Increasingly, companies are judged not only on financial performance but also on their relationships with employees, suppliers, customers, community and the society at large. It is no longer enough for corporations to hit their quarterly earnings target – they need to be more aware of the world around them, have a sense of purpose, build trust, and collaborate and engage for the good of society. “Society is demanding that companies, both public and private, serve a social purpose,” wrote Larry Fink, chairman and CEO of Blackrock, in his 2018 annual letter to CEOs. Blackrock is the world’s largest asset manager with over $6 trillion in assets. “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” Fink is asking CEOs to publicly articulate their companies’ strategic framework for value creation. Questions he asks companies to think through include the company’s environmental impact, role in community, preparedness for automation and technological change, and readiness for worker retirement.
“Corporations and entrepreneurs are increasingly using the [UN Sustainable Development Goals] as a platform for multisector collaboration. Businesses are essential partners as they transcend national boundaries, can harness the power of the market to scale, and possess resources that are often greater than those of nations. Entrepreneurs bring renewed purpose and disruption to old business models.” – Vanina Farber