The Business Revolution Episode 13

In this episode of The Business Revolution, Mik, Alan, and Cherry dive deep into the often-misunderstood “S”-pillar of ESG – the “Social” pillar.

Moving beyond typical perceptions of diversity and inclusion, they broaden the lens to explore the fundamental responsibility businesses have to the very fabric of society.

Cherry, with her extensive background in organisational development and D&I, leads the discussion, emphasising that the “S” is not “soft,” but rather the foundation of trust, resilience and a company’s license to operate. It is the heart of your company!

Key discussion points include:

Why social impact is critical for business success and longevity, extending beyond mere ethical considerations to tangible business outcomes.
Moving beyond shareholder centricity and the imperative for businesses consider the impact of their decisions on all stakeholders – employees, customers, communities, suppliers, and the planet.
Unpacking the hidden human suffering often embedded in global supply chains (e.g., modern slavery, unfair labor practices) and the ethical responsibility of businesses to ensure clean sourcing.
How involving employees in social initiatives can boost loyalty, innovation, and overall organisational performance.
The Importance of Awareness & Action. Encouraging businesses to understand the broad scope of social issues (beyond just DEI) and to take tangible steps towards positive community impact, even when noise from anti-ESG movements might suggest otherwise.
A brief preview of how social impact can be measured to demonstrate tangible returns on investment for social initiatives.

The episode challenges leaders to ask, “Are we just? Are we human? Are we proud of how we treat people?” It underscores that there is no sustainable future without focusing on the people within and beyond the business.

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My call to CEOs: About the ‘S’ in ESG

Bios in brief:

Mik Aidt
Mik has been a highly influential player with respect to our environment, with very active communications experience for over 10 years. Examples include playing a very significant part in the global ‘Climate Emergency Declaration’ movement, and long-lived podcasts.

Cherry Ward
Cherry is a seasoned leadership development expert, coach (ICF ACC), and advisor with over two decades of experience in the corporate world. She is also the founder of Bluebird Leadership, a boutique consulting firm pioneering innovative solutions that cultivate thriving leaders, teams, cultures, and a sustainable planet.

Alan Taylor
Alan has moved from corporate IT consulting into this domain because he adamantly believes that humans need to adapt, businesses can benefit from this new revolution and therefore he is determined to help it happen. Alan is an accredited coach (ICF ACC), supporting leaders and teams in personal and leadership development and transformation.

Episode 13 links

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🎧 𝐓𝐁𝐑 episode 13 for download: audio mp3

🎧 𝐒𝐩𝐨𝐭𝐢𝐟𝐲: open.spotify.com/episode

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Social media posts: Linkedin – Facebook – Instagram

The ‘S’ in ESG: Glow Up Careers’ impactful approach

Transcript – episode 13

Mik Aidt (00:00)

Welcome, or welcome back, to The Business Revolution, the podcast where we are trying to rewrite the rules of business for a sustainable future. I’m Mik, your co-host.

Alan Taylor (00:11)

And I’m Alan.

Cherry Ward (00:12)

And I’m Cherry. We’re your guides on this journey to explore the intersection of business, sustainability and positive change.

Mik Aidt (00:20)

In each episode, we bring you inspiring conversations with experts and change makers who are proving that sustainability is not just good for the planet, it’s good for business.

Alan Taylor (00:31)

And we uncover innovative solutions, we share practical strategies, and we discover the new trends that will help the future of sustainable businesses in all of their contexts.

Cherry Ward (00:41)

So whether you’re a seasoned CEO, a budding entrepreneur, or simply curious about how to make a difference, you’ve come to the right place.

Mik Aidt (00:50)

So grab a cup of your favorite sustainable brew, settle in and get ready to be inspired. This is The Business Revolution.

JINGLE with song

Alan Taylor (00:58)

In this episode, we’re diving deep into the often misunderstood, yet absolutely critical pillar of the ESG, the S for social.

Mik Aidt (01:06)

And this is, you know, we often talk about it as something with diversity or being nice, you know, inclusion among the employees and so on. And that’s of course, that is a part of it. But today we are hoping to broaden out our lens to explore the fundamental responsibility that business actually have to the very fabric of society that they operate in.

Cherry Ward (01:27)

So we will be unpacking what it truly means for businesses to be good social citizens from how they treat their employees, know, engage with their communities to the ethical considerations within their supply chains and beyond. So this is going to be a really great episode to look at more broadly at the S.

