100 Best Companies Ranking Gets It Right

The 100 Best Companies 2009 ranking (UK) caught my eye on Sunday and I was surprised to find myself overcoming my usual cynacism and scepticism about indexes and rankings.

I am less inclined to comment about the actual results - see the link at the end of this post if you’re dying to know - and more interested in the design. It seems to me, this list got a few critical things right:

1. Not the usual suspects - It was refreshing to see most of the names on the list were not the big-brand, household names that tend to crop up over and over on many of the other CSR-type rankings. In particular, many are small and medium-sized companies, which often get overlooked.
   
2. A holistic approach - Although very employee-focused, the categories on which companies are assessed seem to present a balanced picture of what sustainable and responsible companies should be striving for. They include for example: leadership, personal growth, wellbeing, giving something back and fairness.
   
3. A stakeholder perspective - Unlike so many CSR rankings which rely on either reported (PR-shaped) performance or questionnaires filled in by single managers, Best Companies uses employee surveys and even site visits to obtain a more representative picture.
   
4. Different lenses of analysis - The list is easily sortable online into ranks according to the various categories, as well as some sub-categories (like Greenest company and best Work/Life balance).
   

I should add a caveat. These kind of lists are no guarantee of responsibility and sustainability, as Enron demonstrated spectacularly - it was one of Fortune magazine’s 100 Best Companies to Work For in America - just a year before their total lack of ethics was revealed and they imploded shamefully.

That being said, any system which encourages corporate assessment on a broader set of metrics than financials is, in my view, worth giving some credit. And especially those, like the Best Companies, that make a brave effort to measure intangibles like return on human capital investment.

Links

Results: http://business.timesonline.co.uk/tol/business/career_and_jobs/best_100_companies/best_100_tables/

Methodology: http://www.bestcompanies.co.uk/

CSR is dead ... Long live CSR

For those who didn't already see this on the new CSR International website, here is the press release about last week's launch event. Note: You can now also follow the blog on www.csrinternational.org:

On Wednesday (4 March), a funeral service was held in London to commemorate the life of ‘Old CSR’ (known to many as Corporate Social Responsibility or CSR 1.0), who passed away peacefully in his sleep, another unfortunate victim of the global financial crisis.

After the coffin was respectfully laid down at The Hub Kings Cross, Dr Wayne Visser, Founder and CEO of CSR International, paid tribute to “a life well lived” and “a pioneer in his time”:

“Old CSR was a good person at heart, always willing to give to those in need. Some will remember him for his outlandish dress style – how he always loved to dress in green and show off – but that was part of his charm. We will miss him dearly, not least because he touched the lives of so many around the world. He leaves behind baby daughter.”

Visser’s eulogy was followed by touching tributes from friends and colleagues, who each lit a candle in his memory. In the respectful hush that followed, an unexpected baby’s cry was heard, which seemed to be coming from the coffin. Tentatively, the cloth draped over the coffin was removed, only to reveal a tiny crib with a new-born baby.

As the lights went up, flowers were handed out by Ms Clemence Viel and minstrel Mr Lenny Charles launched into a festive tune on the berimbau, Visser conducte a spontaneous naming and blessing ceremony:

“Some of you may be wondering who this innocent child is. Well, I just happen to know that it is none other than Old CSR’s daughter, who with his dying breaths, he named CSR 2.0. She brings hope to our troubled world, for as the ‘new CSR’ of ‘Corporate Sustainability & Responsibility’, her life will be inspired by new world the principles of Connectivity, Scaleability and Responsiveness.”

After bestowing his blessing, a few friends came forward, each holding a bright flower, and spoke of their hopes and wishes for CSR 2.0.

Tributes also poured in from those around the world who could not be there in person, but who attended the live web broadcast of event or sent their good wishes ahead. Among these was John Elkington, Founder Director of SustainAbility and Volans and a good friend of Old CSR over the years:

“The theme of Death and Rebirth is timely. We have just completed some work that begins to map out what we call the ‘Phoenix Economy’, a new order that is struggling to rise from the rubble and ashes of the old. CSR 2.0 will be a necessary condition for success.  We wish CSR International every success.”

As guests left the CSR International launch event, many were smiling – some bemused, some amused, but most hopeful, having just witnessed the birth of a new era of Corporate Sustainability & Responsibility. CSR is dead … long live CSR!

CSR or another label: Who cares?

Some people get very excited about what label you use to describe the role of business in society. Should it be corporate socialresponsibility, or just corporate responsibility, or maybe business (social) responsibility? What about corporate citizenship or corporate accountability? Maybe sustainable development or corporate sustainability or just sustainability? Social enterprise or sustainable business? On and on the debate rages … or rather, whimpers.

As someone who is about to launch a new variation - corporate sustainability & responsibility or CSR 2.0 - of an old label - corporate social responsibility or just plain CSR - I feel I should make my position clear on the battle of the labels. To borrow from Gone With the Wind, “Quite frankly, my dear, I don’t give a damn!” Which is not to say that labels don’t tell us something. They can be quite instructive.

