The new social contract of business— why today’s brands have an obligation to act

by | Mar 16, 2020 | Public Relations

Today’s stakeholders are more committed to brands that have strong feelings about hot-button societal and cultural issues, and take an active stand on them—and this includes company employees. New research from Atlassian Corporation confirms American employees want businesses to play a stronger leadership role on key social issues such as healthcare, the environment, and cost of living—and if they don’t, those employees will take their business skills elsewhere.

The study, in conjunction with PwC Australia, offers new perspectives on the priorities, expectations, and behaviors of U.S. employees—the societal issues that matter most, where responsibility lies, and the implications of businesses acting in or out of alignment with the values of a changing workforce. It calls time on the once-favored business strategy of avoiding action on social and political issues—a key finding was that businesses are more likely to lose employees if they don’t take a stand on important issues.

The Return on Action Report, which surveyed more than 2,500 U.S. employees, provides an up-to-date snapshot of the growing expectations of businesses to lead on the issues important to society. The report marks the first cross-generational research on the new expectations and accountability of business and its moral obligations.

The new social contract of business— why today’s brands have an obligation to act

Key findings include:

  • 60 percent of employees agree businesses should be just as concerned with their societal impact as they are with their financial performance
  • 73 percent agree businesses need to take full responsibility for their environmental impact
  • 67 percent agree that businesses should invest in and use renewable energy, instead of fossil fuels like oil and coal
  • 62 percent agree business leaders should hold politicians to account on major issues
  • Only 42 percent are satisfied with the level of action their own employer takes on key societal issues such as climate change, data privacy, unemployment and the cost of living

Employees agree businesses should take some form of action:

The new social contract of business— why today’s brands have an obligation to act

Change from within

Mike Cannon-Brookes, co-founder and co-CEO of Atlassian, said businesses have reached a tipping point—and are sitting on the fence is no longer good enough.

“As business leaders, we have an awesome responsibility. Employees want us to ensure we are making the planet better, not worse,” he said, in a news release. “Faced with government inaction on some of our biggest problems, it’s the business community that can step up and drive meaningful change.”

“Many companies focus only on the Return on Investment and delivering profit for shareholders. But times have changed. As business leaders, we should listen to the views of the workforce—focusing on our impact on society delivers a return of its own. It’s now on us to respond,” added Scott Farquhar, co-CEO and co-founder of Atlassian, in the release.

The new social contract of business— why today’s brands have an obligation to act

Clear zones of focus

Across all demographics, economic and environmental issues emerged as the top two areas for businesses to effect change. Economically, businesses are expected to help support and take more accountability with their local communities, through appropriate wages and equal employment opportunities, to play a much larger role in addressing the current wage gap. This aligns with the growing movement from The Business Roundtable. The U.S. collective has amassed more than 180 signatures in February 2020 from leaders of some of the biggest global operations to share in a fundamental commitment to all of a business’s stakeholders. The pledge outlines five commitments including investing in employees and supporting the communities in which a business operates.

The new social contract of business— why today’s brands have an obligation to act

The new report also showed widespread agreement (73 percent) that businesses need to take full responsibility for their environmental impact. While perceptions of businesses were that of being major waste and pollution contributors, they were also seen as far more agile and financially capable of enacting change compared to government. Businesses are largely seen as agents of change with the ability to encourage cooperation across large swaths of society due to the connections they’re able to create through their brands. Sixty-one percent of Gen Z and 65 percent of millennials believe businesses can significantly improve the impact of climate change if they act now.

The kids are not all right—Gen Zers are eager for action

For businesses that do take a stand, there is a considerable opportunity. Nearly a third (32 percent) of employees agreed that if their employer were to act in a way that didn’t align with their values they would quit their job. For the socially conscious Gen Z, this rises to 43 percent while more than half of this cohort (57 percent) believe employees should be allowed to voice their opinions on political and societal issues they care about.

The new social contract of business— why today’s brands have an obligation to act

However, only a third of employees (42 percent) are satisfied with the level of action their employer currently takes on key societal issues. Yet with 59 percent agreeing that a business known for speaking out on issues important to them is more attractive as a future employer, the opportunity for improvement is clear.

Download the full report here.

PwC Australia prepared this research on behalf of Atlassian. Qualitative research commenced in November 2019 to explore the topics in depth with 96 U.S. employees and this was used to inform the quantitative survey which completed in December 2019 with N=2421. The samples provided representation across demographics, geographies and employment industries. This report summarizes the findings for the US market and a simultaneous study was conducted in Australia.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter