CSR 2.0 as a New DNA for Business

By Wayne Visser

Part 6 of 13 in Wayne Visser's Age of Responsibility Blog Series for 3BL Media.

By May 2008, it was clear to me that the evolutionary concept of Web 2.0 held many lessons for CSR, and I began to develop my thinking around CSR 2.0. It quickly became clear, however, that a metaphor can only take you so far. What was needed was a set of principles against which we could test CSR. These went through a few iterations, but I eventually settled on five, which form a kind of mnemonic for CSR 2.0: Creativity (C), Scalability (S), Responsiveness (R), Glocality (2) and Circularity (0). These principles, which will be explored in detail in the next blog posts, can be described briefly as follows:

Creativity – The problem with the current obsession with CSR codes and standards (including the new ISO 26000 standard) is that it encourages a tick-box approach to CSR. But our social and environmental problems are complex and intractable. They need creative solutions, like Free-play’s wind-up technology or Vodafone’s M-Pesa money transfer scheme.

Scalability – The CSR literature is liberally sprinkled with charming case studies of truly responsible and sustainable projects. The problem is that so few of them ever go to scale. We need more examples like Wal-Mart ‘choice editing’ by converting to organic cotton, Tata creating the affordable eco-efficient Nano car or Muhammad Yunus’s Grameen microfinance model.

Responsiveness – More cross-sector partnerships and stakeholder-driven approaches are needed at every level, as well as more uncomfortable, transformative responsiveness, which questions whether particular industries, or the business model itself, are part of the solution or part of the problem. A good example of responsiveness is the Corporate Leaders Group on Climate Change.

Glocality – This means ‘think global, act local’. In a complex, interconnected, globalising world, companies (and their critics) will have to become far more sophisticated in combining international norms with local contexts, finding local solutions that are culturally appropriate, without forsaking universal principles. We are moving from an ‘either-or’ one-size-fits-all world to a ‘both-and’ strength-in-diversity world.

Circularity – Our global economic and commercial system is based on a fundamentally flawed design, which acts as if there are no limits on resource consumption or waste disposal. Instead, we need a cradle-to-cradle approach, closing the loop on production and designing products and processes to be inherently ‘good’, rather than ‘less bad’, as Shaw Carpets does.

I believe that CSR 2.0 – or Systemic CSR (I also sometimes call it Radical CSR or Holistic CSR, so use whichever you prefer) – represents a new model of CSR. In one sense, it is not so different from other models we have seen before. We can recognise echoes of Archie Carroll’s CSR Pyramid, Ed Freeman’s Stakeholder Theory, Donna Wood’s Corporate Social Performance, John Elkington’s Triple Bottom Line, Stuart Hart and C.K. Prahalad’s Bottom of the Pyramid, Michael Porter’s Strategic CSR and the ESG approach of Socially Responsible Investment, to mention but a few. But that is really the point – it integrates what we have learned to date. It presents a holistic model of CSR.

The essence of the CSR 2.0 DNA model are the four DNA Responsibility Bases, which are like the four nitrogenous bases of biological DNA (adenine, cytosine, guanine, and thymine), sometimes abbreviated to the four-letters GCTA (which was the inspiration for the 1997 science fiction film GATTACA). In the case of CSR 2.0, the DNA Responsibility Bases are Value creation, Good governance, Societal contribution and Environmental integrity, or VEGS if you like. Each DNA Base has a primary goal and each goal has key indicators.

Hence, if we look at Value Creation, it is clear we are talking about more than financial profitability. The goal is economic development, which means not only contributing to the enrichment of shareholders and executives, but improving the economic context in which a company operates, including investing in infrastructure, creating jobs, providing skills development and so on. There can be any number of KPIs, but I want to highlight two that I believe are essential: beneficial products and inclusive business. Does the company’s products and services really improve our quality of life, or do they cause harm or add to the low-quality junk of what Charles Handy calls the ‘chindogu society’. And how are the economic benefits shared? Does wealth trickle up or down; are employees, SMEs in the supply chain and poor communities genuinely empowered?

