INTERNATIONAL CONSULTATION – PARIS In the current moment of great distress caused by war in Ukraine and in still presence of problems related to the covid pandemic we are forced to post pone the Paris Consultation Paris  next year and we will indicate as soon as possible a new date.

Dear All members of the foundation,

In the current moment of great distress caused by war in Ukraine and in still presence of problems related to the covid pandemic we are forced to post pone the Paris Consultation 2022,  next year and we will indicate as soon as possible a new date.

BUILDING AN INCLUSIVE GLOBAL ECONOMY:

THE ROLE OF BUSINESS COMPANIES

Protecting the poor, the vulnerable and promoting sustainable prosperity

Paris, March 24th– 25th, 2022

 

1 – Introduction

The teaching of Pope Francis from the beginning of his pontificate is marked by repeated statements on the economy. In his first Apostolic Exhortation Evagelii Gaudium (2013), he sharply condemns “an economy of exclusion and inequality” and he writes: «Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality. Such an economy kills» (n.EG, 53). Pope Francis calls us «to seek new ways of understanding the economy and progress» (Laudato Sì, n. 16) and to develop a better financial and economic system for the 21st century. At the same time, he is inviting all of us to translate a new way of thinking into a new way of acting.

This invitation is specifically addressed to business companies which are required to invent and develop new models of business more inclusive, more attentive on creating long-term economic, social and environmental value, instead of being focused on profit maximization only.

In accordance with the above indications, the 2022 Centesimus Annus Paris Consultation intends to reflect on the role of business companies in developing a new more inclusive economic model, both at a theoretical and practical levels, with the help of academics, entrepreneurs and professionals, in order to match theoretical analysis with practical concerns, in line with the Pope’s indications. For Christian business leaders, inclusion should be at the heart of their inner life and thus be a central thread in their actions. Nevertheless, it is easy to say, more difficult to do every day. This central thread is all the more crucial as the Covid crisis has drawn new and sometimes hard lines between workers, sectors and generations.

The 2022 Consultation is organized in four different sessions, three of them dedicated to a restricted and selected audience, and thus more suited for discussion and in-depth analysis, and one final public session in which the contents and the main conclusions of the three closed sessions will be shared with a wider audience. A short description of each session is provided in the following paragraph.

 

2 – Consultation’s topics description

In his address to French catholic entrepreneurs participating in the “Journey of the common good in the capital” on the 2nd of December 2019, Pope Francis recognized that it is not always easy to reconcile the demands of the Gospel with the demands of business and commerce; but, he said, the “evangelical values” that entrepreneurs and managers hope to implement in their businesses provide an opportunity for “genuine and irreplaceable Christian witness”. He added: “In the Encyclical Laudato si’, to which I refer you to nurture your prayer and your reflection, a certain evaluation is made of the situation in the world, of certain systems that regulate its economic activities, with their consequences for people and the environment. It is an evaluation which may seem at times severe, but which leads – I believe – to a cry of alarm at the deterioration of our common home, as well as at the multiplication of poverty and slavery which innumerable human beings know today. Everything is connected.

Faced with this reality, and being actors, as far as you are concerned, in the systems in question, you certainly do not have an immediately effective response to give to the challenges of today’s world. In this, you may sometimes feel powerless. And yet you have an essential role to play. Because, even in a modest way, in some concrete changes of habits and style, whether in relationships with your direct collaborators, or even better in the dissemination of new corporate cultures, it is possible for you to take action to change things tangibly and, little by little, to educate the world of work in a new style”.

The Covid-19 pandemic has highlighted severe flaws in supply and distribution chains, in the internal organization of companies, as well as the dependency of every company on its externalities such as supplier and customer well-being, or access to sustainable environmental resources. It has also highlighted that a pure financial measurement doesn’t reflect the true value creation (and the quality of that creation) of a business. The Consultation intends to investigate how robust is the perception, among business leaders, that is this real value creation that should be accurately measured. Another crucial issue refers to the adoption of ESG criteria and impact measures. How widespread is the knowledge of benefit corporations and of existing impact measures?

The general points raised by Pope Francis in his social teaching can be subsumed in the following specific questions directly addressed to business leaders and which will be the general focus of the Consultation:

  • How can entrepreneurs and business companies include in their governance practices the full consideration of the interdependence of their activities within the ecosystem in which these activities are placed?
  • How can managers take appropriate consideration of the impact of their actions on society and environment?
  • How can they connect the short-term urgencies with the long-term value creation, in harmony with the externalities of the business?
  • How should they use the Catholic Social Teaching to resolve conflicting objectives and constraints in his everyday choices?

 

First Session: Short term inclusion: the lessons of the pandemic

The first session of the Consultation is devoted both to a thorough analysis of the consequences of the pandemic and to investigate, in the light of the COVID crisis, how can decision makers fast react and include in their guidelines the impact of their decisions on the people.

Deep diving on root causes, lines of actions and behaviors in our companies and organizations, the session would first focus on economic and social inclusion: how to place human beings, i.e., our Fratelli, at the center of what we do every day? This perspective has to be enlarged to environmental responsibility in the light of Laudato Si’ with renewed issues, such as the impact of technologies. A crucial element of the reflection is the need to take fully into account what personal inclusion means and eventually acknowledge that no actions nor behaviors can be consistent, sincere, and sustainable if we don’t take our inspiration in a real inner life fed by our faith in Jesus Christ.

More specifically, the COVID crisis has created new wedges and inequalities with potential exclusion on at least 5 grounds:

–          Between workers who had to come to their duties no matter what and those who could work digitally: how to include the not digitally savvy?

–          Between workers who enjoy a protected status (civil servants, employees of large corporations) and those who are self-employed (including agricultural workers and business owners): how to include the non-protected workers?

