Capitalism Redefined? New Deloitte Survey Finds Executives Around the World Are Embracing a Larger Responsibility Beyond Profit
- Stakeholder interests–those of consumers, employees, and broader society–increasingly influence business decisions.
- An increasing number of executives are concerned about and beginning to act on environmental sustainability issues, a shift from recent years.
- Companies with comprehensive strategies focused on Industry 4.0 believe they are performing better on several factors including financial returns, societal impact, talent, and technology investments.
The world’s business leaders are increasingly embracing a new form of capitalism, moving from one focused primarily on shareholder value to one focused on serving the broader world, as the Fourth Industrial Revolution (also known as Industry 4.0) rewrites the role of business in society. Released , Deloitte’s third annual Readiness Report, “The Fourth Industrial Revolution: At the intersection of readiness and responsibility,” identifies an evolving form of capitalism in which business leaders and organizations are starting to prioritize their responsibilities to societal stakeholders alongside profitability.
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The survey of more than 2,000 C-suite executives across 19 countries affirms recent statements issued by the Business Roundtable and World Economic Forum, both of which stress that business should serve customers, employees, suppliers, and communities, in addition to shareholders.
The survey found evidence that most businesses are striving to find a balance between purpose and profit; nearly six in 10 executives said increasing their companies’ positive impact on society was among their top-five desired outcomes for Industry 4.0. By comparison, two years ago, just 35 percent of CXOs believed that the leading organizations of the future needed to spend more time preparing for how new solutions will impact society. Executives’ growing attention to purpose may largely be attributed to increased pressure from internal and external stakeholders. After “generate revenue,” the top two reasons executives claim they focus on societal issues are “external stakeholders’ priority” (40 percent) and “employee pressure” (20 percent).
“We’re seeing a significant shift in executive outlook as they accept the realities of Industry 4.0,” said Punit Renjen, Deloitte Global CEO. “We’re in a new era where shifting societal attitudes have made it an imperative for businesses to place societal responsibility at the heart of their strategies. Business readiness now demands leaders understand this expanded responsibility and deliver solutions not just for business growth, but also for societal progression.”
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As companies face these new realities, leaders are re-evaluating their approaches to four key areas critical to Industry 4.0: strategy, societal impact, talent, and technology. Below are some of the report’s major findings and insights.
Heightened concern and focus on addressing climate change
In a notable contrast from two years ago, the issues of climate change and environmental sustainability have risen in importance for executives. Almost 90 percent agreed the impacts of climate change will negatively affect their organizations and 59 percent claimed to have internal sustainability initiatives in place—from reducing travel to eliminating plastics, and more. From a broader societal perspective, 48 percent believe tackling climate change is a top responsibility for the current generation of leaders, and 54 percent said they are focused on and/or have external societal programs in place to address it. Two years ago, only 10 percent of executives believed their companies could influence environmental sustainability to a significant degree.
“With an increasing number of catastrophic, climate-related events affecting populations and geographies, we’re seeing business leaders increasing their focus and attention on climate and environmental sustainability,” said Sharon Thorne, Deloitte Global Board Chair. “Executives are beginning to acknowledge the business imperative of climate change. And, they are beginning to act as they feel mounting pressure from stakeholders and threats to their own business.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”).
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