In the belly of the beast of global finance, there are people motivated not by bonuses, but by supporting a more fair and sustainable world. These people can become allies not enemies of the needed transformation of finance and investment. The new networks and projects they are creating may be crucial in the coming years, as societies call on governments to make financial systems, and the professionals involved, more accountable and supportive of society as a whole. One important initiative is the UN Principles for Responsible Investment (UNPRI), whose signatories now account for a significant proportion of global capital. In this video interview the founder and now Executive Director of the UNPRI, Dr James Gifford, talks to Lifeworth’s Dr Jem Bendell about how the UNPRI began, the role of responsible investment, the extent of responsibility from investors, and implications from and for the financial crisis. In addition, the accountability of investors in making decisions on social and environmental issues is discussed, as well as James’s reflections on responsible leadership. To discuss implications of the issues raised, we recommend you consider joining The Finance Lab, which is a new multistakeholder platform for sharing ideas on how to create a financial system that will help not hinder a fair and sustainable world.

Click here to view the embedded video.

Read more about the UNPRI or see more videos from their participants at http://www.youtube.com/user/UNPRItube

The Finance Lab is the result of a project initiated in 2007 by Jen Morgan at WWF-UK and Lifeworth’s director Jem Bendell. Senior Lifeworth Associate Cheryl Hicks is convening the online dialogue, and Lifeworth Associate Matthew Slater is cohosting the discussions in the Lab on Money Systems.

In 2007 Lifeworth Consulting launched a network for professionals in the luxury industry who want to promote social and environmental excellence. This was one initiative to build upon the Deeper Luxury report we researched, wrote and production managed for WWF-UK. The following is the latest update sent to members of this network. To join it, visit http://www.authenticluxury.net

Welcome to an occasional update from The Authentic Luxury Network.

With over 500 members, our network is growing. However, quality not quantity is important. Therefore all new requests to join are screened for commitment to advancing social and environmental excellence in high-end brands, and some existing members will be requested in the coming week to affirm that commitment in order to continue participating.

Relevant headlines are featured on the homepage of AuthenticLuxury.net. Recent ones include Life Magazine and Reuters reports of the eco-fashion show at the UN in Geneva, put together by network members Christina Green of EcoChic and Eduardo Escobedo of UN Biotrade.org The headlines selected so far this year are the following (scroll down the homepage of the network site to click on these links):

United Nations EcoChic Geneva Fashion – Show – LIFE Magazine

EcoChic Geneva Showcases Sustainable Fashion at UN Headquarters : TreeHugger

Eco-chic fashion shows off stylish sustainability | Reuters

Disappearing acts: Making a silk tie | Money | guardian.co.uk

FT.com / Style – Sustainable fashion: what does green mean?

How Luxury Changes People — HBS Working Knowledge

Naomi Klein on how corporate branding has taken over America | Books | The Guardian

Sustainability in Cruise Industry – Ethical Traveler: News

The Rise of the Eco-Sexual – exchange4media.com

Livia Firth’s Blog on Green Style (Vogue.com UK)

Tesla’s Roadster Sport saves the electric car | Bibi van der Zee | Environment | guardian.co.uk

Mass-market certification shames upmarket glamour – Ethical Corporation

Fairmont To Raise Money For Sustainable Seafood – 2010-01-28 18:52:09 | Hotels

Rags to riches: Erin O’Connor’s fairtrade fashion | The Observer

Transforming Management » Mark Tungate’s new book on luxury

India to change world fashion | Dr Bendell concurs in the Financial Chronicle

Berlin Eco Fashion Show

Innovative Thai Architect Singh Intrachooto: “Focus on process, not products.” | Use Celsias.com – reduce global °Celsius

These stories show authentic luxury issues remain in the news. They are also the concluding focus of three new books on the industry, including Mark Tungate’s “Luxury World” and network member Maria Eugenia Giron’s “Secrets of Luxury”, which is a top 5 best-seller for the publisher (but still only in Spanish). Being creative in delivering social and environmental value is also a key message of network member Marco Bevolo’s forthcoming book “Premium by Design”. All links to these books follow at the end of his message.

