Corporate Social Responsibility

Human resources executives and managers have a crucial contribution to the socioeconomic status that prevails in a country. Think no further than the Ginicoefficient. Where to focus energies to sustain jobs and healthy triple bottom-lines

If we think of CSR and Corporate Citizenship in terms of painting a creche wall or delivering a soccer kit, we ought to think again.

While these are great cheer-givers, corporates can do more to ensure that the cheer lingers beyond a Mandela Day campaign. We need to create a lasting social cheer at policy level, and hold hands with like-minded organisations to deliver it at strategic level.

No one said these times would be easy, so we can gear ourselves for tough from here on.

Today, it can’t be hard to imagine a day when we have all the money but we have to throw it to the streets because there’s nothing to buy with it. It is not too difficult to imagine a day when we will be on permanent self-imposed lockdown because the streets are swarming with desperate, hungry people that will do anything to feed their destitute families.

For those who are not real South African it may be easy enough – a flight will do, literally and figuratively. But for those who are real to South Africa and to the world for that matter – born here or not, corporate or private citizens, the window to entertain vulgar wealth for two, when two thousand other humans outside the perimeter wall or estate go without, is closing.

For business leadership and HR, it is time to carefully look at the gap between executive pay and the brown/blue-collar wage and decide what to do about it, while it can still be ‘an executive decision’.

At corporate citizenship level, we need to look at how we can make a contribution to a national strategy that will see the country empowering citizens – not by giving hand-outs, but creating jobs that sustain their existence, wellbeing and even happiness.

Of course, we want technology. No, we need it. It helps us to be efficient, safe, and creative. But if that is achieved with no concern for humans who are displaced by technology, we might as well pack our bags right now and hitch the flight. Of course, government has to do its part, that’s the job. Yes, it should clean up its act, that’s the commitment. But, as corporates, our job is not to hemorrhage human resources for profit that sustains only a few. If we are in charge of resources, our job is to upgrade or re-skill them using the very technology infrastructure, to re-purpose them for continued economic contribution within our organisations or outside, as productive entreor sociopreneurs.

So here comes inspiration… Just think on these words:

“A good economy meets everyone’s basic needs. It means people are healthy and happy with life. It avoids storing up potential sources of long-term trouble, such as extreme inequality.

FIVE MEASURES OF GROWTH YOU

can contribute to, that are better than GDP

BY: STEWART WALLIS

GDP is like a speedometer: it tells you whether your economy is going faster or slower. As in cars, a speedometer is useful but doesn’t tell you everything you want to know. For example, it won’t tell you whether you are overheating, or about to run out of fuel.

Above all, the speedometer doesn’t tell you whether or not you’re going in the right direction. If you suggest to a car driver that you might be on the wrong road, and the response is “then we must go faster”, you might think that’s pretty stupid. Yet this is what happens whenever complaints about the state of the economy elicit a commitment to boost growth.

So what is the right direction for a modern economy (and companies operating within it)? That’s a relatively easy question to answer: when you ask people, they say much the same things. A good economy meets everyone’s basic needs. It means people are healthy and happy with life. It avoids storing up potential sources of long-term trouble, such as extreme inequality and environmental collapse.

It is, of course, entirely possible for an economy to go faster and faster without getting closer to meeting these goals – indeed, while heading the wrong direction.

Now the trickier part. What would be the economic equivalent of a compass? We need to measure the direction of economic travel in a way that’s comparable to how GDP measures its speed – easy to communicate, and amenable to being influenced by policy decisions. The New Economics Foundation (NEF), where I was the Executive Director until December 2015, proposed five indicators in an October 2015 report. Imagine them arrayed like dials on a dashboard that you can glance at for an overall picture, as well as study in more detail if you want. Why five? It’s hard to capture everything that matters in one metric, and psychological research demonstrates that people struggle to hold more than five things in their heads at once. So here goes:

1. Good jobs. Employment statistics tell us what proportion of people have jobs. They don’t tell us what proportion of those with jobs are paid too little to afford a decent standard of living, or worry about whether they’ll still have work next month. According to UK government figures, 94% of people were in work in 2014 – up nearly two percentage points in four years. However, the NEF calculated that only 61% were in secure jobs paying a living wage – down a similar amount in the same period. 2. Wellbeing. A growing economy is not an end in itself – it’s a means to improving people’s lives. Few would disagree that the ultimate aim of public policy is wellbeing; we care about GDP because we assume it means more wellbeing. So why not also measure wellbeing directly? The validity of research into measuring wellbeing, by asking people about their life satisfaction, is now widely accepted. Such measures capture a range of things that people care about and that policies can influence – from income and health to housing and social connections. Some governments do measure life satisfaction, including the UK

(it increased from 7.4 to 7.6, on a scale of 0-10, in the four years to 2014). However, it remains at the margins of policymaking. 3. Environment. The NEF propose a national indicator of lifestylerelated carbon emissions, relative to an allocation calculated from global targets for avoiding dangerous levels of climate change. In four years, the UK’s position deteriorated from using 91% of its allocation to 98%. As climate is a global problem, this indicator is effectively a measure of responsible global citizenship. 4.Fairness. Research increasingly shows that high income inequality has negative social consequences, while casting doubt on the idea that it incentivises hard work.

Comparing the average incomes of the top and bottom

10%, inequality in the UK has been worsening by an average of 0.8% a year for the last four years. 5. Health. The NEF proposes “avoidable deaths” as a simple, easily-understandable measure that captures the quality of health interventions – not only treatment, but also prevention. Here, the UK shows a positive trend, but with plenty of room for further improvement – the latest figures suggest 23% of deaths need not have happened..

Image: Courtesy New Economics Foundation (NEF)

would devise means to conduct a national study representative of the population, companies can proactively get intra-organisational snap shots in a similar way as they conduct climate surveys.

This approach to measuring countries’ social and economic health has been well canvassed since the initial proposal by NEF in 2015, and in South Africa, it aligns with the National Development Plan (NDP-2030) aspirations. While there’s some ‘reluctance to move away from viewing economics as a hard, mathematical science, and accept the need to incorporate more of a social science mindset’, the new measurements have been well received across the world by policy makers and technocrats who increasingly appreciate the problems with the current economic system.

On the other hand, it is yet to take hold among political leaders and ultimate decision-makers. Wallis suggests that venturing into a new measurement system would require commitment and initiation costs. In addition, it might bring latent weakness to government policy-or programmes to the fore, imposing further short-term costs toward addressing them.

But if we look at the measurement as a more meaningful tool to reflect the state of sustainable wellbeing of the country, a willingness to invest in its operationalisation should cut across - with a view to long-term dividends for the economy. On different levels and scales, organisational programmes and interventions that kick-start

GOOD JOBS WELLBEING ENVIRONMEMNT FAIRNESS HEALTH

Average annual deterioration of 1.0% over 4 years

61% of the labour force has a secure job that pays at least the Living Wage

Average annual improvement of 0.9% over 4 years

Average life satisfaction is 7.6 on a scale of 0-10

Average annual deterioration of 1.8% over 4 years

Carbon emissions are 2% below a limit set to avoid dangerous climate change

Average annual deterioration of 0.8% over 4 years

After tax, average incomes of the top 10% of households are 8.7 times higher than the bottom 10%

Avearge annual improvement of 1.8% over 4 years

23% of deaths in England and Wales could have been avoided through good quality healthcare or public health interventions

Reflection:

While these measures were designed with the United Kingdom in mind, working with the UK national statistics office, they are easy to adopt for any country. What makes them attractive is that they are quite meaningful across all sectors of economy.

Individual organisations can also formulate policies and set themselves targets to positively contribute to the wellbeing of their employees and by default, the country’s. They could establish programmes and promote behaviours that will drive positive results and feed into the national effort and statistics. While the country improvements to the quality of life ultimately contributing toward a positive national picture. So, each organisation can move ahead and do its part.

A slow political uptake should not deter us, nor should we be bent on the abolishment of the GDP measure before the alternative measurements have successfully bedded.

Stewart Wallis is an Independent Thinker, Speaker and advocate for the new economic system. This article is by courtesy of the author and the WEF, where it first appeared.