PROFITS ARE NO LONGER ENOUGH
Corporates are looking beyond profit margins and inculcating a culture of environmental, social, and governance standards to assess success and long-term business viability.
Customers, investors, and employees consider the way businesses treat their people, the environment, and the communities within which they operate, as critical competitive differentiators. This mindset shift toward ‘stakeholder capitalism’ is demonstrated by, for example, the fact that companies rated higher in initiatives such as diversity and inclusion and corporate social responsibility (CSR) attract more investors than traditional, profit-oriented businesses. Millennials, in particular, share this economic bias when evaluating employment opportunities and making consumer purchase decisions.
Global challenges such as the pandemic, geopolitical uncertainty, and climate risk further amplify the importance of executives looking beyond profits as their North Star. The rise of environmental, social, and governance (ESG) factors in corporate agendas highlights executive adoption of this broader stakeholder view.
As larger social and economic realities and needs dominate boardroom discussions, CEOs around the globe are revisiting the ‘purpose’ of their enterprises and, in turn, the measures by which they assess success and ensure their businesses’ long-term viability.