july 2024
In the sixth episode of our “In Conversation..” podcast series for 2024, Lucy speaks to Giles Gibbons, co-founder and CEO of Good Business, a strategy consultancy firm with almost 30 years of experience advising organisations on purpose, behaviour change, sustainability and responsible business strategies.
While many organisations are taking positive steps to manage their social and environmental impact, the sustainability agenda continues to move faster than business’s rate of change. In this conversation, Giles explains how having a sustainability and responsible business strategy is good for business and why this is a growing area of focus for employees and wider stakeholders. Lucy and Giles explore the role of employee activism and regulation in driving corporate action in the sustainability space and the challenges that poses for businesses, particularly where views and opinions in the workplace conflict. Lastly, they explore practical ways employers can make impactful change.
“And so, you know, we talk about that business should be political with a small P because it should have a view on the world, because it's made up of people who have a view on the world and what they're doing and how they're doing it. But it shouldn't be political with a capital P. That's for citizens, that's for individuals to decide how to vote. It's not what a company should do, but a company should have a point of view on its impact on climate. It should have a point of view if it employs people on its pay responsibility or whatever it may be. So in a sense, it's being linked to the things that actually matter, and you have an impact on, that people will therefore see you as a credible force rather than as a sort of tokenistic organisation.”
Key takeaways
More rapid change is needed. According to the IPCC, climate change is moving ever faster and organisations’ rate of change is not quick enough.
Organisations should be proactive. To differentiate themselves, businesses should use regulation as a catalyst for governance transformation and innovation by taking proactive instead of reactive steps towards change.
Focus on the issues on which you can make the biggest impact. Organisations should assess their impact on the climate and society and focus time and resources to affect change in those areas through the way it does business.
Employer brand is so important. Employees want to know they work for a company that is having a positive impact on the world. As employers strive to attract and retain the best talent, increasingly employees have a greater share of voice in the importance of sustainability within an organisation.
Create a safe place for divergent viewpoints. Create an organisational culture where it’s okay to have diverging views and it feels safe for employees to engage with people with conflicting viewpoints.
Have conversations with your employees. Rather than demanding change, turn this into a proactive conversation between employers or employees.
Lucy Lewis: Hello and welcome to the Future of Work Hub’s “In Conversation…” podcast. I am your host, Lucy Lewis, a partner in Lewis Silkin’s employment team. Whether you’re a seasoned listener or this is your first time, I am delighted you are here to join me for some fascinating conversations with innovators, business leaders and thought leaders exploring some of the longer-term trends and immediate drivers shaping the world of work.
There are many examples of organisations taking positive steps to manage their social and environmental impact but the sustainability agenda is moving faster than business’s rate of change. At the same time, the relationship between businesses and their consumers is evolving. There is a growing expectation on businesses to be able to demonstrate ethical behaviours. Businesses today face really intense scrutiny from consumers, investors and employees on how they do business. Employees expect to be able to influence their employer's approach to sustainability and their approach to responsible business strategies. But that can also lead to challenges and it can lead to conflict.
Our guest today has a huge amount of experience and expertise in this area. Giles Gibbons is the co-founder and CEO of Good Business, a strategy consultancy firm with almost 30 years of experience advising organisations on purpose, behaviour change, sustainability and responsible business strategies. I’m delighted to welcome you to the podcast, Giles.
Giles Gibbons: Thanks very much Lucy. Great to be here.
Sustainability and responsible business
Lucy Lewis: So, I thought we would start right at the beginning because we sometimes hear this word ‘sustainability’ and I think the temptation is to think immediately of climate change and, of course, that is a huge part of it but sustainability really encompasses much more than that. So, I thought a useful way to kick off the conversation would be hearing from you, because you’re really the expert on this, what sustainability and responsible business means to you?
Giles Gibbons: Great and as you say, a good place to start is defining what it is we are here to talk about. Sustainability is the method and the way an organisation manages its social and environmental impacts, that in doing business it has on the world. Of course, sustainability as a phrase was more linked to environment in the years gone by. But the evolution of that as a phrase that has sort of taken over from corporate responsibility and CSR and these other nomenclatures that have been around in the last 20-30 years, for sustainability to become really the sort of umbrella concept which sits above it and talks about all the impacts an organisation has - positive and negative - in relation to the social and environment.
