Open Letter to Young People on Donald Trump’s Election as President

Open Letter to Young People on Donald Trump’s Election as President

A blog by Wayne Visser, first published on Huffington Post

To the Next Generation of Leaders:

As Donald Trump prepares to take up office as US President, I (like so many others) am trying to make sense of it all. And whether you care about politics or not, this is a seismic event, which is shaking the foundations of the world and will affect you in one way or another.

I don’t know how you feel about it – amused, indifferent, shocked, disappointed, or outraged. But whatever your emotions, we all must now accept the disturbing fact that 60 million educated people have voted for a chauvinist, bigoted, racist, old white man to be the so-called ‘leader of the free world’.

Of course, the choice was not unambiguous – Hillary was far from a perfect alternative. I have heard commentators say that this was a vote by the ‘common people’ for change, fuelled by a deep mistrust of the corrupt political and business elites of Washington and Wall Street, which is not entirely unjustified.

Be that as it may, while the media and the public are still in an apoplectic frenzy of recrimination (or celebration, depending on their political perspective), I want to rise above the storm and reflect on what this might mean for you and your future, beyond the next four years.

My first plea to you is: Do Not Panic!

Martin Luther King said: “The arc of the moral universe is long, but it bends towards justice”.

And as someone who lived through South Africa’s triumph of democracy over a 40-year brutal, racist apartheid regime, I have seen the truth of these words.

Trump, for all his bluster, cannot turn the tide of history, nor change the momentum of decades of progress on human rights, peace and the environment. He can try to renege on the global climate deal or any number of other responsibilities, but the world (and you) will move forward, with or without him.

The future belongs to the youth and I am optimistic, because you have grown up empowered by global connectivity and with access to the best that science and knowledge has to offer. I am convinced that you will not allow your opinions to be dictated by narrow-mindedness and shallow sloganeering.

At the same time, I am encouraged that the nature of leadership has changed in the past few decades. The way you live your life – and the values you choose to express – is no longer determined by politicians. Today, the people creating a better world are young social entrepreneurs, activists and change-makers.

I am not saying that we can or should ignore calamitous leadership when we see it. On the contrary, as right wing forces grow – in reaction to increased uncertainty and fear in the world – we must be extra vigilant and stronger advocates for social justice and sustainability than ever before.

No doubt about it, the work of defending liberal values just got harder in the wake of Trump’s election.

But as Lebanese poet and mystic Kahlil Gibran said: “Every dragon gives birth to a St George who slays it”.

And we are the knights who will take up the challenge to fight for the better future you deserve.

My simple message to you is this: Do Not Be Disheartened.

Sometimes it takes a crisis to remind us of what is really important in life. And in the darkest hours, that is precisely when the human spirit shines brightest. So do not be distracted by the ensuing circus in the White House. Stay focused on the big picture and the long view.

Build your future on strong ethical foundations – those values that many before you have fought and died for, and which you now cherish. Then, rest assured, you will triumph, no matter what political earthquakes, social upheavals, environmental catastrophes or moral storms may come your way.

You are not alone.

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Visions of the Future

Visions of the Future:

CSR, sustainable business and capitalism in 2020

A blog by Wayne Visser

Over the last 12 weeks, I have shared examples from around the world of an approach to CSR (by which I mean Corporate Sustainability and Responsibility) in which companies seek to identify and tackle the root causes of our present unsustainability and irresponsibility, typically through innovating business models, revolutionising their processes, products and services and lobbying for progressive national and international policies.

 Forecasts for 2020

Based on this vision – and the evolution of sustainable business over the past 20 years – I have made ten forecasts for 2020. They are meant as a basis for discussion and action, rather than an attempt at predictive certainly. Hence, I am inviting you to join a dialogue about the future. Here is my opening gambit:

Forecast 1 – By 2020, we will see most large, international companies having moved through the first four types or stages of CSR (defensive, charitable, promotional and strategic) and practising, to varying degrees, transformative CSR, or CSR 2.0.

Forecast 2 – By 2020, reliance on sustainable business codes, standards and guidelines such as the UN Global Compact, ISO 14001and SA 8000, will be seen as a necessary but insufficient way to practise CSR. Instead, companies will be judged on how innovative they are in using their products and processes to tackle social and environmental problems.

Forecast 3 – By 2020, self-selecting ‘ethical consumers’ will become less relevant as a force for change. Companies—strongly encouraged by government policies and incentives—will scale up their choice-editing and cease offering ‘less ethical’ product ranges, thus allowing guilt-free shopping.

Forecast 4 – By 2020, cross-sector partnerships will be at the heart of all CSR approaches. These will increasingly be defined by business bringing its core competencies and skills (rather than just its financial resources) to the party.

Forecast 5 – By 2020, companies practising sustainable business will be expected to comply with global best-practice principles, such as those in the UN Global Compact or the Ruggie Human Rights Framework, but simultaneously demonstrate sensitivity to local issues and priorities.

Forecast 6 – By 2020, progressive companies will be required to demonstrate full life-cycle management of their products, from cradle to cradle. We will see most large companies committing to the goal of zero-waste, carbon-neutral and water-neutral production, with mandated take-back schemes for most products.

Forecast 7 – By 2020, some form of Generally Accepted Sustainability Practices (GASP) will be agreed, much like the Generally Accepted Accounting Practices (GAAP), including consensus principles, methods, approaches and rules for measuring and disclosing sustainable business. Furthermore, a set of credible CSR rating agencies will have emerged.

Forecast 8 – By 2020, many of today’s sustainable business practices will be mandatory requirements. However, CSR will remain a voluntary practice – an innovation and differentiation frontier – for those companies that are either willing and able, or pushed and prodded through non-governmental means, to go ahead of the legislation to improve quality of life around the world.

Forecast 9 – By 2020, corporate transparency will take the form of publicly available sets of mandatory disclosed social, environmental and governance data—available down to a product life-cycle impact level—as well as Web 2.0 collaborative sustainable business feedback platforms, WikiLeaks-type whistle-blowing sites and product-rating applications.

Forecast 10 – By 2020, CSR will have diversified back into its specialist disciplines and functions, leaving little or no sustainable business departments behind, yet having more specialists in particular areas (climate, biodiversity, human rights, community involvement, etc.), and more employees with knowledge of how to integrate CSR issues into their functional areas (HR, marketing, finance, etc.).

