Latest from Lifeworth ConsultingExpert Insights
|
Crane and Matten
An informed and thought-provoking analysis of what lies behind the headlines and headaches of business ethics and corporate social responsibility
Updated: 4 min 19 sec ago
GE, IBM and Ford still top performers in sustainability communications using social mediaWe're pleased to feature a guest blog today from Matthew Yeomans, a leading expert on social media in the area of sustainability and CSR. We asked him to tell us a little more about the Social Media Sustainability Index, an impressive report that he recently authored on the state of social media sustainability communication among major international companies. Read what he has to say, and then download the free report in full over at the SMI website. It's full of practical tips on how to communicate effectively about sustainability using social media - and of course there's a top 100 list to pore over at your leisure. "One year ago, we published the inaugural Social Media Sustainability Index, a trawl through 287 major companies in North America and Europe to identify who was using social media tools and thinking to communicate sustainability. At the time we found just 60 companies that were devoting any real time or dedicated resources to that mission. Fast-forward to the end of 2011 and a new landscape of social media sustainability has emerged. In researching our new report, The SMI-Wizness Social Media Sustainability Index, we identified at least 250 major corporates that are engaged in some form of social media sustainability comms and more than 100 have a blog, YouTube, Facebook or Twitter channel dedicated to talking about sustainability. Those dedicated 100 form the basis of our new Index. Even as the volume of social media sustainability content has increased, the standout leaders of our Index – GE, IBM, Ford, PepsiCo, BBVA and Allianz – are the same as last year. This we believe is a testament to good social media practice in that none of these leaders consider social media sustainability through the prism of a campaign mentality. Indeed the top companies in our Index all have built upon the editorial platforms and community engagement they had established in 2010. The social media sustainability leaders also demonstrate that companies who are committed to making their business more sustainable – be it through improved energy efficiency, lowering emissions, policing their supply chains, pioneering ethical sourcing and promoting equitable working environments – have a distinct advantage in social media communications. That’s because they have a good and believable story to tell, and good storytelling remains the most valuable currency in social media.Here are some of the ways the smartest companies are using social media, not just to communicate their sustainability stance, but also to involve the public in building a better world:
It just so happens that we think those qualities are exactly what companies need if they are to succeed in social media communications. And so they form the bedrock of how we have ranked and rated the 100 companies that make the Index." You can download the entire Index at: http://socialmediainfluence.com/SMI-report/ This post was first published on SMI. Graphic copyright SMI Wiziness Down-under, are things upside down?Last week we talked about executive pay and bonuses. If you read or watch the news today in Australia you will come across an entirely different story though. In a time when bankers have to be told off by governments to stuff their pockets, CEOs get stripped of royal titles for their reckless actions or presidential hopefuls turn out to be ruthless maximizers of personal wealth – this story sounds like a fairytale. Ken Grenda, the owner of a bus operating and manufacturing company in Melbourne has given all his staff a AUD 15 million bonus (US$ 15.3m), averaging $8,500 per employee with some receiving as much as $30,000! The background of the payout is a sale of the family-owned company which netted Ken some $400m. His rationale:"A business is only as good as its people, and our people are fantastic. This is to recognise that. We have had people here who are second generation, and one fellow in the same job for 52 years. We have grown from just four bus routes ... in 1945 to operating 1300 buses in Melbourne, Adelaide and Perth. You only get there if you have good people." Now that’s exceptional. And good on Ken and his family – sure enough. The facebook page of the event is full of praise, amazement and disbelief. It is indeed a gesture which is rare, if not unprecedented in today’s economic climate. It makes you think though. Ken’s rationale, above, is perfectly sound. Especially in a service company, the personnel at the customer interface, such as bus drivers, can make all the difference. In a time, when bonuses have become a common instrument for people at the top, there is no good reason to exclude workers from the same thinking. Recently, The Guardian has published a piece on the intellectual heritage of the current situation of excessive bonuses. It is really hard to understand why Michael Jensen and his colleagues, when suggesting share-price related remunerations for top management, never thought to include the lower ranks. The real question here though seems to be why those performance related elements have to be just this discretionary, pseudo-feudal benevolence of a rich guy. It’s a great gesture of philanthropy, as some bloggers say, but if employees are really so vital to a company’s performance why not make it a right of the employee? After all, $15m of $400m is not all that much. What would be a fair share? And who should decide about that? As we have commented earlier in this blog, there is a funny bifurcation in the debate on CSR and industrial relations. From a CSR perspective we should praise the Grenda family; but from an industrial relations perspective we might ask the question why – if what Ken Grenda says above is true – the employees should not have a right to their share in the growth of the company’s value to begin with? It all points to the role of worker’s representation and collective bargaining. These used to be the classic tools to make sure that workers participate in a company’s overall prosperity. But Australia and New Zealand have seen the highest declines in trade union membership over the last two decades, between roughly 30 to 50%. In that sense then, Australian industrial relations are pretty similar to the rest of the world and Grenda's example more a one-off than something of a rule. Other solutions might be share ownership of employees, which apart from examples such as John Lewis (department stores, UK), Westjet (airline, Canada) or W.L. Gore (Gore-Tex, US) have remained exceptions. In as much as gestures such as that of Ken Grenda deserve praise and respect as a single incident – they also raise these more general question of how sustainable this approach is. As critics in the Australian blogosphere point out, is this just the final golden handshake, before the new Brazilian owners of Grenda take over and expose workers to an entirely new game to make their new investment pay off? Picture by Natinaal Archief, reproduced under the Creative Commons License. Solving the executive pay problemThe idea that executive pay can be "too high" is a touchy issue. While many regular Joes are seeing their jobs disappear, or have been forced to endure cut backs to salary and benefits, CEO pay continues to escalate. Bonuses in the financial sector - never popular among the general public - are largely back to their stratospheric pre-crisis levels, much to the chagrin of the tax payers who funded the bailouts that kept them in business. And there is the growing chasm between those at the top and the bottom of the pay ladder that helped galvanize the Occupy movement. According to one recent study, the gap between CEO and average U.S. worker pay was 325-to-1 in 2010. In 1965, it was 24:1. The business community, of course, continues to argue that it should have the right to determine its own remuneration