Mik Aidt (01:46)

And we should mention that today we haven’t invited an expert in because we have one among us. Cherry, we consider you the expert of the S in ESG. So we’ll be hearing from you and about your experiences and actually interviewing you a little bit. But I think before we start, let’s again, like last time when we talked about the E, let’s first of all hear what would it sound like if a CEO was to stand up and say, listen, folks, employees, I’m calling you. This is what we are going to talk about when we talk about the S in ESG. Here’s a take on that:

CEO (02:21)

Thank you for taking the time to listen. I know you’re busy. Leading teams, driving strategy, managing complexity. We’ve talked about the S in ESG before. You might have written some soft kind words about it in your company’s latest CSR or ESG report. But let me be clear. The S in ESG is not soft. It’s not an afterthought. It is the foundation of trust, of resilience, of your license to operate. Because here’s the truth. Businesses do not exist in a vacuum.

Every company is embedded in a social fabric made up of workers, customers, suppliers and communities. And that fabric is fraying. We live in an era of polarisation, inequality, dislocation and mistrust. Around the world, people are questioning whether the system still works for them. Whether business still serves just shareholders and disregards everything else. If we as leaders don’t address that head on, then we are not just risking reputational damage for our company.

We are actually at risk of social collapse at a global scale. I am not here to suggest you can fix everything, but I am here to tell you that every business decision you make, how you treat your workers, how you pay your people, how you engage with your suppliers and community, it all matters. Social responsibility is not charity, it’s a strategy. Treat your employees fairly and you build loyalty, innovation and lasting retention. Invest in your communities and you create stable markets and sustainable growth.

Prioritise diversity and inclusion and you unlock talent and resilience your competitors are missing. And let’s not pretend this is just an issue in the Western world. The global supply chains we depend on, from minerals to manufacturing to food, are often built on human suffering. Forced labor, child labor, unsafe conditions, these are not distant problems. They are embedded in the products we profit from. And silence is complicity.

So the question becomes what kind of leaders do we want to be? The ones who look away? Or the ones who take responsibility? Who is accountable for the decisions and choices we’ve made? We cannot outsource ethics. We cannot defer values to a compliance department. Social impact is a boardroom issue, a leadership issue, your issue. And here’s the opportunity. Business can be the most powerful force for good in the world.

We can raise standards, empower workers and lift communities. Not someday, not hypothetically, but today through the decisions we make. So this is my challenge to you. Look beyond quarterly results. Ask what kind of society your business is helping to create. Will your legacy be extraction or contribution, exploitation or dignity? Because the world is watching, employees are watching, customers are watching, and the next generation of talent is making values-based choices.

So ask yourself not just are we successful, but are we just, are we human? Are we proud of how we treat people? The S in ESG is about people and there is no sustainable future without them. on the right side of history.

Ban Ki-moon, former United Nations General-Secretary
It may sound strange to speak of revolution, but that is what we need at this time. We need a revolution. Revolutionary thinking, revolutionary action!

Song
It’s both cheaper and cleaner and healthy too. Now the business revolution starts with you.

Mik Aidt (06:14)

And as we mentioned in our last episode where we talked about the E in ESG, we’ve created these courses. We’re still working on making more courses about ESG, E-learning courses that can be used for you if you’re running a business and you have employees, then these courses are meant to educate and inspire employees about what is this thing, ESG, and how do we go about it and why have we even entered this space?

And I think, you know, just to set the right tone, let’s hear a little snippet from the first course, the introduction to ESG, just so we get it right. What is the E and the S and the G very briefly explained.

ESG e-learning course speakers (06:52)

“What is ESG all about? ESG is about how we take responsibility for our planet, our well-being in the workplace, and how management focuses on ensuring we have a good and sustainable everyday life.
E stands for our organisation’s impact on climate and the environment. S is for our organisation’s contribution to well-being and a fairer society. G for governance and ethics, decision-making and reporting. Click on the yellow button to start the quiz.”

Cherry Ward (07:27)

So we’ve just seen the little video explaining what the E and the S and the G is. And I think, from my perspective, the S is not soft. Often people think the S is the soft, fluffy stuff. But for me, it’s a foundation of trust and for a business, it’s their license to operate. So let’s elaborate on why we see the social aspect as foundational for business success and their longevity as well.

