The new normal will require a new strategic approach to the circular economy

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On August 10, 2019, the influential Business Roundtable announced something that sounded like it could have been issued by the Vatican: Maximizing profits for shareholders should no longer be the only objective of corporations. Instead, corporations should be managed with a purpose to improve the future of our environment, citizens, employees and other business partners. Take it one step further, and corporations should no longer look at business, the environment or society as separate entities with varying degrees of importance—on the contrary the new thinking should focus on all three areas in an integrated manner, as the parts of an organization’s overall strategic and supply chain objectives:

• delivering value to our customers;
• investing in our employees;
• dealing fairly and ethically with our suppliers;
• supporting the communities in which we work; and
• generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate.

Think of it as the purpose-driven supply chain.

Purpose must consider all dimensions

When the statement was issued, the Wall Street Journal took exception in an editorial, and surely, somewhere Milton Friedman is turning in his grave. But, in the current environment, there is clearly something afoot that business needs to pay attention to with more than lip service.

While most companies believe that corporate social responsibility (CSR) should be a strategic initiative, the majority have not fully institutionalized it and are very cautious about adopting a comprehensive program. However, the innovators and early adopters of the CSR framework have transformed beyond this framework and have accepted the Business Roundtable’s suggestion for a new purpose-driven ethical enterprise supply network (PDE2SN) approach to their business model.

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