As I read leading commentators on business responsibility and sustainability sharing their insights on trends for 2012, I saw a new boldness. People are recognising the need for ambitious goals that address root causes, including economic governance failures. At Lifeworth we have been seeking to contribute to a sustainable economic transformation and published a variety of works on that theme over the past ten years. In that time I’ve seen the more critical analyses initially ignored by leaders in favour of less challenging narratives. Yet this year I think we will see more opportunity for ‘radical’ suggestions for change to be discussed and trialled. In that sense, despite the fears, it’s the year we have been waiting for. But rather than adding to the many predictions, I’ll summarise Lifeworth’s efforts that could be of relevance if you seek to team up to strive for far greater positive change than you might have before.

The first area for transformative action in which we are engaged is policy innovations for scaling responsible enterprise and finance. Rightly or wrongly, government budgets cuts are happening in many countries. The implications for them to regulate businesses for social and environmental objectives are beginning to be felt. How then can we promote and reward better business practice, without increasing the costs to government? Leveraging private standards of social or environmental performance is one option. In work for the UN Conference on Trade and Development (UNCTAD), we looked at public policy innovations to scale the number of firms adhering to voluntary standards like the Forest Stewardship Council. This appeared in the World Investment Report, with the full academic study published elsewhere. The idea that these forms of ‘collaborative economic governance’ are a pragmatic response to the twin challenges of sustainable development and government efficiencies, was fed into the policy discussions leading to Rio+20, happening this June. The need now is to create systems for collecting innovative public policies for scaling responsible business, analysing which work well in what contents, and disseminating this to government officials worldwide. If you can help on this project, do get in touch.

Yet we must go further than coping mechanisms in a world of irresponsible enterprise and governance failures. The second area for transformative action, therefore, is redesigning financial systems for more fair and sustainable outcomes. Although commitments to responsible investment have existed for some years, the translation into investment practice and the realities of corporate leaders has far to go. The limitations of current environmental, social and governance (ESG) practice in empowering investors to act is one of the stumbling blocks which we analysed in 2011, sparking lively debate. Our interest in ESG is because of the potential for progressive investor influence, which is a historically novel situation. In 2012 I hope we see the emergence of a progressive voice from investors on matters of public concern. Aside from investor-business relations, the public voice of the progressive investor has been slow to emerge. The Carbon Disclosure Project has shown that on climate change investors can sound a new tune on public policy. In 2012 and beyond, we could see other forums, particularly the UN-backed Principles for Responsible Investment (UNPRI), providing opportunities for progressive investors to promote policy debates that better include social and environmental priorities. Whether they will be able to counter-balance the more regressive investor resistance to financial re-regulation will be interesting to watch.

In 2012 I’ll continue to participate in fora that discuss the need for transformation of economic systems for sustainable development, including The Finance Innovation Lab in the UK, the World Economic Forum in Davos, Switzerland, and the Griffith University conference on transition, in Australia. As I explained in an interview for Griffith, the key stumbling block to progress on tough issues is our limiting assumptions and oversights about the real causes of our crises. During the next months I’ll be asking world leaders what they think are the key activities to drive massive positive change that weren’t possible before now, and who they need to work with to make that happen. Identifying such pressure points for massive positive change will inform our philanthropy advisory during 2012, and beyond.

One area where I think there is currently a woefully lack of attention, funding and action is in “sustainable currencies”. Current monetary systems are incompatible with the goal of a fair and sustainable economy, and thus we need greater efforts at reform, as well as at developing secure, scalable and community-owned alternative currencies and barter systems. It is, no doubt, a difficult area for many to grasp; as I experienced myself. Yet in 2011 there were strides towards greater understanding by sustainable development professionals, through the work of New Economics foundation (nef), among others. My TEDx talk on the topic reached over 12,000 views in a couple of months. As austerity bites and unemployment persists, new ways of getting people working for each other without putting governments further into debt will inevitably rise up political agendas. In 2012 we will help through collaboration with Community Forge and The Finance Innovation Lab, amongst others, and promote the uptake of ’sustainable currencies’ as an innovative social development mechanism, through fora such as the Geneva Forum on Social Change.

What does this renewed emphasis on systemic change mean for specific industry sectors? I think the main implication is to be more ambitious in attempting to mainstream change for sustainable development. That is a third area for seeking transformative action. That has been our approach in the work we do in the luxury and mining sectors. With the organisation Fair Jewelry Action we researched and published “Uplifting the Earth: the ethical performance of high jewellery brands.” In this report we mapped out a transformative agenda for responsible jewellery, where the industry can contribute to sustainable development. From this basis, we aided De Beers’ stakeholder consultations, and worked with the UN Institute for Training and Research (UNITAR) on their training for the jewellery industry, which will be rolled out from Antwerp this year. The Spanish version of the report was launched at the world’s first Sustainable Luxury Awards, in Buenos Aires, co-organised with CSSL and the Authentic Luxury Network. The aim of these awards is to encourage sustainable innovation in the luxury sector; this year’s awards are scheduled for November. The insights from our work on transformative corporate responsibility in the luxury sector were refined for the launch of the world’s first MBA module on ‘Sustainable Luxury and Design’, which I teach at IE Business School, in Madrid. Students learn how sustainability is the smartest and most elegant paradigm within which to design anything. At the other end of the value chain, in 2012 we are working with Channel Research and the German development agency Gesellschaft für Internationale Zusammenarbeit (GIZ) to encourage disclosure on the social, environmental and economic impacts and contributions of mining companies in the Congo. There are few more challenging locations for mining to align better with the goals of peace, human rights and development.

A fourth area for transformative action in 2012 is enhancing the way UN agencies and civil society organisations engage companies. There are now many cross-sectoral partnerships, and the relationships they established hold the potential for greater changes. Largescale change goals need to be connected back to practical steps that can deliver benefits in the near term for various partner organisations. That’s the thinking behind a spate of new resources on more transformative partnering that were released in 2011, including reports from the UN Global Compact, and my own book, “Evolving Partnerships: engaging business for greater social change.” During 2011 we applied our approach to developing transformative alliances in our support for the International Labour Organisation’s fight against forced labour. In 2012 we aim to help the development of their Global Business Alliance against Forced Labour.

Despite the shocking persistence of slavery today, and the general dystopian tone we hear from thoughtful people in international fora, or indeed, because of such darkness, we need a bright vision for life on Earth. That is why we are helping the Future Perfect Festival in Sweden in August. It will celebrate the brilliance and fun of sustainable lifestyles, sustainable businesses and sustainable communities. It will shine rays of light on a better way of life, beyond the dark mountains of outmoded and destructive ways of thinking, working and living. Our ability to understand values, and articulate them in professional contexts, is important when working towards a positive vision. My colleague Ian Doyle has therefore been teaching ‘voicing your values’ class at Grenoble Graduate School of Business, and we will be integrating this into various lines of work in 2012. In our forthcoming book, Healing Capitalism, Ian and I will seek to integrate both the personal and systemic levels of analysis, to aid transformative action.

