SCDI and the Scottish Government launch
new Business Purpose Commission

 The Scottish Government and the Scottish Council for Development and Industry have established a Business Purpose Commission for Scotland.

The Commission will make recommendations on how more purposeful businesses can be developed in Scotland; helping to generate good jobs and deliver Net Zero. Developing practical recommendations to enable more Scottish businesses to be successful by meeting the needs of society as well as those of their investors, staff, suppliers, customers and communities will be a focus.

The Commission was launched by Richard Lochhead MSP, Minister for Just Transition, Employment and Fair Work, members of the Business Purpose Commission for Scotland and SCDI during SCDI’s Forum on Friday 19 November.

 

Just Transition Minister Richard Lochhead said:

“The Commission places Scotland at the forefront of an exciting agenda to ensure business maximises its contribution to meeting the great economic, social and environmental challenges of our time.

“The evidence confirms that businesses with a guiding purpose deliver improved performance. We are confident that increasing the number of purposeful companies will make a positive impact on Scotland’s economic prosperity, social wellbeing and environmental sustainability.

“We are firmly focused on creating the right economic conditions and fair work practices to drive a greener, fairer and more prosperous economy.”

Amanda Young, Global Head of Responsible Investment, abrdn, who is co-chairing the Commission, commented:

“Businesses which put purpose at the centre of their business strategy are more likely to achieve better long-term performance.  This will bring benefits for their customers, employees, investors and the communities in which they operate. The investment landscape has changed, which makes business purpose an even more important issue for Scottish businesses, particularly those seeking to attract investment.

“I am delighted to be working with colleagues from businesses and organisations around Scotland. The Commission is fully focussed on driving recommendations which will make a real difference for businesses and our economy.”

Increasing numbers of businesses in Scotland and internationally have acknowledged that they have a desire and a societal obligation to play a leadership role in tackling the 21st century’s challenges, such as technological change, inequality and climate change. They have identified the need for a clear shift in the purpose of businesses, especially from those which have prioritised shareholder value above all other outcomes, to one in which results for customers and investors are achieved in tandem with wider benefits for employees, the wider community and our environment.

A new Fraser of Allander Institute survey of Scottish firms has found that more than half of them think that finding profitable solutions to the problems of people and the planet best reflects the role that businesses have in society.

The Business Purpose Commission for Scotland is a group of leaders from businesses of all sizes, social enterprises, the voluntary sector, academia and government. It has been set up to recommend how Scotland can become known at home and internationally for nurturing purposeful businesses. The Commission is a joint initiative between the Scottish Government and SCDI and will oversee a short-life programme of work, reporting in Spring 2022.

The Commission included a question in the business survey for the latest Fraser of Allander Scottish Business Monitor, which was published earlier this week. This found that more than half of the 475 firms in Scotland who answered the question (53%) think that the purpose of business is to find profitable solutions to the problems of people and the planet and not to profit from creating problems for either. This compared to 1 in 4 businesses who think that the purpose of business is to maximise returns for shareholders/owners within the confines of the law, and 22% of businesses thought neither of these statements best describes the role of business in society.

More businesses in all sectors agreed that the role of business is to find profitable solutions to the problems of people and the planet and not to profit from creating problems for either, along with a majority of firms of all sizes.

Clare Reid, Director of Policy and Public Affairs, SCDI, who is a member of the Commission, added:

“The growth, creativity, entrepreneurship and innovation of businesses is key to the prosperity of Scotland’s communities and society. Working with business to find ways to put purpose more firmly at the heart of Scottish businesses will promote these capabilities. In turn this will be at the core of economic recovery and tackling the challenges that matter most to people and our world.

“SCDI looks forward to working with our commissioners, the wider business community and civic society in gathering evidence and the Scottish Government on the Commission.”

The full membership of the Business Purpose Commission for Scotland can be viewed here.

The Commission will be issuing a Call for Evidence to businesses next week and will lead an intensive programme of research and consultations before making its recommendations for actions by businesses, government and partners.

The Business Purpose Commission for Scotland will also complement a range of current activity in which the Scottish Government is working with businesses and other stakeholders in pursuit of shared goals. These 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.