Pandora's CSR Box: The Case for Banning CSR

I participated in a strategy session on CSR/sustainability this week and was left wondering if we CSR specialists are our own worst enemy. Would more progress be made if we banned CSR? Would we be better off if we never used the C-word again? What if we substituted “CSR” with “risk management” or “new business development”?

Let me explain what I mean. By having a CSR function, or department, or profession or career, we have created a neat little box for mainstream business to put CSR-related activities into - the CSR report, the ethics code, the supply chain audit. That has some advantages - there is a focal point, people to get things done - but at what cost?

The problem with boxes is that people often don’t think (or act) outside them. If environmental quality, or human rights, or health and safety, or stakeholder engagement is something that gets assigned to the CSR-box, there is a very real danger that everyone else feels they have been absolved of responsibility.

Not only that, the CSR-box mentality suggests that social, environmental and ethical challenges can be solved by thinkering at the edges of business, rather than reforming the core. If the current financial crisis teaches us anything, it is that we have to fundamentally change the way we do business. The current model is broken.

But what are the chances that business will change voluntarily? The answer is: extremely good! In fact, it is inevitable. That is because the issues we are dealing with - the breakdown of ecosystem services, the erosion of morality and the disintegration of social justice - are not marginal issues. They are business deal-breakers.

Put another way, the issues CSR is trying to tackle are business risks. If fish stocks collapse, or communities stay poor, or we have catastrophic climate change, or corruption is endemic - these undermine the ability for business to prosper. They undermine the enabling conditions for business - resource availability, political stability, and clear rules and ethics.

So when I say there is a case for banning CSR, I don’t mean stopping CSR-related efforts, or firing CSR professionals. I mean changing the language of CSR and raising the CSR game - to the level of strategic risk and opportunity. This is not about greenwash and moral high ground. This is about competitive survival and future markets.

Business will not (and should not) do CSR only because it is the right thing to do. Business should do CSR because it will go out of business if it doesn’t and it will be more successful if it does. And if it just calls that approach “good business sense” or “risk management” or “strategic investment”, rather than “CSR”, so much the better.

An Agenda for the Future of CSR (Part 2)

An idealistic-realistic approach calls us to engage in making CSR a catalyst for systemic change. Consequently a new agenda for CSR can emerge, with four essential tracks where coalitions need to be built.

Changing the baseline

The first track involves changing the baseline of markets, the driving force behind most business. This will involve coalitions of businesses, financiers, NGOs, governments, and others, aimed at changing the rules that govern the basics of capitalism, such as company law, currency flows, property rights, competition, tax management and executive accountability. Such work will be time-consuming and technical, and may seem too abstract and negative for some. But there are other crucial things to do.

Playing the Solos

The second track involves playing the solos within markets, by pioneering sustainable and just models of enterprise. Social entrepreneurs will help prefigure a new economy through creating businesses and projects that are inherently just and sustainable, including environmental technologies, co-operatives, and even sustainability stock markets. Their own success and their ability to takeover the mainstream economy will, however, depend partly on how well the first track is changing the baseline. Page 4 of 5 © Wayne Visser

To some people these first two tracks may seem too much like pontificating about macro economics, on the one hand, or following a fashion for eco-ethical enterprise on the other. They will focus instead on how people continue to be abused, poisoned, evicted, sacked and even killed, because of corporate interests and activities.

Singing the Chorus

Therefore the third track involves standing alongside and singing the chorus with those negatively affected by current market dynamics. Thus some will continue to work either with or against large companies to help specific groups of people improve their lot or seek redress – an area where much of the current effort on CSR and corporate accountability is located.

Maintaining the Beat

The fourth track involves maintaining the beat within the CSR profession, to keep its focus on a transformative agenda. This will require preventing it from becoming either solely client-directed and only interested in the goals of its paymasters, or protectionist and primarily interested in regulating access to services in this area. Instead, coalitions will form to help evolve a values-oriented profession, to maintain the heartbeat that is essential to a transformative movement.

Choosing Our Future?

The activities one chooses to engage in will depend on one’s particular skills, inclinations and circumstances. But for CSR to be part of the Rise and Shine scenario, a four-track agenda is essential, with the tracks harmonising to create a powerful music greater than the sum of its parts.

This means that people working in each of the four tracks will need to recognise the value of each and ensure their own work synergises with, rather than undermines, the other tracks. Unfortunately this is not always the case at the moment, as some people suggest their path is the only right one. We hope that developing and sharing a vision of how different activities could actually synergise towards creating systemic change will help that vision to become a reality.

