Chief Executive Officer, Vedanta Resources
Corporate managers have a fiduciary obligation to deliver on the expectations of their shareholders in a legally compliant manner. By contrast, there is no regulatory requirement for businesses to create social value for the various stakeholders in society. As a result, there is an unfortunate perception that the corporate sector ignores social obligations and impact.
This is not in fact the case. Though there are, indeed, exceptional cases in which companies choose to ignore their social responsibilities, for the most part, those who have been in business for a long time know that their relationships with their employees, their communities and their customers require at least some degree of engagement.
Expectations on this front are rising. Today, sustainable business practices demand that attention be paid to social impact. It is therefore imperative for corporations to build 'inclusive capitalism' into their operating models.
I believe that - in the extractive sector in particular - the social license to operate is the strategic bridge that enables management to strike a balance between maximizing the investors' returns and fulfilling societal responsibilities. Mines cannot relocate in the way that factories can, and they generally have a lifespan of many decades. This means that operators have to work within a framework that integrates ethics, governance, sustainability and corporate social responsibility while also generating returns for their shareholders. Tax transparency is a critical element.
By taking care of people, the planet and profit a corporation can create a positive socio-economic legacy: it can improve the state of the world. 'Inclusive capitalism' can help foster sustainable growth and prosperity for society at large so long as there is constructive communication and mutual respect between governments, regulators and corporations, and greater accountability to society from all partners.