In summary, we hope our 2012 will involve the following arenas of transformative action:
1) Policy innovations for scaling responsible enterprise and finance;
2) Redesigning financial and monetary systems for more fair and sustainable outcomes;
3) Mainstreaming contributions to sustainable development within specific industry sectors (including luxury, mining etc);
4) More ambitious collaborations between UN agencies, civil society organisations and companies;
5) Visions of sustainable ways of living, pathways to achieve them, and values competence to walk that path.

To better develop our work, this year we become a Swiss non-profit association. We will remain a network of independent associates, and will continue to deliver in partnership with other service providers, for a limited number of clients who seek to create meaningful change. If you can help us have an impact in these areas, I’d love to hear from you.

Professor Jem Bendell
Founder and Director, Lifeworth.com and Lifeworth Consulting
Adjunct Professor, Asia Pacific Centre for Sustainable Enterprise, Griffith Business School
Distinguished Visiting Professor, IE Business School

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Professor Bendell explains that the damaging effects of the financial crisis on companies are making some business leaders ask deeper questions about our economic system. Increasing inequality also presents risks to business, according to the International Monetary Fund and World Economic Forum. Meanwhile, as the costs of natural resources rise and our population reaches 7 billion, so more business leaders are wondering whether the world can support more and more economic growth. Professor Bendell, explains that management consultants and business schools have largely failed to provide business leaders with insight on these questions, and help them develop appropriate strategies. Throughout 2011 more business thinkers shared initial ideas on creating a new form of capitalism, but were too narrow in their analysis, according to Bendell.

He says we need to uncover our hidden assumptions in order to develop new insights into the strategic implications of our current crises. He describes how the current debate about the merits of economic growth is illustrative of how the wrong assumptions lead to meaningless and unresolvable debates. Professor Bendell explains that there are now four main views about the role of economic growth in society – pro-growth, no-growth, green-growth, and beyond-growth. These positions seem irreconcilable, and yet they are all based on a false assumption that the nature of money, and its mode of creation, is neutral in its effect on society. He explains how better understanding the monetary system could help resolve the impasse on growth, and lead to new approaches from business, even including new business opportunities.

The interview echoes arguments in his 2009 book “The Corporate Responsibility Movement”, where he suggests the fundamental reform of capitalism is now an issue for responsible business leadership. The interview follows up Professor Bendell’s TEDx talk on the hidden cause of the financial crisis, which is rapidly becoming the most watched speech on monetary reform available online. During 2012 Professor Bendell will be helping Griffith Business School develop its research and events to explore redesigning capitalism for sustainable development.

Interview at Griffith University, December 2011

Click here to view the embedded video.

Speech at TEDxTransmedia, September 2011

Click here to view the embedded video.

A typology of cross-sectoral partnerships, based on the type of activity involved:

* Sponsorship
The company provides funds for a public interest organisation to carry out its activities, often in return for some brand profile.

* Donation In-kind
The company provides its services, or staff or goods, for free or for significantly reduced cost. The business benefits from brand profile, and staff learning and motivation.

* Marketing
The company associates a cause with its products or services, and donates funds to the partner depending on sales, or the partner licences its name to the company. The company benefits from increases sales and brand profile.

* Co-financing and/or Joint Operation of Projects/Enterprises
The company works with the public interest organisation to co-design, or co-establish or co-finance a project or enterprise to achieve a public purpose. The company benefits from securer long-term returns on investment.

* Consultation, Research and Learning
The company participates in ongoing dialogues with partners to learn about public issues and to co-fund relevant research and educational activities with partners. The company benefits from learning, new knowledge, understanding and trust.

* Business Process Improvement
The company engages public benefit organisations to advise on improving the social, environmental, ethical or developmental impacts of its internal operations. The company benefits from expert, cheap and credible advice, as well as the benefits of the changes implemented and an enhanced reputation

* Standards and Guidelines Development
The company engages public benefit organisations to define best practice and how to implement it, including related monitoring and certification systems. The company benefits from a framework for organising internal improvements, and the brand benefit of meeting credible standards.

* Progressive Business Development
The company engages public benefit organisations to develop socially or environmentally preferable products and services, or to make existing products and services available to under-served markets or for unmet social needs. The company benefits from business development that might otherwise have been impossible or financially unworkable.

* Advocacy and Lobbying
The company works with partners to influence the attitudes, behaviours or policy positions of consumers, the general public, specific organisations or politicians on matters of common concern. The company benefits from more effective advocacy and lobbying, brand profile, an enhanced reputation, and the operational benefits of a positively influenced business environment.

* Multiple Actions
The company works with partners on a specific issue or area, to develop a wide range of potential activities, including those listed above and perhaps other new types of activity to address the issue. The company benefits from a framework for working with multiple partners on addressing the issue, with various positive outcomes depending on partnership activities.

Personally, I get more excited by the latter forms of partnership, as they have potential for far wider impact. The need for, and ways of creating such partnerships, you can read about in Evolving Partnerships: Engaging Business for Greater Social Change (out April 2011!)

Keep up with this stuff via http://twitter.com/jembendell

“I want to thank the team at the Wellness Summit for making sustainability a theme this year. It has been rather challenging times for many in the industry these past 2 years, and that could have led some to focus purely on the near term, rather than providing a space for reflection on what it is we are doing and why. The location is also refreshing. We do not have to put ourselves in concrete jungles to be smart and serious. We are part of nature, and when we are in sight of nature we are more relaxed and thus more creative… and the science on that process is in.

I am here because I think wellness professionals can be leaders in the transition to a fair and sustainable world. You can be part of what I term in my latest book, The Corporate Responsibility Movement – A movement that is pursuing a transition to a fair and sustainable economy through new approaches to enterprise.

I was invited partly because of a report I researched and wrote about sustainable luxury, for the environmental group WWF. In Deeper Luxury, we mapped out the sustainability challenge, and how luxury brands perform, the commercial reasons why they can do more, and some examples and tips for companies. The report took off around the world. I even ended up pictured in Tatler; a dubious indicator of success for an environmentalist perhaps.

