Business Not As Usual: How COVID-19 Will Shape Corporate Sustainability
By Shorena Megrelishvili, Partnerships and Fundraising Manager at CiDA and Global Compact Network Georgia
“It is a truth universally acknowledged” that when faced with crisis or adversity, businesses can make strategic mistakes - choosing short-term solutions over long-term goals. Georgian businesses have not been an exception - many companies did not look at the business operations from the sustainability perspective and harmed continuity of their business operations in the long-run.
On the other hand, promoting corporate sustainability in the business sector, in Global Compact Network Georgia, we have been glad to see many other successful examples of how business companies saw an opportunity in a crisis and responded to COVID-19 with resilience, endurance and innovation, focusing on their stakeholders, responding to market needs, engaging in multi-stakeholder partnerships and maintaining responsible business conduct.
The COVID-19 will leave its mark on the world and only the companies that can adapt to an unpredictable environment and focus their efforts on long-term strategic goals will win. We may not believe it or see it yet, but winds of change in the world of business and corporate sustainability as we know it, are inevitable. Here are several reasons why:
- (Winds of) Changing Context and Sustainability Agenda
Day-by-day, gradually and steadily, sustainability is rising in the agenda of businesses, investors, governments, civil society and everyday citizens. Corporate sustainability is no longer an option you can opt out from when tight in budget. You do not have a separate budget for “corporate sustainability actions”, rather your whole budget should focus on corporate sustainability and making your whole operations sustainable.
Thus, being sustainable is not about having extra cash for “socially responsible actions” but it is about doing business responsibly, being transparent and socially and environmentally cautious. More and more businesses become committed to ESG (Environmental, Social and Governance) and more and more investors make their investing decisions based on ESG criteria. In this changing context, where corporate sustainability is not only about profit, but also people and planet, business as usual, focused on maximizing profit will no longer be a viable option.
- Delivering the Shared Value - for the Society AND the Business
Delivering ‘shared value’ is becoming a cornerstone of business strategies. And it is exactly what our Network promotes when we encourage multi-stakeholder partnerships in Georgia, engaging businesses, business and civil society organizations and/or other actors in cooperation. One-off charity actions (common misconception of Corporate Responsibility) are not (and have never been) sustainable, neither are uncoordinated, unrelated philanthropic actions, events, or projects focusing on certain areas or social groups because they do not focus on promoting continuity of business operations. They do not create the value for the society AND the business.
With our facilitation, the job portal - hiro.ge has partnered with the civil society organization, Association Anika to promote employment of the people with disabilities. For hiro.ge, this initiative is enhancing corporate sustainability as ‘shared value’ is all about connecting the needs of the society to business interests. In the post-pandemic era, in order to respond to societal needs, business companies will have to turn these needs into their new products or services and explore new opportunities.
- Seeing Benefit in Uncertainty (Responding to Market Needs)
Some of the biggest inventions and innovations in world history have been made in response to challenges existing at that time. The pandemic has shed light to importance of resilience and long-term sustainability in the times of uncertainty. Forward-thinking business companies will embrace uncertainty not because they like to shoot in the dark, but because they will get out of their comfort zone, focus on innovation, doing things sustainably, transparently and responsibly.
In addition, the global pandemic has greatly impacted both, customer behaviour and business models and showed once again how important it is to be capable to adjust to new realities and adapt your business models to new demands. Smart strategists do not think what customers want NOW, but rather what will be the next “trend” in the consumer behavior and how the existing business model will respond to it.
UN Global Compact participant HG Company (which produces biodegradable paper cups) has responded to the global pandemic by also producing facial masks. Through partnering with civil society organizations, the company has directed part of its profits to provide hundreds of people with free masks. In addition, the company expanded its operations and employed up to 30 Internally Displaced People in the Tserovani settlement. This example clearly shows a company responding to market needs, embracing partnerships and creating shared value.
- Embracing Multi-Stakeholder Partnerships
As the Georgian proverb goes, “The strength is in the unity”. Surely, in the times of the pandemic, various business-to-business or multi-stakeholder partnerships are emerging that are bringing benefits to the corporate sector and the society. The COVID-19 pandemic has been a great example how cross-sector partnerships contributed to the fight against the virus, mobilized communities, funds and resources.
For example, members of the UN Global Compact, Adjara Group and Georgian Farmers’ Association, along with other actors, have been leading a partnership initiative “1anoba” (Unity) that is focusing on delivery of food, medicines and other necessary antivirus materials to various vulnerable groups joining forces with variety of companies, organizations and government institutions. Examples like this initiative prove how partnerships can bring tangible benefits to all sectors and the society as a whole.
Sustainability is here to stay. It is natural to be tempted to focus on today’s profits and short-term goals during crises, however it will not bring long-term benefits or serve strategic goals. Enhancing corporate sustainability is a way to promote business continuity, increasing profits, satisfying all stakeholders and benefiting the society and the environment, not having to choose among Profit, People or Planet.
This article has been published within the Swedish Government funded project "Leadership for SDG in Georgia".