3D Business: What It Is - And Why It Is The Future

“The incentive is clear: businesses cannot thrive in a world in which people don’t. Protect people and the environment, and you will protect the future of your enterprise.” Paul Polman, Former CEO of Unilever

The notion that business has a higher purpose than generating profits is not a new one - it has its roots in some of the greatest businesses of the 19th century, from Ford, to Rowntree, to Carnegie. However, towards the end of the 20th century, and gathering pace in the 1980s, making money for shareholders became the raison d'être for business leaders around the world. The results of this single bottom line - the drive to increase profits with little regard for consequences for people or the environment - have been devastating. 

For the fashion industry, the impact of a one dimensional, profit-led approach is especially stark. One dimensional fashion business has created a global industry in which low pay, worker exploitation, a throwaway culture, and environmental catastrophe - from the disappearance of the Aral Sea to the plastification of the world’s water ecosystem - are endemic.

Yet it is the capacity for business to generate profit, to grow and to prosper, that gives enterprise almost unlimited power to reverse mistakes that have been made, while addressing the greatest challenges of our time, from poverty to climate change.

As the Global Agenda Council on the Role of Business, World Economic Forum, put it: "Business has been, and should remain, a driver of innovation and efficiency, a creator of wealth, and a harbinger of economic freedom. The challenge for business is to increase value for its stakeholders, while safeguarding the societal ecosystems in which it operates.

The concept of 3D business embraces the commercial, profit driven dimension that is fundamental to the impact of enterprise. It also places equal weight on two other dimensions that are fundamental to the success of our global society - people and planet.

At CO, we measure and define business success in 3D. We believe that the fashion businesses of the future will operate successfully and with equal rigour across all three dimensions.

Driving profit  - across the triple bottom line

Disregarding the societal side effects, we have seen phenomenal achievements when it comes to profit, productivity and wealth creation through a single bottom line approach in business. 

3D business: a world in which business works better for everyone - and the planet.

These achievements are made possible through rigorous and standardised accounting practices, target setting and accountability systems, backed up by national and international regulations and regulatory bodies. The businesses that have thrived against the single bottom line have monthly (often weekly) targets to meet that they are held accountable for, and that they are required to document and submit to a regulatory body in the form of annual accounts.

Consider for a moment how transformative it could be if the same level of rigour was required from all businesses not just against their financial goals and reporting, but also against their social and environmental goals and impact. 

Imagine if accounting regulatory bodies and shareholder value took into consideration the financial impact of the year’s activities on climate change, on pollution, and on the quality of the lives impacted across the supply chain. The potential outcome of such a system is that every business, everywhere, would be incentivised to safeguard the environmental and societal ecosystems in which it operates.  

This is the vision for 3D business. A world in which business works better for everyone - and the planet.

Business in 3D: Becoming a licence to operate

National or international regulatory bodies are still some years off regulating in favour of 3D Business. However, there is increasing evidence that a three dimensional approach to business is becoming a licence to operate and will be essential in order to compete for market share.

Between December 2018 and January 2019, the Young Presidents Organization’ carried out a survey of its membership — 27,000 business leaders in 130 countries, collectively generating $9 trillion in annual revenues and employing more than 22 million people — in which CEOs "emphatically affirmed a massive shift in mindset regarding the role of business leadership in today's society... Ninety-three percent of those surveyed said that business should have a positive impact on society beyond pursuing profits and wealth, a departure for most of these CEOs from previously held views. In fact, three of four respondents acknowledge that their perspective on this priority and their own role in advancing it (serving business and society) has changed over the past five years."

40% of those polled by the Deloitte Millennial Survey 2018 believe the goal of businesses should be to improve society.  By 2020, millennials will make up 40% of all consumers, influencing about $40 billion in annual sales. They also make up the workforce of the future - and it will be businesses that operate in 3D that attract and retain the top talent.

According to Antonio Zappulla, CEO Designate, Thomson Reuters Foundation, writing for the World Economic Forum: 

"Profit with purpose is set to become the new norm...The CEOs of the future will want their companies to be recognised as forces for good."

Implementing business in 3D

According to the British Fashion Council steering committee, the majority of brands engaging with London Fashion Week are now interested in operating in a more sustainable way.  When it comes to the Common Objective member base*, 55% of businesses on the CO platform have an operational sustainability policy, and 27% are already measuring their social and environmental impact goals.

For CO, this trend is indicative of a global movement - and momentum is growing.

More and more fashion businesses are operating across three dimensions and integrating social and environmental goals alongside commercial targets.  Despite this, less than 1% of fashion on the UK high street is promoted as ethical or sustainable. Here lies an enormous opportunity for fashion brands that operate in 3D to gain market share.

The Common Objective platform was created to support, and to reward, business in 3D. Our goal is to provide solutions for fashion professionals at every stage on the sustainability journey - from first steps to the leaders at the forefront of best practice.

We’ve created the CO 3D Business Suite to allow anyone, in any fashion business, based anywhere, to work towards excellence across the triple bottom line.

*Over 13,000 fashion professionals with over 1400 business profiles from 138 countries in development on the site, as of March 2019

Header image credit: Christopher Raeburn

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Author
Tamsin Lejeune

CEO & Founder at Common Objective

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