levels. The global market for executives, they say, forces them to offer high salaries to attract the top talent. But stagnant performance is prompting many to question the logic of that argument. Why should companies be rewarding top executives for failure when everyone else is tightening belts? Unsurprisingly, regulators have started talking tough. But progress has been limited. Three years ago President Obama announced that he would cap the salaries of executives of companies in receipt of TARP balilouts, yet by 2010 could do nothing to stop those companies awarding huge bonuses, judged to be "ill advised" by his newly appointed pay czar. A more systematic approach was promised with the Dodd Frank financial regulation, but efforts to rein in pay have had limited success. After much sword rattling from senior British politicians, the announcement by the UK government on January 23rd of a new approach to regulating executive pay claims to be the start of a more concerted response to the problem. The trouble is, it is not a very convincing solution. And perhaps even worse, it is not at all clear what the problem really is that they are trying to solve. The "problem" with executive pay is that it is in fact a whole set of related problems. And each of these require different types of solutions. Income disparity between high and low earners is one thing, whereas CEOs being rewarded for poor performance is quite another. Setting the pay of bailed out businesses is yet another. And so on. Regulators have to work out which of these problems they are trying to solve and what the best combination of regulation, encouragement, incentives, and sanctions should be to achieve desired results. Take the problem of pay disparity and those troubling pay ratios. Blunt regulation probably isn't going to be very helpful here. For a start no one really knows what the "right" ratio should be. A maximum permitted ratio of say 100:1 may be feasible in some industries, less so in others. And as many have pointed out, the unintended effects might be that companies start outsourcing any of the low wage jobs they still have to generate a lower ratio. Incentives, such as tax breaks for companies reaching certain thresholds, may offer more potential, although it would be technically complicated to administer effectively. A pay-ratio credits type market could also be devised whereby those companies failing to meet their targeted ratio could buy credits from those that over-achieve theirs. Much like in carbon markets, these types of systems help to even out differences across industries. The "transparency" option trumpeted by the current UK government speaks to a more typical way of government providing the framework for corporate social responsibility initiatives. In creating a mechanism for pay ratios to be compared across companies (such as through mandatory reporting of pay, and support for some type of league tables comparing performance) governments can spur companies to improve their ranking. This avoids any necessity of setting limits or levels of acceptable performance and instead relies on competitive forces to drive improvements. As with all these incentives type approaches, it remains up to companies themselves to determine how to improve their performance, whether through increasing the remuneration of lower paid workers or decreasing that of higher paid executives. It stops regulators getting directly involved in setting pay limits and enables businesses the freedom to determine what works best for them from a competitive point of view. Of course, there are also other less direct ways to encourage better pay equity. George Monbiot the UK journalist and environmental campaigner has recently put forward a spirited defense of a "maximum wage". Others argue for incentives or regulations to encourage increased employee share ownership among the lower paid. Such initiatives avoid the risk of companies simply "gaming" the pay ratio statistics, but also run into other problems, such as resistance from the business community and difficulties in implementation. Still, there is plenty of scope for interesting and imaginative ideas to help solve this and the other executive pay problems, and the UK in particular seems to be at a crucial tipping point in terms of public support for change. Where the current UK government's proposals largely fall flat is in their over-emphasis on enhancing shareholder control of executive pay. For a start this does nothing directly about pay equity (which is what the public wants) but rather focuses more on the problem of whether senior executives are being rewarded for poor performance. Whilst giving shareholders more input into executive pay is not a bad thing, first you need to have shareholders that are active participants in the companies they invest in. In our dispersed ownership model of financial capitalism where shares are often held for matters of minutes, hours, and days rather than months and years, we often simply don't have sufficient shareholder engagement for such initiatives to make all that much difference. Similar rules imposed by the Dodd Frank Act in the US have done little to curb executive pay. Clearly the time is right for action on the manifold problems of executive pay. But for those seeking to tackle them, whether in industry, government, academia, or civil society, it is imperative that there is clarity on which problems are going to be addressed. And dealing with such complex issues is going to require more creativity in terms of solutions, and more joined-up-thinking in terms of the causes of those problems, than we've generally seen so far. Photo by GDS Infographics. Reproduced under Creative Commons Licence Business Ethics enters Politics
Finally. The American establishment is talking about the issues the Occupy Wall Street movement attempted to raise since October last year: the ethics of Wall Street investors, private equity firms, the inequality of income distribution, the unfair taxation system. All these issues are now at the core of the Republican primary. Four of the five remaining contestant use those things in an attempt to stop current front runner Mitt Romney. And apparently he looks guilty on all accounts.
Mind you – let’s not get into the ethics of why these issues are brought up. The Republican base, many of them evangelical Christians, just hates Mormons such as Romney. So any argument will do to stop an heretic on his way to the White House. And while Newt Gingrich, Rick Perry and Rick Santorum are pretty much guilty of most of the things they accuse their opponent of - Mitt Romney as the Ex-CEO of Bain Capital, a private equity firm and the richest of the contestants, is just such a clear cut, stereotypical representative of the ‘One Percent’. There are a number of reasons why this is worth pondering. The first and obvious one is that none of the Republican candidates was a strong supporter of these classic ‘Occupy’ issues. They all more or less dismissed the movement. In the primary election, in which the Republican base selects the next presidential candidate though it appears that obviously the issues have traction even with conservative voters. Whether this is an indirect result of the ‘Occupy’ movement is hard to tell. But it certainly shows that the role of Wall Street, income inequality and a tax code that favors wealthy people resonates with a far wider constituency of Americans. These issues currently, in the Republican primary, appear to be somewhat engineered and disingenuous; but they will become a core issue of the election later this year, when Romney as the most likely winner of the Republican ticket will run against Obama in the fall. This turn in the debate is also remarkable as for the first time in a presidential race, a serious candidate with a background in business is assessed on his credentials in business ethics. Not that he is the first business person to do so: Romney stands in a long line of the likes of Mike Bloomberg in New York, Silvio Berlusconi in Italy or Sebastián Piñera in Chile - all examples of this kind of career. But it is