For example, corporate social responsibility indicates the strong philanthropic roots of CSR, going back to the late 1800s, with benefactors like Rockerfeller and Cadbury giving business responsibility a distinctly social flavour. On the other hand, corporate sustainability, which grew out of the Rio Earth Summit, still struggles to shake off its environmental tinge, despite John Elkington’s best efforts at rebranding it as a “triple bottom line”.

Likewise, my concept of CSR 2.0 is trying to say something - notably that the old CSR as philanthropy, public relations, voluntary action and incremental improvement is no longer adequate (if ever it was) to the challenges the world faces, be they persistant poverty, climate change or rampant corruption. The old version - 1.0 - is obselete, and the new version - 2.0 - is still in the “beta testing phase”, to use Web 2.0 jargon.

Another thing I’m trying to signal by rebranding CSR as Corporate Sustainability & Responsibility is that we should concede that there are only really two label-games in town - corporate responsibility and corporate sustainability. You only need to look at companies’ non-financial reports to see this. So rather than keep up the ding-dong battle for who’s best, why not simply combine the two, and keep the acronym CSR, which slips easily off the tongue.

That’s the kind of transformative and integrated CSR we’re aiming for at CSR International. But far more important than the label are the principles behind the name. Is business’s response simply more tinkering at the edges, or does it create scalable solutions to our global challenges? Is business really listening to its stakeholders, or do they get short shrift when the economic going gets tough?

So pick whatever label you most fancy, or none at all if you like. But promise me that whatever your choice, you will not let companies hide behind the label and pretend that a few well-meaning donations, or marginal improvements in energy efficiency, or meeting minimum labour conditions makes them a serious part of the solution. As Muhammad Yunus said to me in an interview last year, that doesn’t give them “the right to be remembered”.

He went on to say that it is only when we change the world - when we change people’s lives for the better - that we have a right to put our signature on this planet. These are the sort of values, principles and results by which any CSR or alternative label should be judged. I only hope that in 10 years time, CSR 2.0 will have lived up to this challenge and give us all the right to speak with confidence about the contribution of CSR, rather than have to apologise for its continued failure.

The role of charity in CSR

Following my last post on philanthrocapitalism, you may think that I am somehow anti-charity. Nothing can be further from the truth. Charity has an important role to play in society. There will always be those who are vulnerable or who are victims of injustice, who need and deserve the help of those of us who have been more fortunate.

I found out the other day (reading the Oxford  Book of 20th Century Words) that "Barnado" entered the English language as an adjective in 1904 (thanks to Rudyard Kipling - "all the time the beggar was a balmy Barnardo Orphan!"). What an amazing legacy of Dr Thomas John Barnado, who first founded Barnado homes in 1867.

In fact, supporting an orphanage was one of the first recorded instances of CSR-related charity, by Macy's in 1875 (as Archie Carroll tells in his excellent chapter on "A History of CSR" in The Oxford Handbook of CSR). I share Carroll's perspective on philanthropy, namely that it is just one part of CSR (along with economic, legal and ethical responsibilities in Carroll's CSR pyramid).

As I also show, however, philanthropy plays a different role in different countries and regions. In many developing countries (as I argue in a chaper in the same book), philanthropy tends to be the second-most important aspect of CSR (after economic contribution). But this is not ideal - it brings serious dilemmas and dangers.

One dilemma is that it casts companies in the role of governments - providing public services like education, healthcare and infrastructure. The problem is that business acts more like a monarchy than a democracy. Nobody voted them in and there are serious conflicts of interest when the beneficiaries are often dependent on the company for jobs.

Which is really the second major dilemma and danger - dependency. I saw this especially in Mozambique when I did some CSR work there a few years ago. The entire economy is geared towards foreign aid and donations. This leads to perverse policies (and sometimes questionable behaviours from charities themselves) that do not encourage independence or innovation.

Since charity will always be an important part of CSR, the real challenge is how to make sure that it "does what it says on the tin". Can we trust the organisations that act on our behalf? Today, I dropped off some spare clothes and books with Oxfam, which I think does a great job. But the issue of charity governance and accountability will certainly not go away.

The final point I would make is that charity is as much about the giver as the receiver. Giving makes us feel good. My research on what provides CSR managers with meaning in their work and life suggests that "making a difference" (which is the title of my CSR book on the subject) represents a deep pyschological motivation in humans that companies be aware of and tap into.

Eco-Cities; Does it Pay Off?

This is my first post since I've been invited to contribute this blog in last December. Hence, I wanted to share an interesting phonemenon in China these days, country where I work at, also the country where a lot of media thinks that is the next land of opportunity.

I've recently been contacted by one of the local media company that has been outsourced a job from a medium sized city to set up a showcase event to attract FDI (Foreign Direct Investment) to their city.

