The future success and sustainability of utilities companies hinges on their ability to deliver projects that are socially inclusive and equitable. It calls for new skills and behaviours, says Kerry Scott.
For many organisations, ‘corporate social responsibility’ has been little more than window dressing – an accompaniment to financial reporting. But that is changing. A host of issues is focusing attention on businesses’ responsibility to society like never before – legislation, population growth, zero hours contracts, widening income gaps, social media, the climate emergency, technological change, lengthening life spans, #Me Too, and many more.
Taking care of people is increasingly recognised as important for the development of a positive corporate reputation, for getting projects started and delivered more efficiently and effectively, for developing and recruiting quality employees, and in some cases for permission to operate.
Social value and inclusion are part of the push by more progressive companies to demonstrate ‘purpose’ above and beyond delivering shareholder return.
Social media is playing a part in this shift of attitudes. For years, the supply of services and goods has been informed by what companies think people want or need. But the tables are turning. Social media have given a much wider group of people the power to influence the agenda. Communities how have a loud new voice – the ability to say what they actually want and need… which are sometimes quite different to suppliers’ assumptions.
In consumer markets, customers have always had the power to vote with their feet – or bank cards – if they don’t like the products, services or treatment they receive. In the utilities sector the seller-buyer relationship has been different. It is contractual, with consumers held captive. But now, in some markets, the digital revolution and new technologies are freeing people to buy services from other providers – or become providers themselves.
Responding to these social drivers isn’t easy, as people are inherently complex and diverse. What is right for one community isn’t necessarily right for another. And solutions for the energy sector might not match those for water. It requires companies and those that advise and supply them to think and behave differently.
Where utilities were until now focused on compliance with regulatory, technical or commercial requirements, there are new social questions that utilities firms should consider:
- Do people have good and equal access to the service provided and its benefits?
- Are all elements of society asked about their preferences and what matters to them; is decision-making based on information rather than assumption?
- Do planned interventions create opportunity for affected individuals and communities, as well as to the organisation undertaking them? Are the benefits fairly distributed?
- Are the services and benefits provided resilient and dependable in the face of physical, economic and technological threats?
- And in addition to the service provided, does the behaviour of the company, contribute to the physical and mental wellbeing of the individuals and communities it interacts with?
Answering these questions is no simple task, but the key is to ask them in first place. Creating strong, sustainable businesses and delivering better services for communities depends on it.
A public agenda
National governments and local authorities are putting social inclusion on the policy agenda. The 2013 Public Services (Social Value) Act requires people who commission public services to think about how they can also secure wider social, economic and environmental benefits in their area. The Scottish Government’s 2015 economic strategy defined inclusive growth as: ‘growth that combines increased prosperity with greater equity that creates opportunities for all and distributes the dividends of increased prosperity fairly’. In Wales, the Wellbeing of Future Generations (Wales) Act 2015 requires public bodies to think about the long-term impacts of their decisions and work together to prevent persistent problems such as poverty and health inequalities.
Not all growth is good
There has long been a flawed assumption that investing in development is universally positive, for example that new infrastructure will address socio-economic deprivation by boosting GDP growth. However, this link is not a given and new infrastructure can accentuate social imbalances. New infrastructure investment should look to prioritise inclusion and the equitable distribution of the benefits of growth. This involves:
- analysing potential consequences, adverse as well as positive, with the same rigour
- being bold and proactive in seeking opportunities to achieve more, rather than just mitigate the risks.
The infrastructure industry’s standard tools for calculating the benefit to cost ratio (BCR) of projects do not account for social value. Mott MacDonald has its own systemic social impact assessment toolkit that helps businesses to identify social challenges and opportunities. Identified early and addressed creatively, the social agenda adds value not just for affected people, but for the business itself, by contributing to better conceived, more acceptable, socially adapted solutions that offer sustainable payback.
Duty of care
Like asbestos and smoking in past decades, climate change presents risks to society that those in the infrastructure industry – including utilities – must address. Protecting against harm is morally ‘the right thing to do’, but it is also part of each organisation’s corporate duty of care.