Optimism in the minds of CEOs across the globe is at a record high, with many believing that 2018 may be the best year for the global economy since 2010. The same CEOs also claim to be anxious about the longer-term future, however, due to threats coming from situations over which they have seemingly no control.
Speaking at the Economy Days conference held on 22 March 2018, John Parkhouse, CEO of PwC Luxembourg, briefly presented the key results of the 21st PwC Global CEO Survey and described these “existential threats”, as societal issues like, “Protectionism, cyber threats, terrorism etc.”
He explained that today’s challenges of, “Global uncertainty, with opposing political views leading to increasing protectionism and nationalism; the ageing population and the general breakdown of trust in the public and private sectors means that, “We live in an increasingly fractured world, shifting towards fragmented systems.”
This sentiment was echoed by 82% of the CEOs questioned in the survey who listed, “Multiple beliefs and value systems; multiple rules of law and liberties, as well as nationalism and devolved nations,” as the greatest drivers of this change.
“We are not immune to these problems in Luxembourg,” Parkhouse continued. “Trust is a key issue. After events such as LuxLeaks and the Panama Papers, how to we ensure trust in the Luxembourg brand?”
He believes that this is not just a job for the government, but that the private sector also has a massive role to play.
“The government has set up many forward-looking initiatives like the Third Industrial Revolution, the Rifkin Process and Luxembourg’s green finance exchange, but where is the private sector?”
“There are plenty of good public/private partnerships taking place, but how much does the private sector actually drive change?”
Parkhouse called for the Luxembourg private sector to take action and recommended a “creating shared value (CSV)” approach, which is not only about value creation, but also about value enhancement. He said that a lot of companies already engage in corporate social responsibility activities, but that they are not part of the core business.
“We need to embed CSV into our core business, which means we will need to think differently about what value means to us. CSV means creating value for all the stakeholders that our businesses engage with to create a much bigger positive social impact.”
What is “creating shared value”?
CSV carries the idea that in order to overcome the profound and harmful disconnect between the needs of society and business, a business must create value for society alongside creating value for shareholders in order to be successful in the long term, according to the Financial Times.