Sustainable by Design? Lessons in Circularity from Seventh Generation

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.11

The CSR 2.0 principle of circularity has roots in life cycle assessment, cleaner production, sustainable consumption and cradle to cradle concepts. In The Age of Responsibility, I explore various well-known multinational examples, from Interface’s carpets and Nike’s Considered Design shoes to Coca-Cola’s water neutral initiative and Tesco’s carbon neutral programme.

But there are also smaller, more nimble companies, like Seventh Generation, that are able to go much further, much faster. What can we learn from these companies that are intentionally sustainable ‘by design’?

Seventh Generation, an American household cleaning products business started more than 20 years ago by Jeffrey Hollender, took inspiration for its name and philosophy from the Iroquois Confederacy (a council of Native American Indian tribes), which included the admonition that ‘in our every deliberation, we must consider the impact of our decisions on the next seven generations.’ From the beginning, this meant thinking in a circular way about the impact of their products.

To begin with, this meant swimming upstream. “When Seventh Generation told executives at the old Fort Howard Paper Company that we wanted to market bathroom tissue made from unbleached recycled fibre, they laughed,” recalls Hollender. Despite such early resistance, however, Seventh Generation has remained steadfast in its commitment to ‘becoming the world's most trusted brand of authentic, safe, and environmentally-responsible products for a healthy home.’ And indeed, now has an impressive catalogue of cradle to cradle designed products, and has been doing extremely well, showing strong growth even through the recession.

However, ensuring that Seventh Generation lives up to their promise of authenticity is something that requires constant vigilance. For example, in March 2008, the company was ‘exposed’ by the Organic Consumers Association for having detectable levels of the contaminate 1,4-dioxane in their dish liquid. In fact, Seventh Generation’s product was declared the safest of those available and they had been working with suppliers for more than five years to remove it. They have since eliminated the contaminant completely, but as Hollender later declared: “Our effort was simply not good enough. Our real mistake was to exclude consumers and key stakeholders from our ongoing dialogue about dioxane. In short, we flunked the transparency test.”

Of course, the very foundation of transparency is information and the most basic kind is a full list of product ingredients, which, unbelievably, is not required by US law for household products. Consequently, Seventh Generation launched a Show What’s Inside initiative, which included an educational website and an online Label Reading Guide, downloadable directly to shoppers’ cell phones, which helped them interpret labels at the point of purchase, especially any associated risks.

As Hollender and Bill Breen report in their book, The Responsibility Revolution, not long after, SC Johnson launched a cloned version called What’s Inside. “That’s just what we had hoped for,” declared Hollender and Breen. “When a $7.5 billion giant like SC Johnson puts its brawn behind ingredient disclosure, it’s likely that the rest of the industry will follow, regardless of what the regulators do.”

Despite its green image, Seventh Generation knows that it needs to create virtuous cycles in its social as well as its environmental impacts. As a result, in 2009, the company joined Women's Action to Gain Economic Security (WAGES) – an organisation committed to building worker-owned, cooperatively-structured, eco-friendly, residential cleaning businesses in San Francisco – to launch Home Green Home, WAGES' fourth worker-owned cooperative. This unique social enterprise serves the city of San Francisco and is creating healthy, dignified jobs for women in an industry known for long hours and low pay. The women who own and work in the business earn wages that average 50 percent more than their non-coop counterparts, and receive health care and paid vacation benefits.

In the future, Seventh Generation and WAGES hope to expand the innovative practice beyond San Francisco. Hollender is under no illusions about how far we collectively still have to go. In his Foreword to The Age of Responsibility, he confesses that:

“Corporate responsibility in its present incarnation has been an enormous disappointment at best. It has not lifted people out of poverty. It has not protected the environment. It has not boosted community wellbeing. It has been too little, too late and at most has succeeded in getting some companies to aspire to simply do less damage than they did before. Instead of changing the world, corporate responsibility merely evolved into a baseline requirement in every company’s license to operate. Where it succeeded, it only managed to slow the rate of decay, which is hardly enough to do much more than maintain the status quo.”

And yet, he remains optimistic. “Though much has changed in the last 25 years, one thing hasn’t: Business is still the only force with the reach and resources to do what needs to be done as quickly and efficiently as possible. The hour may be late and the clock loudly ticking but the story of responsible business is not over yet. There’s still room for a happy ending. And the time has come for us to write it for ourselves.”

It is examples like these and many others that show that the principle of circularity is not wishful thinking, but a practical strategy for achieving sustainability and responsibility, economically, socially and environmentally. And together with the other principles of CSR 2.0 or Transformative CSR – creativity, scalability, responsiveness and glocality (touched on in the previous blogs) – these inspiring innovations and bold actions are ushering in the new Age of Responsibility and with it, a new kind of ‘susponsible’ capitalism.

Without a doubt, however, achieving this vision requires change on a scale and urgency that has seldom been witnessed in human history. So the question remains, how do we make change happen? I’ll examine the myriad answers to this in my forthcoming blogs, recommencing in January.

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Original link on CSRwire

Myths About CSR in Developing Countries

By Wayne Visser

Part of the Quest for CSR 2.0 series.

Are concepts and models of corporate social responsibility (CSR) developed in the West appropriate for developing countries?

I decided to first tackle this question by setting out what I believe to be Seven Popular Myths about CSR in developing countries. Most of these myths exist as a result of the feeding frenzy that inevitably occurs every time the media has hunted down and sunk its teeth into one or other juicy story of corporate exploitation. They, however, become sustainable because they are spread by whole legions of largely well-intentioned people who have vested interests in promoting their particular brand of the truth about CSR.

The Seven Myths:

1. Economic growth is not compatible with CSR.
2. Multinationals are the biggest CSR sinners.
3. Multinationals are the biggest CSR saviours.
4. Developing countries are anti-multinational.
5. Developed countries lead on CSR.
6. Codes can ensure CSR in developing countries.
7. CSR is the same the world over.

Let’s look at these myths each briefly in turn.

Myth 1: Economic growth is not compatible with CSR: What the Index for Sustainable Economic Welfare and Genuine Progress Index show is that GDP growth and quality of life move in parallel until social and environmental costs begin to outweigh economic benefits. According to this ‘threshold hypothesis’ – coined by Chilean barefoot economist, Manfred Max-Neef – most developing countries have yet to reach this divergence threshold. For them, economic growth and the expansion of business activities is still one of the most effective ways to achieve improved social development, while environmental impacts are increasingly being tackled through leapfrog clean technologies.

Myth 2: Multinationals are the biggest CSR sinners: On the ground in most countries, multinationals are generally powerful forces for good, through their investment in local economies, creation of jobs, upgrading of infrastructure, provision of basic services and involvement in community development and environmental conservation. There are always exceptions, of course, and these should be named and shamed. But they shouldn’t overshadow the overall positive role of big companies in developing countries. The cumulative social and environmental impacts of smaller companies, which operate below the radar of the media and out of reach of the arm of the law, are typically far larger than that of the high profile multinationals.

Myth 3: Multinationals are the biggest CSR saviours: Not only do large companies have limited influence over government policy, but most multinationals, despite large capital investments, provide only a minuscule proportion of the total employment in developing countries. The real potential saviours are small, medium and micro enterprises (SMMEs), including social enterprises, which are labour intensive and better placed to affect local economic development. If the social and environmental impacts of these SMMEs can be improved, the knock on benefits will be proportionally much greater than anything that multinationals could achieve on their own. This is why the work CSR for SMEs by Anahuac University in Mexico and Forum Empresa in Latin America is so encouraging and important.

Myth 4: Developing countries are anti-multinational: Developing countries are often caught in a no-man’s land of under-development in a competitive, monetized, global economy, and the sooner they can modernise and integrate, the better for them. Most often, developing country communities welcome multinationals and their CSR initiatives. This is not the same as saying the developing world should repeat the past mistakes of the developed countries, such as highly polluting industrialisation, nor that multinationals should not be required to be responsible and held accountable. But we should not deny developing countries the dignity of choice, whether it be Unilever products or Coca Cola, both of which have made significant progress on CSR in recent years.