A couple of new discussions have been started on “What is ethical luxury?” by Lavanya Venkatraman, and “Is Luxury in Flux in 2010?” by myself.

We plan a few developments for the network in the coming months:

a – a free directory of authentic luxury companies and professional services

b – a collaborative crowd-sourced news feed of relevant news, using twitter and other services

c – a user-managed glossary of social and environmental issues and approaches for luxury brands

More information to follow. Log in to join in at www.authenticluxury.net

Thanks
Dr Jem Bendell

Founder, Authentic Luxury Network

Director, Lifeworth Consulting (www.lifeworth.com/consult)

Links to the books mentioned:

https://www.amazon.com/dp/0749452633?tag=lifeworth-20&camp=0&creative=0&linkCode=as4&creativeASIN=0749452633&adid=1DFW3BKSEH09FP835WME&

http://www.lideditorial.com/ficha_libro.php?id=LI307

http://www.amazon.com/gp/product/013712600X?ie=UTF8&tag=lifeworth-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=013712600X

Capitalism is up for debate, and that’s a good thing, according to a new review from a management consultancy. “The dual financial and climate crises are leading people in all walks of life to question the kind of economy that makes sense for their businesses, communities and families,” explains lead author of the review, Associate Professor Jem Bendell. “As well as some anger at bankers, the financial crisis has led many to ask deeper questions about finance in general and, therefore, about capitalism. From bars to seminars, bookshops to board meetings, capitalism is being discussed – openly and critically,” he claims.

Capitalism in Question

Entitled “Capitalism in Question”, the annual review describes how politicians and even business leaders are calling for more critical assessment of what kind of economic system we need for a fair and sustainable future. The review from Lifeworth Consulting summarises over a dozen books that have been published in the last weeks that debate the relative merits of capitalism and what form of economic governance is needed post-crisis, and in a new era of economic power. “The majority of these new books seek to do something that previously seemed neither necessary or interesting − to defend capitalism,” says John Stuart of Greenleaf Publishing, which supports the review.

Bendell explains that defensiveness wont help. Referring to the “Restoring Trust” report overseen by Allianz, Barclays Capital, Blackstone, and Carlyle Group, among others, he said “seeking to defend one’s immediate interests, as the banks writing the recent World Economic Forum report clearly did, is not how we are going to discover together the next step in our economic evolution. Fearful people in incumbent institutions may waste our time with diversionary drivel, but real exploration of the core issues is unavoidable. The question now is who should participate and how.”

Co-author of the review, Lifeworth Consulting’s Ian Doyle, explained that “much of the corporate social responsibility, or CSR agenda, has been predicated on a belief that government is constrained by global finance and can, or should, only intervene in markets to a limited extent. The giving of huge amounts of money to private banks may suggest that global finance is still dominant, but it also shows that sometimes when called on to act, most governments will intervene in markets in dramatic ways. So it’s not unreasonable for people to look to their governments to now shape responsible business practice more than before. And that is what we are seeing.”

The review is a call for people to become more involved in exploring how to evolve economic systems to promote fair and sustainable societies, says Bendell. “We are calling for this kind of engagement because after doing nine years of quarterly responsible business trends analysis for the Journal of Corporate Citizenship, we have concluded that there is a nascent social movement for the transformation of business and finance. Behind the jargon of corporate social responsibility, corporate accountability, environmental management, social enterprise, and responsible finance, are people like you and me who want to change the way business does business and the way money makes money. As such we need to think through what we are aiming for, longer term, and how we can work in concert. We all need to look up from our projects and shape the unfolding programme of economic transformation.”

