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Social cohesion: The big business issue for 2012-2015

Here in London, smart pundits from the UK, Japan and the US are debating ‘balance sheet recessions’ on BBC’s Newsnight as I write.

The key takeaway from the conversation for me is their debate about social cohesion.

“How do you allocate pain?” is the question posed by the FT’s US editor Gillian Tett. Allocating pain does not win elections.

The thesis is this: Near zero growth requires immense social cohesion for democracies to withstand ‘lost decades’.

Japan, culturally, has that social cohesion. Europe has it only in a very local sense, at best.

Our coming lost decade here in Europe will require immense social cohesion to withstand the pain allocation.

No matter where it falls, and it will fall on the poorest hardest.

Large companies, currently paying down debt rather than borrowing money despite the low interest rates, will need to make a serious contribution.

It’s time in 2012 for heads of CSR and Sustainability to educate their boards about this. There are many compelling ways to frame this debate for CEOs that will make sense to them.

We’re all going to need to get a lot better at doing that.

NB: Control Risks recently held a webinar on the global risks in 2012. Social protest features heavily. Check it out here. It’s a useful tool for other executives who need to understand social risk.