–          Based on the assets: up to this day the marked resilience of the stock markets implies an increasing inequality in terms of possible resources and precariousness, and this inequality can end up in social tensions: how to include those who do not access capital?

–          Based on the age: retirees are obviously the first victim of the pandemic but from an economic perspective, graduates and those seeking to enter the workforce are the ones most heavily affected: how to include the youth?

–          Based on gender: Women around the world have been deeply affected by the COVID-19 pandemic, which has widened the inequalities—both at work and at home—that women face daily: How to include women?

 

Second Session – Developing an inclusive alternative economy: the responsibility of the companies, new models of business, new value-based leadership 

The second session of the Consultation aims at investigating how could concretely be carried out Pope Francis’ indication of an overall rethinking of the current financial and economic system, whose current approach seems to have lost sight of the needs of individuals, families, and local businesses, developing a “globalization of indifference” (Evangelii Gaudium, 54).

The ethical message of the Gospel can contribute to the renewal of the contemporary economy, making it more humane, practiced as an activity “by man, of man, for man”. In this perspective, economic activity must be configured according to humanistic and not individualistic requirements, taking to heart the dignity of every person. A more humane economy is an inclusive economy. This means that everyone has the right to participate in economic and financial life and to contribute, according to his or her abilities, to the economic progress of the country to which he or she belongs and of the human community.

A change towards a more inclusive, sustainable and trusted economic system that addresses the needs of all the people and the planet, requires integrated policies applied in coordination on the fields of education, health, economy and finance, labor and trade. On each of these areas companies can do a lot both directly and indirectly through cooperation with policy world.

All have a role to play in developing an inclusive alternative economy and have the capacity of “choosing what is good and making a new start” (LS n. 205). We need to promote at all levels – education, health, economy and finance – labor, trade – an effective organizational change to shape a culture of dialogue, sobriety and solidarity. A particular change is required in business and leadership models. We need to change the leadership models adopting one based on values. Values-driven organizations generate – according to many researches – higher levels of employee engagement, higher retention rates, and lower absenteeism. Because employees feel cared for, they are willing bring their creativity and discretionary energy to their work which are crucial for the success of a company (see Raj Sisodia, David Wolfe and Jagdish Sheth, Firms of Endearment: how world-class companies profit from passion and purpose, Upper Saddle River, NJ; Wharton School Publishing, 2007). Values-driven organizations also generate more consumer loyalty and more societal goodwill, therefore more inclusion. The reasons they do this is that they strive to meet the needs of all their stakeholders (see John Mackey and Raj Sisodia, Conscious Capitalism, Boston: Harvard Business School Review, 2013). This in turn generate high levels of trust. Trust is the glue that bonds people together and the lubricant that allows energy and passion to flow. Trust builds internal cohesion.

Questions: are companies aware of the urgent need to adopt new inclusive and sustainable business models? Are they changing their strategic plans to include non-financial sustainability goals? What measurement systems do they adopt to evaluate the achievement of non-financial objectives? Companies recognize the necessity of a new style of leadership, like the Value-driven Leadership? According to them which characteristic must have values-driven leaders to cope with the economic, social and environmental aims? How do business companies assess and compensate employee’s values?

 

Third Session – The concrete actions companies can take to build an inclusive global economy:  testimonials of sustainable business models

This third session aims at analyzing the recent evolution of business models in order to investigate whether progress towards a more inclusive economy has really occurred. The analysis will be carried out through the testimonials of entrepreneurs and managers actively involved in promoting new more sustainable and more inclusive business models.

Since the last few years, a large number of initiatives emerged among investors and managers of large companies (the EPIC Initiative, the Value Balancing Alliance and the meeting of 34 CEOs during the G7 summit in Biarritz, the 2019 Business Roundtable Statement on the Purpose of a Corporation, the 2020 World Economic Forum Manifesto). Is it the tip of the iceberg or a true movement that has started?

Financial and accounting norms are very powerful frameworks governing business decisions (see e.g. the EU’s regulation on sustainability‐related disclosures in the financial services sector – the SFDR – adopted by the European Parliament and European Council on 27 November 2019 and applied to certain financial services sector firms from 10 March 2021). What type of common will between business and social leaders could help to redesign business performance measurements? In light of Laudato Si’ and Fratelli Tutti, would Christian leaders be able to take a special leadership or advocacy role in redesigning these norms?

A generational shift is in motion, with 2.5 billion people between 15 and 25, with a deep conscience of the work to be done to preserve our ecosystems. Their voice is being increasingly taken into account by business and political leaders alike. What impact can young people have on business leaders to better include ESG concerns in their choices?

Technology adoption is spreading fast in certain sectors, but how to discern if technology is serving humans or rather enslaving them? More generally, is technology adoption a threat or an opportunity towards more human-centric and more society-centric organizations? What are the key positive and negative effects of technology adoption on the company (and its external partners), on its environmental footprint and on its societal impact? How to ensure that business leaders ask themselves the right ethical questions before investing or adopting in a new technology (AI, blockchain, crypto-currencies, online meetings, Virtual Reality, etc.), and how to deal with conflicting constraints?

Finally: What are business companies willing to do or already doing concretely? Are they adopting ESG criteria or are they becoming B. corporations? Are they changing their strategic goals? Are they trying to propose rather than to impose? Are they taking care of everybody dignity? With which policies inside the companies? How to realize an inclusive business model and a Values-based leadership?

 

Fourth Session (public session): The role of companies in the path towards a more inclusive world.

This final session is aimed both at disseminating the contents of the three closed sessions to a wider audience and, in accordance with the Foundation’s statutory purposes, at promoting the knowledge and concrete implementation of the principles of the social doctrine of the Catholic Church.

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