Wellness services target the same market as many luxury brands, and many wellness services are themselves luxury brands. The luxury industry has been under an increasing spotlight on its social and environmental performance. From the sourcing of metals and stones in jewellery, to the working practices for models, to the use of endangered species in its products. More and more luxury brands have made steps to improve practice, and some luxury groups have even decided to make major investments in buying niche ethical luxury brands, such as LVMH buying half of Edun, which focuses on ethical clothing. The trends they are responding to are trends that also affect wellness industries – a growing realisation amongst people around the world of social and environmental malaise and how our consumption affects that, and how our choices at work matter. If you are in a business where the products and services are highly discretionary, and where personal motivation of staff is key to your success, then these broader public issues affect your business, because they affect customer and staff mood.

I’m new to wellness, and I need some. Having flu at my first wellness conference maybe tells me something I need to hear. I’ve been working on sustainability for 15 years and it is a huge agenda. It can seem complicated, with more stuff to have to think about, to check on, and so on. But actually its quite simple. At its most basic sustainability is about people being in harmony with nature, including our own natures. As our societies have developed our work and ways of living have separated us from that harmony with nature, with each other and with our true selves. You have likely heard that before. Right now I’d like us to take a moment to sense what restoring that harmony could feel like. You may find it helpful if you close your eyes for the next few moments.

So, now with you eyes shut, try to recall a moment when you think you won an argument, or clinched a deal, or got promoted. Think of how it felt at the time.

Still with your eyes shut, next, try to recall a moment when you were in nature, perhaps looking at a sunset, or where you completely lost yourself in the moment of something you enjoy doing. Try to taste that feeling.

Now contrast that feeling with the first – the feeling generated within you when you won out on something.

Consider whether that first feeling is one of self-promotion – a worldly feeling, while the second feeling comes from somewhere else, something some would call your soul.

This is a reflection recommended to us by Anthony De Mello, a Jesuit priest from India. He says the worldly feelings control us, and make us controllable, and don’t provide the nourishment and happiness from when one contemplates nature or enjoys the company of one’s friends or one’s work. He suggests we are weighed down by these worldly motivations for approval, popularity, and power.

That is also a sustainability message. Because sustainability is not so much a challenge out there, but in here. It comes down to how mindful we are in our work. A sustainable wellness industry will flow from a sustainable wellness profession of people inspired by creating experiences that generate well-being for everyone involved, not just the client, and restoring the biological diversity and balance of our planet in the process.

The good news is that more and more people want that from us.

This time tomorrow you will hear from Adam Horler of LOHAS Asia, some new data on consumer attitudes to the environment and consumption, from across South East Asia. So I wont go into the data I have from last year. The positive news is that contrary to myth, middle class urban Asian consumers are concerned about the environment and would prefer better options on that issue. But today, Ill share with you some statistics on why it is so important we try to meet those consumers’ aspirations and help them turn it into behavioural change.

Since the conference opened here at 9am yesterday morning, just 24 hours ago, over 80,000 acres of tropical rainforest have been lost. Over a million tonnes of toxic waste have been released into our environment. Since 9am yesterday, 98,000 people on our planet died of starvation, tens of thousands of them children. In just a day, 137 species have been driven into extinction. In that time, up to 200,000 sharks have been killed, many of them endangered species, by removing their fins to flavour our soup. Perhaps it is no wonder then that an estimated 2 million people around the world took a day off work yesterday due to stress or depression.

We are exposed to bad news in the media on most days, and it seems so abstract and unconnected to us. It can make us numb, partly because we don’t know what to do. But if we repress certain feelings then that can come out in other ways, damaging ourselves and others. The numbness can also hold us back from acting on what we know and what we care about. There’s an American poet Drew Dellinger, who I particularly like for the way he reaches through this numbness. Suffering with this flu, I was bored in bed and listening to his poetry. One poem reached me in the middle of the night. It goes something like this:

“It’s 3:23 in the morning
and I’m awake
because my great great grandchildren
won’t let me sleep
my great great grandchildren
ask me in dreams
what did you do while the planet was plundered?
what did you do while the earth was unravelling?
Surely you did something when the seasons started failing
when the animals, reptiles and birds were all dying?
Did you fill the streets with protest when democracy was stolen?
What did you do?
Once you knew…”

When that touches us, even if its painful, we can be grateful for that, because we are feeling our extended self, our fuller self, expressing itself.

We are lucky we are not one of the people who suffered in the last 24 hours. We are probably lucky we are not our great great grandchildren. But we are also guilty. Not of inaction or apathy. Because we are already active in causing the problems I’ve described, through what we buy and what our savings get used for, who or what we work for or on. The problems in the world are not there from an absence of human action, but because of human action, in pursuit of profit and pride. The building, the lights, the food, our clothes, credit cards, the works, its all of us involved in all the difficulties I’ve just described.

Am I making you feel well? The sustainability agenda must make us question what we mean by wellness.

Some may cynically surmise that such malaise may mean a growth in demand for wellness services. But wellness seems to be more than health, moments of happiness and thin veil of calm. Rather, wellness is a form of contentment and balance, a way of being where one is both healer and whole. Providing people opportunities to awaken to their higher selves can be part of the wellness agenda. It might be unsettling, but ultimately can be deeply affirming. In any case, new evidence confirms that personal wellness and well-being is often affected by collective wellness and well-being.

Personal and collective wellness are connected in two key ways – environmental and social. A US government study published last month found a strong, consistent correlation between adult diabetes and particulate air pollution. There are also scientific studies published this year that correlate levels of air pollution, such as nitrous oxides, with levels of personal happiness. Studies also correlate more traffic congestion with less sense of well-being. We probably didn’t need scientists to work that one out.

Our proximity to nature also matters. Studies have found that post-operation patients housed in rooms with views of nature require less time in hospital and require fewer pain killers. In a study by the University of Illinois “those who lived in housing units with no immediate view of or access to nature reported a greater number of aggressive conflicts with partners or children than their peers who lived near trees and grass.” Our natural world is our common well-being.

The second way that personal and collective wellness is connected is through social factors. One study reported this year finds that if you are not in a good relationship, your injuries will take twice as long to heal, than if you are in a positive and nurturing relationship. Studies show correlations between unemployment, or poverty or economic inequality, with higher rates of crime. It is not surprising then that one study found that in the most economically unequal of states of the USA, 35 to 40 percent of the population feel they cannot trust other people, compared to only 10 percent in the more equal states. Not trusting each other, and being anxious of our rank in society, and what will happen if we slip back, is one explanation for why growing GDP has not correlated with growing levels of happiness, beyond a fairly low threshold. Even UN studies report more unequal societies are more unhappy, top to bottom.

Can one be well when many are not? Apparently not.

There are two major implications for the wellness industry from recognising this connection between personal and collective wellness, or from now on, between personal and global wellness. First, are implications for the relationship with the client. Second, the relationship with everyone else involved, and the environment.

