In the current context of mistrust, when those who increasingly call on business to consider the common good as a priority are the same people who consider CSR activities to be greenwashing, what flexibility do companies have to maintain public trust? How can business bridge the common good and profit while remaining sustainable in the long term?
In 2018, a group of experts in sustainability and good governance created Your Public Value to address the general lack of understanding between society and business. They invited representatives from the public and private sectors, as well as civil society and youth, to set up a non-profit association that emphasises dialogue and co-creation, and rejects 'blame and shame'. Their stated aim was to help restore trust between business, the economic elite and society, and to strive for the common good.
The proliferation of ESG standards shows that there is no single solution that would suit all companies, all communities, and all environmental emergencies. There is, however, a mindset that, if widely shared, could not only help restore trust, but also improve the impact of business on people and the planet. That mind-set is that of public value.
Public value is value preserved and created through positive action – for ALL and each of us, for society and the environment
The 'public value mind-set' considers that companies should adopt key practices that go beyond CSR activities and can, if properly implemented and measured, shape a modern accountability framework. In its modern definition, public value:
- Defines society and the environment as key stakeholders;
- Sees these stakeholders as sources of legitimacy and support for any public or private organisation, as they work together to maintain a balance between self- and collective interests;
- Articulates a common objective for all stakeholders in any corporation or public project with the aim of reaching consensus; and
- Generates reciprocity – i.e. inclusive dialogue and public participation – to ensure transparency and compliance.
To restore public trust towards business, Your Public Value chose to co-create Public Value Principles to guide us and help us address the complexity of global issues and problems. They are not regulations intended to bind us. On the contrary, they reinforce the narrative of the common good and shape the way we operate within and outside corporations and companies. Taken together, they form the basis of a new belief system which, in turn, leads to a new behavioural system, i.e. a new corporate culture.
The Public Value Principles are not additional ESG performance indicators. Rather, they are guidelines that companies can use to adapt or reorient their business models and strategies while taking the interests of all stakeholders into account and ensuring that the collective interest remains their common and shared goal.
The report Common Good and Profit sets out nine Public Value Principles that 124 European experts on sustainability and good governance co-created this year. It tells the story behind the Public Value Principles and lists in detail the positive and negative arguments that were collected during the process, through which participants focused on corporate issues they considered crucial to the proper functioning of any company or corporation in the current economic system.
Notably, they considered that:
- Stakeholder mapping should include both society and the environment;
- The human aspect should be at the centre of corporate strategies;
- Referring to regeneration would lead to systemic change; and that
- All of the above are ethical elements that shape modern accountability.
Created after six months of intense discussions on business ethics in the current context, the Public Value Principles represent a shared understanding of what companies should do to protect the common good, human beings, and the planet. The nine principles read as follows:
- We govern, lead, and run our company on the principles of fairness, respect and inclusion for the benefit of society.
- We empower individuals and lead by example at all levels.
- We acknowledge individuals as the owners of their data and their privacy as a human right.
- We enable and empower human oversight for an inclusive, transparent, and ethical use and application of technologies, data, and knowledge.
- We seek continuous improvement and build trust by measuring, auditing, and sharing intentions, actions, and impact transparently and regularly.
- We commit to corrective action in collaboration with our peers and stakeholders at large for any negative impact throughout our value chain.
- We are accountable for making a positive contribution to the societies in which we operate through our business models.
- We strive for systemic improvement towards circularity and regeneration within planetary boundaries.
- We aspire to an inclusive global social contract that will improve the lives of people locally and beyond.
Although in the principles, the word ‘we’ refers to companies as collective bodies, participants stressed that it is the duty and responsibility of all of us – experts, corporates, citizens, every member of society – to contribute to the creation of public value.
We all have a role to play if we want to establish a constructive dialogue between business and society.
We would love to hear your thoughts. Please send your feedback to firstname.lastname@example.org.
Virginie Coulloudon is co-founder and executive director of Berlin-based NGO Your Public Value, which focuses on public value creation to increase trust, sustainability and profit globally.