission, various sectoral industry leadership groups, and Scotland Can B, a partnership between B Lab UK (part of B Corp UK) and the Scottish Government. It is also envisaged that the Commission’s work will potentially contribute to a number of the national outcomes contained in the National Performance Framework including those on the Economy, Fair Work and Business, the Environment and Human Rights.
To date, issues around business purpose, governance and ownership have hardly featured in the public debate about Scotland’s overall economic performance and its deepest challenges, including business investment, skills formation, productivity, research and development and, crucially, inequality. The Business Purpose Commission for Scotland will, therefore, break new ground by helping to define and illuminate specific challenges and opportunities at Scottish level.
Contact us: If you’ve got thoughts on business purpose or a positive story to tell, we’d love to hear from you.
Gareth Williams, Head of Policy, SCDI