Video: Ana Muro on Sustainability Trends in Argentina

Ana Muro is Co-ordinator of the CSR Group of the Argentine Business Council for Sustainable Development (BCSD). In this interview with Dr Wayne Visser, Director of CSR International, she discusses trends and best practice cases in corporate sustainability in Argentina. The interview took place on 20 July 2010.

POLL: CSR Leaders - Who is your top 10?

CSR International - with your help - is compiling a Top 100 list of CSR Leaders (including thought-leaders and leaders-in-practice). 

Taking into account your prior input and our own research, we have compiled a master list of potential CSR 100 Leaders. 

Now we need you to help us sort out who really deserves to be there. Simply click on the survey link below and select your Top 10 CSR Leaders (it should take 5 minutes or less!) and we will do the rest. 

The results will be displayed on the CSR International website in March, and will help to shape our upcoming CSR Leaders Webinar series. I look forward to discovering who the popular choices of the CSR community are!

http://www.surveymonkey.com/s.aspx?sm=FYrw73VzlRHkKwYd_2b73nVg_3d_3d

What Obama's inauguration speech means for CSR?

Having just watched the inauguration of Obama, it is hard not to feel that we have just witnessed a geopolitical (perhaps even a psycho-spiritual) shift. But what will this mean for corporate sustainability and responsibility?

The speech was notable from a CSR perspective in a number of ways:

1. Obama's acknowledgement of the irresponsibility of capital markets and the need to regulate them, which should lead to some reigning in of "casino capitalism";
   
2. Obama's repeated mention (twice I think) of the need to invest in renewables (although I also noticed the "harness the soil" comment, which presumably means fossil fuels);
   
3. Obama's emotional identification with the marginalised populations of the US and the world, which should lead to a prioritisation of social issues; and
   
4. Obama's clear desire for America to demonstrate its leadership in the world, including in the area of climate change, which should lead to progress in the post-Kyoto deal.
   

Then again, as one BBC commentator pointed out, Obama needs to convince us all that he is not just good at words, but at actions as well. The next 100 days will, I believe, give us a much clearer picture of Obama's likely influence on the global CSR agenda.

(For those interesting in something a bit more creative on the subject, I have written a new poem about Obama's inauguration, which is posted here:

http://waynevisser.blogspot.com/2009/01/poem-on-obamas-inauguration.html)

Guest column: Crane & Matten on CSR and the financial crisis

CSR Professors Andrew Crane and Dirk Matten of Schulich Business School, who I've been spending some time with this week, have been tracking the implications of the financial crisis on their blog (http://craneandmatten.blogspot.com) for a few weeks now. Here is one recent entry:

"As the turmoil in financial markets continues unabated, some of those in the responsible business arena are considering what the likely effects of all this are going to be on the practice of CSR. The last decade or so has seen a seemingly unstoppable rise in interest, attention, and action on CSR issues, at least from some quarters of the business community. But with recession around the corner (or apparently already arriving for some countries), what is the prognosis for responsible business when times are haOut here in the blogosphere a range of opinions are circulating. One post that has gotten quite a lot of attention came from Adam Jones of the Financial Times, who was among the first to raise the issue, and ended up somewhat hedging his bets:

"I suspect there are lots of Milton Friedman-reading managers in the private sector who grumblingly tolerated CSR programmes during the boom and would now love to get rid of them on similar cost grounds. Instead of throwing the money changers out of the temple, it would be a case of throwing the CSR priests out of the marketplace. But that would be a pretty dumb move at a time when the public mood is for more accountability and regulation, not less."

Reenita Malhotra, writing on her "Inspired Economist" blog, focused on the specific effects on CSR in the investment banking industry, arguing that such enterprises should be protected exactly because of their positive social benefits:

"A high return on investment has enabled many of the investment banks to show a solid to commitment to corporate social responsibility in the last few years"

Taking an opposite point of view, Nic Paton at the online resource Management-Issues suggested that a lack of attention to genuine CSR was actually to blame for the crisis in the first place:

"While many companies believed they were engaging in corporate social responsibility, they were in fact missing the point. Truly responsible business, rather than chasing a fast buck and in the process taking overly dangerous risks, would have considered the interests of all those who had a stake in their business."

Finally, Mallen Baker, writing for Business Respect, has taken a similar line, but has also sought to move the debate forward by looking at what this should mean for practicing CSR in the future

"Bear Stearns produced no CSR report of any sort. Lehman Brothers did not produce a CSR report, but they produced a philanthropy report. Even if they had gone further, it seems unlikely that the complex nature of how they created wealth would have been a feature. Now it needs to change. If anything is to come out of this, it has to be that corporate social responsibility once and for all leaves behind the philanthropy tag, and we see clear focus on two areas:

• How we create a different ownership structure for businesses where responsibility for consequences is a more real feature of share ownership.
  