They obviously came to me since I had credible contacts at different country's chambers of commerce in China and my simple answer was "no" to them and I gave a reason that this is not my scope of business and that I cannot utilize my contacts for other reasons.

Then they came back to me few days later with a concept of "Eco-City" and justified my involvement as Environment is one of the issues that we do deal with. Now, I must confess that although we deal with it, it's done through our partners and also we usually take care of the overall marketing/communications side of it, rather than technical side, hence I did not see a correlation between the concept of "Eco-City" and my firm. However, it was an interesting topic in a long run and I decided to utilize the chance to learn. Afterall, if it turned out to be a good project, I can simply toss it on to our environmental consultacy partners.

They requested a proposal and an overall explanation/examples of eco-cities to show to the Gov leaders at that city. While I was working on the Proposal and different research on eco-cities, I found out that there were a lot in development, not only outside of China but also with-in China. Dongtan, in Shanghai was a big issue till the leader of the gov was jailed for corruption/ Sino-Singapore Tianjin Eco-City is becoming a big issue with an initial investment of 8billion RMB, and there were at least 3-4 others that were preparing themselves to be eco-cities.

Tonight, Since we take part in the environment consortium project of the German Chamber in Shanghai, I had a chance to attend a media appreciation dinner. Unlike other press conferences and media appreciation dinner, we decided to brainstorm and ask the reporters about "Green Industry" to understand their perception towards the industry and the German green technologies. Out of many interesting things we found out, there was a comment on the eco-city; that it will never pay off and that ROI is expected to be negative.

That got me thinking of the Eco-City project proposal. Perhaps the concept of the eco-city is unrealistic? No doubt that it will take years to break even and that it is a long-term project. So should this trend continue? Not to mention the current situation of the financial crisis? I am curious to find out other successful cases but all of them seem to not have clear answers. Perhaps we need to wait few years to find out. Currently, my thoughts are more supportive of reporters....

Philanthrocapitalism: A disaster idea that threatens CSR

Philanthrocapitalism is quite frankly the worst CSR-related idea I've come across in a long, long time. For those who aren't yet familiar with the term, it is the title of a book by Matthew Bishop and Michael Green, with high-powered endorsers like Bill Clinton and Bill Gates (hardly surprising given that both have reinvented themselves as uber-philanthropists).

Now first, let me confess that I have not read the book, nor do I ever intend to, unless someone holds an (ethically sourced, fairtrade) gun to my head. So I am reacting against the concept, rather than the content. Apart from the awful neologism, for me, the sub-title of the book - "how the rich can save the world" - says enough.

The idea that philanthropists can save the world is exactly the sort of backward thinking legacy that the CSR movement has been fighting to escape from over the past 20 years and more. Don't get me wrong, philanthropists do have a positive impact in the world (witness the progress made on diseases like Polio and river blindness) and we should be grateful for their generosity. 

But the idea that social justice, environmental sustainability, human rights and ethical transparency should be left to the whims of a few super-rich individuals is not only irresponsible, it is dangerous. They are not elected; hence there is no public mandate, nor any accountability mechanisms to control their actions. We should be looking to strengthen governance, not abdicating responsibility to profiteers.

Of more fundamental concern is that the very brand of capitalism that has made philanthropists wealthy is the root cause of many of the environmental, social and ethical impacts that CSR is trying to remedy. It is the same capitalism that breeds the income inequalities that allow philanthropists to have such preposterous wealth in the first place. It is the capitalism that has fuelled the culture of greed and excess that tipped us into a global recession. 

But that's a topic for another day. What about CSR? CSR should be about how you make your money, not whether you give it away once it's made. Companies and their leaders should be judged on who they trample on and what they destroy in the process of making money, not who they help once they've succeeded at all costs. Writing cheques is easy. Running a sustainable and responsible business is hard. 

Already the view that CSR equals philanthropy is in danger of taking hold in places like China. The last thing we need is to encourage this Stone-Age thinking. By all means, let us cheer on the philanthropists. But let us not for one moment think that this is CSR, nor that it makes these generous souls good role models for responsible business. If we want CSR to survive and thrive into the future, the idea of philanthrocapitalism must die a quick and painless death. If it doesn't, CSR will be dead and buried within the decade.

Online Speaker - Steven Lydenberg

Steve Lydenberg is the latest to confirm participation in CSR International's Online Dialogue series. Steve, for those don't know him or his work, is Chief Investment Officer of Domini Social Investments and Vice President of the Domini Funds. He has been active in social research since 1975.

Steve has written numerous publications on issues of corporate social responsibility. He is the author of Corporations and the Public Interest, co-author of Investing for Good, co-editor of The Social Investment Almanac and co-author of Rating America’s Corporate Conscience.

I look forward to welcoming him (and you!) to our virtual platform on 6 October.

For a full list of upcoming Online Dialogues, see 

http://www.csrinternational.org/csri_calendar.pdf