Myth 5: Developed countries lead on CSR: There are countless examples of how developing countries are proving themselves highly adept at delivering the so-called triple bottom line of sustainability, namely balanced and integrated social, economic and environmental benefits. It is actually not surprising, since in developing countries, these three spheres are seldom separable – economic development almost inevitably results in social upliftment and environmental improvement, and vice versa. Whether it is South Africa’s King Code, which encourages integrated sustainability reporting, or A Little World, which uses mobile phone and biometric scanners to bring micro-banking services to the poor in India, a lot of the innovation in CSR is taking place in developing countries.

Myth 6: Codes can ensure CSR in developing countries: The past few years have seen a mushrooming of corporate responsibility codes, standards and guidelines, which developing countries are keen to adopt, if only to satisfy their Western partners. This standardisation trend is both inevitable and necessary in a globalising world—which is desperately searching for an alternative to command-and-control style business regulation in order to satisfy the governance and accountability void which still exists. But this codification tends to measure CSR activities, rather than CSR impacts on the ground. Developing countries need to move rapidly through this Strategic CSR approach in an Age of Management to a more transformative CSR approach in an Age of Responsibility.

Myth 7: CSR is the same the world over: One of the biggest fallacies is that, in a globalised world, CSR can somehow conform to a unitary model. Of course, we need universal principles, like the Global Compact, and perhaps even process frameworks, like ISO 14001. But standardised performance metrics, like those of the Global Reporting Initiative and the numerous sustainability funds and indexes, start to tread on shaky ground. The tendency is for developed country priorities – such as energy and climate change – to receive emphasis and for northern NGO agendas to dominate.

The antitdote to these CSR myths for developing countries is glocality – one of the five principles of CSR 2.0. The term ‘glocal’ – a portmanteau of global and local – is said to come from the Japanese worddochakuka, which simply means global localisation. Or more simply, ‘think global, act local’. The question is, do we see glocality in action, or do we just see corporations in developing countries mimicking the practices of the West?

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Original link on CSRwire

The Future Faces of CSR Activism

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.9

The third principle of Transformative CSR, or CSR 2.0, is responsiveness. (We explored creativityand scalability in the last two posts). Some of the most important players in the responsiveness game – especially through cross-sector partnerships – are civil society organizations (CSOs, which I prefer rather than the term NGOs). Reflecting on how this sector is changing in the face of increased calls for responsiveness, I have distinguished 10 ‘Paths to the Future’ for CSR activism. I believe that CSOs acting in the CSR space will increasingly be:

• Platforms for transparency – Undertaking investigative exposes & hosting disclosure forums;
• Brokers of volunteerism – Providing project opportunities for employee volunteers;
• Champions of CSR – Raising awareness and increasing public pressure for CSR;
• Advisors of business – Offering consulting services to business on responsibility;
• Agents of government – Working with or on behalf of regulatory authorities;
• Reformers of policy – Pressuring for government policy reforms to incentivise CSR;
• Makers of standards – Developing voluntary standards & inviting business compliance;
• Channels for taxes – Receiving and deploying specially earmarked tax revenues;
• Partners in solutions – Partnering with business/government to tackle specific issues; and
• Catalysts for creativity – Creating social enterprises & supporting social entrepreneurs.

Let’s explore these ‘future faces’ of CSR activism in a little more detail below, drawing on examples from around the world of CSOs emerging roles.

Platforms for transparency – The role of CSOs as agitators for, and agents of, greater transparency seems set to continue. For example, in Senegal, Benin, and Guinea, CSO intervention has been critical in the development of a free press. And in India, Karmayog allows citizens to report specific instances of bribery and corruption on a live, public website.

Brokers of volunteerism – As companies increasingly see the benefits of volunteerism (greater job satisfaction, productivity, commitment and loyalty), CSOs are increasingly becoming people-brokers, as sources of projects for employee volunteers. For example, the Voluntary Workcamps Association of Ghana (VOLU) coordinates volunteers to help with the construction of schools, reforestation and AIDS campaigning.

Champions of CSR – While some CSOs remain sceptical about CSR, in many countries they are the main agents for promoting CSR. For example, in Iran, a group of CSOs have joined forces with the UNDP to promote CSR through targeted training for managers under the umbrella of the UN MDGs. And in Senegal, CSR awareness has grown mainly due to a CSO called La Lumière in Kédougou.