• That the oversight and accountability demanded of companies now goes into the detail of how they make their money - and what are the consequences of their actions.

Two months ago, such concepts were unthinkable. Now they are essential."

Pretty profound stuff. But the prognosis for CSR is, as far as we can see, far from clear. Changing ownership structures for businesses seems a long way off, unless by this Baker means the movement into public ownership of banking institutions in the UK, US, Iceland and elsewhere. But somehow we doubt that's what he is getting at.

So, really, it's probably too soon to say for sure what will happen next on the rocky road of CSR. But hopefully our poll at the top of the page will give some indication of where our readers think it should be heading....

CSR in China: Cause for Hope or Despair?

China, like its ancient philosophy of Taoism, is full of apparent contradictions, a dance of yin and yang, light and shadow, miracles and disasters.  This is equally true for China's social, environmental and ethical dilemmas, and its recently acquired appetite for CSR. 

This article looks at some of the mind-numbing facts and recent developments in CSR, as it wrestles with the question of whether to feel hopeful or depressed about the future of China and world. Let us begin with the facts ...

10 BAD NEWS FACTS

• An estimated 207 million people still live in poverty. (source: World Bank, 2005 figures)
• Of the 20 most polluted cities in the world, 16 are Chinese, and between 2001 and 2020, China will experience 590,000 premature deaths per year due to air pollution. (source: World Bank)
• China’s primary energy demand is projected to more than double from 2005 to 2030, overtaking the US to become the world’s largest energy consumer soon after 2010. (source: IEA)
• Increased fossil fuel use is expected to more than double Chinese CO2 emissions, which overtook the US in 2007, from 5.1 gigatonnes today to 11.4 Gt in 2030. (source: IEA)
• Nearly two thirds of China's rural population (more than 500 million people) use water contaminated by human or industrial waste. (source: National Geographic)
• On average, 17 miners lose their lives everyday in Chinese coal mines, with coal mine accidents killing 4,746 people in China in 2006. (source: State Administration of Work Safety)
• Groundwater usage has almost doubled since 1970, and today, two thirds of total consumption comes from aquifers, resulting in sinking water tables. (source: National Geographic)
• Environmental damage robs China of 5.8% of its GDP every year. (source: World Bank)
• There are 1,000 additional cars on Beijing roads every day, adding to the 11.5 million already owned. (source: National Geographic)
• China ranks 163 out of 169 nations in terms of press freedom. (source: Reporters Without Borders)

10 GOOD NEWS FACTS

• Between 1981 and 2005, China’s poverty rate fell from 85% to 15.9%, or by over 600 million people. (source: World Bank)
• Public protests rose by 50% in 2007. (source: National Geographic)
• China's clean technology market is expected to increase to $186 billion by 2010 and $555 billion by 2020. (source: China Daily)
• China has 220 million internet users, more than the US. (source: National Geographic)
• China's wind energy capacity has doubled in size in each of the past three years and is forecast to be the biggest in the world by the end of 2009. (source: Guardian)
• 45% of Chinese women do not want to give up their careers to get married. (source: National Geographic)
• The new Chinese auto emissions standards are more stringent than Australia, Canada, California, and the United States. (source: Pew Centre for Global Climate Change)
• The SA 8000 labour standard has certified 224 facilities covering 197,593 employees. (source: SAI)
• In 2006, China had the 18,842 ISO 14001 certifications, the second highest number in the world. (source: ISO)
• China is aiming for a 30% reduction in water consumption and 10% decrease in pollution discharges by 2010. (source: National Geographic)

CSR PERSPECTIVES

So much for the facts. What about CSR? Well, the first question we should ask about CSR in China is: What do we (or more importantly, what do the Chinese) mean by CSR? China has only fairly recently begun to use the CSR label, partly because it resonates with the government policy on creating a "harmonious society", and partly because it seems to placate Western investors and supply chain owners.

Disappointingly, however, in China CSR is still used almost exclusively as a synonym for public relations and philanthropic activities. They have completely failed to heed the lessons of the West, which spent the past 100 years evolving the CSR concept into something that has more to do with the impacts of companies' core operations on people and the planet than peripheral charity or marketing spin.