To contribute to the debate, Lifeworth offers a framework for democratising capitalism. As Bendell, who is also Lifeworth’s director explains, “It’s simply that we need more governance of capital by people who are directly affected by its ownership and control. From that one concept flow many implications for tax, currencies, stocks, and all social and environmental regulations. This democratisation of capitalism could be the ultimate goal of the corporate responsibility movement, and the seeds of this approach are already to be found in the ideas and practices of many people working on corporate responsibility today.”

A discussion of economic systems can seem distant from the day-to-day preoccupations of most executives and the academics who seek to educate them, but as Bendell suggests, “making such connections will be important if the corporate responsibility movement is to have a substantial and lasting effect on commerce and society.” In ‘Capitalism in Question’ some initial guidance is given for how business leaders and educators can play a socially progressive role at this time. Specific multi-stakeholder initiatives are recommended.

The review of trends in corporate responsibility during 2009 includes analysis of government stimulus packages, responsible tax management, responsible mining, responsible cosmetics and beauty businesses, as well as particular trends in Asian and Francophone countries. It also explores the potential of ‘design thinking’ for sustainable business innovation, and provides in-depth analysis of the implications of the Copenhagen climate summit.

“Deep changes will be required in economic governance if we are to achieve a sustainable society… Capitalism will change, there is no doubt, and it must change so that it delivers both private wealth and public good” explains Professor Malcolm McIntosh of the Asia Pacific Centre for Sustainable Enterprise. “As we enter a period of potential reconfiguration of economic governance, leaders of organisations will need to better understand the issues, actors and dynamics to be successful. Part of Griffith Business School in Australia, Professor McIntosh’s centre supported the free release of this review to promote creative thinking at a time of critical global challenges and because “the lead author Jem Bendell, is an important commentator on the world stage.”

Dr Bendell says there are important implications for management education. “In Griffith’s new “Graduate Certificate for Sustainable Enterprise” we help our students to navigate increasingly complex social and political contexts so they can find ways to prosper by being part of the solution.”

‘Capitalism in Question: The Lifeworth Annual Review of 2009′ is available in pdf for free download at http://www.lifeworth.com/capitalisminquestion.pdf

Lifeworth’s responsible enterprise trends analysis during 2010 can be obtained by subscribing to the ‘Journal of Corporate Citizenship’. New subscribers to the journal before March 31st 2010 receive all 2009 copies for free. Visit http://www.greenleaf-publishing.com

Information on Griffith’s research centre and graduate certificate is available at http://www.asiapacificsustainableenterprise.com/

For media enquiries about ‘Capitalism in Question’ contact Jem Bendell via connect [at] lifeworth.com or +44(0)2071936102

People working in the corporate responsibility field are becoming a social movement. That’s the conclusion of journalist Bill Baue, of Sea Change Radio (the best weekly podcast on all things to do with sustainable business).

Bill writes in CSR Wire that “perhaps the biggest CSR development of the year [2009] was not readily visible, as it was an idea: that CSR represents not just a trend or professional discipline, but a social movement. In other words, CSR is not a random collection of ad hoc, discrete actions to revise corporate behavior, but rather a coherent aggregation of sustained, widespread efforts to reform (or even revolutionize) the role of corporations, shifting from negative to positive impacts on society, environment, and economy.”

He explains that this will take off in the coming years. “Initially slow on the uptake of social media and other interactive technologies to connect with their stakeholders, but increasingly building online networks to advance a more community-based approach to corporate accountability and sustainability – most notably, Timberland’s Voices of Challenge stakeholder engagement website. Corporate adoption of Web 2.0 tools shows promise of fueling the CSR movement into the new year and decade.”

Read more

A new study from the World Economic Forum has found:

* Over two-thirds of people believe the current economic crisis is also a crisis of ethics and values.
* The poll results point to a trust deficit regarding values in the business world.
* Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, said the report underlines the need for a set of values around which our global economic institutions and mechanisms of international cooperation must be built: “Our present system fails to meet its obligations to as many as 3 billion people in the world.