Good Business
Lucy Lewis: And it would be great if you could go on to tell us a little bit about what Good Business are doing in this space, in the sustainability space.
Giles Gibbons: So, we help organisations understand what those impacts are. We support them in prioritising those impacts and seeing, particularly through then the measurement of those impacts, how they can, in simplistic terms, do less of the bad stuff and more of the good stuff. And then tell people who have stakeholders about what they are doing, why they are doing it and how they are doing it. So, it’s really about focusing the organisation in on the impacts that really matter and helping them make change and then communicating that change to people who care about the organisation in some form.
Why sustainability is good for the bottom line
Lucy Lewis: And picking up on some of those impacts because it is obvious to everybody listening, that dealing with climate change, this broader concept of sustainability, that is really important from a human perspective. But they are also going to be asked by their investors, you know, how is sustainability, how is responsible business, how is that good for business? How is it good for the bottom line?
Giles Gibbons: Fundamentally, in the world that we live now, which we would sort of define in its broadest terms of stakeholder capitalism, which has sort of moved on from shareholder capitalism, it is critical for a business to be successful that the stakeholders around it believe in, support and want that organisation to succeed, be that employees, as you were talking about at the beginning, or shareholders, or civil society, or politicians. So really, the management of an organisation's social and environmental impacts is really critical for those people to be supportive of the organisation and enable it to be a successful business, in a sense. It is so important that the people that make that business up in whatever form, be it consumers or employees, use and can see the benefit that it is providing to society.
Consumer and employee activism
Lucy Lewis: That takes us to this idea that you hear a bit about, the idea of consumer or employee activism, those were the two that we talked about. How important do you think that has been in driving action on sustainability in recent years? How important is consumer and employee activism?
Giles Gibbons: Yes, it’s such an interesting area because I think we believed 10, 20, 30 years ago that it was consumers which were driving the change and, in many ways, they are because the media would say that they are representing consumer concern in what they are writing about and how they put pressure on organisations to change. But actually, consumers are a fickle bunch and, you know, perhaps do not always use their purchase behaviour to, sort of, meet with what they might be thinking about an organisation. And so, in a sense, it’s not a perfect science, it’s not like consumers are all one direction and not another. So, I do think that consumers have played an incredibly important role in driving the importance of sustainability, but because they may take a very short amount of time to think about you and your organisation, they have got very busy lives, perhaps they do not always make the most informed decisions about what they do and how they purchase. I think employees, however, are very different. Obviously there are less of them, but they are much more important to organisations and I think we really see much of the sustainability work that organisations are doing is because they want to recruit the best, they want to retain the best and it is really important for those people that they are working for a company that they are proud of, that they believe is having a positive impact on the world. So, I do think both are important in different ways, but I think increasingly, employees have a greater share of voice in the importance of sustainability within an organisation.
Employer brand
Lucy Lewis: Yeah, that is really interesting because I think, and we’ve talked a bit about this on the podcast before, we have seen this idea of brand, and brand has tended to be a sense of consumer brand, and that is the way that we have tended to look at brands. But increasingly, my sense is that there is a feeling of employer brand. What is your brand? What is your position as an employer? Is that something that you see growing, particularly in this space, namely enhancing your employer brand?
Giles Gibbons: We know that organisations, in many ways, are just simply as good as the people in which they employ and, therefore, if you feel that your values are stopping you getting those people, then are you going to be as good as you can as an organisation? And I think we have seen the success of the likes of Google and their ability to recruit and retain the best graduates and the best employees has been a fundamental part of their success over the last 20 to 30 years and continues to be so.
Lucy Lewis: If we sort of take a slight sideways step and this idea of employer brand is important, but obviously you then have to maintain your employer brand. I know you are familiar with Edelman and their 2023 social report on climate and one of the things I think is really interesting about that is that it tells us that trust in business, in keeping climate commitments, is actually falling and that the perception, the number one perception, is that business is too focused on short-term profits. So, we know that this idea of employer brand is important, but you have got to be able to maintain it. Do you think businesses are doing enough, for example about the climate crisis to maintain that idea of employer brand?