Transforming capitalism

These forecasts all suggest a transformational agenda for sustainable business, or CSR. I call this CSR 2.0, but the labels do not matter; the substance of the change matters. However, underlying these trends is an even more potent shift, which is an evolution from our winner-takes-all shareholder-driven model of capitalism to what we might call Sustainable and Responsible Capitalism, or Purpose-Inspired Capitalism.

For me, this means testing all economic activity against five principles:

  1. Productive investment – Ensuring that money is channelled towards productive investments and not into speculative trading in the casino economy, as the Co-operative Bank has demonstrated successfully.
  2. Long termism – Understanding that real wealth is created by taking a long-term perspective, including the needs of future generations, as Al Gore’s Generation Investment and Warren Buffet’s Berkshire Hathaway practice.
  3. Transparency – Embracing transparency in revenues and social and environmental impacts, in line with the Global Reporting Initiative, International Integrated Reporting Council, Carbon Disclosure Project and Extractive Industries Transparency Initiative (EITI).
  4. Full cost accounting – Internalising social and environmental costs (externalities), through taxes (e.g. on carbon and pollution) and social and environmental profit & loss accounts, such as Puma is pioneering.
  5. Social inclusion – enacting Michael Porter and Mark Kramer’s concept of creating shared value, and Stuart Hart and C.K. Prahalad’s model of serving the bottom of the pyramid (BOP) markets, as demonstrated by the BOP 2.0 Protocol.

We live in exciting times – a true period of bifurcation. We live on the cusp of the post-industrial revolution, and for the first time, we can finally glimpse what a new model of sustainable business and purpose-inspired capitalism could look like.

But as with so many things in life, the quest for a sustainable future is like a wheelbarrow. The only way we will make progress is if we pick it up and push forward. And the only way we will motivate people to join us in this effort is if they believe in what we are building.

That means having a compelling vision of the future, what I call a 5-S vision of “future fitness” in which our products, organisations, communities, cities or countries are Safe, Smart, Shared, Sustainable and Satisfying. What that means and how we get there is another quest, another book and another set of stories.

For now, we have come to end of this “Searching for Sustainable Business” series of articles, which were all extracted, summarised and adapted from my book, The Quest for Sustainable Business. I hope that they have given you a glimpse into some of the insights from my own journey to more than 65 countries over the past 20 years – and that you will be inspired to continue on your own quest.

Download

[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2013/09/blog_csrwire13_wvisser.pdf”]Pdf[/button] Visions of the Future: CSR, sustainable business and capitalism in 2020 (blog)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this article

Visser, W. (2013) Visions of the Future: CSR, sustainable business and capitalism in 2020. Wayne Visser Blog Briefing, 10 September 2013.

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America’s Idea Incubators

America’s idea incubators:

Seeding a revolution in capitalism

A blog by Wayne Visser

In this article I want to share insights from some of America’s greatest ‘meme-weavers’ – pioneers of new thinking, who I have been fortunate enough to meet and talk to about the future sustainability of business and the world.

Joseph Stiglitz: Globalization Guru

Let me begin with Nobel Prize winner in Economic Sciences and former World Bank Senior Vice-President and Chief Economist, Joseph Stiglitz. I wanted to know his views on globalisation, which is a theme running through many of his books. It is clear that Stiglitz is sympathetic to the critics of globalisation. As he told me:

We have learned how to temper capitalism – how to make the market economy work in the advancing industrial countries for most citizens – but we haven’t learned how to temper globalisation. One of the paradoxes is that, while in principle everybody was supposed to be better off as a result of globalisation, in practice the opposition to globalisation rose from both the North and the South. There were some winners but there were a lot more losers.

The problem with globalisation, according to Stiglitz, is not with the concept or the trend itself, but with the way globalisation has been managed. However, he is hopeful that change is possible:

The most exciting developments are the result of the efforts of civil society. Before the Seattle riots, there was an enthusiasm that was not tempered by reality. As people started looking at what happened at the IMF and World Bank – failures of regulation of the global financial markets – there was a widespread recognition that something has not worked well. So understanding there is a problem is necessary before you’re going to change.

Stuart Hart: Capitalism Reformer

Someone who shares concerns about the way the global economy has evolved is Stuart Hart, author of Capitalism at the Crossroads and co-creator of the ‘Bottom of the Pyramid’ (BOP) model of doing business with the world’s poor. He told me that:

We haven’t resolved the dark side of 19th century industrial capitalism. But I’m absolutely convinced that we’re in the midst of the next transformation, to a sustainable form of capitalism that actually has the potential to solve social and environmental problems; to create wealth for everyone in the world and to take us more quickly to the next generation of potentially clean and sustainable technology.

Interestingly, unlike many other authors who have written on capitalism, such as Naomi Klein, Hart focuses on the positive role that business can play. I asked him if that is justified, given their track record, to which he replied:

I’m a pragmatist, in the sense that I try to assess where the leverage points are for change to occur most rapidly. We’re headed rapidly for the cliff, so to speak. But there is also great potential to change quickly. What makes the world of commerce interesting is its ability to creatively destroy itself, to fall back on Joseph Schumpeter’s term. We have a mechanism through which this change could unfold at the rate that it needs to in order to move us towards a sustainable world before it’s too late.

One way that Hart sees this happening is through the ‘great convergence’ of disruptive clean technology and innovation at the base of the pyramid, which is the focus on his newly established Enterprise for a Sustainable World.

Jeffrey Sachs: Poverty Wizard

Jeffrey Sachs, twice been named among Time Magazine’s 100 most influential world leaders and author of books like The End of Poverty and Common Wealth, is similarly an optimist, but places less faith in the market and more in effective government policy and global collaboration. He told me:

I love markets wherever they work, but markets don’t work for everything. For cell phones, yes, you may be able to reach 40% penetration in Africa, and it’s phenomenal; it’s world-changing. But 40% penetration for immunisations won’t do it. Business has scalability, information and management systems and it holds the technology. But if there’s no market at the end for the public good that we need, then at a minimum we need a public–private partnership.