The first thing to understand are the values that are already embedded in our current money systems, credit ratings, and corporate governance frameworks. The following is excerpted from Lifeworth’s last annual review.

“Credit ratings agencies took some heat for an apparent lack of rigour in their valuation of complex derivatives. Developments in accounting, with the introduction of mark-to-market or ‘fair value’ approaches, facilitated a global-market group-think of ‘it is valuable because many of us think that many other people think it is valuable’. The credit ratings agencies are involved in a process that sociologists call ‘social construction’, i.e. where assumptions, beliefs and norms are constructed by people and organisations in society. The larger and more famous the ratings agencies, the more authoritative their ratings are and the greater impact on perceptions and thus of the market price of what they value. Thus within the current system there is an implicit value in play—that might is right. The socially constructed nature of financial markets was discussed at length by financier George Soros. Yet he did not articulate a value basis from which such processes could be more accurate and beneficial. Sociologists and stakeholder dialogue experts have different views on how a socially constructed concept of something’s nature or worth can be made legitimate and effective, with some advocating forms of ‘communicative action’ in the process as a way to achieve a participatory and intelligent view of phenomena. There is no such ‘communicative action’ in the valuing of assets in the financial markets.

Perhaps the underlying reason for this situation is a lack of sociological and political-historical understanding within the financial services sector and its regulators. Finance services professionals, like most people, are naturally competent in objectivist or positivist approaches to understanding reality, and so, when they work in fields that are relativist in their nature, they are not at ease with exploring how we might wish to shape the ways in which we decide what the value of something is, and so just fall back on mob rule—where something is valued according to the sum of the views of the most powerful. If we are explicit about values, then we might seek a credit ratings system that allows new entrants, balances views, moderates the influence of strategic commercial self-interest and seeks to arrive at socially beneficial forms of valuation, such as using a five-capitals model of valuation.28 In this way the financial system might be able to learn something from the corporate responsibility community. A lack of political-historical understanding also contributed to the problem, according to Harvard historian Niall Ferguson. He said that most people in the industry and its regulators do not have memories stretching back before the 1980s, so they do not understand how financial systems have evolved over time and how they can collapse.29…

….At a time of crisis it is natural to look for a quick fix. Yet, once the gold dust settles, it is clear that deeper questions must be asked, and discussed by a broader range of people than international financial institutions and the finance ministers of powerful nations. Any economic historian will tell you that ‘moral sentiments’ precede ‘the wealth of nations’. We should be considering what values we want to further through the design of financial systems. Being clearer about the values embedded within and furthered by the current financial system, and whether that’s suitable for this century, would be a good start. Steve Waddell, of the Global Finance Initiative (GFI), said, ‘although stability is clearly the major concern, there are also significant concerns about the social and environmental impacts of finance. Indeed, increasingly there are suggestions that stability cannot be realized without more categorically considering these broader impacts. There is no formal, open and inclusive public space to develop a global strategy to address these concerns.’42 Along with the Network for Sustainable Financial Markets,43 the GFI is one of a number of initiatives of progressive professionals thinking big on the future of finance.”

The World Economic Forum has played a useful role in raising this debate. But is it the one to convene it? This from the last annual review from Lifeworth:

“The World Economic Forum (WEF) likes to think it is the leading intellectual forum on the world of business. As the financial system unravelled, their minor mea culpas mixed with ‘told you so’ was particularly revealing. In interviews with Bloomberg, leading staff at the WEF said ‘chief executive officers who gathered in Davos, Switzerland, over the last five years didn’t listen to warnings from their peers. Davos organizers also say they failed to play tough with the financial-industry bosses, opting to accept their funding and let them turn Davos into a rave-up for Wall Street excesses.’62