interesting, that for the first time the ethics of a businessman-turned-politician's wealth creation is the subject of a debate on whether s/he is fit for public office. Obviously, ethical issues in business resonate with the general public more than ever before. This includes the level at which they have paid taxes, which in Romney's case with just 15% over the last years will make it very hard for him to endear him to the '99 per cent'... This said then, the crucial ‘ethical’ issue seems to be the question whether Romney’s activities at a private equity firm resulted in job losses for the average American. This is however just a small fraction of what really is the ethical issue with private equity firms. In some ways, the rise of the private equity industry in the US (and beyond) was a result of the Sarbanes-Oxley Act, which attempted at addressing limited transparency and accountability which led to the Enron- and other scandals 11 years ago. With Romney in the race, for the first time there seems to be a real public awareness and scrutiny of what has happened in corporate America in the last decade. While this makes one feel somewhat hopeful with regard to the potential of politics and the public sphere to not just accept the current state of ‘financial crisis’ and all that has gone along with it, it is also important to not forget about the context in which this happens. In some ways, if we judge Romney by his track record as Governor of Massachusetts – from the perspective of a liberal democracy he looks actually not too bad: as much as he denies it now, he pioneered what Obama now wants to implement as a general approach to health care in the United States. At the same time, characters like Rick Santorum are nothing short of suggesting some sort of ‘Judeo-Christian Sharia’ law, dismissing the rights of gays or women’s rights of abortion, just to name a few. The first country in the world that constitutionally separated state and religion now decides on candidates according to their faith. But that’s a whole new topic. Picture by LWVC, reproduced under the Creative Commons License Top 10 Corporate Responsibility Stories of 2011It's that time of year again when we consider the big news events around corporate responsibility during the past twelve months. It has undoubtedly been a significant year, with some stories potentially having a huge impact on future corporate responsibility practice or government policy. Nuclear accidents, protests galore, high level corruption - there's been a lot of ugliness again this year. But sometimes you've got to go down before you can go up. Let's hope 2011 will be looked back on as the year that business finally woke up to the new realities of corporate responsibility. 1. Fukushima nuclear disaster As with the BP oil leak in 2010, no corporate responsibility story dominated the media in the same way that Fukushima did. And for good reason. The world's second worst nuclear disaster (after Chernobyl) slammed home just how risky the nuclear industry could be. Tokyo Electric Power (TEPCO), the company operating the plant, has had to shoulder a lot of the blame for its shoddy risk management, poor planning and siting, falsified safety records, governance procedures, and lots more besides. Its now mired in debt, awaiting either nationalization or a government bail-out. Japanese regulators meanwhile failed in providing adequate oversight, in large part due to overly cosy relations with the energy industry. Not surprising then that Fukushima also had huge impacts more broadly, most notably in a massive swing away from nuclear in the clean energy debate. Germany for one has made a 180 degree switch away from nuclear. Really this was the mother of all corporate responsibility disasters in 2011. 2. The 'Occupy' movement Starting with Los Indignados in Spain, gradually hitting the headlines with Occupy Wall Street, and then turning into a global phenomenon, the Occupy Movement thrust social equity and democracy into the corporate responsibility debate like never before. We've had anti-capitalism protests before, but the Occupy Movement took a much more focused aim at the titans of the financial sector, and kept an unlikely conversation going for months. The challenges the unruly movement posed for business may not always have been crystal clear, but they've struck such a chord with the general public, and even among senior business leaders, that they can't just be ignored. Demands for tax justice, banking regulation, and more controls on corporate political influence have all received a fillip by the movement. Who know's? Maybe in time, the legacy of Occupy for corporate responsibilty may even surpass that of Fukushima. 3. News International phone hacking scandal Few corporate responsibility stories can claim the scalp of an entire business, but the closing of the UK newspaper the News of the World, and the arrest of its editor, Rebekah Brooks, in July of 2011 showed just how significant the phone hacking story surrounding News International had become. When the story also took the scalp of the UK's most senior police officer, and landed veteran media mogul Rupert Murdoch in a Parliamentary inquiry, the reverberations were felt near and far. We like our journalists to pursue truth. But when they cross the line and illegally tap the private phones of bereaved families, it's clearly time for a clean up in the media. On the bright side, the story was broken, and vigorously investigated over several years, by the Guardian newspaper. So while we may not trust journalists all that much any more (if we ever did), the story also demonstrated the importance of a strong and independent media as a corporate responsibility watchdog. 4. FIFA's corruption own-goal 2011 was a bad year for integrity in sport. The Pakistani cricket betting scandal, the Sumo wrestling bout-fixing revelations, the Penn State University football coaching sex abuse case, the continued flow of scandals convulsing the Chinese Football Association and the Turkish Football Federation - few sports or countries have managed to come out looking clean. But rising above them all has been the FIFA corruption story, which more than any other sporting corruption story of 2011, demonstrated not just how deeply ingrained corruption is in sport but even how much it is embedded in sporting management and administration. The scandal has been rumbling on at least since 2010 when allegations about bought votes in the 2018 and 2022 World Cup hosting competition started pouring in. After bribery allegations, resignations, and an unopposed re-election of beleaguered FIFA chair Sepp Blatter, the organization finally looked to be getting itself back on track with an internal inquiry and a life-ban for the President of the Asian Football Confederation. But FIFA's proposed roadmap for tackling its integrity problems fell far short of the root and branch surgery that was necessary, and the recent withdrawal of Transparency International from the reform process demonstrates that the FIFA leadership still don't understand the basic principles of ethics management. Students of corporate responsibility need no better case study of how to get it all so wrong. 5. Raj Rajaratnam's insider trading trial No list of corporate responsibility stories is complete without a big fish being caught. In 2010 we saw the sacking of HP CEO Mark Hurd for expense claims fraud. This year, we had a two-for-price-of-one bonanza with the trial of former hedge fund boss Raj Rajaratnam giving us a guilty verdict, 11 years in jail and a $10m fine for insider trading .... plus the charging of his friend and former McKinsey head Rajat Gupta with securities fraud for passing on insider information to Rajaratnam. As the New York Times said: "it was the longest-ever prison sentence for insider trading, [and] a watershed moment in the government’s aggressive two-year campaign to root out the illegal exchange of confidential information on Wall Street." 