Alan Taylor (07:54)

I think that’s a really cool point and I love that. I’m going to latch back on something else you said earlier there, Cherry. It’s about it being an ethical consideration. It’s because that’s where when we say it’s not just being soft, sometimes to actually fix the ethical issues, we need to be pretty hard. We need to work hard and change often patterns or behaviors at every stage in the whole supply chain. And because ethics is it’s very is about a lot is around what is right, but also what is perceived as right and what is the impact on your business.

And a really good example of that is that if anybody is watching what’s happening to Tesla at the moment in the market. Whether you believe in Trump and Elon Musk sort of behaviors at the moment or not, the fact is that they are having an impact on Tesla sales, especially in Europe. And so that’s an example of where the ethics part of the S plays a big part in your business. It’s how markets are perceived, both as a carrot to instill customers to come to you, or obviously putting people off.

Mik Aidt (08:55)

And I think, you know, this thing also, as we heard in the pep talk, the CEO pep talk there is really important to talk about, you know, how do we move beyond the shareholder centric model that is really the core of the problem of many things that is wrong at the moment.

For instance, I believe deeply that the climate change problem we have in this world goes back to that, that businesses are so focused on their shareholders and not so much focused on the environment and the impact that their decisions have on society as a whole. So moving away from the shareholder centric model and considering the impact that our decisions have on all stakeholders, which are the employees, the customers, the communities, the suppliers and the planet.

Cherry Ward (09:41)

Absolutely. And I think the last one often gets forgotten. You know, it’s the silent stakeholder just because it doesn’t have a voice. know, and I think taking that sort of holistic view of all stakeholders is really key. And it was interesting you mentioned Tesla, Alan.

I was just recently listening to ‘If You’re Listening’, the ABC podcast, and they talk about another business in the United States who’s made the same mistake as Tesla many years ago, which is, don’t know if you’ve heard of, know, the Coors beer company. If you go back, it’s a really fascinating story and it has direct sort of parallels to Tesla. And we’ll put that in the show notes, but it talks about how this company, they didn’t look at, you know, all the aspects of S and so you had all of these different groups, whether they were, they were anti-union initially.

But not only do they impact people who were unionised, also, you know, the LBGTI community, the migrants and so if all of these small groups or what you would call minority groups stop buying this particular brand of beer and they still haven’t recovered to this day, you know, people will buy Budweiser over Coors And so I think there’s so many lessons in that in terms of the S is just so much more and I think there’s so much depth in terms of how we look at it and the view of, you know, how do we make sure that we are considering all of the stakeholders in how an organisation or its leaders make decisions that impact all of their stakeholders.

Alan Taylor (11:14)

Yeah, it’s a great point. And I think we’ve, there’s two bits I wanna latch together. One is to remind me of more examples of this body shop in the UK that went bust last year. And that was because its owners, I’ve forgotten who bought them, but they disregarded its origins, which was an environment and social, both of the two. And as they describe, regarded that they lost their customer base and eventually they collapsed.

But another point you mentioned is a silent stakeholder. And I think what’s a really curious part with that is that quite often they are actually even the shareholders, the significant shareholders. And there it’s a case of each of the shareholders is thinking, I believe this, but I don’t know. Therefore, I won’t put my voice up. I won’t put my hand up. But then you get certain cases where somebody’s, it’s almost like if people know the concept of the first follower, the first organisation or person starts the ball rolling, but they’re not noticed as being doing it. But once one or two people follow them, everybody follows the first follower. And that was an example that was demonstrated here in Australia when Atlassian boss decided that he wanted to try and buy AGL to clean them up.

AGL was like, no, we’re not going to actually do anything because our shareholders are not going to actually care. I know this is environment, but it’s an example of the situation about gas pollution and burning coal. But once he tried to buy the shares, well, he did buy a significant number of shares, suddenly there’s a whole backlash. All these silent people who are not liking the idea or were afraid of putting their hands up suddenly were.

And so I think there’s a lot of that that’s happening in the social space as well. It’s just people are not quite brave enough to put their hands up.

Mik Aidt (12:51)

Hmm. Cherry, tell us a little bit about your background and how you have been working with the ‘S’ in ESG for a long time. And then also what that brings you to today. Where are your headlines? What is the most important when we talk about the S in your view?

Cherry Ward (12:59)

Yes. Absolutely. So I’ve been sort of in organisational development, people and culture roles, and specifically being accountable for, diversity and inclusion and also extension of that community and stakeholder, in HR leadership roles. And so I’ve been involved in designing, delivering and implementing initiatives for DEI, diversity, equity and inclusion.

