Global Compact Network Australia calls for greater activism from CEOs

Kylie Porter

The United Nations-affiliated Global Compact Network Australia has urged CEOs to become more outspoken on issues such as climate change, or risk reputational damage to their business and long-term decline in revenue.

“The time for quiet is over,” according to the GCNA’s 2020 Pressures Report. “Leaders who speak up, who authentically match words with action and drive societal change will reap the benefits.”

“Authentic public action will raise a leader’s visibility, reinforce social licence to operate and demonstrate action beyond business as usual,” the report says.

Conversely, business leaders who remain quiet will find themselves “outcompeted by purpose driven leaders and companies.”

“Their silence will likely lead to reputation damage, loss of customers and long term decline in revenue.” The report says Australian business leaders could learn from those who had already spoken out such as BHP’s former CEO Andrew McKenzie, who publicly described climate change as “an escalation towards a crisis”.

Those leading the charge internationally included Starbucks CEO Andrew Johnson who closed all of the company’s stores to conduct racial bias training in order to tackle systemic racism. GCNA executive director Kylie Porter said that while pressure on CEO’s to take a public stance on social and environmental issues had been mounting, the impetus was growing due to increasing public awareness and activism.

“There is a real opportunity for businesses to tap into the public groundswell and take the lead where governments have fallen short,” she said.

“Shareholders, consumers and employees want to trust the organisations they engage with and they expect their leaders to have views on issues such as climate and human rights and be prepared to voice those views publicly.”

Climate change and its impact on human rights heads the GCNA’s list of key pressures facing Australian business.

Other key pressures facing corporate leaders are:

• Compliance with the Commonwealth Modern Slavery Act with businesses being judged on how they are responding to the risks of modern slavery and human trafficking in their supply chain.
• Effective water governance and management to ensure “mature stewardship of vital water resources.
• Adequately managing the risks associated with the transition to a net zero carbon economy by 2050.
• The need to rebuild trust through effective communication, particularly with influential Generation Z, estimated to account for 40% of global consumers by the end of 2020.

“Businesses no longer have the luxury of time,” the report says. “They must step away from a business as usual approach and reposition themselves as more responsible and sustainably savvy.”