The government thinks big business has not pulled its weight in helping to sell its policies on reducing corporate tax. Business privately thinks Canberra’s environmental policy credentials are poor at best.
Meanwhile, the latest spat stems from the government’s misplaced notion that large business institutions have no wider licence to engage on social issues.
In picking this fight the government is taking on some of the goliaths of business. BHP chief executive Andrew Mackenzie has become an international environmental warrior in his attempts to reduce his own company’s global emissions and work towards cutting the carbon footprint of BHP’s customers.
Australia’s largest and most successful technology company, Atlassian, has made its campaign on climate into a public relations positive. It, like many other companies, has recognised that people, and particularly younger people, want to work for a company with a conscience and social principles. It’s good for business.
Similarly, Qantas’s high profile boss, Alan Joyce, actively promoted same-sex marriage as a means to be seen to be reflecting the views of his workforce and customers.
“We’re not going to pull back on what we say on social issues, because that’s important to our employees, our customers, our shareholders,” Joyce said this week.
Even billionaire rag trader Solomon Lew, not known for social activism, is keen to voice his support for anti-slavey in supply chains.
Issues that were once considered social have now landed squarely into the corporate domain and it is the companies’ owners – the shareholders – that have put them there.
Shareholders are increasingly expecting boards and management to exercise their social licence on everything from the environment to gender to slavery-free supply chains.
Environmental social and governance (ESG) investing is now mainstream and mandated by many if not most of the large superannuation funds that dominate the ownership of Australia’s largest and most important companies.
Many have policies that do not allow them to buy into companies unless the business has an audited climate risk policy, and gender targets.
These are no longer considered fringe issues and are instead recognised as fundamental to business risk and labour productivity.
A government that believes social issues are not part of the modern company’s remit is one that lacks the sensitivities to the broader feelings of the community – or the ‘quiet Australians’ that Morrison says he respects and represents.
Ironically it is Canberra that has been pushing for companies to be better corporate citizens and understand the social licence – as long as business doesn’t show government to be wanting.
Elizabeth Knight comments on companies, markets and the economy.