Advisors of business – A combination of genuine expertise, valuable perspectives and a crunch on funding means that many CSOs are turning to consultancy, working with and advising companies not only on specific social and environmental issues, but also more generally on sustainability and responsibility. For example, in Hungary, as opposed to the traditional role of watchdog, many CSOs engage in consultancy on CSR.

Agents of government – The phenomena of GONGOs (government organised NGOs), GINGOs (government-inspired NGOs), GRINGOs (government regulated/run and initiated NGOs) and PANGOs (party-affiliated NGOs) are becoming more widespread, no longer just seen in China. Even where governments are not setting up or running the CSOs, they are supporting them as key catalysts. For example, Belgian CSOs receive €3 government funding for every €1 they raised themselves.

Reformers of policy – Realizing that the ‘rules of the game’ need to change, CSOs are increasingly getting involved in legal reform. For example, in Indonesia, it was largely due to rising pressure from CSOs that the Law No. 40/2007 concerning Limited Liability Companies was introduced to make CSR mandatory.

Makers of standards – In an effort to raise the bar on voluntary action by companies, many CSOs are developing their own social and environmental codes and standards, then inviting business to comply with them. For example, in Israel, the Public Trust Organisation established The Public Trust Code, covering advertising, transparency, disclosure, service and product guarantees, honesty in contracts and privacy of information.

Channels for taxes – In some countries, the effectiveness of CSOs has earned them the ability to source tax dollars directly. For example, in Mexico, the FECHAC (Federation of the Chihuahuan Industry) is a CSO, set up after devastating floods in 1990, that is funded through a special annual tax on more than 38,000 industries. And in Romania, the 2% Law (in terms of the Fiscal Code) allows citizens to redirect 2% of personal income tax to a CSO.

Partners in solutions – Not only are CSOs collaborating with business more and more, but also with governments and multilateral agencies. For example, in South Korea, ‘Cross Sector Alliance’ is one of 5 approaches to CSR being promoted, while in Africa the New Nigeria Foundation provides a platform for mobilizing non-traditional resources through public-private partnerships. In Turkey, TUSEV promotes linkages between domestic and international CSOs and encourages CSR by putting foreign and domestic firms in contact with appropriate CSOs.

Catalysts for creativity – CSOs are increasingly expected to provide solutions, not just point out the problems, especially by launching or supporting social enterprises. For example, in Bangladesh, BRAC (formerly Bangladesh Rural Advancement Committee) has been crucial in the microcredit movement, and in Singapore, the National Trades Union Congress (NTUC) has 12 social enterprises and 4 related organisations that are owned by more than 500,000 workers.

However the future unfolds, it is clear that CSOs will be a significant player in the new landscape of responsible governance and accountability, both as a counter-balancing force and a partner to governments and business. In fact, I believe CSOs will be the responsive glue that holds society together in the turbulent years ahead.

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Original link on CSRwire

Could Less Consumer Choice Be A Good Thing?

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.8

So you buy fair-trade or eco-friendly products, and you think that is a good thing, right? Think again. What if so-called ‘ethical consumers’ are the very ones standing between us a sustainable future?

I’m crazy, right? Maybe, but here is why I say it. By creating a premium-priced, niche market for ‘ethical consumption’, companies have been able to present a responsible front to the world, while leaving the vast majority of their products – which are, by implication, less ethical, less responsible, less sustainable – unquestioned and unchanged. At the same time, a small group of usually well-to-do Western consumers have been able to ease their conscience by feeling that they are making a positive difference.

Now let me be clear. I am not against organic or fair-trade or eco-friendly products per se. That wouldbe insane. Clearly, there are groups of producers – usually poor farmers in the Third World – that have benefited from these initiatives. What I am against is the voluntary nature and premium pricing of sustainable and responsible products. The combination of these two factors has ensured that, with one or two exceptions, these products have never gone to scale. As compared with the total and ongoing impacts of mainstream shopping habits, ethical consumption, laudable as it is, has remained marginal at best and totally insignificant at worst.

The UK’s Sustainable Consumption Roundtable says, ‘we know that there is a considerable gap – the so-called ‘value-action gap – between people’s attitudes, which are often pro-environmental, and their everyday behaviors’. We know the ‘value-action’ gap is partly explained by price and availability of alternatives, but there’s something else. Context matters as well.

