Sustainable businesses will inevitably be at the core of recovery from the economic impact of Covid-19.
But what those businesses look like, what they do and how they do it will in many cases be very different from existing and historic models. The enabling mechanisms of business law were built to enable person-to-person trade in a material world, with records kept on paper and where obtaining information about another party could be very expensive.
The Covid-19 pandemic has hastened the rush to digital technology-enabled practices in many markets, with existing trends towards online shopping, for example, accelerating massively. Great changes in consumer demand will force many businesses to re-evaluate and remodel their operations, while others will not be able to survive.
As many businesses reform and restructure, having the right rules in place to help them will be fundamental to their future viability. ‘The bedrock of a sustainable economy, small and medium-sized enterprises need the right legal models in place. Policymakers need to ask the right questions, and understand the implications of the answers, when they’re making changes to the laws regulating legal form’.[1]
Making a positive social, environmental and economic impact is at the heart of 21st-century value creation for all organisations. ‘Social and environmental challenges are becoming more complex. Increasingly, these two issues, and the ecosystems of impact areas that they encompass, are seen by government, business and finance as interconnected priorities’.[2] Being a sustainable organisation means being committed to minimising environmental impact while putting social justice and social responsibility at the heart of strategy.
But being sustainable means more than simply operating within a framework of rules. Sustainable businesses deliver financial returns that are inextricably interconnected with generating positive value for society and taking responsibility for environmental impacts on the planet. The principles driving decision makers to pursue those goals will often embed the trustworthiness and integrity that characterise ethical behaviour.
The collaboration and cooperation fundamental to a sustainable recovery will need to be built on trust. Investment advice frequently carries the warning, ‘Past performance is no guarantee of future returns’, and for financial investments, always susceptible to uncontrollable external influences, that is true. When making business decisions about whom to trust, however, past performance is very much a guide to future behaviour. Knowledge of past good behaviour encourages trust in future behaviour. That’s where universal values shine through – understanding that human endeavour involves teamwork, collaboration and cooperation, which in turn are built on trust.
[1] Piper, J. (2019) ‘Business Forms: Building the Legal Framework to Help Business Succeed’ [website article], 11 July <https://www.accaglobal.com/my/en/professional-insights/global-profession/Business-Forms-Building-the-legal-framework.html>, accessed 28 September 2020.
[2] Greer, J. (2019) ‘Social and Environmental Value Creation’ [website article], 23 September <https://www.accaglobal.com/my/en/professional-insights/global-profession/Social_and_environmental_value_creation.html>, accessed 28 September 2020.