This piece first appeared in the Melbourne Age in September 2004
The message from big business during the current reporting season is clear. We’re doing very well thank you! The past quarter has seen record profits from Newcrest, Woolworths, Rio Tinto, IAG and Pacific Brands to name just a few. These aren’t just profits in the millions, but profits rated in the billions. Rio’s last profit registered 1.4 billion. BHP Billiton’s was 7.6 billion. Now that’s a big number. I previously thought a billion was only a number astronomers used, yet a billion is actually a thousand million. I know because I looked it up.
Yet these figures represent only a third of the much-discussed ‘triple bottom line’ now expected from big business. The triple bottom line involves reporting not only on financial matters, but environmental and social factors as well. The recently published Corporate Responsibility Index (The Age, August 28) rated companies according to a number of criteria including corporate values and community involvement. It was a terrific start in assessing big business on more than just financial performance.
Yet Australian business is slow when it comes to thinking beyond the dollar bottom line. Community partnerships, the concept that big businesses can band together to support initiatives that advance society is far more popular in the USA and Britain. The Levi Strauss Company recently pioneered the Community Investment Team (CIT) approach, where over 100 CITs around the world identify and invest in worthwhile projects.
The London Benchmarking Group is another. This is an association of unrelated businesses that donate to specific need areas. Companies such as BP, IBM UK, Marks & Spencer and Whitbread view social investment as a business obligation, and see no need to ‘own’ the investment as a brand recognition or PR tool. The linking together of businesses to foster social development may provide some marketing leverage, yet it’s the power of joint investment that’s more important. In this way, massive investment from a group of companies can be made towards society, and massive results benchmarked. It’s really quite simple.
In Australia, the areas of social concern have always been education and healthcare. The robust argument lately has centred more on education, and specifically federal government funding to the private school system. There’s either rage over the perceived neglect of the public system or rage over the possible withdrawal of funds from private schools. There’s also an enormous chasm when it comes to educational resources across both sectors. Not every private school is well resourced, while not every public school is broke.
Yet what if our big end of town took the lead from some other countries and saw education not only as the responsibility of government and individuals, but of the corporate sector as well…and I don’t mean the corporate takeover of our schools by Krispy Crème or Macdonalds!
An Australian equivalent of the London Benchmarking Group may consist of companies like Rio Tinto, Woolworths, BHP Billiton and IAG. Lets call them the ‘Aussie Helpers’ just for fun. These ‘Helpers’ may identify a few specific issues that need to be addressed during a year, and may decide that 5% of their total net yearly profit is all they can afford. They may argue that they already give to other charities, the arts, sports and community events so 5% is reasonable. Fair enough.
If 5% of net profit came from these four companies alone a total of 512.6 million dollars could be dedicated to particular issues over the year.
Then let’s say they decided to allocate just half of this towards the public and private education of Australians. Let’s call this the ‘Aussie Helper Education Fund’…a fund with 256 million dollars. If my research is correct, this is more than the total public works budget for Victoria’s schools in 2004.
Their advisors may nominate 150 public schools and 50 private schools that really need a hand across the country. Some may only get enough to build a new classroom. Others may get an assembly hall, specialist teachers or new heaters. Two and a half million among 200 schools buys a lot of resources.
Now if the top 30 companies in Australia gave 2.5% of net profit, we would see such a dramatic balancing in our education resources that the great private/public school divide would no longer be an issue. Imagine!
I can hear the cries of ‘red under the bed’ now. Yet doesn’t it seem a little odd that in the days of record profits from the big end of town, we are still experiencing an enormous chasm in the educational resources available to our children? Perhaps with just a little cooperation from our corporate champions we could not just narrow the divide, but fill it completely. By doing so, these champions would add substantially to their triple bottom line at a time when Australians are suddenly realizing the true meaning of billion…a potentially dangerous piece of learning.