Co-authored with Jem Bendell. Extracted from “The Corporate Responsibility Movement” (2009) by Bendell, Visser, et al.

Islamic and Cleantech markets: A CSR 2.0 tipping point?

I was fascinated to read a recent Time Magazine article on the growth of Islamic markets, which are reportedly already worth $1 trillion! The Halal food sector alone makes $632 billion annually, accounting for about 16% of the entire global food industry, acording to Halal Journal. The Islamic finance sector (which forbids the charging of interest) stands at $500 billion and is expected to grow to $4 trillion in five years, according to a 2008 report from Moody's Investors Service.

What is interesting about these and other Islamic markets (cosmetics, real estate, hotels and fashion) is that they have an ethical basis. According to Time, "citing the kosher and organic industries as successful examples of doing well by doing good, some entrepreneurs even see halal products moving into the mainstream and appealing to consumers looking for high-quality, ethical products." Mah Hussain-Gambles, founder of Saaf Pure Skincare which markets halal makeup, calls it "the next purity thing".

The other market area that is booming is the so-called clean-tech or green-tech sector. According to Clean Edge, $148 billion was invested in clean energy companies and projects in 2007, up 60% from 2006. Venture capital and private equity investment in clean energy companies was up 34% in 2007 to $9.8 billion, while finance via public markets was up more than 123%. Annual revenue for four benchmark clean technologies — solar photovoltaics, wind power, biofuels, and fuel cells - increased nearly 40% from $40 billion in 2005 to $55 billion in 2006. These are forecast to become a $226 billion market by 2016.

Add to this the vast sums being promised and poured into the so-called “green collar economy” as part of government financial stimulus packages around the world in 2009. Then add the emerging policies on climate change, such as the UK government's commitment to reduce carbon emissions of 80% by 2050, and we have something starting to feel like a brewing revolution. In fact, according the The State of Responsible Competitiveness 2007 report by AccountAbility, responsible markets in climate change, gender, human rights and anti-corruption will be worth at least US$750 billion by 2050.

Taken together, the green moon of Islamic markets and the green sun of cleantech may be just the tipping point we have been hoping for to turn CSR from a marginal, philanthropic activity into a connected, scaleable, responsive force of business for good. This is the real meaning of CSR 2.0 - the creation of a different way of doing business and an evolution of sustainability and responsibility to the level of markets, as opposed to old-style CSR applied at the individual manager or company level. Who knows, perhaps in the future, when we explain to our children how we narrowly escaped plunging into an overshoot and collapse catastrophe in our global social and ecological systems, we will use a simple tipping point formula:

Green Moon + Green Sun = Transformational Change.

An Agenda for the Future of CSR

I recently received my copy of “The Corporate Responsibility Movement” by Jem Bendell, et al., which includes some pieces I wrote together with him. I was struck by how relevant the chapter on “An Agenda for the Future of CSR”, which we wrote in 2005, still seems to be. So I have decided to repost it here:

We believe that the movement is at a crucial juncture. Companies have climbed the corporate social responsibility (CSR) learning curve and are now playing the game like experts. They have reframed the debate into language which they can understand and use without upsetting most of their shareholders, and they have designed policies and programs which they can implement without having to question their underlying business model.

There seems to be a pervading sense in many CSR circles that there is now business consensus about the most pressing issues in our global society, taking their cues from the Millennium Development Goals (MDGs), the Global Compact and other such frameworks. While many of the issues remain difficult to deal with in practice, companies are credited with putting strategies in place for tackling them. Everything, they argue, is going according to plan; hence, there is no need for anything more dramatic, especially not legislation to enforce improved performance. Or is there?

There is another perspective, which enjoys far less air time. A perspective that says the world is in a deepening crisis of alarming proportions and that the private sector’s response, under the guise of CSR, is as effective as placing a band aid on the foot of someone who is haemorrhaging from a head wound. This alternative perspective, radical as it sounds, nevertheless seems to be confirmed by just about every available statistic on the ecological and social health of our global society.

The question then becomes: is CSR, as it is currently being preached and practiced by multinational corporations around the world, actually a red herring? Is it a distraction from the more fundamental transformation (perhaps revolution even) of the capitalist business model which is needed? And as CSR becomes an established professional practice, will it take as given that its purpose is to benefit those who employ its professionals, rather than a primary goal of transforming the world?

If so, CSR will have contributed towards a global ‘Crash and Burn’ scenario, with growing ecological and social degradation.