Let’s consider the client. Instead of retreat many people seek reconnection. Jeorg DeMeuth, who runs Organic Spa and who you heard from yesterday, told me that he finds more “people are looking for a holistic experience, where they experience soul, mind and body. The new Spa is a kind of dreamland for new ideas and life concepts”. For those clients who don’t yet have this awareness, as professionals with access to the latest science on the relation between personal and global wellness do we have a responsibility to help lead more people towards that thinking, as it is in their own interests? Serving people by proposing something they don’t yet know they want is an old challenge. Henry Ford knew it well when he famously said, “If I asked my customers what they wanted, they’d tell me a faster horse.” We can serve customers by seeking to lead them.

How to lead customers in this way is an important questions. I want to learn about that, and am looking for examples to include in my next book, on sustainable luxury, so Id welcome chatting after, if you have tried it. I think one subtle way of leading consumers is to communicate how you are providing your services in more responsible ways. Demonstrating a practical manifestation of values can be a good teacher. This also connects to the the second main implication of the connection between personal and global wellness – unless you are supporting collective wellness through the actual operations of your wellness business, you are not really helping your clients’ individual wellness. If the products you use have no contaminants but their manufacture polluted the air we breath, rising our rates of diabetes, destabilising our climate, then that’s not so ‘well’.

I hear that there are many companies embracing this agenda, and some of them we are hearing about at this conference.

There are a variety of initiatives bringing people together to make this happen, such as The Campaign for Greener Healthcare, The Green Occupational Therapy Network, The Green Yoga Association and the Authentic Luxury Network which I launched with some people in the luxury world. There are also initiatives such as Green Globe’s standard for environmental management of Spas, which the luxury resort chain Six Senses developed with them. What is exciting is that we do not have to only focus on making less impact on the planet and people, but we can create products and services that make a positive impact on people and nature. For example, I’m an advisor to The UN’s Biotrade initiative, which is working with skincare and fragrance companies to develop product lines that create new revenues to pay for the conservation of species and their ecosystems. One participant is the Swiss fragrance firm Firmenich, who worked with the NGO Care International, to improve the lives of Vanilla farmers in Uganda, and incorporate that into the brand proposition for a new perfume by Estee Lauder and Donna Karan, called PureDKNY.

This is not about companies offering charity. It is about upgrading normal business operations. The sustainable wellness agenda is about how you make your money not how you give it away. It may seem complex but you can start anywhere, for instance by empowering your staff to become aware of issues and how they relate to their values and their healing practices, and then together discover ways of reducing negative impacts and making more positive contributions. You can look for guidelines and standards, and you can take lots of notes during Jeorg’s skills development session tomorrow.

In summary, I think wellness professions are important to sustainability and vice versa. It will soon be impossible to separate personal wellness from working on collective or global wellness. We will only integrate these properly if we have a heartfelt intention to serve all life through our work. That is an intention most of us share, but it gets covered up with all the stresses and strivings of everyday life. The reflection from Anthony de Mello at the start, helps us see that our world needs from us simply what we deeply need for ourselves. To be authentic, soulful and purposeful. We don’t have to be whole to heal – we just have to be on the way. Thank you.

[References to the data mentioned will appear in my forthcoming book, “Higher Ends”. Thanks to Lifeworth's Hanniah Tariq and Sara Walcott for research assistance, and comments from Matthew Slater and Ian Doyle on an earlier version. A video of the talk will appear soon].

View the summit at http://www.wellnesssummit.com

For the study, Lifeworth Consulting analysed the reports classified as A+ by the Global Reporting Initiative in 2009. They found only 3% of the world’s best corporate responsibility reports that were searchable online mentioned the problem of economic inequality.

Hanniah Tariq

None were found to explain the specific problems of economic inequality, in terms of its impacts on issues such as well-being, security, and the environment. The companies that were found to cite some work on economic inequality are Abeinsa, Banco Bradesco, Caja de Burgos, Caja Navarres, Larsen & Toubro, Otto Group, Telefonica S.A., and The Co-operative Group. “The study argues that economic inequality will become increasingly important in future, as both its extent and awareness of its wider impacts grows,” explains Lifeworth Associate Hanniah Tariq, a co-author of the study.

Although the study explains how this agenda poses difficult challenges for large for-profit corporations, it points to some ways for companies to voluntarily begin to address this issue, including:

• reducing wage differentials and encouraging that from suppliers and other business partners
• promoting working arrangements that enable the less economically advantaged to participate more gainfully in a firm
• developing new ownership forms that involve staff and consumers, and favouring certain forms of ownership structure in their business partners
• seeking more independent locally run businesses to purchase from and work with
• avoiding lobbying against policies that are aimed at reducing economic inequality
• incorporating measurement of project impacts on economic inequality into social performance metrics

The study summarises evidence from leading sociologist, economists, political scientists and authoritative bodies such as the UN, that link economic inequality with the levels of environmental degradation, crime, conflict, physical and mental illness, and poverty. Published in a leading academic journal on corporate responsibility, it was written before David A. Moss, an economic and policy historian at the Harvard Business School was reported in the New York Times this year as having found a correlation between economic inequality and financial instability.

Dr. Jem Bendell

The study argues that one of the reasons that economic inequality has not been addressed yet by voluntary corporate responsibility initiatives is that the issue has not often been raised by civil society and the media. “The mainstream development community of intergovernmental agencies, government aid agencies, large foundations and Western NGOs have been rather quiet on the issue of economic inequality in the past decades. For instance, it does not feature well in the Millennium Development Goals. This has meant people in business and finance may have missed economic inequality, not only as a key public problem, but one with real commercial and investment implications, not only in the global South but in advanced economies as well,” argues lead author of the study, Dr Jem Bendell, an Associate Professor with Griffith Business School.

In addition, the authors recognise that on first glance the issue appears too difficult for voluntary corporate engagement. But rather than dismiss it with arguments that economic inequality is inevitable or useful, study co-author and Lifeworth Associate Ian Doyle explains that “the first step to any decent engagement with this issue is to understand the problem better – the impact of economic inequality on society as a whole, and the potential impacts on business success.”

Ian Doyle

The study describes successful companies that have alternative forms of ownership that do not add significantly to economic inequality, such as The John Lewis Partnership (JLP), Organic Valley, Carris Companies and Coopaname. It also discusses the experience with attempts by governments to pluralise ownership of companies, such as the Broad Based Black Economic Empowerment Act of 2003 (BBBEE) in South Africa.

The study argues there are implications from an economic inequality agenda for the social enterprise and social innovation community. None of the metrics for social impact that the study authors were able to review currently examine how the ownership of the organisations involved in a particular activity then affects economic inequality. “The agenda on social enterprise, promoted by Schwab Foundation, Acumen Fund, among others, has tended to make little or no distinction between organisations on the grounds of their ownership. Given an awareness of the downsides of economic inequality, rather than poverty alone, this approach will not be tenable in future,” explains Dr Bendell.

