Growing momentum to put social purpose at the center of employee-owned firms
by Karen Kahn
Employee ownership organizations around the world are committing to supporting forms of employee ownership that embrace social purpose and sustainability goals. On June 22, the Japan Employee Ownership Association and the Southern Africa Employee Ownership Association announced their support for making employee-owned companies “exemplars for reducing inequality, tackling climate change and sustainability,” particularly as nations around the world recover from the COVID-19 pandemic.
Employee ownership has huge potential as part of a wide range of strategies that benefit society and the environment, including in COVID-19 economic recovery plans.–Tendani Nelwamondo, Southern Africa Employee Ownership Association
The notion that employee-owned firms should be leaders in measuring and achieving environmental, social and governance (ESG) goals was the theme of Graeme Nuttall’s Gandhi Foundation 2020 annual lecture. In that lecture, Nuttall said, “The employee ownership sector can lead the way in good corporate citizenship by embracing wider corporate purposes as part of what it means to be employee owned.”
Following Nuttall’s Gandhi lecture, the UK Employee Ownership Association, Employee Ownership Wales, Scotland for Employee Ownership, Irish ProShare Association and Employee Ownership Australia endorsed the call for broadening the goals of employee ownership to include social purpose.
In making the announcement this week, Tendani Nelwamondo, founding director of the Southern Africa Employee Ownership Association, said, employee ownership “has huge potential as part of a wide range of strategies that benefit society and the environment, including in COVID-19 economic recovery plans, saving jobs in company reconstructions, addressing economic challenges like renewable energy generation, and as an option for a business owner struggling to find a suitable buyer for their business. Furthermore, these values can be promoted throughout a company’s value chain.”
Art Hosokawa, chair of the Japan Employee Ownership Association, noted that “taking positive actions for society and the environment is in the blood of employee-owned companies.”
Graeme Nuttall OBE is a partner at the European law firm FieldFisher; its employee ownership team has been vital in shaping employee ownership models over the last three decades. Nuttall is the author of the Nuttall Review of Employee Ownership, which has been highly influential in growing the number of employee-owned firms in the UK by more than 300 percent since 2014.
Karen Kahn is a communications consultant and the editor of Employee Ownership News.