To illustrate this, Timothy Devinney, author of The Myth of the Ethical Consumer, reports on a very interesting experiment he conducted while researching his book. The experiment took place at a coffee shop in central Sydney, Australia, over a period of several weeks. This coffee shop displayed a large and prominent sign indicating the products available, their prices and active specials. To this was added, quite obtrusively, another special, indicating: We have Fair Trade coffee! No extra charge. Just ask.

Here’s what he found. Unprompted, with only the sign to notify them of the availability of the ‘ethical’ alternative, less than 1% of customers bothered to ask for Fair Trade coffee, even though it was free. “When they prompted customers with a reminder that the ‘ethical’ alternative was available, the number of customers opting for the Fair Trade option rose to 30%. They then went a step further and took the customer’s privacy away: each time the clerk prompted a customer with the Fair Trade option, we ensured there was someone standing next to that person at the counter. In this situation, the number of ‘ethical consumers’ rose to 70%.”

This is a hugely important lesson: If we want to achieve scalability of sustainable and responsible products and services, we cannot leave it to the passive choices of customers. Context is critical, and a little bit of peer pressure goes a long way. But do we really want to resort to public embarrassment to achieve scalability?

The alternative is the trend towards ‘choice editing’. The idea of choice editing is likely to get free-market fundamentalists all in a tizz, but the fact is that manufacturers and retailers choice edit all the time – for example on quality, price, aesthetics and brand. The only difference is now we are asking them to add sustainability and responsibility to their list of criteria.

So who is doing choice editing? Well, outdoor clothing company Patagonia converted to 100% organic cotton in 1996, frozen foods retailer Iceland banned genetically modified food in 1997 and carpet manufacturer Interface has been using only renewable (green tariff) energy since 1998, so it’s not a new idea. The difference is now some of the big manufacturers and retailers are coming on board. For example, Unilever has committed to sourcing 100% of agricultural raw materials sustainably, Sainsbury’s only stocks Fairtrade bananas and Walmart has adopted an organic cotton and sustainable fish strategy.

Let’s look at Walmart in a little more detail to illustrate the point. Walmart set a target to purchase all of its wild-caught fresh and frozen fish for the U.S. market from Marine Stewardship Council (MSC)-certified fisheries by the end 2011. They are also working work with Global Aquaculture Alliance (GAA) and Aquaculture Certification Council (ACC) to certify that all foreign shrimp suppliers adhere to Best Aquaculture Practices standards in the U.S and by 2009, they were already halfway there.

Speaking to the Wall Street Journal, George Chamberlain, president of the Aquaculture Alliance puts the move in perspective: “The endorsement drew attention; Wal-Mart buys more shrimp than any other U.S. company, importing 20,000 tons annually – about 3.4% of U.S. shrimp imports. With Wal-Mart's nod, we went from trying to convince individual facilities to become certified to having long waiting lines.”

Walmart also made a commitment to phase out chemically-treated textile crops. By 2008, Wal-Mart was the largest buyer of organic cotton, with more than 10 million pounds purchased annually. They are also the world’s largest purchaser of conversion cotton – cotton grown without chemicals, but waiting to be certified as organic. Former CEO, Lee Scott, was under no illusions about the ripple effects when he made the strategic choice-editing decision: “Cotton farmers can now invest in organic farming because they have the certainty and stability of a major buyer. Through leadership and purchasing power, all of us can create new markets for sustainable products and services. We can drive innovation. We can build acceptance. All we need is the will to step out and make the difference.”

The question is, since not everyone has the size and economies of scale of Walmart, should we pin our hopes on voluntary choice editing? Or should we be lobbying for a different, and arguably more effective, form of choice editing, namely good, old-fashioned government regulation? The state regulates to ensure the health and safety of products, so why not for sustainability as well?

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Original link on CSRwire

The Creative Destruction Revolution

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.7

One of the key theories on creativity is creative destruction. The concept is most associated with Joseph Schumpeter, following his 1942 bookCapitalism, Socialism and Democracy, in which he described creative destruction as ‘the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one ... [The process] must be seen in its role in the perennial gale of creative destruction; it cannot be understood on the hypothesis that there is a perennial lull.’

