In the 40 years that I have been in business, expectations of business and its role in society have changed. When I started my career, the key marker of success began and ended with financial results. Today, society is facing more serious challenges – from resource scarcity to concerns around health and well-being. As a result, more and more companies are committed to creating a profit while also defining their broader contribution to society.
As Chairman and CEO of Coca-Cola Enterprises, the largest manufacturer, distributer and marketer of Coca-Cola products in Western Europe, I have been a firm advocate of two principles: that business must contribute to society and the environment, and that every investment a company makes should return value to the business. I do not believe these principles are mutually exclusive – in fact, I believe they are mutually beneficial.
To explore this relationship between economic, social and environmental value further, we partnered with the Doughty Centre for Corporate Responsibility at Cranfield University and the Financial Times’ FT Remark to research the views of current and future business leaders. The findings reveal a paradigm shift between the CEOs of today and those who will be running our businesses in the future.
Current CEOs and future business leaders agree that business should provide value to society above and beyond a financial return to shareholders – with 88 per cent of current leaders and 90 per cent of future leaders stating that business should have a social purpose. However the ‘millennial’ generation’s expectations of business have shifted far beyond those of current leaders. Only one in five future business leaders think companies already have a clear focus on social purpose today, compared with over four in five current leaders.
Many future leaders expressed frustration at the apparent reluctance of business to embrace a wider concept of value beyond financial returns. One MBA student from Sweden said: “It’s going in the right direction but for many businesses, the rate of progress is nowhere near as fast as it should be.”
This millennial generation will not just be the CEOs of our future, but its politicians, its shareholders, its customers. It is clear that the demand for business to demonstrate social and environmental purpose will increase in the years to come. As business leaders today, we have a responsibility to ask ourselves what our legacy will be – what can we do differently now, to hand the next generation of leaders resilient businesses built for success?
We face many obstacles on the journey towards combining profit and purpose. The market system in which we operate will continue to look for and reward outstanding financial performance – it is our job to better define and communicate the financial benefits of integrating social and environmental impacts into business strategy to this audience. Future leaders also identify management attitudes as a major barrier to agreeing a social purpose. We must advocate for the partnership of profit with purpose both within the boardroom and beyond.
At Coca-Cola Enterprises, we’ve integrated sustainability into our operating framework, which expresses our core business purpose to every employee, and have set ambitious sustainability goals to reduce the impact of our drinks across our entire value chain. We recognize we still have a long way to go in truly combining profit with purpose, but our determination to keep moving towards that destination is delivering real value to our business.
However, we realize we cannot accomplish this alone. Collaboration is absolutely vital. We have moved from focusing on what we do inside our own four walls to exploring how we can be more sustainable across all aspects of our value chain, from sourcing to sales. We must also join other companies to share our experience of successfully embedding a wider sense of purpose into everyday business. The Future for Sustainability Summit we are hosting today in London will give us the chance to do just that.
Ultimately, we are in unchartered territory; society is facing bigger, more serious challenges than ever before and there is an expectation on business to play a central role in addressing them. The successful companies of the future will combine profit with purpose, and successfully define their broader contribution to society and the planet.