‘Business as usual’ is not enough in today’s climate. Global markets are undergoing profound change and the UK can no longer count on sustained domestic growth.
But business holds many of the cards that we need to play to kick start economic growth and ultimately lift our shared prosperity. It can innovate and develop new engines of growth. It also needs to rebuild its relationship with society, restore trust in its core purpose and better communicate its contribution. In this context, we created UK Futures, a multi-year programme to assess and facilitate how business can drive UK growth. Our aim is to begin a strategic discussion on future prosperity, and to present a roadmap for achieving it. We will be issuing regular updates as we develop this programme.
At the World Economic Forum in Davos, we led the debate on the role of business in society. Our research demonstrated that more than 76 per cent of global business leaders felt the value of their company should be measured by the positive contribution it makes to society as well as profit. Now is the time for a proper discussion about the role and value of business in society.
That’s why in this, my first report as Senior Partner and Chief Executive of Deloitte, we are changing the way we report to focus on the contribution that we make to the UK.
As we continue to adapt to changing conditions, we are committed to showing leadership; showing leadership in our role in restoring trust and confidence in the capital markets and leadership around three key elements of our wider contribution, where Deloitte can make a real difference: driving economic growth; investing in higher value skills and delivering on our commitment to sustainability.
Driving economic growth
The professional services sector itself is an important economic force in the UK. It is a key area of competitive advantage and a driver of future growth, particularly in global markets.
Over the past two years, we have started to measure our firm’s direct economic contribution to the UK economy. We are proud to demonstrate that in FY12, through our direct activities, the firm contributed just over £1 in each £1,000 of UK economic output. Our direct contribution towards GDP is £1.6 billion, an increase of 21 per cent over the past two years - while the UK as a whole has grown by just 0.5 per cent over the same period.
This success reflects our focus on adding value to our clients and assisting them in exploiting their growth opportunities. We have introduced new, innovative services to the market, such as Deloitte Analytics and started to embed such capabilities within our core offerings such as audit, where we are consistently looking to improve audit quality and respond to increasing investor and other stakeholder expectations. This has enabled us to continue to grow, despite the market conditions. We are also actively participating in the debate on economic, financial and regulatory policy and the role of audit in the 21st century – issues that are crucial to sustainable, long-term growth. In addition, we are supporting entrepreneurial business, for example, through Deloitte UK Technology Fast 50.
Of course, as well as supporting our clients, part of our role is to provide confidence and reassurance about business transparency. It’s clear that the financial crisis and its aftermath have deeply eroded trust in the capital markets, and restoring this confidence is fundamental to restoring economic growth, both here in the UK and globally. We recognise that the status quo is not sustainable and that the capital markets need to have trust and confidence in the financial information that companies produce. We acknowledge that we need to listen and respond more effectively to the needs of the investor community as the ultimate end-users of accounts and we remain determined to develop measures that will enhance risk communication between auditors, financial supervisors and other regulators.
Investing in higher value skills
The UK economy depends heavily on higher value skills. Having the right talent is critical to business performance and growth. And with an increasingly global workforce and a shift in workforce demographics, accessing and keeping that talent can be difficult. We aim to influence and nurture new sources of talent and give them the skills and confidence to successfully enter the workforce – whether through Deloitte Employability or our own school-leavers entry programme, BrightStart.
People come to Deloitte for challenging and motivating experiences, world-class training and our high-performance culture. Our ability to attract outstanding individuals underpins our capacity to deliver impact to our clients, and to foster an ever-growing cadre of business leaders as Deloitte-trained professionals take up positions in industry. This year, we have recruited 3,215 people, an increase of almost 3 per cent on last year, and we have invested over £20m in learning and development, part of which has enabled more than 740 of our people to achieve a professional qualification.
We actively share our knowledge with our clients, through initiatives such as our market-leading Next Generation CFO Development programme, which has already helped 74 of its 273 participants to become CFOs of some of the UK’s largest businesses. And our Deloitte Academy 'Navigating the Boardroom: women on Boards' programme, which we launched in September last year, has already supported nearly 40 senior women prepare for board-level roles.
Commitment to sustainability
Our commitment is to create sustainable growth, and as a responsible business, that means growth which is sustainable for the environment, for the communities in which we operate, and for the economy. The issue of sustainability is an essential part of business for our own firm and our clients.
We take the challenges our clients face in this area seriously and we’ve invested significantly over recent years to expand our sustainability services offering, in parallel, keeping pace with new thinking in how we approach this in our own business.
I am particularly proud of the move we took in 2011 to help bring long-term unemployed people into employment by forming a joint venture with leading employability services provider, Ingeus. A year on and an enormous amount has been achieved with tens of thousands of people supported into employment. Our Social Innovation Pioneers programme, launched in May 2012, is another example of how we are showing leadership around the role and value of business in society. The programme is working in partnership with 30 leading social businesses, providing us with the impetus and direction to really connect, understand and drive forward the positive contribution that all business can make to a sustainable and prosperous society.
I am also proud of the significant investment we make in our local communities. This has increased by 20 per cent over the past three years to almost £12m. We specifically choose to apply the skills of our people to make a difference on issues that, we believe, will impact and influence widening prosperity and social progress.
In terms of environmental impact, we have made great strides to drive efficiencies in our estate. We have reduced our emissions from energy consumption by 9 per cent, our waste by 2 per cent and our water usage by 6 per cent per full-time employee in the past year. However, like other professional firms, we continue to face challenges in balancing business travel with the needs of our clients operating in expanding global markets. This remains a particular focus for us if we are to meet our own ambitious 2020 targets.
London 2012
Running through the whole of our 2012 Report is our contribution to one of the biggest and most exciting challenges our firm has ever taken on – delivering the London 2012 Olympic and Paralympic Games. The Games were a moment of great pride for Great Britain, as the nation – organisers, athletes, volunteers, armed forces and spectators alike - came together to host an unforgettable experience for the rest of the world.
For us, London 2012 has become the ultimate demonstration of how all the elements of our business can be drawn together to deliver truly outstanding impact. Since backing the bid nine years ago, we have dedicated 750,000 hours of expertise as the Official Professional Services Provider to help make the Games happen. We are now focusing on realising the full potential of their legacy. Naturally that means the sporting dividend and the transformation and operation of the Olympic Park and venues, but it also means capitalising on the success of hosting the 2012 Games to promote the world-class skills and knowledge of British business, both domestically and internationally. We are proud of the part we played, and continue to play, in delivering such a comprehensive British success story. We are delighted by the recognition from our clients, and we see London 2012 as an enduring milestone in the history of Deloitte.
Over the coming year we will focus on further defining and measuring Deloitte’s impact, as well as publishing new targets for our business for the short-term and over the next 10-20 years. We recognise that this is not a straightforward task; this report is a first step in that direction as we seek to outline our major areas of contribution and invite feedback from all our stakeholders to help shape our future plans.
There are opportunities for you to provide feedback as you read through the report so please do take the time to comment. You can also send your thoughts to us directly at: ukdeloitteimpact@deloitte.co.uk.
I hope you enjoy the report.
David Sproul
Senior Partner and Chief Executive
