3OXERA |
BEST PRACTICE REPRESENTATIVE
balance between five forms of capital
– financial, physical, human, social and
natural – and represent the needs of all
stakeholders and shareholders in the
long term. We believe that economics,
with its ability to understand trade-offs,
plays a vital role in establishing this new
approach, providing understanding
and insights around which businesses
can coalesce. It is vital for organisations
to comprehensively understand and
quantify the trade-offs between forms
of capital, to model cause and effect,
and to create frameworks that help
businesses to stay within the boundaries
of competition, fairness and regulation.
Applying this new approach
We focus on applying this thinking to
ensure the suitability and success of our
organisation and the clients we work
with. For us, a level of investment in all
five forms of capital – financial, physical,
human, social and natural – achieves
the right balance. We embed these
values in our frameworks, allowing us
to remain competitive and innovative
and to attain our long-term goals.
As an economics consultancy, we are
acutely aware that one of our main
sources of capital takes the form of the
talented individuals who work with us.
These bright people could be doing many
other things in society, so we have to
ensure that they are growing as people
and enjoying the work they do with us.
Therefore, investing in human capital is
a fundamental part of Oxera’s current
and future business model – focusing
on developing the skills, knowledge
and attributes of our people. We give
our people clear meaning, purpose and
direction in the roles that they play and
the contributions that they make.
Our clients
We have been helping clients evolve
and adapt their business models to
meet these changing expectations.
For example, in financial services, we
are assisting firms in ensuring that
their business models do not exploit
behavioural biases. In the water sector,
firms are developing business plans
that capture the trade-offs between
natural and financial capital and making
the implicit social contract explicit.
Technology firms are thinking about
how they balance the benefit they
provide to consumers with the impact
on suppliers and competitors.
In a broader sense, taking this new
approach means that we are making
a commitment to people, society, the
environment and our clients that goes
beyond corporate social responsibility
and reputation. It’s a big undertaking
– and how can we and the wider
business community know if we have
been successful? At present, there is
no simple, unified way to set goals
and evaluate performance against the
different forms of capital.
Helping to redefine and redesign
businesses and markets with long-term
resilience, expert economic advice
encourages organisations to think more
strategically and base their short-term
decisions on well-considered financial
frameworks. Moreover, this advice can
help to crystallise solutions to long-term
challenges such as material and fuel
scarcity. Economics can power new
perspectives and support long-term
business sustainability by measuring the
cause and effect of a range of scenarios
and supporting companies in meeting
the needs of the broadest range of
stakeholders possible. Considering how
we make use of and generate returns
upon the five forms of capital is a
natural extension of this philosophy.
It is not a straightforward journey.
Indeed, for many businesses, this is
uncharted territory. Success will come
only if we continue to discuss and
debate every aspect, chipping away at
these seemingly difficult trade-offs until
their complexities unravel and solutions
begin to emerge. It is in this spirit that
I ask businesses, organisations and
policymakers: is now the time to think
beyond the bottom line?
We help our
clients to cultivate
sustainable, forward-
looking business
models
Businesses
need to
understand
that beyond
providing
returns to
their
shareholders,
they play a
critical
systemic role
in the
development
of society
“
“
Rt Hon The Lord David Blunkett
Rt Hon The Lord Eric Pickles