I think most people are familiar with that. That’s become a word that, or a term that people are comfortable with. But I think the other aspect of it is more around that community and social impact work. So I’ve worked for organisations that are global and you know not every country is like Australia where everyone’s you know living in a developed country so sometimes I think organisations that are thinking about well how can we improve the very fabric of this society that we’re operating in you know yes we’re here to make money but at the same time if we’re able to improve lives improve people’s you know whether it’s living standards the way they think about life, aspirations and so on.

That’s where that sort of community development, that social impact work comes in. So I think, you know, there are some great organisations out there doing a lot of that social impact work within the community, be it with Indigenous and First Nations or with low socioeconomic minority groups and so on.

So I think there’s so many opportunities for organisations and what you will reap or the return on investment is so much more than what you see just on the balance sheet. To the point where whether it’s employees, their families, one company I worked for, they even started naming the kids the name of the organisation just because they saw the value and it was changing the lives of these communities that they were serving in.

Sorry, that was a long way of answering your question, Mik.

Mik Aidt (14:58)

No, yeah. So what are the headlines? Let’s say if I’m a CEO or someone who has, you know, decisions to make in this area, in my company, what would you say are the headlines? What’s the most important right now? Whether, you know, the world keeps changing and suddenly, for instance, the DEI really became famous because of Trump, you know, who has sort of put it in a very different light, hasn’t he?

Cherry Ward (15:20)

Absolutely. And for the wrong reasons, right? I’ve just read a report that just came out this week around, you know, the top reasons why employees are disillusioned. One of the top reasons is around companies not doing enough in the environment, social space, in the ESG space, essentially.

So I think first of all, there’s an opportunity. The headline is engage with your employees because that’s so powerful. Because when you engage with your employees, yeah, they’re going to talk about the organisation at barbecues.

You know, they will try and get their families to work experience, whatever it may be. It’s a bit like, you know, going back several decades ago when companies had family barbecues, for example. So think focus on your employees. They are your key stakeholders. They’re the ones that are delivering your work and making the sales, your services, so on. But then it’s also your customers who are buying from you and then the communities, how are you giving back to the communities and then the supply chain as well.

And of course the planet, the silent stakeholder. How do we change the narrative so that we are thinking and putting ourselves in the shoes of the stakeholders who might not be, who might not have a voice? I’ve heard of one organisation at a board meeting, they said, what if we put ourselves in the shoes of whales? What would they have to say about what we’re doing?

Alan Taylor (16:43)

Yeah, and it’s a beautiful one because we’ve got to sort of keep our eyes on that. And I just got to say a little interjection that a lot of people might be hearing this and going, but companies are not doing it. You mentioned Trump. That’s what brought this one out. And there’s a lot of noise about, yeah, so and so is dropping their reducing their DEI policies. They’re dropping their social governance policies and obviously environment. Interestingly, though, they’re the noisy headlines.

Recent research by PwC came up, just was shared only a couple of weeks ago, showing that actually, although a few companies have dropped their targets, actually more have increased their targets. And so companies have to be aware that if they are not doing this, it’s not only that it’s saving them money at the moment, which is often what a lot of companies do, they are going to become further and further behind, even though the noise is not making that clear to them perhaps, but it’s something they have to be watching for their own sustainability.

Mik Aidt (17:40)

I think the world is beginning to realise, even those people who thought that Trump was a great thinker and the rest, you know, are beginning to realise that America is in a big mess and the way they’re moving away from EVs, for instance, and moving away from wind turbines and so on, it’s gonna hurt.

It’s gonna actually cost people in the long run because, you know, the rest of the world is moving on and very soon there won’t be anything else but EVs and the Americans will be going around in their fossil fuel cars and feeling really sorry because they’re getting more more expensive to drive.

Alan Taylor (18:12)

Just thinking to the, so the consequences, I’m just gonna divert back to another point that Cherry made. And it’s interesting when we think about America, but also Australia and the other first world countries as we’re often referred to the global North. It’s actually interesting, there’s a lot of social issues outside of the DEI, which are there as well. And being cognisant of how broad this topic actually is.

In modern slavery, and I’ve forgotten the phrase, maybe somebody can remind me. There’s another one which isn’t quite the same as modern slavery, but it’s very similar in my view, in that, you know, the rich countries are still employing people at below rates, or they’re coercing people into paying horrendous fees to, well, provide you the support you need to get into our country, but not, you know, they’re ripping them off, or tying them into… constraining contracts where they can’t move.