Good Governance is another area that is not new, but in my view has failed to be properly recognised or integrated in CSR circles. The goal of institutional effectiveness is as important as more lofty social and environmental ideals. After all, if the institution fails, or is not transparent and fair, this undermines everything else that CSR is trying to accomplish. Trends in reporting, but also other forms of transparency like social media and brand- or product-linked public databases of CSR performance, will be increasingly important indicators of success, alongside embedding ethical conduct in the culture of companies. Tools like Goodguide, KPMG’s Integrity Thermometer and Covalence’s EthicalQuote ranking will become more prevalent.

Societal Contribution is an area that CSR is traditionally more used to addressing, with its goal of stakeholder orientation. This gives philanthropy its rightful place in CSR – as one tile in a larger mosaic – while also providing a spotlight for the importance of fair labour practices. It is simply unacceptable that there are more people in slavery today than there were before it was officially abolished in the 1800s, just as regular exposures of high-brand companies for the use of child-labour are despicable. This area of stakeholder engagement, community participation and supply chain integrity remains one of the most vexing and critical elements of CSR.

Finally, Environmental Integrity sets the bar way higher than minimising damage and rather aims at maintaining and improving ecosystem sustainability. The KPIs give some sense of the ambition required here – 100% renewable energy and zero waste. We cannot continue the same practices that have, according to WWF’s Living Planet Index, caused us to lose a third of the biodiversity on the planet since they began monitoring 1970. Nor can we continue to gamble with prospect of dangerous – and perhaps catastrophic and irreversible – climate change.

In this blog series, I will explore what a different approach – CSR 2.0 – may look like.

Give a Man the Means to Fish

From Paternalistic Charity to Venture Philanthropy

Part 3 of 13 in Wayne Visser's Age of Responsibility Blog Series for 3BL Media.

By Dr Wayne Visser

Give a man a fish and he will eat today. Teach a man to fish and he will eat tomorrow – or until his nets break. Invest in a man’s fishing business and he will feed himself and others for a long time to come. This is what it means to shift from paternalistic charity to venture philanthropy. It is an evolution that is important to root in a long and varied cultural tradition of philanthropy.

Confucius (551-479 BC) said: ‘When wealth is centralized, the people are dispersed. When wealth is distributed, the people are brought together.’ Hence, ‘a man of humanity is one who, in seeking to establish himself, finds a foothold for others and who, desiring attainment for himself, helps others to attain.’ When asked, ‘Is there one word which may serve as a rule of practice for all one's life?’ he replied, ‘Is not reciprocity such a word? What you do not want done to yourself, do not do to others’.

This so-called Golden Rule, which we find in all the world’s major religions, has come to represent the very essence of charity. In fact, the word charity derives from Latin caritas, which meant preciousness, dearness, or high price. However, in Christian theology, caritas became the standard Latin translation for the Greek word agapē, meaning an unlimited loving-kindness to all others. Hence, in St Paul’s Letter to the Corinthians, we read, in the King James Version of the Bible, of ‘faith, hope and charity’. Of course, it is not only giving that is important, but also the nature of giving. There is a Jewish proverb that says: What you give for the cause of charity in health is gold; what you give in sickness is silver; what you give after death is lead.

Islam also has a strong tradition of charity. Zakāt, or alms-giving for the purposes of alleviating poverty and helping those less fortunate, is one of the Five Pillars of Islam. The practice is generally in the form of an annual tithe or tax of 2.5% of an individual’s wealth, including money made through business, savings and income. The zakāt must also be above an agreed minimum (called nisab), which is said to be around $2,640 or the equivalent in any other currency. As important as the collection of zakāt in a community is its fair distribution among the needy. Another form of charitable action is sadaqah, which literally means ‘righteousness’ and refers to the voluntary giving of alms or charity. These ancient traditions are considered to be a personal responsibility for all Muslims, practiced out of love for humanity, to ease economic hardship for others and eliminate inequality.

There are numerous other religious and cultural variations on the theme. Philanthropy in Latin America typically revolves around asistencialismo, which is charitable giving for poverty alleviation. Out of dedication to their religion, education and culture, Bulgarian communities raised donations to build churches, schools and cultural centres called chitalishta. In India, Gandhi’s trusteeship concept was adapted and applied to welfare acts. In Mexico, the Raramori, who still live in the mountains of the state of Chihuahua, use the expression korima, which means ‘to share’ resources in times of stress. In Southern Africa, ubuntu is the practice of humanism based on the collectivist notion that ‘I am a person through other people’.

