The mission of a company goes far beyond profit - PC Trends

The mission of a company goes far beyond profit – PC Trends

More and more companies are deciding to integrate sustainable development objectives into their missions. With very different methods, dissects Marek Hudon, professor at the Solvay Brussels School.

“I dream of getting up every morning telling myself that I’m going to save the planet. But that’s not my role. My vocation is to create value.” The speech of the boss of the Carrefour group, Alexandre Bompard, shook up the small world of “businesses with a mission”, at the beginning of July during the Economic Meetings of Aix-en-Provence. Indeed, the managers and shareholders of these companies clearly affirm, unlike Alexandre Bompard, their desire to combine the search for financial performance (they remain for-profit companies) and a commitment to social or environmental objectives. This status of company with a mission was introduced in France in 2019 (Pacte law), it provides in particular for specific, more participative governance, and validation of compliance with objectives by an external audit. In France, there are currently 628, mainly SMEs but also a few groups such as Danone, Rocher or MAIF.

“I dream of getting up every morning telling myself that I’m going to save the planet. But that’s not my role. My vocation is to create value.” The speech of the boss of the Carrefour group, Alexandre Bompard, shook up the small world of “businesses with a mission”, at the beginning of July during the Economic Meetings of Aix-en-Provence. Indeed, the managers and shareholders of these companies clearly affirm, unlike Alexandre Bompard, their desire to combine the search for financial performance (they remain for-profit companies) and a commitment to social or environmental objectives. This status of company with a mission was introduced in France in 2019 (Pacte law), it provides in particular for specific, more participative governance, and validation of compliance with objectives by an external audit. In France, there are currently 628, mainly SMEs but also a few groups such as Danone, Rocher or MAIF. Similar initiatives exist in many countries, with benefit corporations in the United States and Italy or community interest companies in Great Britain. “These developments explode the differences between traditional commercial enterprises and the associative world or heavily subsidized companies, comments Marek Hudon, professor of business ethics at Solvay and co-author of a study devoted to “social corporations”, published in the prestigious Journal of Business Venturing. This is a major trend: more and more entrepreneurs want to register their activity with a societal impact. In business incubators, projects in development affirm much more important societal dimensions than before .” In Belgium, there is as yet no legal framework in this area. Fortunately, this does not prevent companies from moving forward, for example by seeking international B Corp certification. This has already been granted to 40 Belgian companies, including several listed companies (IBA, Spadel, etc.), on the basis of the actions undertaken with regard to the 17 sustainable development objectives (SDGs). “This certification will gradually become a sort of checkpoint for the societal commitment of companies, a bit like rating agencies are for their financial performance, believes Marek Hudon. The question today is: is it It is up to private labels to define the rules to be followed to qualify a company as virtuous? Wouldn’t it be a legitimate task for the public authorities? Affirming its societal ambitions is not easy for a company. Labeling is indeed a long process, with verification of the concrete achievements of the company. “This can create strong internal tensions because the standards to be respected move the lines throughout the organization, continues the ULB professor. It is also a dynamic that can generate violent backfires if the efforts do not are not considered sufficiently credible internally or externally (this was the case when Nespresso received the B Corp label, Editor’s note). The company voluntarily places itself in a situation of vulnerability. And finally, it is an irreversible process. going back is almost impossible as it would be disastrous for the company which would lose its B Corp label or its status as a company with a mission From a societal point of view, this is perhaps the main interest of these initiatives. The company is really committed to the long term.” The conditions of the B Corp label are evaluated every three years, much like the rating agencies that periodically reassess the financial performance of companies. The evaluation covers 200 points and you have to be in phase with 80 of them to obtain the label. Why only 80? Because the range of the 17 Sustainable Development Goals is so broad that it is almost impossible to be excellent everywhere. But with each evaluation, the company must obtain a higher score to keep the label. What can push leaders to overcome these pitfalls to become a company with a mission? The personal vision of the founder or CEO often plays a role, but there are more and more societal pressures. A company’s commitment, its environmental or social performance now constitute real competitive advantages, which can make the difference to both customers and workers. “A survey in France showed that 77% of employees wanted their company to become a company with a mission, points out Marek Hudon. In a world where there is a battle to attract talent, employers must be attentive to this. New generations are very demanding on this level even if, I am not naive, letting go of your company car remains difficult for many.” Marek Hudon also insists on the importance of the participative dimension in companies with a mission. In France, it is planned for the whole process aimed at determining this famous mission. But the dynamic does not systematically extend to implementation through operational strategies, which gives rise to some internal tensions. If the model were to be transposed into Belgian legislation, Professor de Solvay suggests paying close attention to this aspect. “Companies with a mission are a response to the crisis of participation in business today, to the desire of younger generations to get involved and to ensure consistency between the stated mission and the operational strategies of the company, says- 11. I don’t know what models of governance will emerge, but the issue of participation will escalate.” For him, it is anyway in the direct economic interest of companies. “In our very uncertain world, the potential of internal skills should not be underestimated, says Marek Hudon. When supply chains are broken, when resources become scarce, part of the solutions actually lie inside the company. But you have to have put in place a mode of governance that brings out these solutions.” The French subsidiary of business consulting firm BDO changed its statutes last year to become a company with a mission. The Belgian branch of BDO is moving in the same direction and has just begun the long process of obtaining B Corp certification, expected in 2023 or 2024. “It’s a question of consistency, says Pierre Poncelet, partner in charge of sustainability at BDO Belgium It is a little difficult to explain to a client that he must improve his governance, his energy efficiency or his inclusive diversity without doing this process ourselves. issues are not the same for an audit and consulting firm and for the industry.” For Pierre Poncelet, the ground swell is there. On the one hand, customers and workers are increasingly demanding on sustainability. On the other hand, European directives will push companies to report ever more precisely on their environmental, societal and governance performance. “The transition generates a positive dynamic for the companies that commit to it, continues Pierre Poncelet. But when the majority of companies have made their shift, it will become very complicated for the others. Those who are late will not benefit from the transition but suffer it. With a real risk of no longer being relevant on the market.” This specialist does not advise his clients to tackle all 17 sustainable development goals simultaneously. “Too broad a perspective opens the door to greenwashing, he says. It is imperative to start with the elements that the company, and the ecosystem that revolves around it, can control over time. is gradually widening. The crucial element is the impact and it is clear that you cannot have an impact of the same intensity on everything.”

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