Leaders of the Forum have been putting their failure down to excess, rather than principle. ‘We let it get out of control, and attention was taken away from the speed and complexity of how the world’s challenges built up,’ said its founder Klaus Schwab. If not as much money had been taken from Wall Street speakers at Davos, would the WEF really have been much smarter? Hardly. The lesson is that an institution that pays its bills by convening the world’s largest companies to entertain them at high-powered meetings will be beset by systemic sycophancy. Some WEF staff complained that delegates did not listen seriously to helpful sessions on emerging bubbles. But what do they expect when you are in the Alps and Angelina Jolie might be at the bar? The hubris of the Forum is that they see themselves as an emerging power in global governance as significant as the UN. Yet it would be a truly crazy planet if the world’s largest corporations would be able to set the agenda for policies across the world.

A Davos delegate for seven years, the World Bank Director of Governance and Anti-corruption, Daniel Kaufmann, warned finance bosses ‘about global risk and the abusive nature of their actions, but they had no incentive to change . . . why should they have listened to us? I see it with my 10-year-old daughter, who scolds me because I don’t put the garbage in the correct bin. Let’s not delude ourselves. It’s impossible to teach old dogs and investment bankers new tricks unless you change the incentive structure.’63 This implies that if one is truly committed to improving the state of the world then one must reach out beyond the old dogs and fat cats. More than that, you must seek to be accountable to others. Perhaps if the WEF had listened to the protesters outside their luxury hotels, rather than their hand-picked corporate-sponsored NGO leaders, they might have developed a better sense of the state of the world. The WEF staff mistakenly thought such protests were about specific social and environmental concerns, which they could then effectively incorporate into the agenda. Other staff realised that the criticisms were of an economic kind, particularly as the alternative World Social Forum developed. They thought it was a disagreement about which economic theory was best to encourage social development. But the protesters do not challenge what the WEF delegates believe in, but rather their legitimacy to decide for others.

That message has not sunk in. For 2009, Schwab says his goal is to transform Davos into the ‘Bretton Woods of the new millennium’,64 a meeting targeted at establishing a fresh set of global rules for commercial and financial relations, much as the original Bretton Woods conference in New Hampshire did in the summer of 1944. Doing that in their current form, with their current membership, is bound to cause deep concern across civil society. The World Economic Forum might soon find that not only were they the greatest fans of the Emperor’s new clothes: they were those clothes. For the WEF to avoid being an intellectually insubstantial adornment to power, it will need to reconsider its membership structure and its approach to dialogue. This will become even more important if its Global Agenda Councils, which met for the first time in 2008, are to play a useful role in informing how we tackle global challenges.

Sections excerpted from Bendell, J., and N. Alam, S. Lin, C. Ng, L. Rimando, C. Veuthey, B. Wettstein (2009) The Eastern Turn in Responsible Enterprise: A Yearly Review of Corporate Responsibility from Lifeworth, Lifeworth: Manila, Philippines.
References and page numbers are available in the pdf download and hardcopy.
5 euros from http://stores.lulu.com/lifeworth

An article on WEF’s study is at Article Link: http://www.istockanalyst.com/article/viewarticle/articleid/3789060

To discuss this, leave a comment on this posting, or go to the CSRGeneva.org linked in group.

Post-Copenhagen, it is becoming clear that the only responsible thing for companies and financial institutions to do is to call for a new global framework for carbon taxation, and an end to ineffective and unfair carbon cap and trade markets. The intergovernmental paralysis that has been caused over the last 18 years by seeking agreements on carbon caps, the daylight robbery of both tax payers and consumers that current carbon markets have aided, and their complete ineffectiveness in reducing real carbon emissions, means that a fresh paradigm is called for. Polluters and banks can make millions out of carbon markets, and so their lobbying for such markets is not a sign of responsible leadership, but the exact opposite − exploiting people at a time of global fear. In 1992, carbon cap and trade came to dominate the policy agenda because there was no real will from business to bring emissions down. Today there is such will, and so negotiations need to focus on what will work, and that means putting the cash-grab that carbon markets present into the dustbin of history. It’s a dustbin we could label with the reminder: “beware how selfish elites can threaten our very civilisation.” Post-Copenhagen, the pragmatic arguments for cap and trade have been shown for what they are – the spin of special interests. We must never assume that just by working on an issue of public concern that we are doing a good thing − it depends entirely on why we work on that issue, and on the effectiveness and fairness of our contribution. Many talented individuals have progressed over the past decade from concerned environmentalists to leaders in carbon-markets. Fortunately they now have the chance to use their roles responsibly and promote real solutions, not just serve the elites and their own careers. It’s their choice. In this paper I explore the clear need for them to make that choice.