6. UBS and the not so 'rogue' trader Another big story of personal ethical failure was the revelation back in September that UBS trader Kweku Adoboli had managed to lose the company a staggering $2.3bn in authorized trading. With a loss that big, this one makes the list on scale alone. But the real story here was not so much the ethical failings of Adoboli himself (though that clearly was one of the issues at play here), but the failure of UBS to manage the problem before it got out of hand, and the inherent risk-taking at the heart of the financial services industry. In desperate need to repair its flagging reputation, UBS subsequently accepted the resignation of its CEO and installed a new leader with a mandate to move into less risky and less complex investment banking. 7. Twitter revolutions and Blackberry riots You know when your reputation is in good shape when you get associated with progressive political revolutions like the Arab Spring. After a government telecom crackdown in Egypt, companies like Twitter and Google found themselves center stage in the flourishing revolution. Switch to the ever declining fortunes of Canadian tech pioneers RIM and their Blackberry device, and all you get is an association with mindless looting in London. But whichever way you cut it, 2011 will indelibly be marked as the year that tech companies realized that for better or worse, social protest - and government response to protest - was an inevitable part of their business. Message to CR department: write a policy. 8. Michael Porter's popularization of 'Creating Shared Value' It was certainly not the most popular article among CSR commentators, but Porter and Kramer's piece in the January issue of the Harvard Business Review on 'Creating Shared Value' has probably done more to get corporate responsibility issues into the boardroom than anything else written this year. Sure, it's simplistic, derivative, and takes cheap shots at a version of CSR that most us don't even recognize. But it's also compelling, endearingly positive, and says a lot of things that most of us have been trying to say for years without anyone taking much notice. Plus it couldn't be more prescient with its "capitalism is under siege" motif. Oh, and Michael Porter said it. So it must be true. Take it from us, CSV is here to stay. 9. Facebook's privacy adventures There was little doubt back in January that Facebook would probably be hitting a whole bunch of corporate responsibility snags during the year. Once you get so big and popular, it is inevitable that the critics will start sharpening their knives. Greenpeace pushed hard on the coal powered energy issue and eventually scored a well-earned success. But the big issue dogging Facebook in 2011 was privacy. The tech giant wasn't alone since privacy and security continued to afflict a number of companies especially with the shift to cloud computing. But Facebook's privacy battles stand out simply because they affect so many of us and therefore mark the front line of the personal privacy battles with tech companies and regulators. Remarkably, despite a surge of criticism the company initially managed to stave off too big a hit on its business during the year. But last month's settlement with US regulators saw Facebook accused of "unfair and deceptive practices" and resulted in the company facing an extraordinary obligation to submit to independent privacy audits for the next 20 years. And late in December the Irish data protection commissioner gave Facebook 6 months to comply with a raft of new privacy measures for all of its non US and Canadian users. As a result the company has started adopting a far more conciliatory tone with its critics but the road ahead will be marked by yet more battles as we gradually move to some kind of a post-privacy future. 10. The tar sands failed ethical makeover The year started with the Canadian Environment Minister seeking to make the seemingly indefensible case that the tar sands were an ethical source of oil because they came from a democratic country that respected human rights. The argument was designed to influence US and European policy makers in the run up to critical energy decisions during 2011 such as the controversial Keystone XL Pipeline plan which was designed to bring oil sands crude directly into the US, and the European Commission's deliberations over whether to label tar sands oil as a "dirty fuel" due to its higher carbon intensity. So far the Canadian government and the oil sands producers have failed to win the argument with the Keystone decision being postponed by President Obama and the EC approving the dirty fuel label, which also then attracted further backing from a similar initiative in the State of California. Recently the story has spiraled into the more absurd territory of a banana boycott. The announcement by fruit company Chiquita to reduce their use of tar sands oil in its fleet sparked a concerted campaign by Ethicaloil.org to boycott Chiquita for discriminating against Canada's "ethical oil". You couldn't make this stuff up. Looking at the two stories book-ending our top ten - the seriousness of a world of nuclear disaster and increasingly dirty sources of conventional energy (such as the tar sands and gas fracking) - not to mention the erosion of privacy, a crisis in capitalism and the never ending scourge of corruption that populate the middle order, it is clear that the corporate responsibility stakes have never been higher. Next year promises to be more of the same. Photo by IAEA Imagebank. Reproduced under Creative Commons Licence Ecolabels – it’s time for a change
Today, we have a guest post from Heather Mak from SustainAbility who is a co-author of the recently released report Signed, Sealed ... Delivered? which calls for a fundamentally new approach to eco-labeling. We asked Heather to tell us more....
--------------------------------------------------------------------------------------------------------------- Over 30 years ago, the Blue Angel label came out in Germany. It was significant – a label for consumers to recognize what was the more environmentally sound choice, backed by a standard and certification. Years later, many others followed – including many well-known ones such as Fairtrade, Marine Stewardship Council, Energy Star, Organic – and as of several days ago on the Ecolabel Index, the tally was at 424 labels. But what we needed in the past is not what we need any more. It's time for a change. In a recent research piece from SustainAbility called Signed, Sealed…Delivered? that I co-authored with my colleague Patrin Watanatada – we looked at the value and challenges that businesses find in using certification and labelling as tools to improve economic, environmental and social outcomes across global value chains. What we have found is this - certification, labelling and the standards-setting organizations behind them have been pioneers in building a more sustainable economy. For businesses, they provide a credible, consensus-set reference point for collective action, access to expertise and networks, and can spur demand for certified or labelled goods. This is particularly the case in the B2B space, where labels and sustainable attributes are built into institutional purchasing agreements, such as within large companies or municipalities. However, there are also a number of challenges. The traits that are the strengths of consensus-based standards – governance and inclusiveness — also pose challenges. For one, some businesses are seeking to advance sustainability as quickly as possible – but sometimes the agreement required in a consensus based model can slow things down. In addition, what is best for all stakeholders is not always perfect for sustainability – for example with many of the forestry standards it is a compromise between best available science and what the industry can handle. Also – the issues that are covered by specific standards may not be entirely appropriate for the business, so there are many cases where companies such as Innocent Drinks have developed their own standards for sustainable sourcing. As labels become more known in specific product categories, they also become a mere condition of entry, which has been the case