24/7 Live Chat Bpo Services Provider
The global crisis in financial markets and the current and sudden economic downturn raise a range of important and urgent questions regarding corporate sustainability generally and in Turkey. According to a recent UN Global Compact study, there are five important questions CEOs need to ask themselves:
Amid this context, Turkish CEOs might address the overriding objective and priority of global business leaders and stakeholders. Specifically, CEOs need to restore confidence and trust in markets. They need to manage a paradigm shift from short-term profit maximization to long-term sustainable value creation. In this way, corporate responsibility will become a cornerstone of ethically robust markets. Implementing such an approach is a major challenge in Turkish enterprises.
Turkish CEOs need to make a commitment to sustainability in the spirit of the global principles to help the private sector and markets regain the confidence and trust of the public and other stakeholders.
With respect to the five key questions above, Turkish CEOs need to lead the way:
At the core of the current crisis is a collapse of trust in capital markets. While lack of proper regulatory controls, accountability and transparency are all cited as key factors in the build-up to the crisis, it is also clear that financial markets’ obsession with short-term over long-term considerations played an important role in destabilizing markets. At the same time, there has been insufficient respect for universal “guiding” principles or values – values that encompass both commercial and ethical dimensions.
A company’s principles, mission and focus on long-term considerations could play a major role in helping to restore trust. In other words, by demonstrating a commitment to the tenets of corporate sustainability, Turkish companies can have an opportunity to help domestic and international markets regain the trust of stakeholders.
With respect to Turkish financial institutions specifically, CEOs can provide a platform for asset owners and fund managers to demonstrate a commitment to long-term issues and values, while reinforcing positive actions by investor companies.
With the possibility of the Turkish government to follow the lead of the U.S. and European governments, the Turkish government may take a more active role in establishing both greater economic stimulation and oversight. This means the Turkish CEOs must play an active role in formulating voluntary initiatives that the government must protect and advance. In financial and non-financial areas, lowest-common-denominator rules and policies will still leave space for innovation and value creation that go beyond the “common bar”. There are corporate examples in areas such as climate change, human rights, water and anti-corruption, to name just a few material issues.
More and more in Turkey, there will be a need for voluntary initiatives to reinforce and complement regulatory structures and to fill voids. This is particularly true with respect to the issues and principles to conform with EU standards.
(SPECIAL BOX, CALL OUT) In this climate of economic decline at the national, regional and international levels, there may be a fear that companies cannot “afford” to invest in corporate responsibility programs any longer. But as a CEO quoted in the Financial Times recently noted, “Sustainability will remain critical to our business even during an economic downturn.”
Issues such as climate change, human rights and corruption will not disappear due to today’s economic decline. In fact, if climate change is not vigorously and proactively addressed now, it will become the cause of the next major economic crisis. But the business case for managing these and other issues is today abundantly clear. In fact, according to UN Global Compact, one could argue that companies operating in a difficult economic environment have much to gain by improving their environmental and social performance through initiatives such as the. This is based on the following key observations:
Therefore, Turkish CEOs have a unique opportunity to make the case that a commitment to corporate sustainability is as important in tough economic times as in robust times – perhaps even more important. In fact, investments in sustainability made during this time of downturn will arguably serve to create competitive advantages for Turkish companies when markets begin to recover.
The financial crisis has made clear that economic integration means that a contagion can quickly spread to other interdependent regions of the world…and Turkey is no exception. With this current unprecedented example, there will be the inevitable calls to turn back the clock on integration as countries may see protectionism as a potential safeguard.
Decades of experience demonstrate that a commitment to a level playing field in trade and investment, based on multilateral rules, offers the best hope for wealth creation, development and peaceful economic integration. However, the Turkish market cannot deliver prosperity by itself, let alone justice. The poor and workers do not have “golden parachutes” to break their falls. Therefore, to be legitimate and sustainable and to protect the most vulnerable, Turkish CEOs need to advocate strong political resolve to provide for the necessary safeguards.
The strain on public finances as a result of rescuing major international financial institutions will surely lead capitals to study their priorities in sustainable development. However, there is a strong case to be made that addressing critical social and environmental issues, such as poverty and climate change, can spur growth and address long-term challenges. Development assistance and investments in public-private partnerships are crucially important in difficult times to protect societies and economies from risks that are already in the system. Commitments made to development objectives must be honored.
The financial crisis and the current economic downturn are making a major wound in the evolution of markets and the private sector. Restoring trust and confidence, and shifting to a long-term paradigm of economic value creation in the spirit of universal values are critical. To restore momentum towards sustainable and global integration, it is more important than ever that Turkish CEOs build market legitimacy and gain political support based on sound ethical frameworks such as the UN Global Compact.
(SPECIAL BOX OR CALL OUT) Turkish CEOs need to align their business operations and strategies with internationally accepted principles in human rights, labor, environment and anti-corruption.