Sachs concedes that ‘we have to make a global transition to sustainable technologies’, but is adamant that ‘you can’t leave technological transformation to market forces alone.’ Sach has seen enough poverty not to be in denial, but his spirit remains indomitable:

Every time I turn around – whether it’s in India, China, Malaysia, or Tanzania – there’s no shortage of reasons for optimism. What is the hardest part of all is managing change and having the understanding of how crucial and how fruitful cooperation can be right now. The problem isn’t our lack of tools; the problem is our ability to manage all these wonderfully powerful tools that we have, to a human effect.

Amory Lovins: Design Imagineer

Another person who seems to relish ‘wicked problems’ is maverick engineer, Amory Lovins, Founder and CEO of the Rocky Mountain Institute and co-author of books like Factor Four and Natural Capitalism. What makes Lovins happy is ‘barrier-busting – turning into business opportunities each of the 60 to 80 well-known market failures to buying energy and resource efficiency’. He told me:

We’re talking not so much of technologies, as of design methods, or design mentality. Many of the new buildings we’re designing use no, or negative, amounts of energy – they create more than they use. It’s now perfectly normal to talk about tripled efficiency cars, heavy lorries and airplanes. United Technology has cut its energy intensity 45% in five years. DuPont cut its greenhouse gas emissions to 80% below 1990 levels, and made three billion dollars’ profit on the deal. Efficiency is cheaper than fuel.

I concluded my conversation with Lovins by asking what gives him hope, to which he replied:

Three things stand out. One is the rapid rise of awareness and leadership in the private sector and the corresponding awakening of civil society, empowered by the emerging global central nervous system. Secondly, I’m encouraged by the fact that brains are evenly distributed – one per person –

and as far as we know, there’s nothing in the universe so powerful as six billion minds wrapping around a problem. And third, I’m very encouraged by the quality of the young people I see. They realise there is less time and they need to get on with it. So I think the future is in pretty good hands.

Postscript

These and many other interviews with sustainability thought-leaders from around the world are covered in more depth in The Quest for Sustainable Business, and featured as videos on http://www.waynevisser.com/videos.

Download

[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2013/09/blog_csrwire12_wvisser.pdf”]Pdf[/button] America’s idea incubators: Seeding a revolution in capitalism (blog)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this article

Visser, W. (2013) America’s idea incubators: Seeding a revolution in capitalism. Wayne Visser Blog Briefing, 3 September 2013.

 

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Eurocrats take on CSR

Eurocrats take on CSR:

A case of ‘too little, too late’?

A blog by Wayne Visser

The European Commission’s softly-softly approach lacks impact.

CSR dips its toes in policy waters

Continuing on the theme of CSR policy and regulation, introduced in my reflections on Nigeria and India, I want to shine a spotlight on Europe’s policies on CSR, which have been evolving for more than a decade now.

In 2001 the European Commission (EC) issued a Green Paper on CSR, which ‘provided all interested parties with a platform for further discussion with the goal of policy generation in the CSR area in Europe’. After a year of consultation, the White Paper –entitled ‘CSR: A business contribution to sustainable development’ – was released, and represented the official policy intention of the EC in the field of CSR. Both papers were based on a broad consensus and had been debated through a multi-stakeholder process that included companies, business associations, governments, NGOs and trade unions.

After the White Paper, all seemed to go quiet on the European CSR policy front. Meanwhile, however, there was significant progress on waste management and climate change policy. In terms of waste, the 2002 WEEE Directives made a great leap forward on the restriction of hazardous substances in electrical and electronic equipment and the introduction of take-back schemes for waste electrical and electronic equipment (WEEE). Significant progress was also made on climate change, with a 2003 Directive laying the foundation for the EU Greenhouse Gas Emission Trading Scheme, which commenced operation in January 2005 as the largest multi-country, multi-sector carbon trading scheme in the world.

The EC re-entered the fray in March 2006 by establishing the European Alliance on CSR. This is an open alliance of European enterprises, launched to further promote and encourage CSR. The alliance is a political umbrella for CSR initiatives by large companies, small- and medium-sized enterprises (SMEs), and their stakeholders. In 2006 a research report was published by CSR Europe, the ‘European Cartography on CSR Innovations, Gaps and Future Trends’, which was based on an analysis of 545 CSR-related business solutions and 140 networking activities in 19 EU countries.

Smart, sustainable and inclusive

Things seemed to go quiet again and then, in May 2010, I was invited to make a presentation on CSR in Brussels to the EU High Level Group (HLG), comprising 27 Member State representatives. The topic of my presentation was ‘CSR and the global financial crisis’, and it gave me a fantastic opportunity to talk with some of the people helping to shape the EU agenda. There were a number of trends that I found interesting.

The first was that, whereas formerly CSR was discussed purely as a voluntary activity by business (this was especially clear in the EU’s policy statement on CSR in 2006), there was now increasing discussion and even demand for what Susan Bird, CSR co-ordinator in the Directorate-General for Employment of the European Commission and part of the EU HLG on CSR, called ‘a more active role’, which may involve ‘conditions’ being introduced in the future, although this was all still up for debate.

A second insight was how the competitiveness agenda has changed. The first ten-year economic strategy of the European Union – the Lisbon Agenda, which ended in 2010 – was all about competitiveness and paid very little attention to CSR issues. However, the 2008 European Competitiveness Report dedicated an entire chapter to CSR and countries such as Denmark were claiming that responsible, green growth was central to its international reputation and hence its competitiveness. This changing emphasis is also reflected in the new Lisbon Strategy for 2020, which has as its central goal ‘smart, sustainable and inclusive growth’.

EU strategy on CSR a damp squib

After my visit to Brussels, I concluded that the sleeping giant of CSR policy in Europe was awakening and that we should ‘watch this space’. As it turned out, we did not have to wait very long. In October 2011, ‘A renewed EU strategy 2011–14 for Corporate Social Responsibility’ was launched. The document itself is only 15 pages long (which is a good thing!) and I recommend that everyone reads it. I review the strategy in some detail in The Quest for Sustainable Business. Here, however, let me briefly make six points about the 17 actions that Europe intends to implement.

