The Companies Act 2006 is set to enforce some widespread changes in how businesses operate; not least of these is the fact that the concept of enlightened shareholder value is now enshrined in statute. This concept is about organisations being able to achieve lasting success by increasing their responsibility towards the environment and the community in order to achieve sustainable development.
Many organisations have long embraced this policy, motivated by economic carrots rather than legal sticks. They have realised that they are likely to achieve greater sales/profits if they can make their products more environmentally friendly or if they are seen to be actively developing ethical consumerism. Organisations are encouraging individuals to believe that they have power in this arena; an individual can make a difference – usually by donating assistance in the form of money for doing something within the realms of their normal activity. You can pay for your shopping trip or holiday using a credit card that donates a proportion of your spend straight to charity. You can, it is claimed, offset the carbon emissions associated with your long-haul flight by having a tree planted on your behalf. Organisations allowing these choices are more likely to build consumer loyalty – a win-win situation – they build profit and the consumer can shop guilt-free.