This is a form of modern slavery and it happens even here in Australia. If that’s in your supply chain, could you sleep at night if you were actually involved explicitly in that? Wouldn’t it be better to know that you’ve actually got a clean slate and that you’re actually doing this with that in mind?

Mik Aidt (19:18)

Conscience is the word I think. I think also the customers are increasingly, know, younger customers have more of that conscience, certainly the planetary conscience and the awareness of that we are hurting our planet and all life on it. And I think also these young people are making choices accordingly, you know, when they buy their products and so on. This is something where again, the S is not just like a nice thing to do. It is actually really about understanding your customers and how they want to live in this world.

Cherry Ward (19:50)

Absolutely.

Alan Taylor (19:50)

Being able to sleep at night knowing that you’ve helped make the world a better place.

Mik Aidt (19:54)

So, Cherry, just that thing about the ethical something you had mentioned. Let’s have that in before we round off.

Cherry Ward (19:58)

Yeah, so one thing I do want to touch on, it’s really important part of the S is the ethical supply chains. So, know, Alan, you touched on modern slavery, I think it’s an extension of that. It’s about how do organisations think about how do they end the hidden human suffering behind global supply chains, you know, think about the low wages and third world developing countries and so on.

And a lot of these people don’t see it. might buy a product and they think, okay, it’s green, eco conscious, whatever it is. But then it’s looking at, where is it actually made? How is it ethically sourced? know, is it fair labor practices?

You know, especially in sort of that complex global sort of organisations and then I think the question that I get asked most of the time, the work that Alan and I are doing is, well, this is all great, but what’s the return on investment?

And so what’s exciting is, you know, there are ways that you can measure social impact. And Alan and I are working, you know, with Dr. Daniel Fujiwara and looking at how do we measure the social impact of these initiatives so that it’s, you know, it’s tangible. And you can say by investing in this particular social initiative, this is what we were able to contribute towards society, towards our business and so on. But more to come in future episodes on that.

Mik Aidt (21:21)

This is such a crucial conversation. can’t just end it here, but we will end this podcast. We’ll have to because we don’t want them to be too long. But certainly, as you can hear, the S raises some questions. The ‘S’ in ESG raises questions to you about your role in your business and how your business plays in the wider social fabric. What steps can your business take, big or small, to create this more responsible and impactful social citizen.

Cherry Ward (21:48)

Absolutely. I think, you know, we can deep dive into some of the elements of S and we’ve had some great episodes already from season one that dives into some of the great work that people are doing and we’ll put them in the show notes because I think that S is just more than diversity and inclusion. I think that’s what people think about when they think about the ‘S’.

It’s about all of the stakeholders and what are we doing or what are businesses and leaders doing to ensure that we are meeting the needs of all of our stakeholders.

Mik Aidt (22:17)

Remember, the revolution doesn’t end here. It’s up to each and every one of us to take this knowledge and inspiration that you hopefully also picked up from today’s episode and turn it into action.

Alan Taylor (22:28)

And that’s whether it’s implementing sustainable practices in your own business or advocating for change in your community. Every step counts towards building a better future. And I’m just going to call out quickly, keep an eye out for our future episode when we are chatting to Daniel Fujiwara because that’s going to give you so much insight into how that can be done.

Cherry Ward (22:45)

And don’t forget to visit our website, businessrevolution.earth for more resources, past episodes and ways to get involved. Just one more thing I wanted to add is, you we’d love to hear your thoughts and examples. So connect with us on social media or visit our website, drop us a note and share any insights on this ESG series. And we’d love to get some.

Mik Aidt (23:05)

Because your feedback actually helps us reach even further out, reach more listeners and amplify our collective impact.

Alan Taylor (23:15)

So thank you for joining us on this journey of transformation. Together we can revolutionise the way we do business, and take pride in the fact that we are creating a world that’s sustainable for generations to come.

Cherry Ward (23:27)

So stay tuned for insights and inspirations and actionable steps to help you reshape the way we do business for a better tomorrow. We have some fantastic guests lined up for future episodes.

Alan Taylor (23:39)

So until next time, keep innovating, keep inspiring and keep pushing for positive change for a brighter tomorrow. I’m Alan.

Cherry Ward (23:46)

And I’m Cherry.

Mik Aidt (23:47)

And I’m Mik, signing off. The Business Revolution starts with you.