So much for the roots and cultural traditions of philanthropy. Upon these foundations, the great philanthropists, ancient and modern, built their charities – from Rockefeller and Carnegie to Gates and Turner. The more interesting question, I think, is whether there is anything new and transformative about charitable giving?

One concept that has generated a lot of excitement is ‘venture philanthropy’. Seemingly, it has origins in another HBR article, ‘Virtuous Capital: What Foundations Can Learn from Venture Capitalists’, by Christine W. Letts, William Ryan and Allen Grossman in 1997. Their basic message was that corporate foundations can be more effective if they ‘develop hands-on partnering skills’, for which venture capital firms offer a helpful benchmark: ‘In addition to putting up capital, they closely monitor the companies in which they have invested, provide management support, and stay involved long enough to see the company become strong.’

Since then, the debate has raged about what venture philanthropy is and whether it is plausible, ethical and desirable. After all, if the venture capitalists are treating their donations as an investment with expectations of a financial return, then is it philanthropy, or just business? And is it feasible to expect charities like community development organisations to generate a financial return in the first place? And what about the distinction between venture philanthropy and social enterprise, or social business?

So what do we know? There are basically three models of venture philanthropy. The first is traditional foundations practicing high-engagement grantmaking. The second is organisations which are funded by individuals, but all engagement is done by professional staff. Examples cited include the Robin Hood Foundation in New York City and Tipping Point Community in the San Francisco Bay Area. The third is the partnership model, in which partner investors both donate the financial capital and engage with the grantees. An example is the Silicon Valley Social Venture Fund in San Jose, California.

Without getting heavily into the venture philanthropy debate, I do believe that – as with strategic philanthropy – it is symptomatic of the shift in our approach to tackling society’s most intractable problems. What we have seen is that traditional charity has been, for the most part, invaluable in bringing about alleviation of social and environmental distress, but rather ineffective in achieving resolution of the problems themselves. The need for pure philanthropy, irrespective of its strategic alignment to donors, will always be there. There will always be emergencies, crises and urgent problems that don’t link conveniently to business interests.

Venture philanthropy, on the other hand, recognises that we need ways to scale up solutions, and one way is to link business with a social cause, and provide the capital it needs to be effective. Hence, I regard venture philanthropy as one of the transition tools that we need as we move to the Age of Responsibility, not least because it brings creativity and scalability to the table. It is one of the critical enablers that is facilitating the social enterprise revolution, which is discussed in more detail in later chapters.

About the author

Dr Wayne Visser is Founder and Director of the think-tank CSR International and consultancy Kaleidoscope Futures Ltd. He is the author of thirteen books, including The Age of Responsibility: CSR 2.0 and the New DNA of Business (2011), The World Guide to CSR (2010) and The A to Z of Corporate Social Responsibility (2010). He is the author of over 180 publications (chapters, articles, etc.) and has delivered more than 170 professional speeches on in over 50 countries in the last 20 years. In addition, Wayne is Senior Associate at the University of Cambridge Programme for Sustainability Leadership, Visiting Professor of Sustainability at Magna Carta College, Oxford, and Adjunct Professor of CSR at Warwick Business School, UK.

Fat-Cats versus Alley-Cats: Why the Occupy Movement is Right

By Dr Wayne Visser

Part 2 of 13 in Wayne Visser's Age of Responsibility Blog Series for 3BL Media.

The most common explanation for the global financial crisis is to point a finger at the banks. And rightly so. But I believe we also need to shine a spotlight on the greed and irresponsibility of executives, fat-cats like Lehman Brothers’ former CEO Richard Fuld. These are the enriched 1% that suck the lifeblood out of the fleeced 99% and which the Occupy Movement is justifiably targeting. Naming and shaming is important, but we need to realise that this is a systemic cancer in our economic and financial system.

It is also not a new phenomenon, but worrying it is showing signs of getting worse, not better. In 2000, Enron was the 7th largest company in America, with revenues of $111 billion and over 20,000 staff. When the company collapsed in 2001, due to various fraudulent activities fuelled by a culture of greed, the average severance payment was $45,000, while executives received bonuses of $55 million in the company's last year. Employees lost $1.2 billion in pensions; retirees lost $2 billion, but executives cashed in $116 million in stocks.