For responsible investment, an awareness of the societal and long term financial harm of high economic inequality could necessitate a new reflection on what responsible investors seek from companies and what that means for their own ownership stakes and rights. However, some of the implications of the problem of economic inequality are beyond the arena of voluntary corporate responsibility, says Dr Jem Bendell: “Policy makers need to recognise a firm’s impact on economic inequality as an aspect of its social responsibility, and start to distinguish more clearly between different forms of ownership, as part of their effort to promote a sustainable and socially beneficial enterprise economy,” he explains.

The study appears in the ‘World Review’ of Issue 38 of The Journal of Corporate Citizenship. The study can be purchased from http://www.greenleaf-publishing.com/jcc38.  The c0-authors are Jem Bendell, Hanniah Tariq, Ian Doyle and Janna Greve. Lifeworth Consulting prepared the study as part of the its Enterprise Trends programme, which involves producing quarterly and annual studies of global trends in corporate responsibility. Lifeworth Consulting is a network of associates in nine countries who provide research, strategy, training and liaison for organisations seeking innovative ways of promoting sustainable development through enterprise. http://www.lifeworth.com/consult

…We are now almost 600 members, sharing more than 200 photos of our work, and 50 blogs on our views and news. Check in to www.authenticluxury.net to see what’s being shared, or to share.

It’s been a busy season for authentic luxury pioneers,as our selection of news items from the last 2 months highlights below. ALN members have been active, making some breakthroughs. An organic denim Sherwani designed by Prema Florence Isaac (with some input from yours truly) was featured in Magnum Photos Fashion Yearbook, snapped by world famous photograph Paulo Pellegrin (see The Eco Brigade ). Another member, Anna Zegna, celebrated the centenary of luxury menswear company Zegna, and took the opportunity to explain her family’s enduring commitment to sustainability, from hydro-powered factories or support for sustainable livelihoods in Peru through their Vicuna sourcing. Member Federica Ricci organised a seminar on sustainable luxury, with myself, and artist Michelangelo Pistoletto for companies in the textile area of Northern Italy, as part of their BEST initiative. Member Christopher Cordey announced ‘The Atelier for Sustainable Excellence’, which meets next week in Lausanne, while member Michael Low announced sustainability to be the theme of this year’s Wellness Summit in Singapore in October, where I’ll be keynoting. This booming Asian shopping and style hub is also host to Qi-Global, a summit on sustainable lifestyles and innovation, which as a member of ALN you have a 50% discount on tickets.

The world movement continues: in the coming months I’ll be speaking at the pre launch of the world’s first sustainable luxury institute, in Buenas Aires, on 5th November, and in Brisbane on November 16th at a specialist sustainable enterprise centre.

Tired eyes? Then listen to a discussion of authentic luxury, with myself and Beth Gerstein, the Co-founder and CEO of responsible jewelry company, Brilliant Earth, on Sea Change Radio this week.

If you want your news to be featured in the next bulletin, either blog about it on ALN, or tag it “authenticluxury” on www.delicious.com

Regards, Jem Bendell
Founder, Authentic Luxury Network / Director,Lifeworth Consulting

Jem Bendell and Angelo Zegna at Zegna Centenary, Milan 2010

Selection of news on authentic luxury in last 2 months:

BBC News – Rising clothing production costs mean ‘fast fashion’ is out

BBC News – Can high street fashion have a conscience?

The Future of Luxury: Can we have our world and sustain it too? | Sea Change Radio

FT.com / Reports – Education: Design schools aim to make environment a matter of course

FT.com/ Reports – Luxury goods: Premium brands respond to growing consumer awareness

Nick Clegg’s wife becomes poster girl for sustainable fashion | Life and style | The Guardian

Edun Spring 2011 New York Fashion Week – Heard on the Runway – WSJ

Bio-Friendly Bentley Leads Luxury Car Surge – TheStreet

Luxury goods firm predicts return for UK manufacturing – Telegraph

Star names try to beat slump in eco-clothing – Green Living, Environment – The Independent

Bono & Wife Ali Hewson Louis Vuitton Core Values Ad Campaign

Varanasi Weavers | From the cradle of civilisation

The rise and fall of American Apparel | Business | The Guardian

Luxury and Sustainability: Is it possible? | Smartmeetings.com Event Planning Magazine 07

Fields at Selfridges | From Terra Plana

Eco Fashion, Green, Organic, Sustainable Apparel Ethical Clothing Guide and Directory News and Newsletter

New website brings crowd sourcing to fashion | Reuters

How Green Is My Sneaker? – WSJ.com

Fashion Tries on Zero Waste Design – NYTimes.com

Demand for luxury goods returns – Foreign Direct Investment (fDi)

Emma Watson unveils eco-friendly collection! | InStyle UK

The review examines the policies and reports of the world’s 100 largest Transnational Corporations (TNCs) and 100 largest institutional investors, on matters of social and environmental management. It finds that Corporate Social Responsibility (CSR) and Responsible Investment (RI) activities are now so widespread that they could affect trade and investment flows, yet they differ greatly in their content and scope, so their impact on sustainable development is currently unclear. Lifeworth’s Director Jem Bendell, the co-editor of the report, explains that “the data shows that both corporate reporting and investor engagement on business responsibilities is now widespread around the world yet remains very variable in both form and quality.” An Associate Professor with the Asia Pacific Centre for Sustainable Enterprise at Griffith Business School, Dr Bendell believes “there is a now a need for more guidance in the public interest, involving further dialogue with and between governments. Private policies on sustainable development are becoming such a feature of international trade and investment we need to bring governments to the table and work out what standards and policies will work best for all and then how we can promote them.”

Given the growth and consolidation in environmental, social and governance (ESG) analyst firms in the past 12 months, combined with perplexingly high ratings of BP by many ESG analysts over previous years, the report is likely to add weight to calls from some quarters for CSR reports and ESG ratings to become more accurate assessments of the actual social and environmental performance of companies. As such, it will provide added impetus for efforts within the UN and civil society to raise the standard and relevance of reporting and ratings, for all stakeholders. Within the UN, the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) could play a stronger role in promoting standardisation. In civil society, the nascent Global Initiative for Sustainability Rankings (GISR) can complement existing frameworks from the Global Reporting Initiative. There is already growing support from within the CSR and RI professions for more transparency and clarity in communications and ratings. Mark Tulay, former head of ESG Solutions at RiskMetrics told Responsible Investor magazine ‘We believe it is time for an independent, non-commercial initiative… to chart a longer term strategy for building a world-class, normative ratings framework to guide capital, procurement and business-NGO partnerships toward companies that are true sustainability leaders.”