  1. There is a commitment to create multi-stakeholder CSR platforms for industries. Applying CSR at a sector level makes a lot of sense and a stakeholder engagement approach is always welcome. The concern is that this duplicates many similar initiatives that have already been undertaken by the likes of GRI, WBCSD and industry associations.
  2. The launch of a European CSR award scheme may give CSR some gravitas and greater PR mileage. But the world is already awash with CSR award schemes, and when I look at the sorts of companies that win these awards, I find they tend to be the ‘usual suspects’ who are doing little more than strategic CSR, when what we really need is more transformative approaches.
  3. The problem of greenwash is mentioned, although no specific commitment is made. Regulation on this would be a welcome addition and follows existing best practice in Australia, Canada, Norway and the United Kingdom. There is also an action to develop a code of good practice for self- and co-regulation exercises, which could be interesting, although a lot of this work has already been done by AccountAbility and its suite of AA1000 standards.
  4. The weakest and most disappointing action is on ‘better integration of social and environmental considerations into public procurement’, which has the caveat ‘without introducing additional administrative burdens for contracting authorities or enterprises, and without undermining the principle of awarding contracts to the most economically advantageous tender.’ By including that last phrase, the message is clear: the lowest price will continue to win the day.

Deflecting and devolving responsibility

  1. The only action with any teeth is requiring large companies to commit to the UN Global Compact, or the OECD Guidelines for Multinational Enterprises, or the ISO 26000 Guidance Standard on Social Responsibility by 2014. But giving companies the choice between these very different principles and guidelines is laughable. It suggests an equivalence between the minimal efforts required to sign up to the Global Compact’s ten principles and the 100 pages or so of detailed guidance across seven core areas in ISO 26000.
  2. There is an attempt to extend the EU policy on CSR down to a national level, requiring member states to develop their own plans. It will keep a few bureaucrats busy but I won’t be holding my breath. I really don’t believe we need more policy or legislation on CSR. What we need is to eliminate the contradictory policies (such as fossil fuel subsidies) and focus on more effective regulation of issues, including labour rights, biodiversity loss and transparency.

Europe has shown policy leadership on many issues, from labour rights and animal rights to environmental management and climate change. However, I can’t help but wonder if this new wave of CSR policy development is doing more to confuse and distract than advance the agenda. Time will tell.

Download

[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2013/09/blog_csrwire11_wvisser.pdf”]Pdf[/button] Eurocrats take on CSR: A case of ‘too little, too late’? (blog)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this blog

Visser, W. (2013) Eurocrats take on CSR: A case of ‘too little, too late’? Wayne Visser Blog Briefing, 28 August 2013.

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Pioneering experiments Down Under

From laggard to leader:

Pioneering experiments Down Under

How Australia is innovating on climate policy and social enterprise

Blog by Wayne Visser

Part of the Searching for Sustainable Business series for CSRwire

Moving beyond denial to innovation

I first visited Australia at the invitation of Leeora Black, Director of the Australian Centre for CSR (ACCSR) to deliver a keynote address on ‘Leadership for social responsibility’ at their 2010 ACCSR conference, and to teach a course at La Trobe Business School, where I went on to take up a three-year Visiting Professor role. A year later, in 2011, I also spoke at the launch of the ACCSR State of CSR report, an annual survey of CSR professionals in Australia.

The ACCSR remains one of the most credible voices on the scene. In their most recent 2012/2013 State of CSR report, they identified the corporate leaders in social responsibility in Australia and New Zealand – companies that are integrating CSR into their core business activities and strategies – to be ANZ, Patagonia, Interface, Rio Tinto, Marks & Spencer, Stockland, National Australia Bank, Unilever, Nike and Westpac.

Looking to the year ahead, survey respondents told ACCSR that ‘building internal understanding and support for our CSR/sustainability approach’ was the highest priority, followed by managing regulatory impacts and measuring impacts and outcomes of CSR initiatives. For New Zealand, their top priority was ‘reducing or eliminating any negative environmental impacts of our business’ and ‘improving or beginning our organisation’s sustainability reporting’.

All this points to the steady maturing of CSR in Australia and New Zealand, towards what a more strategic approach. Certainly, they seem to have made up considerable lost ground since I first visited. In 2010, I sensed a huge frustration among people working in sustainable business in Australia. After about ten years of severe drought, fatalities from runaway bushfires in Victoria in 2009, and unprecedented flood and storm damage from Tropical Cyclone Yasi in 2011, most Australians still seemed to be in a state of climate change denial.

The biggest reasons cited were an unsupportive (some even said backward) government and policy, and the negative lobby power of Australia’s two biggest industries – extractives (mainly mining) and agriculture. At the time, the opposition party was scoring cheap political points by saying that everything to do with climate change was a tax, and hence to be avoided. They conveniently forgot to mention that, according to the Stern Review, climate change may cost around 1% of GDP now, but could cost as much as 20% of GDP later if action is stalled.

Since then, Australia has moved from laggard to leader by putting a price on carbon – the legacy of ousted prime minister Gillard. The initial fixed price of $23 per tonne of carbon rose to $24.15 for 2013-14 (which is four times the European rate and almost double California’s price) and is set to rise again in a year, before the government introduces its own national emissions trading scheme (ETS), linked to the EU ETS. There is some debate about whether these commitments will survive the next elections, but early indications are that carbon pricing will stay, albeit at a lower market price.

An experiment in generosity

Besides the focus on climate change, one of the highlights of my 2010 trip was spending some time with Shanaka Fernando, founder of the Melbourne-based restaurant chain, Lentil As Anything, who was introduced to me by an academic colleague, Colin Higgins, now at Deakin University. Fernando is one of those rare pioneers who are prepared to live by their convictions, flaunt social convention and challenge the status quo. All of these are demonstrated through his social enteprise, a restaurant called Lentil As Anything.

I call it a social experiment, because the business goes beyond simply being a social enterprise. In common with other social businesses, Lentil As Anything embraces the entrepreneurial spirit while it ‘seeks to have a significant, positive influence on the development of the community’. But there is something unique, more challenging, more sublime and more subversive—it gets to the heart of human nature and the essence of Western capitalism. I am talking about generosity and money.

Through Lentil As Anything, Fernando is trying to foster a culture of generosity. What would happen, he wondered, if there were no prices? What if people only paid what they could afford, or what they thought the food was worth, or what they were inspired to pay? Is there enough generosity left in Western society to run a viable business on the principle of giving and sharing, rather than profit maximisation? Would the ‘free rider’ problem kick in, with people taking advantage of the ‘free’ food?