Such criticism forces those of us who work on corporate responsibility issues, perhaps even identify ourselves as part of a CSR movement or a CSR profession, to reflect on our roles. Do we have a clear strategy for how we can help solve the big problems of poverty, pollution, abuse and so forth, by working with/in corporates? And if we think we are helping in small ways, do we have a plan for how to scale up our impacts to address problems which require widespread action, like climate change? Without one, might we just be pretending we are helping the planet and its people, while climbing another greasy pole? The risk here is that we all seem remarkably adept at coming up with explanations of our own behaviour and priorities that maintain an appearance of “ethicalness”… at least to ourselves. We have to find the courage to be self-critical, and explore what we are thinking and doing.

It is through this reflexivity that CSR might avoid being complicit in a global ‘Crash and Burn’ and become a crucial part of a ‘Rise and Shine’ scenario, where the world achieves a greater harmony between its peoples and with ecology. This scenario requires systemic change. For CSR to help with this systemic change, we need to embrace both idealism and realism.

Idealism is important as we must reawaken the values which underscore the CSR agenda, rather than hiding them sheepishly behind commercial arguments for action. A revival of zealous passion and moral belief as a driver of corporate change and a new intensity of questioning of the reigning business model is key.

Idealism and realism are often counterpoised, yet we need both if we are to promote systemic change. Idealism should not blind us from awareness of the limits of individual voluntary action. Some realism about markets and the law is essential. The commercial benefits from improved social and environmental performance are patchy, and many companies still make profits through externalising social and environmental costs - a process which is promoted by mainstream financial markets that still focus on short term value creation. Given this situation, the current system of governance, regulation and law enforcement is not often sufficient, as international companies can evade accountability through the use of sub-contracting and subsidiaries, while also being able to influence the processes of public governance itself, with questionable outcomes.

Extracted from “The Corporate Responsibility Movement” (2009) by Bendell, Visser, et al.

Earth Hour: A Tipping Point?

Did you participate in Earth Hour - switching off your lights from 8.30-9.30 pm on 28 March? If you did, you were one of "hundreds of millions" who joined WWF's campaign to "Vote Earth". But did it make a difference, or was it just a feel-good piece of "green spin"?

What is Earth Hour?

Earth Hour began in Sydney in 2007, when 2.2 million homes and businesses switched off their lights for one hour. In 2008 the message had grown into a global sustainability movement, with 50 million people switching off their lights. Global landmarks such as the Golden Gate Bridge in San Francisco, Rome's Colosseum, the Sydney Opera House and the Coca Cola billboard in Times Square all stood in darkness.

In 2009, hundreds of millions of people – from over 4,080 cities and towns across 88 countries - joined in, according to WWF. In the UK, famous landmarks like Big Ben, Buckingham Palace, Tower Bridge, the Millennium Stadium, Stormont and Edinburgh Castle all switched off to support the event. Around the world, iconic landmarks, like the Great Pyramid of Giza, the Eiffel Tower and even Las Vegas all joined in "the big switch-off".

What was the Impact?

I expect an official WWF analysis will emerge, but according to news reports, the Philippines saved 611 MWh of power during Earth Hour, involving 15 million Filipinos in 650 major cities. This placed them ahead of the rest of the world, with Greece placed second with 484 cities and towns participating, followed by Australia with 309. In South Africa, 100,000 people switched off 4.7 million 60 watt lightbulbs, saving 400 MWh. The best-performing city was, apparently, Christchurch in New Zealand, which reported a 13% decline in energy consumption.

Impressive statistics and quite fun to play with. For example, Pulse Energy reports that "if the actions taken for one hour of energy savings tonight [in Vancouver] were repeated for an entire year, enough energy would be saved to make six round trips on the SkyTrain between Vancouver and Paris. On the other hand, in Calgary in Canada, electricity use went up 3.6% during Earth Hour (they blame the weather). I also saw comments like, "Surely candle-power is much less energy efficient than fossil fuels?" (it is). But getting too caught up in the thermodynamics or the numbers, I think, entirely misses the point.

My 10 Reasons Why

Sceptics are well justified in shouting 'green spin!' After all, everyone went straight back to their normal fossil-fuel guzzling ways after the hour was up. And yet, I remain a total fan of Earth Hour. Here are my "10 Reasons Why":