At the end of 2007, just before the crisis went public, Lehmans’ CEO Fuld and president Joseph Gregory paid themselves stock bonuses of $35 million and $29 million respectively. At the time, Fuld lived in an enormous Greenwich mansion, over 9,000 square feet, valued at $10 million. He had four other homes and an art collection valued at $200 million. Hardly a picture of responsible restraint.

Taken on their own, these executive pay packages are outrageous enough. But the extent of creeping executive greed comes into even sharper focus when we look at trends in relative pay. In 1965, U.S. CEOs in major companies earned 24 times more than a typical worker, a ratio that grew to 35 in 1978 and to 71 in 1989. By 2000, it had hit 298, and despite falling to 143 in 2002 (after the post-Enron stock market slump), it bounced back again and has continued rising through the noughties (2000s).

The Institute for Policy Studies Executive Excess report reveals that the 2010 ratio between average worker and average CEO compensation leaped to 325-to-1, up from in 263-to-1 in 2009. Among the nation's top firms, the S&P 500, CEO pay last year averaged $10,762,304, up 27.8 percent over 2009. Average worker pay in 2010? That finished up at $33,121, up just 3.3 percent over the year before.

According to Fair Economy, the average U.S. worker's salary could pay for 10 months of health insurance, 5 months of college tuition, and buy 10 percent of an average home. On the other hand, the average Fortune 500 CEO's salary could pay for 300 years of health insurance, 200 years of college tuition and buy 34.5 new homes.

But at least these CEOs are contributing through taxes, right? Wrong. In fact, corporate tax dodging has gone so out of control that 25 major U.S. corporations last year paid their chief executives more than they paid the U.S. government in federal income taxes. Citizens for Tax Justice, as part of a study on tax avoidance among the Fortune 500, has identified 12 corporations that have paid an effective rate of negative 1.5 percent on $171 billion in profits.

It is easy to go cross-eyed or brain-fried when confronted by a barrage of numbers like that. And yet, there was one particular number that shocked me so much when I read it that it stuck in my mind. I believe I read it in Body Shop founder Anita Roddick’s wonderful and feisty book, Body and Soul. She claimed that it would take one Haitian worker producing Disney clothes and dolls 166 years to earn as much as Disney’s then president, Michael Eisner, earned in one day.

Reflecting on this, I wrote in my book Beyond Reasonable Greed: ‘rather than spreading around the wealth for the common good, it seems to us that Adam Smith’s invisible hand has a compulsive habit of feeding itself’. If decades of inaction by governments on executive pay is anything to go by, then we should not wait for our elected politicians to put restraints on the market’s invisible hands.

So that leaves us – civil society. And that is why I believe the Occupy Movement is a revolution whose time has come. But they need our support; they need our determination; they, even need our outrage. If they don’t get it, we will stand by shaking our self-righteous heads and watch as another generation of Wall Street fat-cats gets fatter at the expense of Main Street alley-cats – that’s us by the way: we, the middle class; we the people who create the real wealth of nations; we who need to say ‘enough is enough!’

About the author

Dr Wayne Visser is Founder and Director of the think-tank CSR International and consultancy Kaleidoscope Futures Ltd. He is the author of thirteen books, including The Age of Responsibility: CSR 2.0 and the New DNA of Business (2011), The World Guide to CSR (2010) and The A to Z of Corporate Social Responsibility (2010). He is the author of over 180 publications (chapters, articles, etc.) and has delivered more than 170 professional speeches on in over 50 countries in the last 20 years. In addition, Wayne is Senior Associate at the University of Cambridge Programme for Sustainability Leadership, Visiting Professor of Sustainability at Magna Carta College, Oxford, and Adjunct Professor of CSR at Warwick Business School, UK.

The Meaning of Responsibility

By Wayne Visser

The Age of Responsibility blog series for TBLmedia - No. 1

Do you sigh when you hear the word responsibility? Perhaps responsibility is even a dirty word in your vocabulary. Perhaps you associate it with burdens and restrictions; the opposite of being carefree and without obligations. But responsibility doesn’t have to be a chore, or a cage. It all depends how you think about it.

