Doing business in a better way - net positive impact

08 May 2014

Malcolm Preston, Global Sustainability leader, explores latest developments in 'net positive' impact management and why access to the right data will be crucial to its success.

I feel a real buzz of excitement in the air! Last week saw the launch of Net Positive: A new way of doing business.  I am delighted to see business coming together to define the 12 principles that drive a net positive approach. “Giving back more than you take” is a great way to do business and must be the way forward - I’ve never felt the “do less harm” approach was the right one. It’s good to see some great brand names (eg. BT, Capgemini, Coca-Cola Enterprises, The Crown Estate, IKEA Group, Kingfisher and SKF) agreeing that there is another way.  But it’s hardly rocket science - why should society accept businesses in their communities that are "net negative"?… the flipside to net positive. Only last autumn I was speaking at The Travel Convention, urging UK travel companies to be "net positive" in their destinations. Why would they (or should they) be given a licence to operate if they are not?

With such industry diversity and one common goal, there’s no one size fits all panacea and I’m sure that’s put-off many from trying, so it’s good to see a principles based route map. I sense that The Climate Group, WWF-UK and Forum for the Future have facilitated some great thinking here that presents an accessible alternative to more businesses.

This is a topic that is close to my heart. I talk a lot about a future with a focus on ‘good’ growth, and identifying and progressing the opportunities that offer real, responsible, inclusive and lasting growth. And, in our latest poll, when we asked “what’s the best way for business to make a profit?”, 58% agreed business should be net positive, giving back more than it takes.[i] Very few, only 8%, thought profit should come first. In fact, the 2014 Edelman Trust Barometer highlights that 84% of citizens believe that business can pursue its self-interest while doing good work for society.  Not doing less harm - doing good work.

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From my experience, one of the biggest hurdles to overcome to change strategy like this is data.  Quantification is second on the list of the 12 principles: “the positive impact is clearly demonstrable, if not measurable”. It might sound inconsequential, but the data a business records for financial performance or accounting or investor purposes is only a sub-sector of what’s required when it wants to demonstrate its impact, let alone that its impact is net positive. And just pause for a moment and think about the detailed financial and operational data that goes in to making any major supply chain, investment or capital decision. How often does that information answer the question - will the impact of the decision be "net positive"? I would suggest this rarely, if ever, happens around most Board rooms of the world.

We’ve seen something similar when we’ve talked to CEOs about measuring their total impact. They’re cognisant that there is a better way to do things but, they hesitate … the biggest barrier to adoption being a lack of available data (74%).[ii]

 

Looking through some of the objectives these companies have in place to drive their net-positive ambitions, they’re around carbon emissions, waste reduction, forestry management and lighting – not the usual fare for the balance sheet. Each requires data that’s recorded to start off with! And hopefully in a way that’s accessible, dependable, ideally automated etc. But it’s only a hurdle, not a brick wall! 

In PwC’s work on total impact, we’re starting to address some of these data issues. Quantification and going that step further to monetise impacts are important considerations and we’re developing the methodologies to get the data business needs. Firstly, we’ve developed a framework called Total Impact Measurement & Management (TIMM) – find out more at www.pwc.com/totalimpact. Designed as a decision making tool, TIMM can be used to help business work out if their activities (including their supply chain) have a positive or negative impact. By valuing social, environmental, tax and economic impacts, it enables business leaders to understand the total impacts of their strategies and investment choices, compare them, and manage the trade-offs. Secondly, we’ve recently acquired GeoTraceability, a company that specialises in large scale data collection and traceability programs adapted to small producers and smallholders in developing and emerging countries. This shows our further commitment to the data issue. 

We recognise that data holds the key to allowing business to deliver its vision to be net positive and, with our heritage in accountancy and audit, we have an appreciation for the quality of data that is required. Fit for purpose, fit for decision making, fit for the boardroom and fit for enabling a growing population to live well on a planet of finite resources.


[i] PwC On-Line Poll: What do you think makes good growth? 226 votes
[ii] PwC CEO Pulse Poll, What CEOs think about total impact, July 2013, 187 CEOs