The Four P's Model of Responsible Business
Money Matters has developed a “Responsibility Scorecard” based on Rodger Spiller’s doctoral research, that we use in our engagement with companies. Rodger’s research provided a holistic and explicit account of ethical and sustainable business in response to the challenge made by leading international responsible investment expert Steven Lydenberg, namely that all the pieces of the socially responsible company needed to be put together in a cohesive whole. Rodger's Four Ps model addresses what Lydenberg described as "this daunting task...for those who would reimagine and redefine the relationship between corporations and society."
The Four Ps are:
The company's stated reason for which it exists. A responsible business will explicitly include environmental, social and economic wealth creation within its statement of purpose. Purpose involves creating financial, social and environmental wealth, thereby making a positive contribution to the environment and society in a financially responsible manner.
These are the beliefs that guide the company’s action. Responsible businesses explicitly state and follow a clear set of principles reflecting core values and virtues. Principles that guide responsible business include fairness, caring, honesty, and courage.
These are the actions that a company takes to fulfil its purpose. It is at the level of business practices that the true test of environmental, social and economic wealth creation occurs, as practices reflect the application of purpose and principles. Practices address stakeholder concerns including community, environment, employees, customers, suppliers, and shareholders. Examples of some of the practices businesses might adopt are:
- the environment: the reduction, reuse and recycling of materials, energy conservation and environmental audits
- employees: effective communication, learning and development opportunities, safe and healthy work environments, and equal employment opportunities
- customers: industry-leading quality programmes, full product disclosure and safe products
- suppliers: long-term purchasing relationships, along with fair and competent handling of disputes
- community: innovative giving, volunteer programmes, and support for education and job training initiatives which strengthen the relationship between business and society
- shareholders: a good rate of return, comprehensive and clear information financial, environmental, social and governance information and effective management of corporate governance issues.
This involves the company reporting on how its practices have impacted its stakeholders, reflected its principles and created environmental, social, and economic wealth. Performance measurement involves qualitative and quantitative measures, using both stakeholder perceptions and company data to determine performance in terms of the triple bottom line.
The Scorecard is a tool that businesses are encouraged to consider to better understand their own Four Ps and areas of strength and concern.