Issue Overview

The context of business has changed dramatically in recent decades: just as the impact of companies on society and on the planet has increased, so too have companies’ responsibilities. Business leaders, investors, civil society and a range of stakeholders have recognized the global demand for new business models. However, mechanisms for creating and sustaining these new models have not succeeded in meeting expectations.

At a time when the world is experiencing momentous changes, Members of the Global Agenda Council on the Role of Business believe that there is an urgent need for business to rethink how it interacts with society and that there is an enormous opportunity for it to play an active leadership role in building a better world. In today’s resource-constrained environments, the challenge of providing prosperity to over 7 billion people can only be accomplished if business aids in the creation of new models for sustainable growth. By broadening its approach to value creation in a way that serves society and bottom lines, business can demonstrate its commitment to responsible global citizenship.

The turmoil in today’s world has generated greater scrutiny of business and sometimes even scepticism about whether companies benefit society. That is why the behaviour of business, including its potential to lead in tackling some of the world's toughest problems, must be grounded in a redefined role with clear responsibilities.

Did You Know?

• 73% of consumers would switch brands if a different brand of similar quality supported a good cause. 
• 1,861 chief executive officers (CEOs) committed their companies to the Global Compact in 2011, with the number of new companies joining increasing by 54% from 2010. 70% of CEOs and 49% of Boards are engaged in corporate sustainability strategies.

Quotes

“It is my belief that business – including the financial sector – needs to address how they serve society, rather than the other way around. Especially since: ‘You cannot be successful, nor even call yourself successful, in a society that fails.’ What this basically means is that business needs to take a long-term view and focus on sustainability in the broad sense of the word.”
Feike Sijbesma, Chief Executive Officer, Royal DSM, Netherlands

"CEOs understand more and more the importance of integrating non-traditional financial issues into strategy and operations, and corporate policies have changed accordingly. However, there are significant gaps between policy statements and actual implementation, including in areas such as subsidiary engagement, supply-chain management, human rights, anti-corruption and government relations. I think the journey has just started. There is certainly much left to be done.” 
Georg Kell, UN Global Compact 

Further resources

Schwab, Klaus, Global Corporate Citizenship. In Foreign Affairs, 2008, Volume 87, No.1
Allaire, Yvan and Firsirotu, Mihaela. A Capitalism of Owners. Institute for Governance, 2012
Emerging Best Practices of China Globalizers: The Corporate Global Citizenship Challenge
The Future of Long-term Investing
Redefining the Future of Growth: New Sustainability Champions

Calendar

UN Annual Forum on Business and Human Rights
4-5 December 2012
Geneva, Switzerland 

10th Annual CBSR Summit on CSR
7 November 2012
Toronto, Canada 

Global Conference on Sustainability and Reporting: Information, Integration, Innovation
22-24 May 2013
Amsterdam, Netherlands 

Business for Social Responsibility Conference
5-8 November 2013
San Francisco, USA

Council Insights

The Council on the Role of Business seeks to define the new covenant of business in today’s world and offers a range of concrete actions that can renew business’s license to operate. Members of the Council collaborate with other thought leaders and executives on developing the main principles that should guide businesses towards playing a greater role in building a sustainable future. 

The Council on the Role of Business began its work two years ago by mapping the new environment for business and assessing the threats to business’s license to operate. This work culminated in the publication of a white paper that presented this conceptual overview and outlined a range of suggested action areas: Final Report of the Global Agenda Council on the Role of Business 2011. The Council built on this foundation by creating a succinct call-to-action for business leaders and other stakeholders. The report, Defining the New Business Covenant, presents a compelling case as to why business can and should be part of the solution to the challenges facing today’s world. It identifies strategic priorities for business leaders to raise these issues with their boards, employees, investors and other stakeholders.

While several vanguard companies have embraced the principles outlined in the Council’s report for many years, no single entity acting in isolation can achieve the scale of change required. Given the need for multistakeholder action, the Council has identified key groups whose influence has a dramatic effect on the environment for business: investors and shareholders, governments and internal business leadership structures such as corporate boards and non-executive chairpersons. Changing perspectives within these groups can make great strides toward realizing a better role for business in today’s world. In the upcoming term, the Council will work to improve partnerships with these groups, engage businesses seeking to embrace corporate citizenship and promote these issues across a wide range of platforms. 

Contact Information

Council Manager: Liana Melchenko, Associate Director, Head of Knowledge Management, Global Agenda Councils, liana.melchenko@weforum.org 
Forum Lead: Robert Greenhill, Managing Director and Chief Business Officer, robert.greenhill@weforum.org