Download the paper in pdf.

The paper will be adapted to appear in the Journal of Corporate Citizenship and the Lifeworth Annual Review of Corporate Responsibility in 2009. Please comment below, especially if you are working on global carbon charging advocacy.

Thanks, Jem Bendell, Director, Lifeworth Consulting.

We can announce the release of the first Directory of CSR Geneva participants.

It lists almost 100 organisations and who they are collaborating with in Geneva.

To download your free copy as pdf file, visit www.lifeworth.com/CSRGenevaDirectory2010.pdf (or right click and save the target file to your harddrive).

Lifeworth’s Dr Jem Bendell is a co-founder of CSR Geneva. Founded in 2006, CSR Geneva is a social network for Geneva-based people interested in corporate responsibility, accountability, sustainability, social enterprise, & responsible finance. We share information on relevant events, reports, jobs & opinions, & gather for seasonal social events & ad hoc dinners when ‘global gurus’ are in town. In Geneva there are a variety of inter-governmental, corporate, financial & nongovernmental organisations working on these topics. We are building on the global town’s role as a crossroads for people from different cultures and professions so they can learn from each other. Participation is free to anyone interested in what Geneva-based organisations are doing on this agenda. CSR Geneva is informal & not affiliated with any organisation. To get involved, join the mailing list by visiting our website, http://www.csrgeneva.org or by sending a blank email to csrgeneva-subscribe@yahoogroups.com

If you want to participate more fully by sharing info on what you do, and start discussing ideas and projects, join our linked in group, which is accessible from our csrgeneva.org homepage. We rely on members of the network to help us organise the social events and talks, so if you have an idea, please get in touch by emailing: jb at lifeworth.com

‘The Eastern Turn In Responsible Enterprise’ describes the rise of Asian business and finance that was hastened by events during 2008. It argues that although expanding economic power generates difficult social and environmental challenges, the world needs Asian business and society to help innovate the technologies, processes and concepts that will help us meet the critical challenges of our time, such as climate change and poverty eradication. It explores some initial implications of this global shift, and some characteristics of Asian forms of corporate social responsibility. Previously 30 Euros, the pdf download is onsale for 5 Euros until January 1st from: http://stores.lulu.com/lifeworth

Lifeworth’s review of 2009 will be published in February 2010. If you would like to sponsor it, contact us.

Eastern Turn

Lifeworth Director Dr Jem Bendell has joined the board of the Global Vision Institute. The GVI is a think-tank and catalyst for creating a values-driven international system. Based in New York, its mission is to revitalize the founding values of the United Nations – peace, justice, equality, human dignity and sustainability. It supports global advancement by strengthening the spirit of idealism, vision, and integrity among members of the world community, particularly within and around the UN system. GVI organises educational events to further these aims.

Dr Bendell joins GVI due to his work as a consultant with the UN system since 1996, designing and hosting events on UN revitalisation in the early noughties, and his ongoing focus on purpose at work.

A TV show on CNBC about the challenge sustainabilty to the luxury industry is now available on youtube. Lifeworth Director Jem Bendell helped the Luxury Channel edit it, and he appears, along with the report he cowrote, called “Deeper Luxury”.

Lifeworth is exploring future such TV projects to promote awareness of responsible enterprise.

CNBC on Eco Luxury

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