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At the end of May, Orange’s shareholders adopted a resolution proposed by the board to establish Orange’s “purpose.” It is a detailed plan of action that can be summarized in two words: Human Inside.

Omdia believes that such a resolution is a laudable move, but importantly we think it’s good for business. Other CSPs need to be aware of the growing importance of being a good corporate citizen.

For too long, telecom operators have mistreated their customers, and for too long, regulators and governments have worked towards protecting consumers “against” telecom operators. True or not, the reputation of many telecoms operators is one of a corporate organization that is always trying to rip people off.

That is bad for today’s business, but even worse for the future strategic direction of telecoms operators. Aggregators, super-aggregators, platforms, and ecosystem players are models of business that rely on trust and prosper when these corporations are loved by their customers and by the much wider group of stakeholders.

COVID-19 has provided a chance for CSPs to prove that they serve a purpose (we have tracked hundreds of telco initiatives) and that they are not only seeking profit but also to help governments and societies. Many of the costly initiatives implemented by telecoms operators today will help win confidence and trust. Still, CSPs need to think beyond crises and create a human-and-environment friendly culture inside and outside their organization.

A purpose that is more than a statement

CEO Stéphane Richard presented Orange’s “purpose” at the end of 2019 to ensure that “digital services are well-thought-out, made available and used in a more caring, inclusive and sustainable way in all areas of our business.” It includes many digital solidarity programs for people in each country in which the company operates: some goals are long term, such as carbon neutrality by 2040, but also short-term environmental goals were unveiled, such as 50% of energy to be from renewable sources by 2025.

It’s not just another CEO statement. Orange’s purpose permeates many areas of the business. In a recent briefing with Steve Jarrett, Orange’s SVP for AI and Data, Omdia has learned that that the Human Inside mission translates into requirements for AI to be trustworthy, green, and regulation-compliant. Of course, Orange uses AI practical implementations such as designing smarter networks, creating a better user experience, and implementing greater operational efficiency. Still, operational outcomes are on par with those of doing good.

Financial and societal goals are not diverging priorities

But there is a recurring issue. How can companies be a good corporate citizen and maximize financial outcomes? Telecoms operators have helped societies during the pandemic, but why should they continue to do so, or why should they expand their socially responsible activities in post-pandemic times? How to reconcile financial objectives with societal ones, as these often appear to be incompatible?

In truth, it is not just governments and society that appreciate and reward corporate kindness. Financial markets are also more inclined to reward purpose-driven organizations. In a study published by Harvard Business Review published in the May–June 2019 issue, it emerged that some of the largest institutional investment firms are taking meaningful steps to integrate Environment, Social, and Governance (ESG) aspects into investing criteria. The fact that Orange’s shareholders approved the board’s proposal also evidences the willingness to take the business to a direction that is more inclusive of the wider interests of stakeholders.

Now investors are rewarding companies who care about society, their employees, and the environment. In future, being a responsible organization might even more directly influence the company’s evaluation. Those CSPs that are still wondering how to reconcile financials and social issues should update their views: the two serve the same purpose.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

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