This article is “sponsored content” as defined by Corporate Knights’ content disclosure policy. Corporate Knights is a media sponsor for Social Value Matters 2020.
Faced with immense pressure from a global pandemic, Canada is at a crossroads. If we truly want to become a sustainable nation, it is time to embrace social value thinking.
What is social value thinking? Social value thinking is an alternative to the view that financial returns are the only way to measure value creation. Social value thinking acknowledges the importance of financial capital, alongside human, natural, cultural and social capitals. Social value thinking requires tangible knowledge and understanding of impact upon people, the environment and the economy before taking any action.
Social value thinking rejects any action that worsens inequality, whether deliberate or otherwise. Instead, it prioritizes actions that will make our society more sustainable – which is increasingly understood to be financial, social, and environmental in balance.
In the past, anything ‘social’ was largely considered to be secondary to the economy, and certainly not a top priority for corporate boards. Today, we are seeing social pressures occupy the minds of many corporate leaders; ranging from real inequalities that persist in Canada; to reputational risks associated with investments, to direct and persistent questions on how corporations will contribute to achieving the UN Sustainable Development Goals by 2030.
Without question, we do see positive actions such as in the launch of the BlackNorth Initiative on senior executive recruitment, in the Canada Pension Plan Investment board decision to sell its interest in two U.S. prison companies, and in the Value Balancing Alliance with corporates advocating that the value a company brings to society should be included as a measure of corporate value and performance.
However positive, the actions we see are just the beginning. More significant and enduring action is needed. This is the opportunity of social value thinking.
From one perspective, social value thinking can be considered strategically self-interested. For example, the recent call by Scotiabank CEO Brian Porter, for a significant boost to child-care support within the upcoming federal Throne Speech. The ‘social’ within that is obvious: better workforce access and increased meaningful work for women, improved care and educational opportunities for children – no argument there. The other side of that call is quite economic, a larger and more diverse pool of future talent, greater likelihood of staff retention, better opportunity to reflect the faces of customers in branches, increased organizational diversity – all factors that research increasingly links to above par corporate performance.
Here’s the thing: every action taken by business, government and civil organizations, touches society. Social value thinking recognizes this, and actively seeks to understand that impact in order to strive for maximum positive result – for everyone. It rejects the idea that one stakeholder, i.e. the shareholder or even the taxpayer, is more important than any other. It goes farther to advocate that value of all material impact on ALL stakeholders should be included in the overall account of profit and loss.
As the Chair of Social Value Canada, a non-profit network to advance the essential skill and much-needed practice of social value thinking across Canada, I have recently had the intellectual gift of engaging with practitioners across all sectors and working in many countries in preparation to co-chair and convene the Social Value Matters Conference 2020 on behalf of Social Value International (#SVM2020). Contributors to #SVM2020 offer examples of day-to-day actions to embedding social value thinking into organizational work and performance.
This ranges from accessing the vast experience and glocal (global+local) perspective of Tim Cummins, Founder and President of the International Association of Contracts and Commercial Management. Tim has a vision for how the contracting/procurement process can achieve best possible outcomes for all parties, and does not require any supplier to ‘lose’ despite being a small cog in a global supply chain.
It includes the work of Mark Gough, CEO of the Capitals Coalition and Caroline Rees, President and Founder of Shift – both working with some of the largest and most complex organizations in the world seeking to manage impact, including protecting of human rights.
It includes the vision of Clint Davis, CEO, Nunasi Corporation, Carol Anne Hilton, CEO of the Indigenomics Institute, and Shannon Metatawabin, CEO, National Aboriginal Capital Corporation Association – for the Indigenous economy to be a $100bn+ contributor within the Canadian economy annually.
Some will argue it is time for social value thinking because it offers a morally right approach. While I agree we are in need of a morally better approach, this new way won’t be easy, nor will it be perfect. Despite that, a growing body of evidence supports arguments that a stakeholder-driven approach creates more value over the medium and longer terms. This is the way forward for Canada, as it is for our planet.
At this time of the 50th anniversary of Milton Freidman’s most famous article, we now must fix the problems that the illusion of shareholder primacy has caused. While climate action is essential, it alone is not enough. The stakeholder voice can no longer be ignored. Its inclusion will lead to greater equity within society, which will support greater value creation. Now is the time for social value thinking.
Stephanie Robertson is Founder of SiMPACT Strategy Group Inc., and facilitator of LBG Canada. She is Board Chair of Social Value Canada and Board Member of Social Value International. The Social Value Matters 2020 conference runs September 28-30, from London UK and Toronto, Canada.