The UNCTAD report incorporates data prepared by EIRIS (United Kingdom), Griffith Business School (Australia) and Ernst & Young (Netherlands). In the downloadable summary of the review, UNCTAD’s Economic Affairs Officer, Dr Miller highlights the following findings:
(a) Private policy on a large enough scale can have an impact similar to or greater than public policy. As a result, CSR has emerged as an important area of soft law self-regulation (or “soft-regulation”). CSR can present policymakers with new options and tools for addressing key development challenges.
(b) Most large TNCs now recognize the importance of CSR yet the standard of communication varies widely. There is a role for policymakers to enhance the quality of communications. Various policy options exist such as supporting the harmonization of CSR reporting, and mandating such standardized reporting through stock exchange listing requirements.
(c) Responsible investment practices (efforts by investors to incorporate ESG issues into investment decisions and to engage with investee companies to encourage ESG practices) have become common features of the world’s 100 largest pension funds. Regulators can work to strengthen the mechanisms through which institutional shareholders are able to influence the ESG practices of the companies in which they invest, while also encouraging investors to formally
articulate their stance on ESG issues in public reports.
(d) At least basic climate change-related information is now reported by most large TNCs. However significant inconsistencies and inadequacies among company reports undermine the comparability and usefulness of this information. Unless reporting is produced in a consistent and comparable manner, it is difficult for policymakers, investors and other stakeholders to use it to make informed decisions. Policymakers could promote an internationally harmonized approach to the way companies explain, calculate and define climate change-related emissions.
(e) A number of voluntary initiatives are taking a leading role in designing and facilitating CSR and responsible investment instruments, encouraging improved corporate communication on ESG issues and creating important benchmarks, based on universally agreed principles. Policymakers can become involved in these initiatives with the aims of promoting sustainable
development goals and identifying useful tools to complement government rules.

The report and its summary can be downloaded at www.unctad.org/csr

Lifeworth Consulting participated in this work as part of its Enterprise Trends programme. Lifeworth’s Jem Bendell can be contacted for interview about the report and the challenges it identifies, via +44(0)2071936102

Unlike other dotcommers, at Lifeworth we didnt want to increase unnecessary user traffic to our site, but to create a system that frees you from trawling through lots of sites, and saves your eyes, back, wrist and soul from so much computer time. So we sought to design a system that frees you from your internet device… by pulling everything together, sorting it, and presenting it in ways relevant to your interests. This means we may not have as much traffic as other sites, but we like to think we are a more efficient use of time for our 7000+ monthly visitors.

It’s a philosophy we intend to keep while we develop the service. Nevertheless, we need to ensure that not only do we provide what users want, but what will be useful for those of you wanting to promote a job, event or course, in light of the growing importance of web 2.0. We are still looking into the various mechanisms of integration with Web 2.0. But the first step has been to upgrade our job and event posting service, so you have the option of using the Lifeworth.com portal to reach out through social media as well. Ee now offer a free, basic and premium option.

FREE OPTION: You can reach thousands of CSR, social enterprise and responsible investment professionals for free. We are your best option to reach the busy professional. Job seekers will look at many sites and browse adverts, but the busy professional will not. Our system provides them with one email a week that pulls together and sifts through all jobs and events matching their interests. That makes us a one-stop shop, serving over 5000 subscribers and 7000 unique visitors per month. 25% each from the UK and USA, the rest from around the world.

BASIC OPTION: You can reach out faster and wider, by simply sending us your job or event and we will put it on the homepage, include it in our monthly bulletin to 5000+ subscribers, and it will appear on our syndication partners’ websites, such as CSR International; all for 100 euros.

PREMIUM OPTION: You can make your job or event unmissable, through our new system that connects with Web 2.0. Your job or event can take pole position in the main box on our homepage for a month, be emailed to our 5000+ subscribers immediately, be featured in our monthly bulletin, be featured in a blog news story written by Lifeworth’s CSR specialists, which is then sent to Twitter, relevant Linked In groups, JustMeans and 10 CSR-related email groups to generate wider interest. UNPRI and Virgin Unite made use of this new premium service, and you can view the stories we wrote in connection to opportunities at their organisations (see UNPRI story and Virgin story). For this service, simply send us the information and we will process all this for you, for 350 euros, subject to availability (we currently allow one Premium Service per week, and we need to identify a relevant and interesting story for our users).

You can get started with one of these options at http://www.lifeworth.com/advertise

Meanwhile, at our consulting practice we continue to explore how the advances in web technologies will change the future of corporate responsibility, social enterprise and responsible investment, and integrate that into our advice to clients in the business, NGO and UN sectors.

The Creativity Revolution in responsible business connects directly to the emerging creative economy, where people’s engagement in new communications technology means we move beyond the information/knowledge economy, to one where personal creativity is empowered and expected, so that people become the co-producers of ideas that shape business, culture, politics. This Creativity Revolution in responsible business is featured in this month’s “Journal of Corporate Citizenship”. Despite the rather uncreative sounding title, it’s full of funky ideas. In a special feature on “design thinking”, which we explain below, Professor David Cooperrider says thinking and practice on a firm’s responsibilities is about to change for good. Then, in a column on global responsible business trends that we at Lifeworth research and write each quarter, we explore the creativity revolution in depth.

Some firms like Virgin are beginning to see the potential. As such they are recruiting more people to work “tackle tough social and environmental problems with an entrepreneurial approach” which we have been to help them with. See: http://www.lifeworth.com/node/19286 [deadline June 4th 2010!]. However, a reality check: the creative approach to a businesses role in society is not yet widespread. In my experience most managers, consultants and academics don’t get it and still think social and environmental issues are just a cost, not a creative force. This is reflected in the codified approaches to responsible business, in things like the new ISO 26000, and most ESG (environmental, social and governance) analysis, where innovation does not feature much, if at all.

To help more executives, their advisers and trainers to get with the creative vibe, and understand the barriers to its mainstream adoption, Ian Doyle and I explored social innovation and design thinking in our column for the journal. It also featured in our annual review of 2009. Here follows sections of the column (for a full copy with references download the pdf, and scan to the final section “sustaining innovation”. Or better still, subscribe to the journal and get to read Prof Cooperriders piece as well).

