The Business Role in Creating a 21st-Century Social Contract

By: Aron Cramer, President and CEO, BSR

Long before the urgent challenges of the COVID-19 pandemic and the long overdue focus on racial justice, diversity, equity, and inclusion changed history, it was clear that our social contracts—the relationship between individuals and institutions—were no longer fit for purpose.  

For much of the second half of the 20th century, the roles and responsibilities of business, government, civil society, and people remained relatively constant and provided vital protections to support healthy and productive lives. But today, people are relying on strained protection systems that fail to keep up with our 21st-century realities. And criticism is on the rise over the value of capitalism and the purpose of business, with the desire to build an economic system that delivers truly shared prosperity while preserving the natural environment.   

BSR launched our contribution to the essential work of modernizing social contracts in 2018. We are committed to taking this work forward, and today we are pleased to present our new report, The Business Role in Creating a 21st-Century Social Contract. 

We are at a hinge point in history where transformation is both possible and necessary. 

In addition to the profound structural changes already remaking our world, 2020 has delivered truly epochal change. At the time of the publication of this blog, COVID-19 has left a global death toll that currently stands at nearly 475,000 people, remade public finances, and threatens to eliminate the equivalent of 195 million jobs around the world. And the tragic murder of George Floyd—and far too many others—is a powerful reminder of the deep structural racism not only in the U.S., but also globally, in addition to other forms of discrimination that continue to plague all societies globally.  

2020 has demonstrated powerfully the importance of a fully functioning social safety net, public health systems, and global collaboration. We see more clearly that the world remains too focused on short-term thinking, leaving us extraordinarily susceptible to shocks that create wide social and economic destruction, with the greatest impacts on the most marginalized groups. In the United States, recent powerful examples of how systemic and institutional racism continues to plague the country, and Black Americans in particular, reinforce the urgency of ensuring a social contract based on more inclusive models and practices.   

We are at a hinge point in history where transformation is both possible and necessary. Reforms to the social contract are clearly needed to protect public health, economic security, and the right of all people to participate fully in society.  

Without a truly modern social contract, the ability of business to innovate and thrive will be compromised.  

There is also a powerful case for business to embrace and contribute to this effort, We believe this work is essential to lay the foundation for business success through increased trust, workforce development fit for the changing needs of business, stable economic conditions, and social consensus on the development and implementation of new technologies and business models. Without a truly modern social contract, the ability of business to innovate and thrive will be compromised.  

Achieving this ambition will require unprecedented collaboration among leaders from all sectors of society: business, government, philanthropy, and civil society, with a goal to define and align on a vision for a post-virus world grounded in equity and inclusion, what the new social contract must deliver, and the roles of each sector in translating that vision into reality. The world is looking for leadership in a time of profound change. Business can and should fully embrace and fulfill its appropriate role by asserting leadership and innovation in its own practices, collaborating with business partners and other stakeholders, and using its voice to call for the public policy solutions that are so badly needed. 

The paper we are publishing today is a first step toward this vision. It speaks both to the underlying structural issues that prompted this effort as well as the new context brought by the pandemic and the renewed call for diversity, equity, and inclusion, not least concerning racial justice. We hope it serves as a foundation for further discussion with companies and other partners about how to make progress. Working together will be critical to achieve these crucial objectives and to turn our current crisis into an opportunity to create models that enable more resilient, fair, and sustainable economic and human development.  

The time is right to pursue a grand bargain that can create a more inclusive economy that enables people to thrive in dignity, preserves the natural world on which we rely, and creates more just and humane institutions that respect the rights of all. With this effort, we can truly meet the moment, and build the future. 

Originally appeared on BSR.