with Energy Star in electronics. This does not suit most marketing departments who seek to differentiate, first and foremost. Another challenge to labelling is that it has limits – in particular, limits to scale. Labels are mostly recognized and understood by a niche group of consumers – a typical consumer will not buy an ecolabelled product unless it has a clear “what’s in it for me?” for them. For example, organic products have done well because many believe it to offer them a significant health benefit. This is also why we see an increasing number of B2B standards and certifications that have no consumer facing element, including the Better Cotton Initiative and UTZ Certified for coffee and cocoa, which allows companies to focus solely on making the commodity more sustainable. What then needs to happen? We think that the model of standards + certifications + on-pack ecolabels needs to evolve, where they are separated and each are used and recognized as part of a larger sustainability toolkit. Standards would provide an increasing, pre-competitive baseline, and brands could compete around this, such as what apparel manufacturers are planning with the Sustainable Apparel Coalition’s index. In concert, partnerships and collaboration with civil society would help to transform supply chains and consumer norms and behaviour, for example with Procter & Gamble’s Turn to 30 cold water washing campaign. Certification could take the form of civil society and government evolving to be more effective and efficient in developing ways to hold business accountable. And lastly, brands – which intentionally started off as trustmarks themselves – would be the main focal point with labels becoming a complementary “back of pack” instrument, such as the case with Method using Cradle to Cradle certification as a design tool to reinforce the brand’s design focus, and using the label for the 1% of its customers who are interested in it. It’s a tall order to be sure, and a lot needs to happen before this vision can be realized. But in a quickly changing space as sustainability – it’s time that ecolabels had their change too. Photo by fmg2001. Reproduced under Creative Commons Licence Cleaning up the "ethical oil" mess
With Stephen Harper's government getting plenty of heat at the Durban climate conference over its decision to relegate Kyoto to the history books, there is a lot of discussion back home about the merits or otherwise of presenting the Canadian oil sands as "ethical oil". It's something we discussed in the blog earlier in the year, but the XL pipeline decision process has kept the issue very much on the front burner. Factor in a controversial TV spot by Ethicaloil.org comparing so-called "ethical" Canadian oil to "conflict" oil sourced from Saudi Arabia that funds oppression of women, and its no surprise to wind up in a heated debate
Yesterday, CBC, Canada's national broadcaster, featured a segment on ethical oil in its popular morning radio show The Current, and we were happy to be invited to participate, along with Kathryn Marshall, the spokesperson for Ethicaloil.org and Jody Williams, a Nobel Peace Prize winner, who has publicly come out against the tar sands. You can hear the lively discussion, led by the impressive host Anna Maria Tremonti on the CBC website. A colleague of ours in the law school here at York University, Stepan Wood, has blogged about the show and takes the time to expand upon some critical points that there was hardly even enough time to raise in the conversation itself. As he says: "For one thing,[ethical oil's] narrow focus on human rights and the rule of law distracts attention from the massive environmental damage and energy consumption involved in extraction and processing of tar sands oil. For another, the claim that tar sands operations fully respect human rights is debatable, with numerous First Nations claiming that these operations impair their rights to clean water and a healthful environment.It is also hard to miss the xenophobic undertones of the Ethical Oil message–it is no coincidence that most of the countries targeted by the campaign are ethnically, culturally or religiously distinct from the white Canadian majority"The bottom line, in which we and Stepan agree, is that Canada is very much not a leader when it comes to handling its responsibilities around oil extraction: "To be a real leader Canada would have to show that it is genuinely committed to progress toward a post-carbon economy and improvement of the human rights records of Canadian companies overseas. This would include holding Canadian oil companies to the same high standards wherever they do business in the world. It is disingenuous to say that oil companies in Canada are ethical leaders if those very same companies are busily pumping oil and propping up those same repressive foreign regimes that the Ethical Oil campaign vilifies."We don't expect that to happen any time soon, and in fact Canada has been content to be relegated very much to the margins of the Durban conference. When even China is criticizing you for setting a bad example, any claims that the country is a leader in providing "ethical oil" are only likely to fall on deaf ears. Graphic by jfeathersmith. Reproduced under Creative Commons Licence The tents are gone. But what about the ideas?The tents are gone in New York’s Zuccotti Park and many other cities - including Toronto's St James Park. Daily we can follow how other Occupy sites in the US are closed down by more or less forceful police actions. By and large, one has to say that the movement as such is fading out, at least in its initial shape. A good time then to assess two important questions. What, if anything, has the movement achieved? And, equally important: Where is it going from here? As to the first question, even skeptics like Jeffrey Simpson from the Globe and Mail admit that the movement has put the finger on an important issue, namely the one of income inequality in most developed democracies. He has quite impressive numbers to make his case - that while Canada, thanks to a tighter regulated banking sector, has not felt the brunt of the current crisis quite as badly, the issue of inequality is no less a matter close to home. As Politico’s Ben Smith has shown, the mentioning of ‘income inequality’ in print and web media has quintupled over the course of the Occupy protests (from 91/week to over 500). So there can be little doubt that the movement has raised long acknowledged issues and has given them a legitimate place in the public. That is a success - no doubt. Other than that though, I am quite pessimistic about the impact of the protests. Despite sympathizing with many of the concerns and this new way of political protest I am rather disillusioned because – by and large – most media outlets, print and TV alike, have not really taken the issue seriously. This certainly applies to the Canadian papers, and apart from TVO, I have a hard time to see some more engaging coverage on TV. Similar observations hold true to the US media – which nearly unanimously ignored Occupy Wall Street for the first couple of days. Even with lone voices such as Keith Olbermann’s on Current TV it is hard to mobilize a broader public when your message is somewhat obscured, watered down or ridiculed. This leads to my second question of where the movement is going. A good measure of the validity of an argument is still the determination of its opposition. Pepper spraying peaceful students (UC Davis) and 84 years old ladies (Seattle), or fracturing the sculls of Iraq veterans (Oakland) are just the tip of that iceberg which is the violent response from public authorities in the United States. The destruction of public spaces or safety concerns were popular arguments in Canada. My home is right next to St. James Park where Occupy Toronto took place. The park, a hangout for homeless people and drug consumers on normal days, has never been safer than during Occupy. And it were police vehicles that ploughed the turf into a brown mess two weeks ago. Be that as it may, the reaction to the movement was decisive and