…What is innovation? According to BusinessDictionary.com, innovation is the “process by which an idea or invention is translated into a good or service for which people will pay. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination, and initiative in deriving greater or different value from resources, and encompasses all processes by which new ideas are generated and converted into useful products.”1 It is in essence a systematic and systemic approach that directs acts of invention towards a shared purpose, this purpose being of public benefit in the case of social, sustainable or responsible innovation.2

[There are some...] deep-seated impediments to sustainable innovation from within businesses themselves [which] were explored in a Boston Consulting Group (BCG) publication in October 2009 entitled ‘The Business of Sustainability.’ The report detailed the results of a global survey of over 1,500 corporate executives and managers which sought to better understand the business implications of sustainability.3 One of the conclusions of the report was that although 92 % of businesses were trying to address sustainability issues, most companies struggled on execution demonstrating a lack of coherence between the desire to act and the ability to implement bold action. The report detailed that one of the major obstacles was the difficulty in modelling a business case for sustainability due to three major factors:

- forecasting and planning beyond the one-to-five year time horizon typical of most investment frameworks;
- gauging the system-wide effects of sustainability investments and;
- planning amid high uncertainty.

Whilst these three points illustrate the ambiguity that businesses face, they also demonstrate the typical decision making mechanisms that businesses use in determining future direction. Expanding upon the third point in particular, the report stipulated that,

‘Strategic planning, as traditionally practiced [sic], is deductive – companies draw on a series of standard gauges to predict where the market is heading and then design and execute strategies on the basis of those calculations. But sustainability drivers are anything but predictable, potentially requiring companies to adopt entirely new concepts and frameworks.’4

In criticising deductive logic, where theories arrived at through past experience are used to predict what will happen in future, BCG were giving voice to other forms of knowledge in a domain traditionally dominated by economics, as illustrated by a range of strategy management journals. Economics is a discipline that is highly reductionist and determinist, meaning that to provide insight into society, it reduces complex interactions into a few key variables (reductionism), and then seeks correlations between the variables as a means of identifying cause and effect (determinism). As such, economics has its limits in revealing insight into complex realities. Beyond economics, many of the tools used to describe major trends in society that inform the fields in which companies focus their innovation, depend on quantitative data, including analysis of the subjective opinions and experiences of individuals through surveys. The reliance on what can be inscribed and aggregated, not only enables some useful macroscopic views of trends, but also means there is a temporal and physical distance between the analyst and the realities studied. The data shows how things used to be, not how they could be, and does not provide insight into the complexity of people’s lived experiences. It is as if by looking for the ‘helicopter view’ of a situation, one has to travel away from the phenomena to look back at it through a telescope. What is lost from this approach is not only an understanding of complex consumer needs and wants, but also the potential for a conversation with consumers about what they might want, and how their expressed behaviours might not actually be how they would wish to behave if they had other choices. For instance, the reason that people spend two hours in traffic everyday might be an observed preference, as it is their behaviour, but it is not necessarily their desired preference.

A key lesson here is that in order to become better at strategy, businesses need to get closer to consumers, which is further discussed below. But the main focus of BCG was on the restrictive effects of business executives requiring “proof” of a business plan, where what constitutes proof is narrowly defined, before making a decision to invest in innovation. This was also the focus in Fast Company magazine in November 2009. In an interview on innovation in business with Mr. Roger Martin, Dean of the Rotman School of Management at the University of Toronto, he explains that

‘Most companies try to be innovative, but the enemy of innovation is the mandate to “prove it.” You cannot prove a new idea in advance…’5

The alternative he suggests requires ‘design thinking.’ A simple definition of design thinking is any process that applies the methods of industrial designers to problems beyond the scope of how a product should look. [Design is a concept that goes beyond the creation of products and is concerned with exploring the role of design in sustaining, developing, and integrating human ideas into broader ecological and cultural environments.] ‘Design thinking’ is a user-based approach that observes people in order to create practical solutions in product design and for social problems. It focuses on the nature of the problem itself. Put this way, such a methodology means that products are created in sync with consumer needs rather than creating a product and pushing it into the market place. Mr. Martin suggests that design thinking is a conduit between the intuition of new ideas and the more structured approaches of analysis that

‘…enables the organization to balance exploration and exploitation, invention of business and administration of business, originality and mastery.’6

This suggests that by thinking like a designer, organisations may be freed up from the burden of proof so that the best solution can be explored rather than the illusion of what can be proven.

A November 2009 special report in Business Week Online highlighted how design thinking is impacting business.7 The article illustrated how companies such as Proctor and Gamble (P&G), GE Healthcare and Philips Lighting use design thinking to solve their problems. At P&G, the number of design facilitators has grown from 100 to 175 since 2008 in an attempt to embed such methodologies throughout the organisation, and judging by their enormous growth between 2000 and 2008 when revenue doubled from $40 billion to $83 billion, it isn’t surprising that their performance is being heralded as a triumph of design thinking.8 GE Healthcare has also adopted design thinking and according to a 2003 report by the Danish Design Center, increased design activity such as design-related employee training boosted the company’s revenue on average by 40% more than other companies over a five-year period.9

These earnings may convince companies that ‘design thinking’ is central to the future of innovation, but what might it imply for the social and environmental performance of business, including the challenge of scaling innovation as rapidly as described above? There are two areas of potential benefit. First, as ‘design thinking’ challenges dominant views of what constitutes proven knowledge in strategic planning, and allows for more complexity and uncertainty in decision making, so investments in innovation may gain more attention. This is because, as BCG noted,

“Decisions regarding sustainability have to be made against a backdrop of high uncertainty. Myriad factors muddy the waters because their timing and magnitude of impact are unknown. Such factors include government legislation, demands by customers and employees, and geopolitical events.”10

Second, ‘design thinking’ could encourage businesses to respond to the needs of consumers, rather than seeking ways of marketing existing things to them. This is closely connected to developing a functional perspective on what consumers do, and why they do it. With this view, a car is no longer just a car, but a means of fulfilling a range of functions to the consumer, such as mobility, status, and fun. With that perspective and recognition of growing resource constraints, changing values and technologies, designers could explore how to serve those needs in different ways. Thus needs for mobility, status and fun could be provided separately, or more sustainable transport solutions infused with characteristics that meet the non-mobility functions of existing cars. Making bicycles cool, for instance, or providing more ticket classes and benefits in public transportation. The importance of taking a consumer need perspective, or ‘functional approach’, and seeking to meet that within resource constraints, was identified by UN Environment Programme as a key sustainability policy paradigm for governments in 2001 and explored in these pages in 2006.11

The shift in mindset in design thinking is from regarding a product as simply a physical thing to regarding it as part of a set of relationships that fulfil various purposes for different people, and so those relationships are as important as the thing in itself. In marketing, this view is often discussed in terms of focusing more on the experience of the consumer. There are also strong resonances here with systems thinking, which emphasises that everything is a set of relationships.

