Michael Carey: just focusing on economic growth is not sustainable
The best businesses have a commitment to corporate social responsibility in their DNA
In 2008 the finalists in the EY Entrepreneur of the Year awards formed the Soul of Haiti Foundation to provide livelihood opportunities in a model farm, bakery and fishing
Businesses should not have a total obsession with maximising profits or wealth creation and our government should not prioritise economic development and GDP growth at any cost. For poor countries in the developing world, driving economic growth makes great sense. For rich countries, like Ireland, it’s not entirely certain that an unrestrained obsession with economic growth will result in a better outcome.
Obviously, we can only afford to have the sort of health and education services that we all demand if the country generates sufficient tax revenue and, as living standards are improved when incomes rise, so the social impact of economic growth can be positive.
But sometimes it seems that the way we achieve growth carries an unacceptable cost, such as damage to the environment and a widening division between the lower paid and the economic elite. How we, as a country, grow our economy really matters. If done right, on this cycle of growth, there will be a better type of economic progress that is more sustainable and secure, resulting in a better impact on society. How we build our individual businesses is similarly important.
This view may seem counterintuitive and a bit odd to read on the business pages of The Irish Times. This is not to suggest we should be any less ambitious or should not build leading world-class businesses. The right type of growth, however, is good business – it results in stronger brands with deeper consumer engagement, in businesses that people want to work for, and that customers and suppliers want to deal with.
It is not uncommon to hear business leaders talk about establishing organisations that make a positive social impact. The best socially engaged firms have moved beyond asking “how can we make a donation, how can we spend the money we make?”, to a question of “how do we make the money we spend?” The best businesses have a commitment to corporate social responsibility as part of their DNA.
Positive social impactOver the past 10 years I’ve participated with other business leaders in creating ventures that aim to provide a framework for companies to make a positive social impact. In 2008 the finalists in the EY Entrepreneur of the Year awards formed the Soul of Haiti Foundation to provide livelihood opportunities in a bakery, model farm, fishing and supporting a orphanage in the south of Haiti, the poorest country in the western hemisphere.
Similarly, Traidlinks was set up by a group of Irish business leaders in 2005, at the request of the government, seeking to support job creation in Ugandan SMEs. These ventures are difficult to get right but can make a real impact, more sustainable than traditional development aid, with all its risks of dependency. At home, a group of 15 food businesses have worked closely with homeless charity Dublin Simon Community, to supply free food for its soup run and homeless hostels. Over €1 million worth of food has been given.
These are just a few of the numerous initiatives by Irish businesses to make a positive social impact: these three programmes alone engage with over 100 businesses. As these types of programme grow, it becomes the norm. Businesses without any type of corporate responsibility are becoming the exception.
Good business can also make a positive impact on the environment. We have witnessed great momentum behind a process to establish Ireland as one of the most sustainable sources of food in the world, establishing structures to measure how our food is grown and processed.
Under the Origin Green banner, systems are in place to measure the carbon and water footprint of our farms and over 90 per cent of all food and drink exporters have signed a commitment to sustainability. Other countries look in awe at how stakeholders in the Irish food sector work together in this way, starting to establish a meaningful reputation for Irish food and meeting the growing global demand for environmentally sustainable food.
There is an obligation on businesses to go beyond just creating more wealth for shareholders, on Government to do more than just drive economic growth without considering consequences. We have many examples of good practice and should grow that. As we start another cycle of economic growth, it would be much more beneficial if we did it better this time and all realised we must achieve more than more. Michael Carey is managing director of East Coast Bakehouse and chairman of An Bord Bia.