Giles Gibbons: Well, we could spend about 50 minutes just talking about this one subject in a way, because it is probably the most important area to dig into. But actually, I think what is so important at the moment, is that it is clear, as we can see there is an IPCC report out today saying that climate change is moving ever faster, so the rate of change is not fast enough and, therefore, it does need to go faster. And yet many organisations have reduced their carbon since their 1990 levels and have done that pretty successfully, but have, in a sense, achieved that by achieving the easy wins, you know, taking out the carbon that was easy to do. And the problem about carbon reduction is it gets harder and harder, it needs more and more capital and it needs business model change in order to achieve the next level of reductions. Therefore, we are coming up against the fundamental challenge that for organisations there is a finite amount of investment money and they need to make difficult decisions about the speed with which they can change and keep other stakeholders happy. They still need to return a profit, they still need to invest in many other things, not just in reducing carbon and so it is becoming harder and harder, even though it needs to continue to go faster and that is becoming really difficult for organisations. And I think that we are going to see a really interesting period over the next two to three years of those companies that are doubling down and will achieve some of that change and will be able to differentiate themselves as a consequence and those that will find it more difficult to do that and the challenges that they will face from employees and consumers by going perhaps too slow.
The role of policy and regulation
Lucy Lewis: I want to come on and talk about some of the practical things that employers can do, because I know you have a huge amount of experience in that. But before that, one of the things that interests me generally about how you drive change for the future of work is what is the role of policy and regulation in that, and I am really interested in your thoughts. We know policy and regulation can nudge better behaviours, and we are seeing much more noise, particularly in the EU around ESG standards, targets, legislating for disclosure requirements. How important do you think those things are in driving change or maybe accelerating change? We recognise that change has got to be quicker.
Giles Gibbons: I think they are fundamentally important. The truth is, in the world of sustainability that I have been in for, as you say, for the last 30 years, it has been based on a voluntary discussion, effectively. You know, we go into boards, we persuade them of the business case of being more sustainable that by going further than their competitors, they can differentiate themselves and therefore win and be a better business and deliver better business results, as a consequence of being a more progressive organisation. But I think we have to accept that change has not been fast enough, that the voluntary nature of sustainability has not achieved the changes that society wants or needs, and therefore, regulation is an important and fundamental part in speeding up that pace of change. You know, it is interesting, as you talked about the European regulations coming in from next year, they are really, really tough and what is interesting about them is that they are not regulations about reporting, they are regulations about ensuring that change happens within organisations. And that I think is what is really interesting about this process is it doesn’t say, have you got a policy? It says, what is that policy going to do? Who is responsible in your organisation for it and what happens if they do not achieve it? So, it is a very dynamic set of regulations that demands change from organisations and there is a lot of worry and concern within businesses about that. I have never been a sort of pro regulation person, but I actually do believe that more change will happen over the next two to three years than we have seen in the last 20 years, as a consequence of those regulations.
Practical steps for driving change beyond regulation
Lucy Lewis: That is a really fascinating insight and that takes us to the really important stuff, the practical stuff, what you as an organisation can do? Because it has always been the case that action is beyond regulation, because regulation sets the parameters, it sets the guardrails, but risks being a tick box exercise. So, when you look at what are the steps beyond regulation, what are the practical things people listening who are thinking, yes you are right, we should be doing more about this but I do not really know where to start. What advice would you have for the people wanting to make practical, effective, impactful change?
Giles Gibbons: Well, I think it is important to say we are in the eye of the storm, from a regulation perspective, if you are sitting in a larger organisation at the moment. What we say to organisations, is let’s use those regulations to provide the sort of governance of transformation. So, let’s not just say, you know, we have got to do what we are being told to do, but let’s use that as a basis for talking about how we take this business in a direction that is still about sustainability strategy, it is still about what can we do, how can we transform it to be a different, better business that serves the future needs of stakeholders in a more effective way. And it is when you bring together the base of that regulation, but on top of it the sort of strategy and innovation and new thinking, that you can get to a place that enables that organisation to change positively, rather than feel that it is being dragged there by another piece of European regulation. So, it is giving the organisation the confidence for it to be able to think ambitiously about how it can transform itself in the future and that is where the benefit will come from sustainability, not just complying with what the regulations say.
