The business of belonging

Strengthening bonds between business and place

21 October 2020

By Ben Franklin and Rosie Fogden

6 minute read

This report seeks to capitalise on the goodwill shown by businesses for communities during the crisis, redefining the role of business within place for the benefit of all stakeholders.

The business of belonging considers how we can drive an inclusive recovery through connection to place. Drawing on polling data commissioned by CPP, it provides new insight into the perspectives of both large and small businesses and sets out recommendations for how business and government leaders can strengthen the bonds between companies and their communities.

What is the business of belonging?

Stalling labour mobility means that communities are highly reliant on their local economies and people want businesses to play a greater role in their area. Previous CPP research shows that the majority (67%) hold businesses responsible for providing good jobs where they live and 51% think large businesses should do more to address specific local issues such as public health, homelessness and crime. This sentiment has been expediated by Covid-19 with 8 in 10 people thinking that businesses currently receiving government support have an increased obligation to act in the interests of society.

Businesses are essential actors in our society that have for too long been seen as bystanders on social issues – concerned only with the company specific goal of profit maximisation. Yet the current crisis has shown this is not always the case, with businesses exhibiting a wide range of behaviours in response to the pandemic. At best, businesses have gone above and beyond to support their workforce and local communities, while at worst, businesses have exploited workers and flouted regulations.

In September, CPP polled over 600 businesses and reveals that Covid-19 has also accelerated businesses' appetite for change, with many employers feeling greater social responsibility towards their workforce:

  • 67% felt that they had greater social responsibility in response to the Covid-19 crisis
  • 42% felt they had greater responsibility to use government funding to maintain pay
  • 40% felt they had greater responsibility to offer secure job contracts to staff

However, the polling also highlights the significant room for improvement amongst UK businesses when it comes to meeting these responsibilities. While companies have demonstrated their appetite for demonstrating greater social responsibility, the report reveals that:

  • Only 35% of employers are meeting all of our criteria for providing good jobs to their workforce.
  • Only 21% of businesses annually review the impact of their business on the local community.
  • Just 32% used suppliers that directly benefit the local community

CPP argues that businesses will need to go much further to address this gap and commit to local economies across the country, investing in places and the people who live there. To ‘level up’ society, and support businesses to invest more in the economic, social and environmental fabric of places, CPP calls for bold national reforms by the government including:

  • Amending the Companies Act to include the local community within a new purposeful business framework.
  • Creating a private-sector led recapitalisation fund for struggling but otherwise viable businesses as part of the new industrial strategy, with investment dependent on businesses’ commitment to meeting community objectives.
  • Funding the creation and survival of social enterprises, which already embody the principle of belonging with their social mission giving them a strong connection to place.
  • Developing a clear framework for measuring social impact, working to build a consensus around measurement so that businesses’ social contribution can be transparently and comparably assessed

As well as setting out recommendations for the government, CPP is also calling on business to recognise their own responsibility and act now to:

  • Secure social value for the local economy through their supply chains, following the example of the Cabinet Office’s recently published social value model.
  • Agree and commit to mutually beneficial local social objectives with local government and the wider community, building on existing examples of collaboration such as the Wigan Deal for Business or the Bristol One City Plan.
  • Pay the real living wage, as set out by the Real Living Wage Foundation and restrict the use of zero-hours contracts to reduce adverse consequences of insecure employment for society.

Rosie Stock Jones, Senior Analyst at CPP said:

The Covid spirit displayed by many businesses up and down the country has proven vital in addressing the health and economic crisis we face. But for many places, recovery remains dependant on the investment and job opportunities available locally. We need businesses to be providing quality jobs and training, especially in in deprived areas, and to think about the impact they can have through their supply chains on local economies.

This is not a philanthropic exercise – businesses gain from community assets like transport, healthcare and pools of skilled labour so investing in the community will benefit them as well.

But the government also needs to recognise the momentum for change and back it up with bold reforms to company law and with financial support for struggling businesses that are already living the community spirit.”

Cllr Craig Cheney and James Durie, Co-Chairs of the Bristol Economy Board said:

“In Bristol, our One City Plan approach is generating impact by bringing private and third sector city partners together with the public sector to work towards a shared mission of a fairer, healthier, more sustainable Bristol. Too many places worry that if they are clear about what they expect from local businesses, in terms of employment and commitment to the local area, then they will choose to relocate elsewhere, but in Bristol we have shown that this need not be the case. We have all kind of businesses represented on our Economy Board, and they understand the positive impact that tackling economic exclusion can have on improving their long-term productivity.”