uncompromising. Perhaps no one other than Frank Luntz, long time strategist for the Republican Party has put the underlying sentiments in better terms:I'm so scared of this anti-Wall Street effort. I'm frightened to death... They're having an impact on what the American people think of capitalism.He said these words instructing Republican campaigners on how to clean up their language to immunize it against Occupy’s agenda. In my book, that endorsement just takes the cake. The tension in a society that embraces both capitalism, free markets and private property on the one hand and democracy on the other has always been there. In the early decades of the 20th century we saw it spiraling out of control, leading to fascism or communism in Europe. In the US it led to the great depression, upon which Franklin Roosevelt took leadership in assigning a new role to government in bridging this inherent contradiction. Capitalism is hampered by two things. First, its inequality of wealth distribution and second, its cyclical ups and downs. Both of which have always put those in a precarious spot who just had their labor to bring to the party of capitalism. The reason capitalism and democracy have now been able to coexist for some 60 years in many developed countries has to do with the fact that mechanisms of economic empowerment and redistribution had been implemented to mitigate against those two problems. Keynes’ solution was that government addresses the problem, by guaranteeing basic welfare state provision and actively spending in times of economic downturn. The ‘neoliberal’ solution, linked to Reagan and Thatcher’s approach in the 1980s has been to turn labor into ‘mini-capitalists’: boosting home ownership and moving from tax-based to investment-based entitlement plans (e.g. retirement, life insurance) has given millions an active stake in the capitalist systems. The financial crisis has pointed out the limits of both approaches. The reality of the Occupy movement is that it has been strongly driven by those ‘middle class’ Americans who fell into poverty in the last years. The movement only started now just because the effects of a rigged system are only now painfully palpable for a critical mass of people, as described in the current issue of the New Yorker. The issue of inequality therefore is here to stay, never mind the preliminary seizure of Occupy protests this past autumn. Looking at the Republican presidential contest in the US offers a somber glimpse at the alternatives. Candidates with no interest in governing and no interest in the institutions that have provided some peace and prosperity for quite some time, dominate the debate. Even George W. Bush’s former speechwriter agonizes about that. If democracies cannot secure a stake for those who just bring their labor to the market of the capitalist system, it has to come up with some other ‘mortar’ for keeping the social fabric together: religion, xenophobia or crude nationalism are just some of the offers we currently see. This is not just a North American problem. The rise of the far Right in Europe – from The Netherlands to Hungary – or the militant protests in Greece point into the same direction. A system of majority based rule only works if the majority has some ‘stake’, some form of participation and real grounds of aspiration with regard to the 'system'. This is exactly what is eroding under our eyes. Occupy deserves credit for making these shifts manifest. One of the sources of antagonism towards the movement was its strong anti-corporate bias. In some ways this preoccupation points towards one avenue of solutions. Heavily indebted governments or individuals disenfranchised by the financial system are not generating the solutions any more which we dearly relied on so far. If we ask for securing the buy-in of the working middle class in the capitalist system, a more active role falls to the corporate sector. In some ways one might argue that this demand has been well heard – the vociferous efforts to shut the movement down certainly allow this interpretation. The social responsibilities of business – beyond avoiding all these obvious scandals surfaced in the financial crisis – certainly extend now beyond pure philanthropy. Paying decent middle class wages, providing employment and affordable access to basic products and services is an imperative - provided we want to see an ongoing coexistence of basic forms of both democracy and free markets. It is in the ‘enlightened self interest’ of business to live up to these demands. So yes, the tents are gone. But the core issue is here to stay. As is the struggle to address these them. How many CSR experts are just cheats and plagiarists?
CSR experts, people that write about, research, and practice CSR day-in, day-out are a pretty responsible bunch, right? After all, who would listen to anyone talking about responsible business who they didn't think was, well ... responsible?
Uh, wrong. Unfortunately, if our recent experience is anything to go by, there are some decidedly irresponsible CSR experts out there. Actually, worse than that; not just irresponsible, but flat-out cheats and plagiarists. And we're not just talking about the usual CSR snake-oil salesmen who are simply out to make a quick buck from some dishonest greenwashing. No, we're talking the supposed purveyors of something resembling objective truth - academics and journalists. How do we know? Simple. In the last couple of months we've run into several glaring examples of so-called experts simply stealing our work and passing it off as their own. Consider this one that has only just come to light. Jaquelina Jimena, a journalist and CSR adviser, wrote a nice article in the Canadian Mining Journal back in 2009 titled "Is Corporate Engagement Possible Through CSR Blogs?" Well, we would say it's nice, because it is almost word-for-word copied from one of our own blog entries "Corporate Engagement through CSR Blogs", published the year before. She changes our use of "we" to "I" of course, but that is about it. The rest is almost entirely plagiarized from our post. Well, except the last paragraph, which we she didn't copy from us. But that's not her work either. It's directly stolen from a post from our fellow blogger Fabian Pattberg. Jimena has published other pieces in the Canadian Mining Journal about CSR, all of which, as far we can tell, contain substantial portions of text just cut and pasted from other people's articles and websites. Our friends at Ethical Corporation are a particularly popular source, it seems. Of course, she claims on her LinkedIn page, to be a "professional journalist" as well as a CSR adviser and lecturer, with experience among others advising at the Global Reporting Initiative and Anglo-American. Now, we're not saying that Jimena isn't an expert in CSR,or in her specialist field of stakeholder engagement and communication. But as a potential editor, employer, client, or reader of hers, would you really put your trust in someone who, from time to time, made a living by stealing other people's work? It's not just journalists though. While plagiarism in academia is usually discussed in relation to students (and we have to say, this continues to be a big problem in the sector), there are no shortage of cheats standing at the front of the classroom too. Again, our own experience is instructive here. A few months back, it came to our attention that an article published in the journal Management Decision under the title "Sustainability managers or rogue mid-managers? A typology of corporate sustainability managers" and suppposedly written by professors Tang, Robinson and Harvey, was in fact almost entirely plagiarized from a working paper written by Andy and one of our long time friends and collaborators, Wayne Visser. After someone had kindly pointed this out to us, we informed the journal who did some checking and then retracted the offending piece, acknowledging that "a large proportion" of the article had been copied from ours. We also did a little further digging and discovered that one of the ostensible authors, Kevin Tang, had