Responsibility is literally what it says – our ability to respond. It is a choice we make – whether to be attentive to our children’s needs, whether to be mindful of the plight of those less fortunate, whether to be considerate of the impact we have on the earth and others. To be responsible is to be proactive in the world, to be sensitive to the interconnections, and to be willing to do something constructive, as a way of giving back.

Responsibility is the counterbalance to rights. If we enjoy the right to freedom, it is because we accept our responsibility not to harm or harass others. If we expect the right to fair treatment, we have a responsibility to respect the rule of law and honour the principle of reciprocity. If we believe in the right to have our basic needs met, we have the responsibility to respond when poverty denies those rights to others.

Taking responsibility, at home or in the workplace, is an expression of confidence in our own abilities, a chance to test our own limits, to challenge ourselves and to see how far we can go. Responsibility is the gateway to achievement. And achievement is the path to growth. Being responsible for something means that we are entrusted with realising its potential, turning its promise into reality. We are the magicians of manifestation, ready to prove to ourselves and to others what can happen when we put our minds to it, if we focus our energies and concentrate our efforts.

Being responsible for someone – another person – is an even greater privilege, for it means that we are embracing our role as caregivers, helping others to develop and flourish. This is an awesome responsibility, in the truest sense, one which should be embraced with gratitude, not reluctantly accepted with trepidation. Responsibility asks no more of us than that we try our best, that we act in the highest and truest way we know. Responsibility is not a guarantee of success, but a commitment to trying.

So why is responsibility seen by many as such an onerous burden? Responsibility becomes onerous when choice is removed from the equation, when we do not realise our freedom to act differently, when we forget that we are allowed to say no. Responsibility becomes pernicious when we take on too much, when we mistakenly think that more is always better, when we take on the guilt and expectations of others. Accepting too many responsibilities is, in fact, irresponsible – for it compromises our ability to respond. Do few things but do them well is the maxim of responsibility.

Being responsible also does not mean doing it all ourselves. Responsibility is a form of sharing, a way of recognising that we’re all in this together. Sole responsibility is an oxymoron.

Taking responsibility is a way of taking ownership in our lives, of acknowledging our own hand in the shaping of destiny. Responsibility is the antidote for victimhood.

When we walk with awareness, we realise the enmeshed nature of reality, we see the subtle strands that make up the web of life, we accept that everything is linked to everything else. Responsibility is being conscious of the oneness of existence.

Responsibility, if we manage it well, should never be like the curse of Sisyphus, eternally rolling a rock uphill, but rather a blessing gratefully received. For what can be more joyous than making a positive contribution in the world, or making a difference in someone else’s life?

Responsibility is the footprint we leave in the sand, the mark of our passage. What tracks will you leave? Where is the place where you can most freely and effectively respond? The choice, as always, is yours.

I wrote these opening words on responsibility in 2005, and I believe they are still as relevant today as they were back then. Responsibility is the choice we make to respond with care. My book – The Age of Responsibility – and this TBLmedia blog series, is a way of taking stock. What choices have we made – in the way we live our lives, in the way we do our work and in the way we run our businesses? How have we responded to the needs of our day – especially the social, environmental and ethical crises we face? And have our actions been taken with care – have we cared about our impacts on others?

There are even more troubling questions. For instance: Are companies more a part of the problem or the solution? Is the net impact of business positive or negative? There are other questions too; awkward questions that cut even closer to the bone. For better or for worse, I chose corporate sustainability and responsibility (CSR) as my way to make a positive difference in the world – the mark of my footprints in the sands of time. But given that CSR has increased dramatically over the same 50 years that many of our global problems have been getting worse, does that mean that CSR is ineffective?

It gets worse. Could the whole CSR bonanza be an unwitting accomplice to the spate of corporate crimes of recent decades? Am I quietly and unintentionally aiding and abetting our collective demise? After all, Enron was stuffed to the gills with CSR – from codes of conduct and ethics officers to corporate volunteering and community development programmes. I am sure all of these CSR programmes had their merits. And yet, if they did nothing to prevent these companies acting like pirates on the high seas of finance, what good are they?

