From the perspective of sociology, globalisation is a process in which the world is said to be becoming ever more interconnected, with more identifiable characteristics of a global society and global culture alongside ones associated with specific countries or regions. The rise of the package holiday in the 1960s and 1970s may be identified as one of the key factors of cultural globalisation in the UK, compounded by the arrival of (financially) inexpensive air transport. This may have contributed to households sitting down to meals of pasta, hummus, or nachos rather than ‘meat and two veg’ followed by a stodgy pudding with custard. Keith Floyd may have introduced us to some unusual foodstuffs from France, but a trip to any local supermarket today can usually mean that the ingredients for a Nigella Lawson or Rick Stein recipe are now easily available and inexpensive.
Technological developments have made the world feel smaller than it once did, with some remote areas of the planet (excluding the ocean beds) becoming far more familiar than they once were. With a good internet connection and reliable tech, it is possible to drop in on webcam footage of newly hatched birds or receding icefields on the furthest reaches of the planet or, thanks to NASA and the James Webb Space Telescope we can observe history unfolding in this and other universes.
However, as the butterfly effect explains, a small action in one part of the world can contribute to a massive issue in another. For example, the consequences of fast fashion on landfill at home and abroad, pay and working conditions in textile factories and the environmental impact of focusing on one mass crop to the detriment of local subsistence and water shortage or pollution.
The decisions we make locally and individually can have a global impact. Never has ‘no man is an island’ ever been so apt, especially as some islands are at risk of being lost to rising seas, with local populations dispersed to welcoming neighbours or individuals keen to head for the wealth of more ‘developed’ nations. As with the global effects of the conflict in Ukraine, the interconnectedness of countries and people is surely no longer up for debate.
As with individuals, companies do not exist in isolation. Successful and sustainable businesses underpin our economy and society by providing employment and creating prosperity. To succeed in the long-term, directors and the companies they lead need to build and maintain successful relationships with a wide range of stakeholders. These relationships will be successful and enduring if they are based on respect, trust and mutual benefit. Accordingly, a company's culture should promote integrity and openness, value diversity and be responsive to the views of shareholders and wider stakeholders.
Even without the broadening of the application of s172 of the Companies Act 2006, the power and reach of social media and the interconnectedness of societies as a consequence of globalisation, has given all organisations the cause to reflect on their operational models, values and priorities. The potential impact of a single individual or organised campaign group can be incredibly powerful. No organisation can afford to ignore those voices: the utterings of an online influencer can make or break a brand; similarly decisions of where to sell a brand of ice cream has impacted the stock market value of a household name company. The rise in the power of stakeholders and the interests of the general public in climate change and social justice has led to some companies audibly and demonstrably improving their business models. Others have been accused of ‘greenwashing’ and some countries of ‘sports washing’, such is the rise in the importance of being seen to be ‘good citizens of the world'.
Delivering appropriate, relevant and effective ESG is not easy – in any organisation. The weight of public opinion, colleagues’ interests, shareholder concerns and regulatory reach adds competing moving parts to the work of the board and directors. This can result in shortcuts being taken to appease the latest calls for improved business behaviours. However, with a more interconnected world, it is easier for individuals and groups to flag up any instances where declared stances and real actions do not align. Any commitment to ESG, therefore, has to be genuine and not just box-ticking. The organisational culture has to fit the actions observed to gain trust, traction and sustainable support for an entity to continue to exist and operate. This is one example of ‘faking it until you make it’ should not be adopted.
To help you find resources on ESG, we have put together a webpage with links to our content, including blogs, papers and relevant courses. Take a look at our ESG resource hub.
