The COVID-19 pandemic has impacted all levels of society and has tested the sense of social responsibility of corporate Australia.
While companies are primarily concerned about making a profit, many understand that business is not just about short-term financial gain.
They know that if they behave responsibly they will earn credit from customers and society more broadly that will help them in other ways.
Supermarket giants Woolworths and Coles have had a profitable pandemic, as people have stocked up on food from their shelves, but they have given back to society, too.
When Qantas stood down 20,000 workers in March, both companies stepped up and hired thousands of them. They also led the way in promoting COVID-safe practices such as social distancing, special deliveries and shopping times for older Australians. It took courage for hardware retailer Bunnings to enforce the wearing of masks in its stores in the face of irrational hostility from some shoppers.
The banks have also played a positive role during this pandemic, which could rebuild some of the trust they lost as a result of bad practices exposed by the Hayne royal commission.
The Commonwealth Bank, Australia’s largest bank, this week announced an annual cash profit of $7.3 billion and a substantial dividend for shareholders. But it has also played its part in cushioning the shock of the pandemic by offering holidays on mortgage repayments. About 14 per cent of the borrowers who have taken advantage of this debt repayment moratorium are living on JobSeeker and could have been thrown on the street without this help.
Chief executive Matt Comyn promised this week he would work with his customers to help them repay their loans.
Yet not all companies appreciate the balance between profits and doing the right thing by wider society.
Private owners of aged care homes, who have earned huge profits until recently, are now in the spotlight as COVID-19 decimates residents of their facilities. The Herald has written about the owners of Heritage Care, which operates the Epping Gardens home in Melbourne, where 135 people have been infected. Its owners enjoy a lavish lifestyle, driving Ferraris and Maseratis. Some will ask why they could not have invested more in safety.
While the debacle of the Ruby Princess has raised questions about the role of governments, the inquiry by Bret Walker, SC, also revealed the cruise ship operator Carnival had failed to enforce some basic safety protocols and procedures.
The dilemma of corporate social responsibility goes well beyond the pandemic. Mining company Rio Tinto failed completely in its obligations to Indigenous traditional owners when it blew up a site in Juukan Gorge in Western Australia, which has been culturally significant for 60,000 years.
The WA government is now considering much stricter rules for protecting similar heritage sites. While some miners are claiming this is unnecessary red tape, BHP to its credit has endorsed them.
Mining companies, too, should appreciate that any short-term profit from the vandalism seen at Juukan Gorge comes with costs to their reputation with governments and their relations with traditional owners that will last for decades.
No area has been more fraught for business than how to deal with the challenge of climate change. Too often the fossil fuel industry has fought tooth and nail against any serious action.
Yet BHP on Friday updated its policy on its climate-related expectations of the business lobby groups it supports, telling them to advocate for Paris agreement-aligned emissions reductions and stop backing energy policies that favour fossil fuels over renewables.
To be sure, BHP’s new stance reflects its decision to exit its coal businesses but it shows a longer term perspective about the risks of climate change.
While some businesses do the right thing for ethical reasons, it is also often consistent with hard-headed profit-making, at least in the longer term.
Superannuation funds that own shares in many companies are now demanding they observe the standards demanded by their hundreds of thousands of small investors. Super funds have led the way in demanding an explanation for Juukan Gorge.
The banks that are now allowing their customers to defer loans and the supermarkets who are imposing safety rules are also building brands and consumer loyalty that will be worth real dollars in years to come.
Many business owners, of course, are fighting from day-to-day just to survive in the current crisis but large corporations which profit from a stable society have a role to play in helping carry Australia through this crisis.
Note from the Editor
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Since the Herald was first published in 1831, the editorial team has believed it important to express a considered view on the issues of the day for readers, always putting the public interest first. Elsewhere, we strive to cover a diversity of views without endorsing any of them.