We saw this limited brand CSR illustrated in the tragic aftermath of the Sichuan earthquake, where companies were ranked by Chinese bloggers on the size of their donations, as a proxy for how responsible they were. The past few years have also seen Chinese companies moving quickly to set up substantial Foundations for ongoing "CSR" investments.

By contrast, according to a McKinsey survey in 2007, the CSR issues which are expected to be most important in China over the next 5 years are: 1) healthcare benefits, 2) the environment, and 3) safer products. Workplace conditions and human rights issues rank lower, at 7 and 9 respectively. These are a far better indication of direction that CSR in China needs to move, if the movement is to avoid being completely discredited almost before it's begun.

When Mattel has to recall almost 1 million toys due to safety concerns, or when chemical contamination of milk products result in 4 deaths and more than 50,000 sick consumers, this is the real CSR battleground. When Chinese companies invest $6 billion on green energy in 2007 and plan to doubling this in 2008, making it the world’s largest green energy investor, or when microcredit programmes reach more than 3 million borrowers in China (since 1994), this is 21st century CSR.

Now, as we witness the beginning of the end for America's experiment with casino capitalism, China has the opportunity to become the testing ground for a new, more evolved version of CSR - what I call CSR 2.0. This next generation CSR has three essential features - it is Connected, Scaleable, and Responsive.

With China's Guangdong Province acting as the world's factory, it has the potential to demonstrate CSR connectivity by worker responsibility and product quality throughout the global supply chain. With its investment in clean technologies and base of the pyramid (BoP) products, it has the potential to make CSR scaleable. And with a population and government that is increasingly educated, empowered, online and proud, China has the chance to show it can be responsive to the needs of both its citizens and the global environment.

To conclude, if I look at China's current appetite for untamed capitalism and what it is currently claiming as its CSR response, I despair for their people and the world's chances of creating a sustainable future. On the other hand, if I look at the speed and scale at which China is tackling many of its social and environmental problems, combined with its growing sense of pride as the world's next superpower, I am hopeful that China can help to usher in a new form of harmonious capitalism.

It may be a journey of a thousand miles, but as the Taoist philosopher said, it begins with the first step. And the first step is for China to rethink, reform and reinvest in its concept of CSR.

CSR 2.0

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" standardisation, 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.

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.

Is CSR failing?

CSR is a necessary, but insufficient response to today's most pressing global challenges. And CSR as it is currently practiced (what I call CSR 1.0) needs to either adapt, or die. Let me elaborate.

If you were to ask: Has CSR improved corporate activity on social, environmental and ethical issues over the past 50 years? The answer is, yes, absolutely. The recent book I co-edited, The A to Z of Corporate Social Responsibility, is testimony to this, listing more than 400 CSR concepts and codes, which are now common parlance and practice in business.

If you were to ask: Has CSR improved corporate performance on social, environmental and ethical issues over the past 50 years? The answer is more ambiguous. We have seen some improvements, for example in eco-efficiency and stakeholder sensitivity. But in many cases, the overall impact, driven by the constant drive for economic growth and globalization, has nevertheless been increasing.

However, if you ask: Has CSR brought us anywhere close to solving our most pressing social, environmental and ethical issues? Then the answer is categorically no, it has failed completely and utterly. Virtually all of the indicators - be they for poverty, health, climate change, biodiversity loss, deforestation, or water - are still headed in the wrong direction, i.e. things continue to get worse, not better. Why is this?

Many would argue that it is because of the spread of Western consumerism on the one hand and continued policies of protectionism on the other. In fact, critics of CSR claim (with some justification) that CSR may even serve to distract from the real reform agenda that is needed to tackle the global environmental, social and ethical crises, which is three-fold:

1. Revisiting the way companies are legally incorporated (and the shareholder-driven short-termism this creates);
2. Restructuring the financial market system (and the greed-driven instability this creates); and
3. Rethinking the type of capitalism we need to deliver fair and sustainable benefits through globalization.

To summarise, I am arguing that we need a revolution in CSR, as fundamental as the internet's evolution from Web 1.0 to Web 2.0. And CSR 2.0 (in which CSR stands for Corporate Sustainability & Responsibility), if it is to address the failings of the old brand of CSR, needs to achieve three things:

1. C - Connectivity - i.e. improved stakeholder relations through a variety of smarter, real-time feedback mechanisms with diverse interest groups.
2. S - Scaleability - i.e. the ability to scale up solutions, like the switch to low carbon and water neutral processes, so that they make real impacts.
3. R - Responsiveness - i.e. the willingness to engage employees and take bold action, through strong leadership, on the most pressing global issues of the day.