The idea, of course, is much older. In Hinduism, the goddess Shiva is simultaneously the creator and destroyer of worlds. In modern times, the German sociologist Werner Sombart described the process in 1913, saying ‘from destruction a new spirit of creation arises; the scarcity of wood and the needs of everyday life ... forced the discovery or invention of substitutes for wood, forced the use of coal for heating, forced the invention of coke for the production of iron.’ Even Marx and Engels had a go at describing the process in their Communist Manifesto, stating that ‘constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. ... All that is solid melts into air.’

The idea of melting solids is very similar to the metaphor used by sustainability and social enterprise thought-leader, John Elkington, to explain the disruptive changes going on in the world. In an interview with him, he explained: “What happens in an earthquake? The land become thixotropic; what was solid suddenly becomes almost semi-liquid. I think we are headed towards a period where the global economy goes into a sort of thixotropic state. Key parts of our economies and societies are on a doomed path really, and I think that’s unavoidable. I think we’re heading into a period of creative destruction on a scale that really we haven't seen for a very long time, and there are all sorts of factors that feed into it—the entry of the Chinese and Indians into the global market, quite apart from things like climate change and new technology.”

As to what this means for business, Elkington believes that “all of these pressures are going to mobilise a set of dynamics which are unpredictable and profoundly disruptive to incumbent companies, so some companies will disappear. I think most companies that we currently know will not be around in 15 – 20 years, which is almost an inconceivable statement. But periodically this happens and there’s a radical bleeding of the landscape. We’ll find this sort of reassembly going on. Over a period of time we’re going to have some fairly different products, technologies, business models coming back into the West, and I think it’s going to be quite exciting, but quite disruptive.”

We see all kinds of examples of creative destruction in corporate sustainability and responsibility. For virtually the whole of the 20th century, the biggest companies in the world were the oil and motor giants – companies like Exxon, BP, General Motors and Toyota. But the 21st century, with growing concerns over energy security and climate change on the one hand and the rising geo-political and economic power of the East on the other, are ushering in a new era. Already in 2006, the richest man in China was reported to be Shi Shengrong, CEO of the solar company Suntech, and the richest women, Zhang Yin, made her fortune from recycling. A 2010 report published by the Pew Environmental Center found that in 2009, China invested $34.6 billion in the clean energy economy, while the United States only invested $18.6 billion.

This explosive growth was brought home to me when, at an event of the Women In Sustainability Action (WISA) in Shanghai where I was speaking in June 2010, I got talking to a supplier of wind turbines to Europe. Simply put, he cannot keep up with the demand. He is turning customers away because there is already 12 months of orders in the pipeline. Even Germany, an early leader in the clean-technology space, can no longer compete with China in this sunrise industry. It is no coincidence that while Obama’s energy reform bill was being scuppered by the U.S. Congress, Malaysia was creating an Energy, Green Technology and Water Ministry. And while the British company BP was virtually on its knees, in May 2010, the Korean company, Samsung, unveiled an eye-watering investment plan to ‘future-proof’ the company by sinking $21 billion into its green technology and healthcare businesses. It claimed the investment would generate $44 billion in annual sales and 45,000 new jobs by 2020.

Make no mistake – creative destruction is happening. The only question is which companies will survive the sustainability and responsibility purge and surge?

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Original link on CSRwire

What can Web 2.0 teach us about CSR?

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.6

By May 2008, it was clear to me the evolutionary concept of Web 2.0 held many lessons for corporate social responsibility. At the time, I declared: "The field of what is variously known as CSR, sustainability, corporate citizenship and business ethics is ushering in a new era in the relationship between business and society. Simply put, we are shifting from the old concept of CSR – the classic notion of ‘Corporate Social Responsibility,’ which I call CSR 1.0 – to a new, integrated conception – CSR 2.0, which can be more accurately labelled ‘Corporate Sustainability and Responsibility.’"

The allusion to Web 1.0 and Web 2.0 is no coincidence. The transformation of the Internet through the emergence of social media networks, user-generated content and open source approaches is a fitting metaphor for the changes business is experiencing as it begins to redefine its role in society. Let's look at some of the similarities.