According to Fernando, all kinds of interesting things happen when people are faced with ‘the magic box’ – the mini treasure chest that people can place their donations in as they leave. A few (very, very few) take advantage. Some, who genuinely can’t afford to pay, offer to chop vegetables or do dishes. Others make their own assessment of what is a fair price to pay. Some are quietly generous, while others make a theatrical gesture of placing their donation in the magic box.

But it goes beyond the money. Other unexpected things happen too. As you look around, you notice that this is not a ‘people like me’ experience, where those from your own socioeconomic or ethnocultural strata surround you. Lentil has succeeded in mixed it up, cutting across traditional divides. And because of the philosophy of the place, you may find a wealthy businessman striking up a conversation with a subsistence artist.

When you create these kinds of creative connections, it is a potent recipe for innovation, for rediscovering what it means to be human. Fernando insists that Lentil is first and foremost about good food (interestingly, vegetarian food, because that is the most inclusive, making concerns about halal or kosher or meat-based preparation irrelevant). But it is clearly more than that. It is an invitation to restore our faith in the essential goodness of humanity and the wholesome nature of community.

As the world recovers from the age of greed that culminated in the global financial crisis, it is refreshing to be reminded of the rightful place of money in society. Money is always a means to an end; never the end in itself. Melbourne – and indeed the world – would be a poorer place if brave experiments such as Lentil As Anything were allowed to fail. Let us make sure that, in the battle of generosity versus money, generosity wins hands down.

After my 2010 visit, I concluded a blog on sustainable business in Australia entitled ‘Too much sunshine?’ with the cheeky words: ‘Why worry about disaster scenarios for 2050 when the sun is shining, the skies are blue and there’s a great sports game on? CSR what? Surf’s up!’ Today, happily, I take those words back. It seems that we can all learn a thing or two from some of the brave experiments in social responsibility happening in the land Down Under.

Download

[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2013/08/blog_csrwire10_wvisser.pdf”]Pdf[/button] From laggard to leader: Pioneering experiments Down Under  (blog)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this blog

Visser, W. (2013) From laggard to leader: Pioneering experiments Down Under, Wayne Visser Blog Briefing, 21 August 2013.

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A giant leap backwards on CSR

A giant leap backwards on CSR:

India’s great missed opportunity

How India’s new mandatory CSR legislation and ‘clean green’ policies are taking companies in the wrong direction 

Blog by Wayne Visser

Part of the Searching for Sustainable Business series for CSRwire

Misguiding the arm of the law

In my last blog on sustainable business in Nigeria, I ended with the call for better policy on corporate social responsibility (CSR) – and a caution against mandating CSR directly, as Nigeria has proposed. This is unfortunately a lesson that India has failed to heed. In the past week, major reforms to the country’s Companies Act of 1956 were approved. Many of the changes are a laudable attempt to bring India’s business sector up to date with international trends in corporate governance, transparency and anti-corruption.

Sad to say, however, through this legislation, India is taking giant leap backwards on CSR. The new Companies Bill requires companies with profits over 50 million Rupees (USD 816,000) in the past three years to spend at least 2% of their profits on CSR. At a time when most of the world has moved beyond defensive and philanthropic modes of CSR, towards promotional, strategic and transformative approaches, India’s policy virtually guarantees that its companies will remain stuck in an out-dated charitable mind set.

The Indian legislation allows companies the freedom to choose the issues that their CSR efforts will tackle, which at least in theory allows some scope for strategic alignment of social and environmental issues with business activities. The policy also suggests that failure to spend the required percentage on CSR – or to adequately explain the reasons why – can result in penalties. However, the problem in India as in many developing countries is that the capacity to monitor and enforce is severely challenged by weak, failing or corrupt governments.

India – along with Nigeria and Malaysia, who are also pursuing the mandatory CSR line – should learn from the United Kingdom’s mistakes. Britain created something similar – a Minister for CSR – in 2003, and eventually abandoned it in 2010 as a largely ineffectual strategy. The reason it failed in the UK, and will most likely fail in India, is the same reason that CSR departments often fail in companies: lack of  integration into the core functions of the organisation, and lack of political or economic clout.

In my view, governments should focus on effective regulation of the issues that sustainable business is trying to address (biodiversity loss, labour conditions, climate change, transparency, etc.) rather than regulating sustainable business activities per se. India could have learned valuable lessons from South Africa’s corporate governance reforms, which integrate sustainability, or from the UK and USA’s legal reforms on social enterprise, or from Canada and Spain’s community development companies. Instead, by regulating CSR directly, they are more likely to create bureaucracy, stifle innovation and invite corruption.

Strengthening inclusive business

There are some more other aspects of the new Companies Bill, which could inadvertently have a bigger positive impact on socially responsible business than its mandatory ‘CSR tax’. For instance, the ability to file class action suits has been bolstered, which could allow stakeholders to take legal action against irresponsible companies. The bill also requires that companies disclose the difference in salaries between directors and employee, thus addressing one of the most neglected issues in CSR and sustainability, namely equitable income distribution.

This equity clause comes closer to the transformative agenda that is so urgently required in CSR, not only in India, but around the world. It builds on the promising trend of inclusive business that has been building in India over the past decade. Long before Michael Porter and Mark Kramer’s idea of ‘creating shared value’ (CSV) was introduced, India became a seedbed of innovation for ‘bottom of the pyramid’ (BOP) strategies, following work by CK Prahalad, Stuart Hart and others.

One of the BOP cases I investigated in some detail when I did my CSR lecture tour of India in 2010 is A Little World, a rural microbanking enterprise. Anurag Gupta, the Indian social entrepreneur who founded the company, has used mobile phone and biometric scanner technologies to make banking accessible and affordable to poor households. As a result, a ‘mini-branch’ costs only USD80 to run per month, and millions of illiterate, undocumented villagers can get low-value bank accounts for the first time in their lives. The case study is written up in detail in my book, The Age of Responsibility, and remains a great example of inclusive business.

Green does not always mean good

There are also many inspiring examples in India of how clean technologies like renewable energy and water purification are bringing vital utilities to poor households. However, research by fellow Cambridge academic, Emma Mawdsley, suggests that some of these success stories mask ongoing inequalities of development in Indian society. She presents extensive evidence of how, for example, Delhi’s ‘clean, green’ campaign has mainly benefited the middle and upper classes, while the poor have suffered.