even plagiarized almost his entire PhD thesis. It took about 5 minutes to find this out given that he'd copied almost word for word Jennifer Lynes' dissertation about environmental commitment in the airline industry which was easily available on-line. So we informed Lynes (who was suitably shocked) and Bond University in Australia, who had awarded Tang's PhD. They've now taken the online version of Tang's PhD down and informed us that a thorough investigation into the allegations is underway. So you can't check now this one yourself, but believe us, it is a cut-and-dried case of plagiarism, even down to the personal acknowledgments page! We'd love to believe that these are just isolated incidents, but realistically we think it is just the tip of the iceberg. Both of these cases came to light by accident just in the last few weeks and we only noticed them because they were rip-offs of our own work. Who else is blissfully unaware of getting their CSR research stolen by a so-called expert? And how many other CSR experts are out there passing off someone else's work as their own that we haven't discovered yet? Academia certainly has been getting into all sorts of cheating scandals recently. Earlier in the year we witnessed the forced resignation of the German Secretary of Defence after revelations of his plagiarized PhD thesis. A few weeks ago, an investigation confirmed that the noted psychologist Diederik Stapel, the former Dean of the Department of Social and Behavioral Sciences at Tilburg University in the Netherlands, had falsified data and made up entire experiments over the course of the past decade. Unethical journalism has also been in the news of late, especially around the News International phone hacking scandal. Both professions are clearly in need of clean-up. At the moment, none of these more high profile scandals have been concerned with CSR experts. Not yet, anyway. But if our experience is anything to go by, it's probably just a matter of time. Photo by loop_oh (Robert Ganzer). Reproduced under Creative Commons licence Happy 2 months birthday, OWS!Its two months today that Occupy Wall Street had occupied Zuccotti Park in New York. And after strong reluctance from the big media (it took most of big US networks more than a week to cover the story) the movement has successfully occupied the news channels for the last weeks. New York’s mayor duly used the two month anniversary of the movement to finally evict them from their initial site. Ironically though, that decision seems to just have added that other bit of publicity the movement could handily use. By the time of writing, between 15,000 and 35,000 people, depending whose estimate you want to believe, are currently marching in the streets of New York. Mike Bloomberg still does not disappoint as the most effective PR agent of the Occupy movement. I had a strange déjà vu today when stumbling over one bit of news. Obviously, the evicted protesters in New York are flocking to church buildings to get food and shelter, and to be secure from police harassment. The last time when churches were the only safe haven for civil unrest was when people in East Germany took to the streets in the summer of 1989. Those famous ‘Monday demonstrations’ and their organization started in churches (note: this was before facebook and twitter). By November 9th that year, the wall had finally fallen. And with it the regime that held the country in its grip for some 40 years. Certainly in Toronto, where the Occupy movement has camped in St. James Park, co-owned by the Anglican Church, a similar pattern is visible. Even though support currently seem to falter, initially the church was one of the crucial supporters of the protest, supplying them with vital access to amenities. This historical parallel is more than just a co-incidence. Like the demonstrations in 1989, the Occupy movement is only loosely organized, has some rather sweeping demands and has little sense of translating their agenda into the institutional setting of how our society is governed. All they have is a legitimate issue. They are concerned with the fact that governments no longer represent the people, the ‘99%’, and that wealth is blatantly unfairly distributed. It all sounds so familiar to me, up the chants to remain non violent by OWS protesters, very much like the famous ‘Keine Gewalt’ (‘no violence’) choruses which became the signature slogan of East German protestors 22 years ago. Like communism, the current form of capitalism has created a governance system, where some very few are perceived to control societies and where large parts of the population feel disenfranchised and curtailed in many ways. The crucial difference to today’s US seems to be that in most US cities the reaction of the police is rather uncompromising and violent. Events in Oakland or the pepper spraying of an 84 year old lady in Seattle are just a tip of the iceberg. In some ways the starkest prove that these protestors have a point is the remarkable police presence. When I visited Zuccotti Park in late October my guess would be that the ratio of police to protesters was at least 2:1. If it is true that OWS is ‘not productive’ (Michael Bloomberg), why do we need so many police there? The fear of the establishment is palpable. New York just serves as the test tube for this: the Mayor Bloomberg, himself firmly in the ‘1%’, symbolizes the seizure of corporate interests of the political process. To become the ‘democratically’ elected mayor he spent $250m out of his private wealth. Drawing the parallel to the fall of communism 22 years ago, one big difference seems to be that there is no ‘Gorbachev’ figure. There is no strong, prominent, visible leader on the other side, who understands the legitimacy of the issues and, as Michael Gorbachev at the time, refuses to use the power at his disposal to crush this movement. This said though, some of the ‘1%’ understand the movement and take it seriously. As business school professors, we occasionally have to go to events where we rub shoulders with these guys. Just yesterday, I was totally flabbergasted listening to one of Canada’s real estate tycoons arguing that this movement is serious and here to stay and that it is something business leaders better take seriously. It is difficult to predict where this movement is going. At the moment, the fact that it has stayed non-violent has certainly helped to make people sympathize with it that do not ordinarily go out on the streets demonstrating. The other element is the core issue of the movement. It seems that the blatant inequality of wealth and the co-optation of governments by business interests are the common denominator of the protests. In some ways we have nothing to add to our earlier comments. There are strong parallels between the green movement starting off in the 1970s with pretty similar features. David McTaggart and the other founders of Greenpeace where hardly taken seriously by the establishment back then. But we all know which impact that movement had on politics, business and civil society. So again, Happy Birthday Occupy Wall Street! And many happy returns!DM Photo by David Shankbone, reproduced under the Creative Commons Licence. Why is communication such a big deal for CSR?
Corporate social responsibility often provokes a lot of debate. But one thing that most people seem to be agreed on is the necessity of good communications. Of course, what makes for "good" communications is not so clear cut. Should companies engage in dialogue and debate with their stakeholders? How do you communicate "authentically" with consumers around social issues? And what do employees expects or want in terms of internal communication around CSR? These are some of the questions occupying minds rights now, so it has been interesting to spend the last couple of weeks exploring some of the challenges around the intersection of CSR and communication, both from a research and practice perspective. Not that this has necessarily brought me any closer to the right answers, but I think it has helped a lot in clarifying what the right questions might be.
