The sword of Damocles is hanging over the most powerful players in the global economy.
Large corporations, investment firms, asset managers, central banks.
For most of their lives, only financial returns mattered. But the pieces on their board game have been thrown into the air.
CEOs and their money managers suddenly need to demonstrate they can provide much broader, fairer and better ‘returns’ – for people and planet.
Before ‘reputational risk’ was associated with serious misdemeanour or gross negligence
But today existential risk comes from not being seen as ‘good’ enough, fast enough.
The biggest organisations in the world are desperately accelerating in a truck called ‘purpose’.
They are bumping and crashing into each other to avoid blame for the multiple crises (economic, technological, social, health, environmental) we face.
Critics of market capitalism have argued that the system cannot adequately respond. That the structures that have channelled so much money towards polluting fuels, big tech and a small number of financiers can’t ascribe proper value to ‘long term good’.
But what if the critics are wrong? What if the ‘market’ is even now providing the greatest pivot in economic history? What if, under the blinding light of scrutiny, financial and planetary value are starting to align?
There are some encouraging signs. Those corporates and investment firms without commitments to ‘net zero’ and social justice are keeping very quiet indeed.
Those bold enough to make ambitious pledges for a better world are communicating it with unprecedented urgency. As if their very survival depends on being seen as forces for good.
Those in the vanguard, who started changing years ago, now seem to be on the right side of history.
2020 – lived through the experience of pandemic angst – may yet be remembered as a tipping point.
One thing is certainly true: those with the biggest balance sheets can get things done. Trillions of dollars of capital redeployed to green energy and sustainable commerce is likely to have a lot more impact than waving placards at demos.
Business leaders who don’t understand this – or who can’t effectively communicate it – may be stuck in the mud, as their rivals sprint past… bringing the most talented people into their slipstream.
And yet – against this positive, hopeful narrative – there are many difficult questions:
- Are financial and social returns really aligning?
- How much of what we are hearing is still spin and ‘greenwash’?
- Is the devil in the detail – what for instance does ‘net zero’ really mean in practice?
What do you think?
As communications professionals, how do we help those moving in the right direction whilst keeping them accountable? How do we ensure this is the real deal?