This pattern of social injustice is reflected in the way Delhi is tackling its air pollution problems, with policies that impact badly on the poor. Small polluting industries were relocated with little or no compensation for owners or workers. Older vehicles that do not use Compressed Natural Gas (CNG) sold to other city transport fleets, thus displacing rather than reducing pollution. Even the focus on air pollution represents a middle-class priority, rather than the most pressing need of the poor—clean, available water.

Looking at the issue of water, Mawdsley is similarly critical. The poor are often criminalised for water theft (estimates indicate that as much as 50% of Delhi’s water is unaccounted for in official meter readings
and thus ‘wasted’), while the authorities turn a blind eye to middle- and upper-class illegality. This common practice involves the falsification of meter readings and technologies that can enhance water amounts extracted from already legal connections or from illegal/unregistered ground water sources (through tub and bore wells).

Mawdsley concludes that ‘the pursuit of profitable environmental policies, technologies and change is
desirable if we are to move towards greater sustainability, but the political and social nature of their impacts must be recognised. “Green” does not automatically mean “good”. There will always be winners and losers, but there is a real danger in India at least that the drive towards greater sustainability will have some regressive social outcomes.’

From my own experiences and research, I believe India is certainly a space to watch on sustainable business, and its progress is far from being a foregone conclusion. Whereas there is a sense of order and control in China’s great transition, India is far more chaotic and unmanaged (or unmanageable?). It is almost as if there is a grand experiment in sustainable business – democratic, messy, ad-hoc Indian style, versus controlled, managed, sanctioned Chinese style. Which will prevail is a question for future historians. I think it’s too soon to place bets on either. If we’re lucky, both will succeed in their own way.

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2013/08/blog_csrwire9_wvisser.pdf”]Pdf[/button] A giant leap backwards on CSR: India’s great missed opportunity  (blog)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this blog

Visser, W. (2013) A giant leap backwards on CSR: India’s great missed opportunity, Wayne Visser Blog Briefing, 14 August 2013.

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Oil on Troubled Waters

Oil on Troubled Waters:

Can Shell Make Good in Nigeria?

Blog by Wayne Visser

Anyone who works in sustainable business or CSR will probably have cut their teeth on the classic (some would say infamous) case study of ‘Shell in Nigeria’. What makes it such a compelling case is that it has yet to reach any final resolution. Ever since Shell was tarred with the brush of bad publicity surrounding the execution in 1995 of environmental activist Ken Saro-Wiwa by the Nigerian government, it has struggled to regain its social license to operate.

My first direct encounter with Shell in Nigeria came a few years after the incident, when I was running KPMG’s sustainability practice in South Africa. In fact, KPMG’s sustainability practice in the Netherlands had worked closely with Shell to pioneer its triple bottom line reporting approach, and the KPMG Norway practice was working with Shell in Nigeria on sustainability reporting and environmental management.

Two things stick in my mind from that time. One was being rather puzzled by the failure of Shell Nigeria’s HSE (health, safety and environment) reports to mention the Saro-Wiwa fiasco, which was still very much at the forefront of protests and boycotts against Shell, both in the country and abroad. If ever there was an elephant in the room!

The second recollection was a trip to Nigeria by one of my team members to do an audit on Shell’s ISO 14001 system. When she returned, I was aghast to learn that, at one point, the Shell vehicle had been surrounded by an angry mob threatening violence, after which the team travelled to Shell sites by helicopter and with an armed guard.

I have subsequently visited Nigeria five times and had a chance to speak to many of those working on corporate responsibility in the country, including a number of Shell’s national sustainability managers. As a result, I am more convinced than ever that the case holds vital lessons for other companies in how to be more accountable in the 21st century.

Lesson 1: Perception is reality

Whether Shell was actually in any way complicit in Saro-Wiwa’s execution did not make any difference. The fact that they made a plea to the Nigerian government for clemency did nothing to change the public perception – shaped largely by activist NGOs like Greenpeace and organisations like The Body Shop – that Shell must be guilty of serious human rights and environmental abuses.

Lesson 2: If you lie with dogs, you wake up with fleas

One of the reasons that Shell was targeted was that it was (and continues to be) ‘in bed’ with the government, which today is a majority shareholder in the company. 95% of Shell’s revenue after costs goes to the Nigerian government. Rightly or wrongly, stakeholders believe that, given these close ties, Shell is little more than a puppet of a corrupt government.

Lesson 3: Beware the resource curse

Despite Nigeria’s vast natural wealth, the majority of its people remain poor. Shell paid $42 billion in revenues to the Nigerian government between 2008 and 2012. A further $5.2 billion was paid in royalties and taxes in 2012. Due to the greed and corruption of its politicians, very little of this money is spent on human development. Poor governance and transparency makes the economic and social contribution of companies as effective as moving around the deck chairs on the Titanic.

Lesson 4: Penalties for losing a social license to operate are high

Shell estimates that, of the 26,000 barrels of oil spilled in 2012, 95% was the result of sabotage and oil theft. Besides these serious economic and environmental impacts, the safety and security of Shell staff are also compromised. In 2012, two contractors were killed in an armed attack while assessing the remediation of an oil-spill site, and in 2010, 26 employees and contractors were kidnapped (down from 51 in 2009).

Lesson 5: Environmental damage is costly

Shell is installing equipment that will reduce gas flaring from its facilities at a cost of $2 billion, in addition to the $3 billion already spent to reduce flaring. In order to lessen its operational spills, Shell constructed a $1.1 billion replacement pipeline. At the beginning of 2012, there 316 sites in need of remediation from spills (they had cleaned nearly 80% by the end of the year).

Lesson 6: Trust begins with transparency

Shell actively promotes and participates in the Extractive Industries Transparency Initiaitve in Nigeria, in which all payments to government are publicly disclosed. Besides this, Shell as created a public website which tracks the company’s response to, and investigation and clean-up of, every spill from its facilities, whether operational or the result of sabotage.

Lesson 7: Communities expect more than promises

Shell uses a Global Memorandum of Understanding (GMoU) model (introduced in 2006) to formalise its community contributions. Communities identify their own needs, decide how to spend the funding provided by SPDC and its joint-venture partners, and directly implement projects. By the end of 2011, Shell had signed and implemented agreements with 290 communities, of which 30% are around their operations in the Delta. In 2011, 596 projects and $79 million was channelled through the GMoUs.

