He also announced the launch of a new master’s degree in sustainable management and technology, to prepare students to drive the transition towards a more resilient and environmentally responsible and inclusive economy, while harnessing the power of technology.

It is a joint center drawing on the expertise of the members of E4S — IMD, EPFL and the University of Lausanne (UNIL).

Academia has a starring role to play in the transition to a sustainable world

Nouria Hernandez, Rector of UNIL, calls on institutions of higher education to follow their moral imperative to act to protect the long-term future of people and the planet. “Only so much of our natural resources are left,” she says. “We will run out soon enough for it to affect our children.” Most people fear change, she says, and the urgency of the need to act is not visible.

But if the problem (rising emissions) is simple, the solution is complicated. Therefore, positive change requires interdisciplinary collaboration.

“This is exactly the type of problem universities should tackle,” Hernandez says. “It concerns things as different as the calculation of Co2 emissions to human behavior. And ultimately our survival. That is why I am so excited about E4S.”

This perspective was echoed by Martin Vetterli, President at EPFL, who says: “We can look at these problems in a holistic way. This is really what it takes. Technology alone is not going to solve problems. Having great ideas without having technologies that deliver, won’t either. And if the real economy won’t adjust, we can’t hand over the planet to our children.”

Jean-François Manzoni, President of IMD, says that his institution also has a responsibility to help in the transition to a more inclusive and ecologically sustainable economic system. He outlined three ways to do this.

First, by helping organizations and executives to understand the urgency of the situation. Second, by helping leaders and organizations understand the link between more inclusive and sustainable behavior and short-term and longer-term profitability. Third, through research activity that helps organizations to put purpose at the core of strategy.

Says Manzoni: “One of our roles is to highlight that, increasingly, it will not only be possible for organizations to do well (financially) by doing good (for the world), it will only be possible to do well by doing good. Because governments, regulators, communities and society in general will increasingly force organizations to internalize the social and environmental cost of their actions.”

Balancing purpose and profit

Colin Mayer, Professor of Management Studies at University of Oxford’s Saïd Business School, calls for a fresh understanding of the purpose of corporations in a conversation with Anand Narasimhan, IMD Dean of Faculty and Research, who also leads the research pillar of E4S.

He highlights a recent shift from a profit maximization doctrine spread by the late Chicago economist Milton Friedman to a recognition that the purpose of business is to serve all its stakeholders.

This shift was reflected, Mayer argued, by the statement from the Business Roundtable group of top chief executives last year that essentially said maximizing shareholder value was no longer the priority.

“The purpose of business is to solve the problems that you and I as individuals, society and the natural world face,” Mayer says. “And to do so in a form that is commercially viable. It’s not about philanthropy or charity; it’s about hard-nosed business.”

He argues that a clear purpose can help organizations to be more resilient to future shocks: “Crises destroy economic activity and capital but they also create it, because they create new problems for us to solve.”

For example, he highlights the current coronavirus pandemic. “It requires new ways of working, communicating, traveling, socialising and entertaining,” says Mayer. “The way we have been experiencing life has been fundamentally changed, and that creates tremendous opportunities for businesses moving forward.”

E4S aims to support organisations as they seek to capitalize on these opportunities, and also help facilitate the broader transition to a more sustainable, inclusive planet for everyone.

“The way foreigners conduct business shouldn’t be Switzerland’s burden”

“Why should a Swiss company be held accountable for illegal or human-rights violations committed by foreign suppliers who, on their own soil, with the inaction or even complicity of their government, do not respect these fundamental aspects?” asked Cristina Gaggini, the director of economiesuisse from the French-speaking part of Switzerland.

As well as flagging up the problem of liability, she also pointed out how Switzerland and its economic fabric would do well to refuse the vote as it would avoid a whole host of legal obstacles inherent to the initiative.

Perception of the initiative: what does the research say?

The E4S center conducts research on how the role of economic actors is perceived, with a view to encouraging debate and positioning various parties. Research carried out by Anna Jasinenko from the HEC faculty of the University of Lausanne, and Vanina Farber, from IMD, together with colleagues from EPFL, shows that the current pandemic-induced crisis has led to more support of the initiative. This indicates that corporate liability claims have increased as a result of the crisis.

“The COVID-19 crisis has repositioned social issues related to the role of key business players,” said Vanina Farber. “Respect for human rights being at the heart of these issues, the time is ripe to have a discussion about the effects that the adoption of the initiative would have. And this is true whether the consequences turn out to be positive or negative, especially in terms of enlightening the population as much as possible about what is at stake in this vote.”

While most participants in an E4S survey agreed that companies have a responsibility to contribute to the common good, an interesting dynamic has appeared during the pandemic. While opponents seem to be more supportive of the initiative, early supporters now have a less favorable perception of its legitimacy.

However, this negative effect has been much smaller than the positive effect of the change in attitude of opponents. Opinions are less polarized today than at the beginning of the pandemic.

Playing on dogmas

SMEs were well represented during the roundtable. Christophe Barman (pictured), founder of the business services company Loyco, pleaded for the rapid emergence of a progressive model that could get rid of the dogmas that weigh on our perception of the economy.

“In addition to sustainable commitment – which is not an option but an obvious and immediate necessity –  it is high time for umbrella organizations and other entrepreneurial firms to better represent the interests and motivations of the current generation,” he said.

“Today’s employees are looking for meaning in what they do. Without this, I am willing to bet that irresponsible economic players will find it increasingly difficult to attract talent to their teams in the near future”.

From soft law to hard law

At the legal level, it seems that the initiative, whether or not it proves complex to implement, is part of a today’s social and political reality, as confirmed by a look at our European neighbors whose projects in the area of corporate social responsibility (CSR) have been multiplying for some time now.

As for the question of controls, if the initiative is accepted, it would seem that “the various solutions and potential applications are still unclear,” said lawyer Julie Wynne of the Froriep law firm.

In the event of rejection, the indirect counter-project developed by the Parliament, would come into effect.