Speaking on the Lloyd’s Register Foundation Global Safety Podcast, available here, Andersen, Chairperson of Lloyd's Register Foundation and Lloyd's Register Group states:
“I believe that long-term value creation is better than the sum of the short-term profits. But you need to have the courage. If you want long-term value creation, you need to invest. And that will probably have a detrimental impact on the short-term profit for the next few years. Investors need to accept the sacrifice on short-term profit in order to get to the long-term value.
“At Lloyd’s Register Foundation, we are working on a Value Sheet to help companies articulate and measure their social purpose aspirations. It is a tool companies can use with investors to force them to actually accept the sacrifice it has on the short-term profit in order to get to the long-term value.”
The Global Safety Podcast, presented by Professor Danielle George and produced by Fresh Air Production, investigates the biggest safety issues facing us all and looks at the latest science and innovation developments to safeguard our future in an unpredictable world.
Episode two of the third series sees thought leaders including Andersen discuss social purpose and how businesses who make a positive social impact can create a better, safer world for all.
June 27 2022 officially marked the ten-year anniversary of Lloyd's Register Foundation and the start of its journey as a social purpose organisation. With a rich heritage dating back to 1760, Lloyd’s Register has always focused on safety. Ten years ago, it converted from being an industrial provident society to being a company owned by the newly created Lloyd’s Register Foundation – an independent global charity. This was the start of a unique social purpose organisation, under the leadership of Thomas Thune Andersen, with a mission to engineer a safer world.
Andersen is joined on the podcast by Dr Anna Barford, senior research associate at the Cambridge Institute for Sustainability Leadership at the University of Cambridge, Professor Subi Rangan, Professor of strategy and management at INSEAD, and Peter Holbrook, the Chief Executive of Social Enterprise UK.
Holbrook comments on the growth of social entrepreneurship:
“There is a new generation of entrepreneurs who don't just want to drive profit at any cost and are really thoughtful about not only the kind of the moral crisis we're in, in terms of our relationship between business and society, but actually seeing a new emerging market where their businesses can really succeed through doing the right thing.
“There is a growing demand and a growing market, not just in terms of customers, but also employees and investors. Being an inclusive business, a sustainable business, an environmentally sound business, can actually help you gain competitive advantage. The commercial opportunity is really powering the movement.”
Professor Rangan makes the case for the importance of fairness in business:
“There is almost always a sacrifice, at least in the short run and maybe in the long run. If you want to pay your employees a living wage; that is a durable sacrifice. Principle number one should be fairness, not profit maximisation or wage minimisation.
“These are not economic decisions. These are moral choices. We have great theories of decision making. We do not have great theories of moral choices. We need to educate business leaders on character, not only on competence. And that's where business education, I think, needs to go.”