By Shane Gladigau
Trends that shape the business landscape matter.
Those managers that react quickly to such forces, or even better, anticipate them, can use them to advantage by protecting or improving the bottom line by minimising risks, capturing emerging market opportunities and spurring innovation.
One of the biggest trends confronting businesses this century is the push toward greater environmental protection in response to rising demand for natural resources, constrained supplies, environmental damage, rising costs of waste disposal and changing social attitudes.
The conduct of some businesses is being called into account by vocal sectors of society who have increasingly greater expectations and demands of business. In a hyper-connected world, society has the ability to put companies and their reputations on trial in the court of public opinion, where there are no judicial controls or processes and lawyers are worthless.
This social pressure can begin to develop once a company is perceived to have violated stakeholder expectations of moral or ethical behaviour, which can ultimately put business value and survival in jeopardy. This depends increasingly on compliance with a range of stakeholder expectations (eg. employees, investors, customers, the local community) rather than merely with environmental laws and regulations.
Businesses, directors, managers and employees are also being exposed to a widening range of environmental laws with heavy penalties for breaches, with an increasing emphasis on personal liability. The inability to defend the environmental standards of a business may quickly result in legal action (eg. by environmental regulators or activist lawyers backed by litigation funders) or the possibility of increased government intervention with new laws and regulations, all of which creates friction and adds further to the costs of doing business
There is a convergence between these two forms of pressure – the social and the legal – as businesses can come under increasing scrutiny in both the courts of law and in the court of public opinion. Forward thinking businesses that are aware of these trends are developing better governance, prudent risk management and progressive policies and strategies that will assist in countering the forms of pressure and build resilience, while also providing commercial opportunities and improvements to the bottom line.
For more information on these trends and a free download see “The Evolving Landscape: sustainability and trends in social and legal pressure”
Shane Gladigau Equilibrium