If CSR cannot form the bedrock of ethical corporate behaviour, does it deserve to have ‘responsibility’ in its title? More worryingly still, if CSR is used to legitimise businesses or practices that are, at heart, irresponsible, surely CSR is partly to blame for the various corporate ‘sins’ that go undetected and unpunished? I am led to a very uncomfortable conclusion. At worst, CSR in its most primitive form may be a smokescreen covering up systemically irresponsible behaviour. At best, even the most evolved CSR practices might just be a band-aid applied to a gaping wound that is haemorrhaging the lifeblood of the economy, society and the planet.

So we need a new approach – a new CSR, which I call CSR 2.0. This blog series will explore why CSR 1.0 is broken, and how CSR 2.0 can breathe new life into the concept and practice of corporate sustainability and responsibility. I hope you will join me.

About the author

Dr Wayne Visser is Founder and Director of the think-tank CSR International and consultancy Kaleidoscope Futures Ltd. He is the author of thirteen books, including The Age of Responsibility: CSR 2.0 and the New DNA of Business (2011), The World Guide to CSR (2010) and The A to Z of Corporate Social Responsibility (2010). He is the author of over 180 publications (chapters, articles, etc.) and has delivered more than 170 professional speeches on in over 50 countries in the last 20 years. In addition, Wayne is Senior Associate at the University of Cambridge Programme for Sustainability Leadership, Visiting Professor of Sustainability at Magna Carta College, Oxford, and Adjunct Professor of CSR at Warwick Business School, UK.

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

Can We Break the Spell of CSR Curses?

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.5

Looking back, we can see that the 1990s were the decade of CSR codes and standards – from EMAS and ISO 14001 to SA 8000 and the Global Reporting Initiative. But these were just a warm up act compared to the last 10 years, when we have seen codes proliferate in virtually every area of sustainability and responsibility and all major industry sectors. So much so that in the A to Z of Corporate Social Responsibility, we included over 100 such codes, guidelines and standards – and that was just a selection of what it out there.

This spawning of CSR codes and standards is typical of Strategic CSR, emerging from the Age of Management. At its heart, this is the drive to relate CSR activities to the company’s core business (like Coca-Cola's focus on water management) by turning these into formal management systems, with cycles of CSR policy development, goal and target setting, programme implementation, auditing and reporting. All good and well, but where does this leave us?

My belief is that Strategic CSR – like its predecessors Defensive, Charitable and Promotional CSR - has brought us to a point of crisis. Specifically, all these approaches are failing to turn around our most serious global problems – the very issues CSR purports to be concerned with – and may even be distracting us from the real issue, which is business’s role causal role in the social and environmental crises we face. This failure is due to what I have called the three Curses of CSR 1.0, namely that it is incremental, peripheral and uneconomic. Let’s look at these briefly in turn.

Curse 1: Incremental CSR

One of the great revolutions of the 1970s was total quality management, conceived by American statistician W. Edwards Deming and perfected by the Japanese before being exported around the world as ISO 9001. At the very core of Deming’s TQM model and the ISO standard is continual improvement, a principle that has now become ubiquitous in all management system approaches to performance. It is no surprise, therefore, that the most popular environmental management standard, ISO 14001, is built on the same principle.

There is nothing wrong with continuous improvement per se. On the contrary, it has brought safety and reliability to the very products and services that we associate with modern quality of life. But when we use it as the primary approach to tackling our social, environmental and ethical challenges, it fails on two critical counts: speed and scale. The incremental approach to CSR, while replete with evidence of micro-scale, gradual improvements, has completely and utterly failed to make any impact on the massive sustainability crises that we face, many of which are getting worse at a pace that far outstrips any futile CSR-led attempts at amelioration.

Curse 2: Peripheral CSR

Ask any CSR manager what their greatest frustration is and they will tell you: lack of top management commitment. Translated, this means that CSR is, at best, a peripheral function in most companies. There may be a CSR manager, a CSR department even, a CSR report and a public commitment to any number of CSR codes and standards. But these do little to mask the underlying truth that shareholder-driven capitalism is rampant and its obsession with short-term financial measures of progress is contradictory in almost every way to the long-term, stakeholder approach needed for high-impact CSR.

