Darren Allen, Genesis Property: Sacrificing long term sustainability objectives will affect short term profitability
The pandemic has exposed the liabilities faced by the world and the need for business leaders to create comprehensive and sustainable strategies that protect people’s long-term wellbeing. The capitalist system must offer all stakeholders in society the opportunity to contribute to the sustainability of the global system, beyond financial profit and shareholder benefits objectives.
Today, the principles of stakeholder capitalism, as advocated by the World Economic Forum (WEF), have never been more important. It is becoming more and more obvious that there is a great need, on a global scale, from business leaders to commit and align their business values and strategies with the UN’s Sustainable Development Goals. This is a crucial step to better serve society and in setting clear, long-term goals to ensure that the planet’s resources are not rapidly and hopelessly depleted.
The essence of stakeholder capitalism can be defined by the ability of the private sector to leverage the innovative power of people to generate long-term value not only for the shareholders, but for all communities and members of the society. But, there is a real challenge to consider in achieving long-term sustainability objectives, specifically a short-term profitability-related one.
About 80% of CFOs said in surveys that they would cut spending on activities such as R&D and marketing to achieve short-term earnings goals, according to McKinsey data. But, this approach, often seen in the past, of sacrificing long-term plans for short-term earnings, is about to change radically in the near future, and the pandemic has been a powerful driver of change.
In today’s landscape, prioritizing the short-term over long-term perspectives is no longer a sustainable approach for the future, especially since the data clearly shows that organizations with a long-term sustainability strategy have more to gain from all points of view. In other words, companies must now shift towards a sustainable vision that factors in the wellbeing of all stakeholders, from shareholders and employees to society at large. To do this, they need to follow a series of norms that are linked to many social aspects such as reducing environmental impact, protecting employees, informing consumers correctly and so on.
In the long run, one of the most important stakeholder’s requirements, especially considering the current context and developments over the past years, is to protect the health of employees and the implementation of a comprehensive set of measures to increase the health of indoor spaces. The IMMUNE Building Standard™, for example, is a standard initiated shortly after the pandemic aiming to create healthier buildings not only for the current context, but also for future health challenges. So far, multiple office, industrial and residential buildings around the world have already been certified and more will follow. All seven buildings of the new YUNITY Park, a new a campus for the work and lifestyle of the future, with a total leasable area of 75,000 square meters, including co-living and food hall areas, will be certified IMMUNE Building Standard™ – Resilient, 5 out of 5 stars.