Adapted from a keynote speech delivered by Sean Haley, Regional Chairman, Sodexo UK & Ireland, at the BSA’s seminar on Business Values: Learning from Lock Down, 24 July 2020
This year, the world has been thrown into turmoil, but it has also shone a light onto what really matters to people. As governments, businesses and households start to emerge from the crisis phase of the pandemic, we start to build an economic recovery.
At this time, it has never been more important for companies to show leadership and take action on societal issues. They need to show that they are interested in more than just short-term financial gain and recognise their profound impact on the people they employ and work for, the places they operate and the environment they impact.
A time of crisis
We were already living – globally and nationally – in a time of crisis. The dangers of climate change, global inequality, a decade of austerity at home, the uncertainties around Brexit – these were all major challenges before Covid-19 threw the economy into reverse.
There was already a need for companies to change, for businesses to have a purpose beyond the pursuit of short-term gain. The British Academy’s work last year on the future of the corporation made the case for businesses to be socially responsible and consciously strive to have a positive social impact. During and after the lockdown, this has become an even greater imperative.
Companies – I believe- on the whole- want to change. They all have corporate responsibility programmes and talk about more than just profit. For companies operating in the business services sector, we also need clients – in the corporate sector and in government – who think about more than just cost. They need to be willing to budget for better societal outcomes.
During the lockdown in the UK, we saw some extraordinary responses.
Who would have predicted that the government would have to order us to effectively shut down all but the most essential activities, and for people to isolate in their homes?
Who would have predicted that a Conservative government would in effect nationalise 80% of the country’s wage bill?
Who could have predicted that every week, people across the country would come out on their doorsteps and applaud our key workers?
And who could have predicted that this crisis would forge the levels of cooperation and opportunity for the private sector to support the public sector to deliver new healthcare infrastructure at pace and –with parliamentary recognition from Ministers – who stood up and rightly defended our contribution in the face of equally rightful, media and parliamentary scrutiny.
The rise of public expectation
We must not forget the extraordinary time and government response we have just lived through. The response to the crisis has also been matched by a rise in public expectations.
While our discussions about social value and social impact had previously been largely confined to a fairly narrow professional community, now people expect companies to step up and for them to do the right thing.
According to Edelman’s latest Trust Barometer, the overwhelming majority of people want companies to be dependable, to be reliable sources of information and to ensure they are protecting them from harm. And, importantly, not to disappoint them by behaving badly or saying the wrong things. They expect us to speak up on societal issues and play a leadership role, not sit on the fence or shirk our responsibilities.
In the wake of the world-wide outbreak of protests that followed the murder of George Floyd, I was proud to hear my colleagues in America speak out in support of Black Lives Matter and to say explicitly that they will not idly stand by when they see injustice wherever they see it.
I have echoed their sentiments in the UK and Ireland. We know we need to do more to tackle racial inequality. We know we need to challenge ourselves to be better, to question our own prejudices and be willing to change. And while I will do this because it is the right thing to do, I will do so in the knowledge that people expect us to do it too.
It is about putting our purpose into action.
Being a good corporate citizen
For Sodexo, doing business in a good way, in an ethical way, has been part of corporate values and our approach for more than 50 years. We were one of the first companies in the world to put social value at the core of its mission – right back in the 1960s. We are a global business that believes deeply that we can improve the lives of the people we employ and the people we serve.
Corporate responsibility is simply part of how we operate – something that manifests itself in
- how we treat our colleagues, customers and suppliers, and the consumers in the communities we serve
- how we care about our social and environmental impact.
- and being a good corporate citizen, including how much tax we pay.
We know that we share the responsibility for what happens to our planet and the people that live on it.
But while we can push ahead with our own initiatives
– To reduce our impact on climate change
– To set up apprenticeships or recruit ex-offenders
– To focus our own spending on local suppliers so that local economies can grow
– To promote women into leadership roles and
– To do more to tackle racism
We cannot achieve as much as we want if we are on our own. And while I genuinely believe that businesses are going to lead the changes on these issues, we still need governments to create the right eco-system to support us.
This is already happening in some areas. The world’s central banks, for example, are creating the conditions in which commercial banks can take the threat of climate change seriously and use it as a lending criteria.
Last year, Sodexo was the first major company to tie its access to its global credit facility to its climate change performance: the more we cut our carbon emissions by reducing our food waste, the cheaper our credit becomes.
Government support on procuring with social impact
In the UK, the government has recently updated its procurement Playbook, which guides government departments on when and how they should buy public services from the private sector, with a clear emphasis on the need to properly embed social value in this process.
This represents a great opportunity for companies to make a real social impact. With over £28 billion pounds of government procurement spend, departments have the chance to ‘procure for good’ and ‘buy economic change’ – if they can successfully embed social value into their contracts with business.
Sodexo welcomes the playbook and would like the government to apply this across the wider public sector and to ensure that the social value consideration is genuinely part of the decision-making process.
Paying the Living Wage
Alongside social value, I also want our clients – both public and private sector – to pay our people at least the living wage. If the Covid-19 crisis taught us anything, it’s that we don’t simply provide a commodity called “cleaning” or “catering”.
Our services have a direct impact on the nation’s health, economy and confidence. Our people are key workers. They worked through the crisis, side by side with the public sector and deserve more than applause. Paying our colleagues on the frontline the living wage is not only ethical, desirable and socially responsible, it also makes sound business sense. The IWFM and Living Wage Foundation report last month made clear the benefits of paying the Living Wage. It improves staff wellbeing, improves recruitment and retention, improves productivity and service levels.
It’s what they tell me is known as a ‘no brainer’.
Sodexo is an accredited Living Wage Employer, and we want all our clients to think about the people we employ and the recognise the real value that they bring to their operations – and reward them accordingly. Our challenge is to ensure clients budget for the Living Wage. In a deepening recession that could be harder to achieve.
Creating purposeful business
Four months after the Covid-19 pandemic led to the lockdown in the UK, the world as we once knew it has changed for good. It’s like nothing we have seen before and we are in a deepening economic recession that will impact the lives of millions of people.
In the drive to recover, it is vital that we build on the progress we have made to get social value, responsible capitalism and purposeful business onto the agenda and that we don’t ditch our commitments in a dash for growth.
What changes now is that our crisis got worse, our challenges never more acute and the expectations on business to respond greater. The pandemic will pass, but recession and the devasting impact of climate change are here and will get greater.
I am convinced that businesses, of all shapes and sizes, need to respond positively to these demands and step up and meet the challenges we now face. Many already are and the pandemic, recession and impacts of climate change are not only catalysts for change but also make change harder to achieve.
Being a purposeful company has never been more necessary. Being a purposeful company has never been harder.