So what we are left with is an approach to CSR which allows each company to set their own voluntary objectives and targets, which appear responsible, but lack the scale and urgency needed to reverse our social and environmental crises. CSR remains peripheral in another sense as well, because it is only a handful of big-branded companies that find themselves in the CSR spotlight. What about the millions of small and medium sized enterprises. By and large, CSR passes them by, despite their collectively bigger impacts.

Curse 3: Uneconomic CSR

Which brings us to Curse 3. If there was ever a monotonously repetitive, stuck record in CSR debates, it is the one about the so-called ‘business case’ for CSR. That is because CSR managers and consultants, and even the occasional saintly CEO, are desperate to find compelling evidence that ‘doing good is good for business’, i.e. CSR pays. The lack of corroborative research seems to be no impediment for these desperados endlessly incanting the motto of the business case, as if it were an entirely self-evident fact.

The rather more ‘inconvenient truth’ is that CSR sometimes pays, in specific circumstances, but more often does not. Of course there are low-hanging fruit – like eco-efficiencies around waste and energy – but these only go so far. Most of the hard-core CSR changes that are needed to reverse the misery of poverty and the sixth mass extinction of species currently underway require strategic change and massive investment. They may very well be lucrative in the long term, economically rational over a generation or two, but we have already established that the financial markets don’t work like that; at least, not yet.

The way I see it, that leaves us with three options for taking CSR forward, which I like to think of as the Parrot, Ostrich and Phoenix scenarios.

The Way of Parrot is to tell it like it is: recognise the limitations of CSR and admit to its primary role as a business tactic for reputation management. The Way of the Ostrich is the status quo: pretend that CSR is working and that more of the same will be enough. The Way of the Phoenix is the transformative agenda: reconceptualise CSR as a radical or revolutionary concept that challenges the intransigent business and economic model and offers genuine solutions to our global challenges. The Way of the Phoenix is what I call Systemic CSR, or Transformative CSR, or CSR 2.0, and is what we are just starting to see rising from the ashes of the previous ages, as we enter a new Age of Responsibility. This rather more positive agenda is what I will explore for the remainder of this blog series.

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

Exposing the CSR Pretenders

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.4

Industrialism created a limitless appetite for resource exploitation, and modem science provided the ethical and cognitive license to make such exploitation possible, acceptable, and desirable. – Vandana Shiva

Can Big Tobacco ever be responsible? British American Tobacco (BAT) have engaged in extensive stakeholder consultation exercises and, since 2001, their businesses in more than 40 markets have produced Social Reports, many of which have won awards from organisations as diverse as the United Nations Environment Programme, PriceWaterhouseCoopers and the Association of Certified Chartered Accountants. BAT has also been ranked in the Dow Jones Sustainability Index, the FTSE Ethical Bonus Index and Business in the Community (BITC) Corporate Responsibility Index, and they funded Nottingham University’s International Centre for CSR.

Yet this is the industry where, in 1994, the CEOs of 7 of America’s largest tobacco companies[1] testified before the House Subcommittee on Health and the Environment of Congress, all denying that cigarettes are addictive. They lied under oath. And this is the business that, according to the World Health Organization, kills more than AIDS, legal drugs, illegal drugs, road accidents, murder and suicide combined.’ Of everyone alive today, 500 million will eventually be killed by smoking, and while 0.1 billion people died from tobacco use in the 20^th century, ten times as many will die in the 21st century. Isn’t responsible tobacco an oxymoron?

Of course, it’s not just Big Tobacco. What about Big Oil? This is the industry that set up and funded the Global Climate Coalition (GCC) to lobby against the emerging consensus of climate science and policy development until it was embarrassed into disbanding in 2002. A 2007 report by the Union of Concerned Scientists, entitled Smoke, Mirrors & Hot Air, documented how ExxonMobil adopted the tobacco industry’s disinformation tactics, as well as some of the same organisations and personnel, to cloud the scientific understanding of climate change and delay action on the issue. According to the report, ExxonMobil funnelled nearly $16 million between 1998 and 2005 to a network of 43 advocacy organisations that seek to confuse the public on global warming science.