Backlash against the sustainability movement
Lucy Lewis: You said something really interesting, and I think lots of people will resonate with this, you said, big business (and actually I am not sure it is just big business) feel like they are in the middle of the storm or the eye of the storm in this kind of sustainability debate. One of the ways - and I guess in a way it is sort of tackling what sometimes feels like an elephant in the room - they are in the eye of the storm is that it is become increasingly common to hear things like “woke capitalism”, you know, this is “corporate virtue signalling” sort of language that we see reported in the media. And it feels like, if you are one of those businesses, you are caught between a rock and a hard place of backlash against sustainability moving away from ESG initiatives, whereas at the same time, recognising that you need to do something. We talked about the employer brand, and the importance of this particularly to younger generations. How do you think businesses find the right balance between this kind of media message about woke capitalism and the drive and demand for change?
Giles Gibbons: I think in two ways. I think a lot of the pushback around woke capitalism came from organisations talking in platitudes about society, saying what they think people wanted to hear, whilst continuing to run their business as it was. And I think that has created a frustration within certain parts of society and, in a way, I think rightly so. There’s a very important Twitter bot and it takes all of the organisations that posted a black square on Instagram for Black Lives Matter, and it responds by saying what their DE&I strategy and goals are and whether it has met them. So, it is this thing, it is like here were these companies, they were going out with platitudes around these issues, but then actually not going through to saying what they are doing as an organisation and how they are changing. And so I think the response that I have to organisations that feel that they do not know where to stand on this stuff, is to go back to basics, which is to say, what are the impacts that you are having as an organisation, which ones are more or less important, which ones can you affect change on and focus your time and energy through your business - not outside your business but through the way you do business - and how you can affect change in those areas. And then you can be confident about what you are doing and how you are doing it and what you are doing it for, because it makes sense to you as an organisation and the people around you. It is when you start deliberating on things that are outside your wheelhouse that I think people start to say, hang on a sec, you are going beyond what is credible. And so, you know, we talk about that business should be political with a small p because it should have a view on the world, because it is made up of people who have a view on the world and what they are doing and how they are doing it. But it shouldn't be Political with a capital P, that’s for citizens, that is for individuals to decide how to vote. It is not what a company should do, but a company should have a point of view on its impact on climate, it should have a point of view if it employs people on its pay responsibility or whatever it may be. So, in a sense, it is being linked to the things that actually matter and you have an impact on that people will, therefore, see you as a credible force, rather than as a sort of tokenistic organisation.
Comparability of ESG metrics
Lucy Lewis: Those bots are fascinating, aren't they? It is really interesting the ways in which businesses are held to account. They did something similar with the platitudes around diversity in relation to pay gap reporting, so, take a similar approach to what people have said on diversity and then they highlight the pay gap. And as we move to a world, potentially, of more reporting, it will be interesting to see how much of that kind of indirect accountability comes through those things. I think it is fascinating.
Giles Gibbons: Well, if we step back from the organisations, the brilliance of what the CSRD requirements are, the regulations that are coming in, is effectively, it is not the organisation deciding what to report on, but society requiring the organisation to report on it and in a particular measured way, in order that citizens, bots, you name it, or investors can compare organisations and make a better decision about whether they want to put their money with them, they want to be employed by them or whether they want to buy their products and that comparability that comes in is going to drive the next evolution of ESG. So, an organisation can decide not to do these things, that’s fine, it is up to them to decide whether they want to do it. But now people will be able to decide whether, in comparison to other people in the marketplace, whether that is what they want or not and make a decision based on that. Whereas the previous ESG activity was based much more on qualitative grounds, and therefore the confusion, and effectively why it blew up, was that my version of ESG was very different to your version of ESG and someone else's and so I could buy an ESG fund, but that it would not be what I would expect it to be. Whereas what we are moving to with the regulations is a much more comparable world and I do think that that will be such a powerful driver in driving change within organisations, as a consequence.