Last week I keynoted the 1st International CSR Communication conference in Amsterdam, NL, a primarily research conference that also featured a lot of practitioner participants. This was preceded by a doctoral workshop on CSR and communication research where budding PhD students sought to test out their ideas, theories, and methods with experienced researchers like myself and Mette Morsing from Copenhagen Business School. Then, this week I keynoted another pretty unique conference - a mixed practitioner/research conference in Copenhagen on CSR and social media titled "Social media for social purposes". Suddenly it seems that the communications challenges in CSR are getting a lot of attention. Certainly they are beginning to attract a lot of research activity, whether from management researchers, communications scientists, or media analysts. There is some really interesting stuff happening out there, much of it making use of the new online data that is all around us. I've been impressed by some of the datasets that are being put together using Tweets, blogs, YouTube videos, media articles, and a variety of online texts and reports. The possibilities of analyzing "big data" around online CSR communication are growing all the time. But also, it is clear that we need more than just huge amounts of data - we also need to be asking the right questions. Consider this. McDonald's, which has been a pioneer in blogging about its CSR practices through its Values in Practice blog, has recorded the following stats from January - November 2011: Number of posts: 16. Average number of comments per post: 0.5 Average number of tweets per post: 1.2 Average number of Facebook likes per post: 3.1 Average number of shares per post: 3.8 Now consider this. McDonald's has more than 11m people who have "liked" the company's main Facebook page. That's a lot of people who don't seem to be much interested in what is happening over at their CSR blog. Clearly something is up. CSR experts are saying that companies need to engage in dialogue with their stakeholders. So are McDonald's stakeholders actually not interested in dialogue? Is the way the company is communicating not relevant for them? Is the company blocking interacting on some way or is one way communication actually effective here? As I say, we don't really have the answers to these sorts of questions yet, but the field is moving fast and through network, discourse, and sentiment analysis, for example, researchers are getting a better understanding of how and why people respond to CSR communications in particular ways.... and what this all means for the society we live in today. There is a long way to go, but it looks like its going to be an exciting and informative journey. AC Photo by joshfassbind. Reproduced under Creative Commons licence Hannah Arendt And The Banality of (Corporate) EvilIn this world of ongoing financial turmoil and unrest against the current form of capitalism it is interesting to see how the search for intellectual resources to fuel our thinking about a changed world is taking us to new shores. This week, as part of the Holocaust Education Week, an exhibition about the philosopher Hannah Arendt started in Toronto. In many ways, this could not have been a timelier moment to have her heritage reinvigorated. Arendt is a staple in many discussions over 20th century history and philosophy. Of Jewish origin, born in Germany in 1906, she emigrated to the US during the Nazi regime and became a vocal analyst on how oppression, totalitarianism and violence affects the individual and what the conditions and options of resistance are. Now much of this seems to be a far cry from the life of many of us in the 21st century. But it gets much more colorful if we add Arendt’s voice audible in later phases of her work: most notably, her book on the trial of Adolf Eichmann in the 1960s. It is here where the famous phrase of the ‘banality of evil’ was coined. It adumbrates the fact that Eichmann – in today’s lingo the ‘logistics-zsar’ of the holocaust – talked about his ‘job’ in his trial in Israel just like any Fed-Ex or UPS manager would describe her/his work today. It was just about ‘getting the job done’. That he was managing a ‘supply chain’ that started in ordinary people’s home and ended in a gas chamber was just a minute detail for Eichmann – otherwise a (more or less) faithful husband and a loving father of four. It was just a slight ethical glitch that his nine-to-five-job happened to be in the business of delivering some six million people to the gas chambers as smooth, efficient and cost-effective as possible. And boy, he was good at that! Here is where Hannah Arendt’s unique vantage point kicks in: she was not so much interested in the individual’s guilt, evilness or criminal inclinations. In fact she thought that those aspects were rather marginal. The evil of Eichmann’s actions was in fact ‘banal’ as it occurred to amount just to some ‘executive decisions’ of an individual who never questioned the ethical nature of the wider organization he was operating in. It is indeed a rather contemporary perspective. We are in the middle of a ‘financial crisis’ which has dominated our lives and attention now for more than three years. The ‘Occupy Wall Street’ protests have taken over globally and – despite a cacophonic range of claims – have highlighted the fact that our current economic and political system produces outcomes that are patently unethical by most available standards of judgment. And apart from Bernie Madoff or Raj Rajaratnam we had a hard time to attribute this mess to any particular individual. Hannah Arendt’s legacy speaks to the fact that ethical agency of individuals is intricately interwoven and embedded in the social systems in which they are enacted. Fine. Maybe not that much of a spectacular finding, some of us might think. But it nevertheless raises the question of how ethical the systems are in which we live and work. What I like about Arendt is that she was not just stopping to blame the specific historical contingencies of the holocaust. It was never about just taking fascism, the Nazis or, for that matter, Germany as a culprit to task. Her central analytic take-away was that societies are able to ‘rationalize’ all sorts of atrocities. Consequently, in the 1970s, when the creeping ecological destruction of our planet reared its first signs of appearance, she talked about the capitalist system as a form of ‘economic totalitarianism’ which rationalizes the destruction of the planet. She plainly coined it as ‘eco-cide’ (as a pun on ‘genocide’). In the current situation, Arendt’s vantage point highlights many of the questions, the ‘Occupy...’ movement elucidates. These are ongoing questions which will, it has to be said, occupy us a little longer than this blog can last. However, Arendt also raises the important question (initially with regard to her study of Adolf Eichmann): ‘The moment you come to the individual person, the question to be raised is no longer, how did this system function, but why did the defendant become a functionary of this organization?’This is in some ways the more compelling question. How do we individually act in a system that, by many people’s conviction, has created blatant inequality, ecological destruction, and a public largely disenfranchised from democratic decision making? Arendt in this sense is a master optician alerting us to the ‘grey zones’ of human ethical existence. But also lets us never get off the hook in terms of questioning our role in the wider societal or organizational contexts we are embedded in. Monday night in Toronto the opening of the ‘Hannah Arendt Denkraum’ (= thinking space) took place. In some ways it was an event riddled by irony. Located in the German Consulate it appeared, in language and in ritual, like yet another atonement for the empirical backdrop of Arendt’s work. This contextualization in some ways could not be further from Arendt’s initial ideas. Equally ironic, the speaker rather skillfully highlighted the general implications of Arendt’s work, and its damning view of contemporary capitalism etc. – while the entire event was sponsored by the German multinational Miele whose executives were rather uncomfortably clinging on to their wine glasses hoping the speech would be over rather sooner than later. What all those millionaire-sponsors of the Holocaust Education Week, listening to a fairly astute reading of Arendt’s anti-capitalist messages were thinking – I could hardly guess. I am very sure though what Arendt - hardly ever photographed without a cigarette in her mouth - would have thought of the oppressive North American 'ethics' on smoking indoors if she would have ever dared to light a fag on this event in her honour in the German Consulate... The picture on top is from the 'Hannah Arendt Denkraum' exhibition by ovit, the picture below was taken from G4Gti - all reproduced under the Creative Commons Licence. |