Or what about BP? In 2000, the company reportedly spent $7 million in researching the new ‘Beyond Petroleum’ Helios brand and $25 million on a campaign to support the brand change. Greenpeace concluded at the time that ‘this is a triumph of style over substance. BP spent more on their logo this year than they did on renewable energy last year’. Antonia Juhasz, author of The Tyranny of Oil (2008), is similarly sceptical, claiming that at its peak, BP was spending 4% of its total capital and exploratory budget on renewable energy and that this has since declined. That’s even before we factor in the Texas City refinery explosion in 2005, or the catastrophic Gulf spill in 2010, or BP’s ongoing investments in the Alberta tar sands. Isn’t sustainable oil a contradiction?

While many of these examples – and I could cite countless more, from automotive, agricultural, chemicals and other industries – are a little more than the familiar toxic mix of old-fashioned dirty lobby tactics, many companies today in engage in far more subtle and seemingly plausible campaigns of misdirection – investing in environmental management systems, producing sustainability reports, and performing supply chain audits. Each of these actions is, on its own merits, laudable and to be encouraged; applauded even. But all too often, they are used as a smokescreen to mask the more damaging impacts and irresponsible practices of business.

Behind these actions lies a pervasive driver. According to the UN Global Compact and Accenture’s 2010 CEO survey, three corporate attributes – brand, trust and reputation – were consistently cited by CEOs as their primary reason for acting on sustainability. Simply put, CSR or sustainability are seen as a means of promotion in an Age of Marketing. As we saw in the BP case, ‘greenwash’ has become one of the popular labels applied to this kind of PR-driven misdirection by companies on environmental issues.

The word was coined by environmentalist David Bellamy in the 1980s and plays off of the concept of ‘whitewashing’ – literally painting over the cracks to cover up inherent faults. In 1999, the Oxford English Dictionary added the term, defining it as: ‘Disinformation disseminated by an organisation, so as to present an environmentally responsible public image; a public image of environmental responsibility promulgated by or for an organisation, but perceived as being unfounded or intentionally misleading.’

Jose Lopez, EVP of Operations of Nestle admits that ‘there is probably out there an environment for pretenders, for the greenwashers. It’s going to get harder and harder to tell apart the greenwasher from the real guy. The reason is, we have a lot of information on what constitutes good sustainability practice,’ i.e. it’s easier to copy apparently credible behaviour.

One classic example was an advert run by Shell which has a picture of a factory with flowers coming out of the smoke-stacks and claiming: ‘We use our waste CO2 to grow flowers’. There was a grain of truth in the claim, as in the Netherlands the company did capture CO2 and use it in floral hothouses. However, since Shell only used 0.325% of its CO2 output in this way, the Advertising Standards Authority banned the advert, following complaints.

As a result of this kind of greenwash, the UK’s Committee of Advertising Practice (CAP) Code, enforced by the Advertising Standards Authority, created a clause for environmental claims in 1995. Since 1998, it has also published a non-binding ‘Green Claims Code’, advising advertisers on how best to make good claims. Despite this, greenwashing complaints, the majority of which are upheld, continue to rise year-on-year. One rather fun, yet informative, publication is ‘The Greenwash Guide’ by Futerra.

Of course, this kind of PR-spin does not only apply to environmental issues. After the launch of the UN Global Compact, companies started to be accused of ‘bluewash’ – a reference to the blue of the UN logo and business using association with the United Nations to appear more responsible than they really are. Likewise, although I haven’t heard the term, I can imagine the ‘redwash’ brush being applied to companies claiming social, community or labour responsibility that masks their real negative impacts on society.

Let’s be clear, I’m not into corporate witch hunts or evil empire theories, but isn’t it time we stop giving credit to industries and practices that tick superficial CSR and sustainability boxes, while doing little or nothing to change the underlying irresponsibility and unsustainability of their industries? Many companies are stuck in an Age of Marketing, with promotional CSR as their modus operandi, and it’s time that we exposed them, so that we can separate the CSR pretenders from the ‘real mccoys’.

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

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[1] Philip Morris U.S.A., RJ Reynolds Tobacco Company, U.S. Tobacco, American Tobacco Company, Lorillard Tobacco Company, Liggett Group, Brown and Williamson Tobacco Company