Lesson 8: Reward innovation and best practice

In 2012, Shell received recognition in Nigeria’s Social Enterprise Reporting Awards (SERA), run by Trucontact, for its $27 million Kobo Fund, which enables small Niger Delta contractors to access loans needed to finance the supply of goods/services to Shell. The company is also providing $6 million for the UN-led Global Alliance for Clean Cooking Stoves, which aims to supply 100 million homes by 2020.

Lesson 9: Go beyond philanthropy

Despite spending over £31 million on community projects in 2012, Shell’s commitment to sustainability in Nigeria is demonstrably focused on reducing the negative environmental and health impacts of their core business operations, while increasing of the positive economic and social benefits.

Lesson 10: Support better policy

In recent years, the Nigerian government has moved to legislate CSR, including a requirement to spend no less than 3.5% of gross annual profits per year on CSR. Shell would do well to oppose policy developments like this, which only serve to embed a philanthropic mode and act like a tax. Far better would be to encourage better legislation (and more importantly, better enforcement) on critical issues like labour rights, environmental management and anti-corruption.

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2013/08/blog_csrwire8_wvisser.pdf”]Pdf[/button] Oil on Troubled Waters: Can Shell Make Good in Nigeria?  (blog)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this blog

Visser, W. (2013) Oil on Troubled Waters: Can Shell Make Good in Nigeria? Wayne Visser Blog Briefing, 7 August 2013.

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CSV: Revolution or clever con?

Creating shared value:

Revolution or clever con?

Blog by Wayne Visser

The Corporate Social Responsibility (CSR) movement has not delivered a system change. Creating shared value (CSV) can change this as it has challenged the narrow definition of corporate purpose to go beyond profit maximization.

‘The capitalist system is under siege. In recent years business has increasingly been viewed as a major cause of social, environmental, and economic problems.’ This was the statement made by Harvard professor Michael Porter and management consultant Mark Kramer in Harvard Business Review in 2011. The solution they propose is ‘creating shared value’ or CSV, which they are at pains to point out ‘is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success.’ At its heart, they say, CSV is the way in which ‘businesses must reconnect company success with social progress.’

Porter and Kramer observe that ‘companies are widely perceived to be prospering at the expense of the broader community. Worse still, the more business has begun to embrace corporate responsibility, the more it has been blamed for society’s failures.’ Hence, for them, CSR is something of a red herring, which they describe as a ‘mind-set in which societal issues are at the periphery, not the core’ and ‘a reaction to external pressure—[which has] emerged largely to improve firms’ reputations.’

However, the question is whether CSR and CSV are really different? In fact, is CSV even a new concept, or just old wine in new wineskins? Porter and Kramer also argue that CSV is more preferable than fair trade. Is that true? In this brief article, I want to tackle some of these questions, as well as reflect on the true value of CSV and the future of CSR.

The first thing to place on record is that CSV reflects an evolution in Porter and Kramer’s own thinking. After a career spent focussing on economic competitiveness devoid of any consideration of social impacts, Porter teamed up with Kramer in 2002 to write about ‘the competitive advantage of corporate philanthropy’, which they then reframed in 2006 as ‘strategic CSR’. Hence, CSV is their third foray into the field of social responsibility – which rather ironically and explicitly disparages the previous two.

The second point is that CSV is nothing new. At the very least, we can say that it strongly echoes the work of C.K. Prahalad and Stuart Hart on serving markets at the ‘bottom of the pyramid’ (BOP), which dates back to 2002, as well as the idea of supporting ‘inclusive business’ – something into which the International Finance Corporation (IFC) has channelled $7 billion in over 80 countries since 2005. It is somewhat disingenuous and poor academic form that these foundational concepts were not even acknowledged by Porter and Kramer.

The third aspect of CSV that I take issue with is the way in which the duo characterise corporate social responsibility. I agree that some companies are still practising an immature form of CSR – which I have called CSR 1.0 – that is defensive and risk-based, philanthropic-oriented or PR-driven. However, numerous companies have moved on to a fourth stage – strategic CSR, as exemplified by the ISO 26000 standard – and some have even gone beyond that, to what I call transformative CSR, or CSR 2.0.

Not content to discredit social responsibility alone, Porter and Kramer also launch an attack on the fair trade movement, which they say ‘is mostly about redistribution rather than expanding the overall amount of value created.’ By contrast, CSV ‘focuses on improving growing techniques and strengthening the local cluster of supporting suppliers and other institutions in order to increase farmers’ efficiency, yields, product quality, and sustainability. This leads to a bigger pie of revenue and profits that benefits both farmers and the companies that buy from them.’ The fact that these aspects are integral to the work that the Fairtrade Foundation seems to have been conveniently overlooked.

Having said all that, if my short critical tirade has given the impression that I am against CSV, allow me to set the record straight: I am a CSV fan, and here are the reasons why: I believe it has injected a new energy into the CSR movement. It has cleverly changed the language of social responsibility into the language of value creation, which business leaders can better understand and it has challenged the narrow definition of corporate purpose to go beyond profit maximization. What is more, it has rightly advocated a better alignment between a company’s core strategy and the social problems that it can have an impact on.

At the end of the day, I am less concerned about the labels we use – be it CSR, BOP, corporate citizenship, sustainability or CSV – and more interested in whether the concept and practice are holistic and transformative. This means business has to embrace what I call the four DNA elements of responsibility: value creation, good governance, societal contribution and environmental integrity. It also means applying creativity, scalability, responsiveness, glocality and circularity to the business solutions to society’s needs. Lastly, it means calling for a transformation of capitalism – which I am pleased to see Porter and Kramer agree with. For a more resilient capitalism to emerge, I believe all future economic and business activity will need to be guided by five criteria:

  • Responsible investment – ensuring that money is channelled towards productive and sustainable investments, as the Co-operative and Triodos banks have done, and not into speculative trading in the casino eco
  • Long-termism – understanding that real wealth is created by adopting a long-term perspective, including the needs of future generations, as Generation Investment and Warren Buffet’s Berkshire Hathaway showcase;
  • Transparent disclosure – embracing transparency in revenues, in line with the International Integrated Reporting Council, Carbon Disclosure Project and Extractive Industries Transparency Initiative (EITI);
  • Full cost accounting – internalising social and environmental costs (externalities), either through taxes (such as those on carbon and pollution) and social and environmental profit & loss accounts (such as Puma’s); and last, but not least …
  • Inclusive development – serving the ‘bottom four billion’ markets, as demonstrated by the BOP 2.0 Protocol, and enacting Porter and Kramer’s concept of creating shared value.