1. Politics - The mass public demonstration of support for action on climate change gives the world's politicians space to maneuver in making the difficult transition to a low-carbon economy.
2. Focus - Earth Hour is not focused on 28 March, but on building pressure on the world's governments when they meet in Copenhagen in December 2009 to work out a Post-Kyoto deal.
3. Governance - In the face of significant corporate lobbying, civil society's ability to mobilise "hundreds of millions"  acts as a vital counter-balance in national and international governance.
4. Awareness - The widespread media coverage of the event means that it is not just "preaching to the converted", but raising broad public awareness of the seriousness of climate change.
5. Downshifting - Going "back to basics", even for just an hour, is a great reminder of what is important in life, without the distractions of all of modernity's electricity-gizmos (TVs, computers, etc.).
6. Empathy - It also gave people pause to think about the billions in the world who have no electricity. Hence, finding a sustainable energy solution needs to be linked to poverty reduction.
7. Community - All around the world, communities and families were drawn together behind a common cause, as so often happens voluntary events.
8. Action - The fact that Earth Hour required action - i.e. switching off lights and other appliances - sends an important psychological message that we need to go beyond talking.
9. Hope - Showing that we can make a difference, and that tackling our energy crisis is possible provides a critical antidote to feelings of hopelessness and disempowerment in the face of climate change.
10. Tipping Point - Earth Hour plays a crucial role in edging us towards a tipping point of public concern and political action on climate change, after which we will see the rapid transformation we need.

Conclusion

My feeling is that Earth Hour is not a once off, but rather the start of a tidal change. In much the same way that Earth Day, which Greenpeace started on 22 April 1970, played an important part in building momentum for the environmental movement, I believe Earth Hour will play a crucial role in fueling the post-carbon movement.

P.S. Switch!

For those with poetic leanings, you may wish to read the poem I wrote by candlelight during Earth Hour (which one Facebook friend called "an incorrigibly romantic way to spend Earth Hour"). It is called Switch!

Acknowledgement: Painting by Kimberly H.

Googlization: For Better or Worse?

I have been intrigued by the twittering and gnashing of teeth over the past week or so over Google's launch of its Street View maps for 25 cities in the UK. This case illustrates the CSR-related dilemmas faced by many companies today. In this blog, I look at the basic facts, the pros and cons and the implied questions for CSR.

What is Street View?

Street View is a 360 degree photographic panoramic view of the streets, which can be accessed through Google Maps in the cities in which it is available. The photos are about a year old and faces and number plates are blurred out. Google believes this is simply an evolution of mapping, giving people more useful and accurate information about their travel routes and destinations. Although new to the UK, it has, I believe, been available in the US for some years already.

What are the Objections?

A number of thematic concerns have emerged in the post-launch hulabaloo:

1. Privacy - The most common objection is that this represents an invasion of privacy and a commericalisation of public space. Somehow, people feel vulunerable, even violated, by having photos of their homes, cars and in some cases themselves or their children, made public.
2. Security - There are concerns that Street View creates a tool for criminals (burglars and perhaps peidophiles) to search for, target and study their victims homes - do they have a burglar alarms, where are the windows and doors, are there children playing in the garden?
3. Consultation - Individual members of the public were not consulted, or asked for permission, before Google took photos of their home. They did this using a modified car, with a special mounted camera that drove down each street taking 360 degree photos.
4. Googlization - There is a deep mistrust among some portions of the public who believe Google is somehow taking over the world, invading our lives, like some sinister, evil meglomaniac - the latest in a long line of corporate colonisers and cultural imperialists, like Coca-Cola and McDonald's.

What is Google's Response?

Google is anything but apologetic. It doesn't believe it is doing anything wrong. Here are their reasons why:

1. Privacy - Since the photos are not live, they are taken in a public space, faces and number plates are blurred out and house owners have the right to request that their house image is removed from Street View, Google believes it is not infringing on people's privacy.
2. Security - Besides the pictures being more than a year old, any criminal could walk down a street and view the same house details without breaking any laws. Criminals use mobile phones and cars to help them commit their crimes, so should we ban mobiles and cars? Why should maps be different?
3. Consultation - There is nothing in law that requires anyone to get permission to take photos in a public space. Also, Google consulted with all the relevant UK authorities (including security and police departments) and got given the green light.
4. Googlization - Google believes it is popular because it offers useful products and services for millions of people. Google's motto is to "do no evil" and its vision is to make all knowledge freely available to everyone on the planet. It also has ambitious plans to make renewables cheaper than fossil fuels. Is this the picture of a monster?

What are the CSR Implications?

