Companies must develop a social purpose to survive

Company reputations could collapse in minutes and more firms will develop an explicit ‘social purpose’ according to a new report from Global corporate responsibility consultancy Corporate Citizenship. “Future Business: the four mega trends that every company needs to prepare for” identifies four mega-trends that it says are likely to shape the nature of business over the coming decade. According to the consultancy, over the last year the proportion of S&P 500 companies that report on sustainability performance has grown from one in five to over half and the over the coming decades, it expects at least as much change again.

It adds: “Corporate reporting has also changed. We’ve seen the birth of the Dow Jones Sustainability Index and the UN Global Compact. Although the future is challenging to predict as different issues interact, new trends emerge and uncertainty is created.

“To simplify this complexity, Corporate Citizenship has identified the four mega-trends that our research indicates could be most significant for companies over the next ten to twenty years. We pose the question: what would happen if these mega-trends accelerated and become mainstream?”

The research draws on the Corporate Citizenship Futures Database, which draws on over 100 trends that it expects to shape the future operating environment for companies. They are:

• “CRUNCH” – rising demand and limited supplies means that it’s crunch time for key resources such as energy, food and water. Sustainable business models are becoming a value-added imperative.
• “CONNECT” – new digital platforms allow people to share information instantaneously. Real-time exchanges amongst billions of people is fast becoming a reality. Privacy and security concerns will accelerate and novel forms of scrutiny will mean that companies are no longer able to hide from demands for transparency.
• “FRAGMENT” – traditional power structures are breaking down as government dominance gives way to diverse new actors including social enterprises, not-for-profits, corporations and engaged citizens. Businesses of the future will embrace this fragmentation and play their part in delivering society’s big goals.
• RE-BALANCE”– New nations are growing in economic, political and cultural power. Massive opportunities are arising to meet the social, environmental and economic needs in these markets. Business in the coming decade will emerge from, engage with and be shaped by the ideological influences of countries like Indonesia, Brazil, Turkey, India and China.

According to the report, companies that take a leadership position will tackle the four mega-trends strategically, for example – companies like Google, which have transformed the recruitment process by supplementing salaries and benefits with training, free exploration time during work, and luxurious workplace amenities.

The report advises: “The findings are not intended to be predictions. Instead, they are designed as a strategic tool to help organisations to plan, prepare, and above all thrive, whatever the future holds.”