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2013/08/blog_csv_csr_wvisser.pdf”]Pdf[/button] Creating shared value: Revolution or clever con? (blog)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this blog

Visser, W. (2013) Creating shared value: Revolution or clever con? Wayne Visser Blog Series, 17 June 2013.

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Yin and Yang

Yin and Yang:

Striving for sustainable harmony in China

Blog by Wayne Visser

Waking dragon of the East

I first visited China in 2008, where I presented at the China Europe International Business School (CEIBS) conference on Responsible Competitiveness, in Shanghai. I was also a judge for the Innovate China International MBA competition. My initial impressions were that – contrary to popular belief – in the medium to long term, China may very well set an example for other countries and companies in terms of sustainability and responsibility.

A clue to my optimism came from something that William Valentino, CSR Director for Bayer in China, said to me: ‘Above all else, China prizes stability. And stability, in turn, can only be maintained under conditions of social upliftment and environmental improvement.’ Despite labour conditions remaining a concern, human rights abuses are starting to become the exception rather than the rule, and I believe China’s sustained economic boom is doing far more social good than harm.

Reconciling its new-found addiction to growth with environmental constraints, however, may prove its most difficult challenge yet. Elizabeth Economy, author of The River Runs Black, has studied China’s environmental challenges in depth and believes the crisis they face is deep and intractable. The facts she cited when I interviewed her for The Top 50 Sustainability Books, were sobering, to say the least. She told me China has 20 of the world’s 30 most polluted cities in terms of its air quality. Seven hundred and fifty thousand people die prematurely every year in China because of respiratory diseases related to air pollution.

Water is another major challenge. China has only 25% of the world’s average per capita availability of water. Something like almost 30% of the water that runs through China’s seven major river systems and tributaries is unfit even for agriculture or industry, much less any form of drinking or fishing. Between five and ten cities will completely run out of water by 2050. China is roughly one-quarter desert, and the desert is advancing somewhere between 1,300 and 1,900 square miles per year. Furthermore, 10% of China’s agricultural land is contaminated with heavy metals and other contaminants.

People like Amory Lovins, founder of the Rocky Mountain Institute, is more optimistic. He told me that China is the only country that’s cut its energy intensity over 5% a year for a quarter of a century. They are the world leader in distributed renewable sources of power and is the only country that has energy efficiency as its top development priority. To be sure, implementation is at an early stage. But, Lovins said, China has better leaders than we do, are more highly motivated and work harder. ‘For all these reasons, I think we can rely on China to lead the world out of the climate mess.’

William McDonough, co-author of Cradle to Cradle, shares these sentiments. He told me that while  …

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2013/08/blog_csrwire7_wvisser.pdf”]Pdf[/button] Yin and yang: Striving for sustainable harmony in China (blog)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this blog

Visser, W. (2013) Yin and yang: Striving for sustainable harmony in China, Wayne Visser Blog Series, 31 July 2013.

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Going glocal with CSR

Going glocal with CSR:

Multilateral musings in Mexico

Blog by Wayne Visser

In some senses, my CSR quest world tour, which was the main inspiration behind The Quest for Sustainable Business, started back in December 2007, on a trip to Guatemala. The main purpose of the visit was to launch The A to Z of Corporate Social Responsibility at the Inter-American Development Bank (IADB) annual conference on CSR. That was when the seed of the idea was planted—while talking to my colleague and co-author, Professor Dirk Matten, over a glass of celebratory champagne in the hotel bar late one night.

One of the greatest insights for me had come after a tour we had at a local sugar plantation. The company had prepared a presentation on its approach to CSR, and imagine my delight when I saw that it also had a CSR pyramid! The interesting thing, however, was that it was not Carroll’s CSR pyramid or a Prahalad and Hart’s BOP pyramid. Economic responsibility was still seen as most important, and depitcted as the bottom layer of the pyramid, but the next most important responsibility was to the families of the plantation’s employees. The third tier was community responsibility and, rather intriguingly, the apex of the pyramid was ‘engagement in responsible national policy development’.

Was that company right and others wrong in its interpretation of CSR? Of course, they were right. That is the beauty of ‘glocality’. It is not an ‘either–or’ mentality, but a ‘both–and’ approach. The other interesting observation is that they had formed a cooperative of farms in order to tackle CSR. Individually, they were too small to justify a sustainable business programme, but collectively, it made sense. This is one of the ways that SMEs can address sustainable business, through pooling their resources and collaborating.

I gained more insights into sustainable business and SMEs when I visited Mexico in 2008, at the invitation of Jorge Reyes, Director of the IDEARSE Centre at Anahuac University, which is doing some excellent work on the subject. In 2009, I was invited back to deliver the keynote address at its 7th International CSR Conference, and again in 2010 to run a workshop, so I got to know a little bit about its research programme.

In response to a government-sponsored project aimed at SME growth acceleration, IDEARSE put together an approach for supporting growth of the businesses through the implementation of a sustainable business administration model that would develop competitive advantages for the companies. Built into its business training programme, therefore, were six elements for SME development: self-regulation, stakeholders, human rights, environment, labour and social/community impact. Working with the supply chains of big brands such as Sony, Coca-Cola and Cemex, IDEARSE have taken more than many SMEs through the programme, with impressive results. On average across the six sustainable business dimensions, the SMEs improved from a score of 23% to 43%, while simultaneously showing average annual sales growth of 30%. They have effectively demonstrated that CSR is perfectly feasible for SMEs and may even be constructed as part of a growth and competitiveness strategy.

In 2008, on another trip to Mexico City …

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[button size=”small” color=”blue” style=”download” new_window=”false” link=”http://www.waynevisser.com/wp-content/uploads/2013/08/blog_csrwire6_wvisser.pdf”]Pdf[/button] Going glocal with CSR: Multilateral musings in Mexico (blog)

Related websites

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.waynevisser.com/books/the-quest-for-sustainable-business”]Link[/button] The Quest for Sustainable Business (book)

[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

Cite this blog

Visser, W. (2013) Going glocal with CSR: Multilateral musings in Mexico, Wayne Visser Blog Series, 24 July 2013.

 

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