This all raises fascinating questions for CSR, for example:

• Legal Compliance - Google is not doing anything illegal, but CSR is about going beyond the law. What does "beyond compliance" mean in this instance? Does giving house-owners the choice to remove their images go far enough?
• Transparency - The launch of Street View came as a surprise (a shock even!) to most people in Britain. Where was the public information, let alone consultation, in the lead-up to the launch? Would there have been less reaction if the public was made more aware?
• Governance - Do companies need to consult stakeholders individually on every issue (surely this is impossible)? If the government is meant to represent the public, is it enough for companies to consult government agencies? Would it have worked better if other stakeholder groups were consulted?
•  Power - At what point does corporate power and influence become dangerous? Google is providing vast free-to-the-public knowledge resources, but at the same time we are placing increasing reliance on one corporation to look after our personal details and private documentation. Isn't this risky?
• Demand - Isn't it hypocritical to demand that Google change, when consumers are clearly demanding and enjoying their services? Surely a public harm would need to be clearly demonstrated (the equivalent of poor labour conditions for low-cost retailers, or health risks for fast-food chains)? Even then, government intervention is difficult in the face of widespread public support.

Google seems content to ride out the public mini-storm, confident that Street View will survive and thrive on its own merits, as it has done in America and elsewhere. But there seem to be some clear CSR lessons they could learn about consultation, transparency and increasingly worrying perceptions of their "Big Brother" mantle.

I have now joined the future

This is a green post. It is recycled from my reporting blog. It's a sort of lighter version of Wayne's excellent analysis of the REAL future of Codes and Standards, though it was actually written before i know that the future would feature in both posts ...here it is:

Guess what ! I have now officially become a member of the future.

I participated yesterday in what was for me a very futuristic experience - yes - you guessed .. a WEBINAR!! I like to think i am a computer-literate techie sort of person, but to date, I have resisted all these millions of webinars and things, mainly because of the hassle factor (getting hooked up), the earphones factor (flat ears) , the poor connection factor (crackles, buzzes and beeps) and the half-sentence factor ( hello, welcome to.................. today............will discuss .................important to note that ....................very significant as you can see on slide 3 that....................) . But the temptation of hearing code-guru Deborah Leipziger was too great to resist. So, albeit a little late (10 yr old daughter needed mom to buy her hundreds of $$$$$ of clothes for her birthday party at the weekend), I accepted the CSR International invitation to join the first in the impressive line-up of webinar events scheduled until the end of 2009 (this is great forward planning - unlike my local culture where planning more than 3 hours ahead causes chronic migraine)

Deborah Leipziger is the first lady of corporate, industry and cause-related codes of conduct and ethical standards. Her Code Book created order and understanding of the relevance and importance of framing conduct expectations and existing best practices. A sort of Code Bible. Amen.

How is this connected to Reporting ? No CSR report today is complete without reference to a Code of Conduct and in many cases, declaration of a string of external codes that the corporation adopts. My guess is that on average, companies have about 5 or more different codes they try to observe in their businesses.

A quick look at some CSR reports proves me mainly right:

• ExxonMobil 2007: corporate code(s) of conduct , global responsible care charter, global compact, voluntary Principles on Security and human Rights, millenium development goals, ILO convention on Indigenous peoples
• Westpac Banking Corp 2008 : UNPRI, principles for doing business, Equator Principles, ASX principles on Good Corporate Governance, sustainable supply chain managment code of conduct, GRI, UNEP Finance Initiative, CEO Water Mandate
• Sony 2008: Sony Group code of conduct, EICC code of conduct (only 2 ? did i miss a few?)
• Diageo 2008: Global compact, Dublin Principles, Business charter for sustainable development, CEO Water Mandate, internal codes of ethics, GRI

The harmonization of codes was one point raised in the discussion - though a key part of the value of the Code is the process by which it was created. So maybe we need lots of processes but less codes ?

Anyway, back to the view from the top - few insights from the guru:

• ISO 26000 is not cutting-edge but it is broad and covers most of the range of CSR issues . It is right to go the guideline route and not the certification route, though certification at a national level in local language could be an opportunity. Some national certification bodies are already starting to consider its use - Portugal and Denmark for instance.
• Sectorialization is becoming more popular and useful as a tool for different industries such as the electronics industry, automotives, forestry, financial sector tools such as the Equator Principles.
• Training is essential to ensure application and assimilation of codes - this is often underestimated
• Impact analysis including gathering of base line data is often overlooked but is an important tool in understanding both the effectiveness of the code and the unintended consequences of implementation.

In response to my question, What about a code of conduct for CSR professionals or are we exempt? there was a knowing smile and an admission that the cobbler forgot to make himself a pair of shoes, or whatever the saying is. There was the question of how do you define a CSR professional . Right now, as long as its polite, I dont mind. :-)
Anyway, i have to end this blog post now as i have to go off and write another code....
Thanks to Deborah and to Wayne Visser, CSRI founder and webinar maestro

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm based in Israel. Visit our website at: www.b-yond.biz !