Well-being vs GDP: How is your business faring?

“A healthy environment is both our duty and our right, and it is each and everyone’s moral and legal obligation to contribute towards a sustainable future. Choosing the path and setting the pace for protecting and managing our environment from now till the next generation is critical for a future which includes our common goods” – A Wellbeing Vision for Malta’s Environment for 2050, National Strategy for the Environment

For decades, we have measured our country’s success in terms of GDP. GDP is “the monetary value of all the finished goods and services produced within a country’s borders in a specific time period and includes anything produced within its borders by the country’s citizens and foreigners”.

There seems to be growing consensus however, both in Malta and internationally, that relying on GDP as an indicator of success is a flawed approach. Success should be measured based on the quality of life of the people within the country. We are finally acknowledging that money isn’t everything!

There are various research reports from global economists that measure the overall happiness and wellbeing within nations. The criteria and indicators used in these studies vary. Nonetheless, these reports help us gain a truer understanding of the current situation.

The OECD Better Life Index, for instance, measures wellbeing across a number of indicators pertaining to housing, income, jobs, community engagement, education, the environment, civic engagement, health, life satisfaction, safety and work-life balance. It is immediately apparent that business can play a huge role in improving the well-being of people across most of these different aspects.

This is where CSR comes in. ‘Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large’ (Good Business Sense; World Business Council for Sustainable Development). Economist Stuart Hart, in fact, opines that “corporations may be better positioned than governments to understand–and respond to–emerging societal needs.  Not the broad and abstract ‘public interest’ trumpeted by enlightenment thinkers, but rather the fine-grained, on-the-ground, ‘micro’ interests of actual individuals, families, and communities (human and natural).”

What’s in it for me?

Whilst previously, the argument for business to act ethically and responsibly relied primarily on moral tenets, there is now growing consensus towards the fact that businesses which indeed have a positive impact on their stakeholders stand to be more productive and profitable. Black Rock CEO Larry Fink went as far as stating that in the very near future, a company’s worth will be directly linked to its impact on society, government and the environment.

Where do I start?

Companies can become more socially responsible by integrating social, environmental, ethical, consumer and human rights considerations into their business strategy and operations. There are some tried and tested steps that a business of any size can follow.

Step 1. Start learning – conduct awareness raising sessions for directors and senior managers to understand the issues and bring everyone on board;

Step 2. Assess your business – carry out an analysis of your company’s performance across the three pillars – People, Planet, Profit;

Step 3. Commit to action – develop a policy for your business and make your commitment known;

Step 4. Roll out your strategy – outline the steps needed to achieve progress and plan a way how this will be achieved.  Allocate time and resources;

Step 5. Measure, report and communicate – identify your metrics, measure progress and report your efforts to your stakeholders.

Every business, no matter how large or small, can contribute towards better outcomes… and it also makes business sense! 

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