Managing conflict and division in the workplace
Lucy Lewis: Thanks Giles. In the time that we have got, there is one thing that I mentioned in the introduction that I just want to pick up with you because I know with all your experience, you have a lot of useful insight on this. One of the things we are experiencing mostly as advisors, but more generally I think HR practitioners are experiencing, is that we are living in this increasingly diverse world, we have moved towards a place where employees feel much more comfortable about bringing their views and opinions to the workplace and of course, there is lots about that that is fantastic. But at the same time, we are seeing an intolerance of views that maybe are not the same as yours. And according to the 2023 Edelman Trust Barometer - people listening will have heard me say this before but I think it is fascinating - only about 20% of people would be willing to work alongside somebody who disagrees with their point of view. And so what we see on things like sustainability and less on the fact of change, more often around the pace of change, is conflict and division and different views in the workplace and I wonder if you have got any advice, particularly to HR people, about how they manage that conflict or tension.
Giles Gibbons: Yes, it is a very real issue and funnily enough I was with a client of ours and she was part of the American part of the business. She was talking about the change in abortion laws in America and how, from her perspective, people wanted them to have a point of view and they wanted to have a point of view, particularly around offering the ability for employees from different States to get the same benefits around that issue. But, you know, they employ 70,000 people within that business and not all those 70,000 people shared the similar view to her in relation to abortion rights within America. And, in a sense, her solution was, we do share different views, what we need to do within the organisation is to find a safe place in order for those views to be aired and discussed and managed, not hidden away and left for the employee to do that outside the organisation or even take their point of view about what an organisation is doing outside the organisation without having found a place, in a safe place within the organisation in order to talk about it. That is really difficult and is very present for many organisations around many issues at the moment. But I do think skirting around it is not going to be the answer, I think it is facing in. People talk about DE&I, but they do not really talk about the “I” as much as the as the “D” and the “E”, in a way. And “I” means that you need to feel safe within your organisation to have divergent views and that that is okay and that you create a culture where it feels safe to have those and to engage with people who might not agree with you, but that the company is making it safe for you to have and perform your function, at the same time as accepting that you do not all agree.
Priority actions for employers
Lucy Lewis: Thanks, Giles. Really, really useful insight there. To finish off our conversation and everybody listening will know that I always ask the same question. So here it is for you, given everything that we have been talking about today, if you were listening, what do you think would or should be the two priority actions for employers and for HR teams to take now, things that they can do to prepare and build organisational resilience for the years ahead?
Giles Gibbons: Gosh, it is such an interesting area isn't it? But you know, I feel like we have been through, and funnily enough, in this conversation, we have not used the C word at all, Covid, which is interesting actually, because I do think that the relationship between employees and employer since Covid, has fundamentally changed, accepting that not every worker can work from home. But the work from home population has had a very different relationship with their employer and I think there have been lots of good things that come out of that, such as work/life balance, and some issues as well. And I feel like rather than going into an organisation, sort of sticking to a particular point of view and demanding change or demanding employees do this or do that, that sort of open relationship, the changed relationship turns into a conversation, an active, proactive conversation about many things, including the way we work, how we work, you know, help their role in decision making within the organisation. And I think I would strongly recommend organisations find this moment in time, when perhaps the workplace is probably changed more than it has in the last 100 years, I would say, use it as a moment to actually have conversations with the people they work with to find how can we be the best version of ourselves? How can we be productive? How can we continue to innovate? How can we balance that with a sort of work life balance that works for us in 2024 and beyond? And that is a very important conversation that needs to be had, at the moment and I am concerned that people are retrenching or they have got strong views and they are not using that as a moment to open up and engage.
Lucy Lewis: Thanks, Giles. It is a really important and actually quite inspiring message that we are only going to make this change through these inclusive conversations and collaboration. I think actually, that is a really lovely way to end the conversation, inclusive conversations and collaboration that are kind of the key to driving the change that we need.
If you would like to know more about the work Giles does at Good Business, you can go to their website, www.good.business. That’s it for the conversation, I have been Lucy Lewis and you have been listening to Lewis Silkin’s In Conversation podcast. To listen to more conversations like this one, you can subscribe on your usual channels. We will be taking a break from the podcast in August, but I look forward to your company again in September for some more fascinating conversations exploring the future world of work. If you would like to be part of our Future of Work Hub community, you can go to our website www.futureofworkhub.info and get in touch with us. We would really love to hear from you how you are navigating some of these issues. But until next time, goodbye.