Web 1.0

• A flat world just beginning to connect itself and finding a new medium to push out information and plug advertising.
• Saw the rise to prominence of innovators like Netscape, but these were quickly out-muscled by giants like Microsoft with its Internet Explorer.
• Focused largely on the standardised hardware and software of the PC as its delivery platform, rather than multi-level applications.

CSR 1.0

• A vehicle for companies to establish relationships with communities, channel philanthropic contributions and manage their image.
• Included many start-up pioneers like Traidcraft, but has ultimately turned into a product for large multinationals like Wal-Mart.
• Travelled down the road of "one size fits all" standardization, through codes, standards and guidelines to shape its offering.

Web 2.0

• Being defined by watchwords like "collective intelligence," "collaborative networks" and "user participation."
• Tools include social media, knowledge syndication and beta testing.
• Is as much a state of being as a technical advance – it is a new philosophy or way of seeing the world differently.

CSR 2.0

• Being defined by "global commons," "innovative partnerships" and "stakeholder involvement."
• Mechanisms include diverse stakeholder panels, real-time transparent reporting and new-wave social entrepreneurship.
• Is recognising a shift in power from centralised to decentralised; a change in scale from few and big to many and small; and a change in application from single and exclusive to multiple and shared.

So what will some of these shifts look like? In my view, the shifts will happen at two levels. At a macro-level, there will be a change in CSR’s ontological assumptions or ways of seeing the world. At a micro-level, there will be a change in CSR’s methodological practices or ways of being in the world.

Macro Shifts

The macro-level changes can be described as follows: Paternalistic relationships between companies and the community based on philanthropy will give way to more equal partnerships. Defensive, minimalist responses to social and environmental issues are replaced with proactive strategies and investment in growing responsibility markets, such as clean technology. Reputation-conscious public-relations approaches to CSR are no longer credible and so companies are judged on actual social, environmental and ethical performance (are things getting better on the ground in absolute, cumulative terms?).

Although CSR specialists still have a role to play, each dimension of CSR 2.0 performance is embedded and integrated into the core operations of companies. Standardized approaches remain useful as guides to consensus, but CSR finds diversified expression and implementation at very local levels. CSR solutions, including responsible products and services, go from niche ‘nice-to-haves’ to mass-market ‘must-haves.’ And the whole concept of CSR loses its Western conceptual and operational dominance, giving way to a more culturally diverse and internationally applied concept.

Micro Shifts

How might these shifting principles manifest as CSR practices? Supporting these meta-level changes, the anticipated micro-level changes can be described as follows: CSR will no longer manifest as luxury products and services (as with current green and fair-trade options), but as affordable solutions for those who most need quality of life improvements. Investment in self-sustaining social enterprises will be favored over cheque-book charity. CSR indexes, which rank the same large companies over and over (often revealing contradictions between indexes) will make way for CSR rating systems, which turn social, environmental, ethical and economic performance into corporate scores (A+, B-, etc., not dissimilar to credit ratings), which analysts and others can usefully employ to compare and integrate into their decision making.

Reliance on CSR departments will disappear or disperse, as performance across responsibility and sustainability dimensions are increasingly built into corporate performance appraisal and market incentive systems. Self-selecting ethical consumers will become irrelevant, as CSR 2.0 companies begin to choice-edit; i.e., cease offering implicitly ‘less ethical’ product ranges, thus allowing guilt-free shopping.

Post-use liability for products will become obsolete, as the service-lease and take-back economy goes mainstream. Annual CSR reporting will be replaced by online, real-time CSR performance data flows. Feeding into these live communications will be Web 2.0 connected social networks, instead of periodic meetings of rather cumbersome stakeholder panels. And typical CSR 1.0 management systems standards like ISO 14001 will be less credible than new performance standards, such as those emerging in climate change that set absolute limits and thresholds.

As our world becomes more connected and global challenges like climate change and poverty loom ever larger, businesses that still practice CSR 1.0 will (like their Web 1.0 counterparts) be rapidly left behind. Highly conscientised and networked stakeholders will expose them and gradually withdraw their social licence to operate. By contrast, companies that embrace the CSR 2.0 era will be those that collaboratively find innovative ways tackle our global challenges and be rewarded in the marketplace as a result.

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Original link on CSRwire