The use of design thinking in business innovation has the potential for encouraging more sustainable design, but it depends on what criteria the observation of users occurs, the choice of their needs to be explored, and the intention of the company. In the case of P&G, when designing cosmetic products for instance, do their designers question their users about the wider consequences of the products, or the reasons why consumers have particular ‘needs’ and tastes? In light of the Environmental Working Group’s cosmetic safety database which details hundreds of P&G products containing potentially harmful toxic chemicals, perhaps user observation needs to be coupled with user education as to avoid certain environmental and social issues.12 Design may be used to support innovation and the bottom line, but there is also the risk that the broader ecological boundaries are deliberately circumvented to the detriment of others. So despite the enormous potential of design thinking as highlighted by the examples of P&G and GE, until environmental and social issues become part of the purpose of the organisation, new products may not necessarily be more sustainable.

That said, P&G is starting to apply sustainability criteria to some of their products. Called ‘Sustainable Innovation Products’ or SIPs, P&G has a goal to deliver $50 billion in cumulative sales of products with improved environmental impact by 2012. SIPs must have an overall use reduction of 10% in the areas of transportation, energy, water or materials, or have replaced non-renewable materials with renewable ones.13

Design thinking is not a panacea for social and environmental effectiveness of corporations, and should not be understood as a new function within business, but just one way of practising a more connected and holistic way of doing business. A Harvard Business Publishing article in October 2009 suggested that the success of design thinking is as much about embracing different points of view as it is design methodologies.14 Although Mr. Peter Holtz, the author of the article, founded his company which is dedicated to experience design, he suggests that the effectiveness of design thinking is that it embraces many different experiences and disciplines. He affirms that,

‘What we must understand is that in this savagely complex world, we need to bring as broad a diversity of viewpoints and perspectives to bear on whatever challenges we have in front of us. While it’s wise to question the supremacy of “business thinking,” shifting the focus only to “design thinking” will mean you’re missing out on countless possibilities.’

His comments supported an article in Fast Company earlier in the year that commented on the role of Claudia Kotchka, P&G’s first ever VP for design strategy.15 The author, Dev Patnaik, CEO and founder of Jump Associates, a firm that helps companies create new businesses and reinvent existing ones was quick to point out that Ms. Kotchka was an accountant by training and spent most of her professional life in marketing and thus had no design experience when she started the role. He insists that what design thinking ultimately embodies is the

‘…conscious blending of different fields of thought to discover and develop opportunities that were previously unseen by the status quo.’

So whilst Ms. Kotchka immersed herself in design thinking, it was combining it with her other experiences that made her such a powerful example of design. As Mr. Patnaik concluded,

‘To walk away concluding that design thinking is what makes P&G great would be like going to the movies and concluding that Indiana Jones is a great hero because he always wears a hat.’

It should be of no surprise that corporations using design thinking are now employing people from the social sciences such as sociologists, anthropologists, ethnologists and the like because they can open up thinking through entirely different points of view. The key here is the need to transcend organisational silos and the single lenses that come from specialisation in marketing, finance, human resources, strategic planning, operations, and so on. The new popularity of design thinking, like systems thinking, reflects how organisations are trying various ways to overcome silos. Having teams of experts from different specialisations is one way that organisations try to overcome these silos, but they are rarely more than the sum of their parts. Instead, if managers develop a competence for trans-disciplinarity or trans-functionality, they can draw upon the expertise in different specialisations, while rejecting certain knowledge claims from those disciplines that they can spot as the result of unhelpful assumptions or preoccupations. Key to this is understanding a knowledge claim in its full context: to distinguish between what it reveals and what is simply a projection of its method, theory, and assumptions. Two of the best underlying factors in developing trans-functional competence are critical discourse analysis, and the philosophy of science, as they enable people to de-construct the truth claims they hear.

Furthermore, the organisational silos are there for a reason – they have helped incumbent organisations to control their activities, and regulate any potentially disruptive changes. As a means to shore-up success, corporations have created organisational structures to maintain their financial commitments. As many large organisations are either financed by debt or equity, there are requirements to ensure that debt is paid back on a predetermined schedule or that shareholders are paid a return and so it is understandable that companies have ordered their organisations to meet these demands.16 According to Mr Roger Martin, the consequences of such arrangements for organisational functions are many, and of note for CR professionals. One, organisations will only take the risks associated with exploring new ideas when there is a clear potential for a significantly enhanced financial return; investments in new approaches that would deliver similar returns to existing practices are not favoured. Two, due to the outflow of money, there are limited resources which can be dedicated to innovation thus, ironically, working against their own long-term interest. Three, as a result, meeting the budget is the first measure of operational success as opposed to, for example, better environmental performance. And four, because the nature of the work environment demands reliability for financial purposes, work itself is secondary to the business of making and selling, often demoting people to machine-like tasks and blocking creative potential.17 A corollary to the last point is that work then becomes a measure of time. The consequence is that performance is measured according to quantity and time rather than quality and objectives, potentially leaving the problem to be addressed unsolved in the interest of rapid turn-around.18

It is not just a top down process that enforces silos in organisations. Rather, to be effective in addressing challenges in ways that integrate insights from various organisational functions one must be highly intelligent and enthusiastic about the organisation’s purpose. If one is tired at work, or not deeply interested in the goal of the organisation, then learning the ropes of a particular discipline, and being satisfied one is a trained practitioner in that discipline, is a natural option. The same is true of management schools, where academics have the added pressure of the expert expectation, so that choosing to put boundaries around one’s expertise is an easier way of life.

Whilst corporate responsibility (CR) professionals are presenting sustainability as a source of business opportunity, little is said about those dominant structural aspects of business that are implicitly opposed to innovation. In the case of business, the requirement to ‘guarantee’ profitability means that businesses depend on mechanisms and processes that have demonstrated reliability in working toward this goal.19 But in the face of climate change, financial crises and continual uncertainty, this raises the question of whether the organisational mechanisms that support profit making are as much hampering as stimulating innovation on challenges such as climate change. For professionals working in CR examining deep-seated impediments to sustainable innovation is important.

Stakeholder dialogue is an area of corporate responsibility where design thinking could have a direct application. Concerns over the effectiveness of stakeholder dialogues in aligning the interests of business and their stakeholders raise the question of why there is little innovation when there is a veritable abundance of differing viewpoints at the table.20 This would suggest that there are tools necessary from a process point of view to create a shared sense of problem, to explore the best solutions and then channel these ideas through to the implementation phase. In light of the diversity parallel with design thinking, perhaps the missing element in innovation through stakeholder dialogue is design facilitation, an admittedly ambitious project. For whilst the design facilitator may be able to unite the stakeholders present to solve a problem, the trickle down effect might be a little less effective if the organisational structures behind them are naturally resistant to innovation. Consequently, the greatest challenge facing the CR movement may not be providing creative ideas for businesses but helping organisations to break free of paradigms that they’ve established in attempts to sure up profitably and returns for shareholders. If business is to unleash its sustainability creativity, the CR movement will need to not only promote more design thinking, but also transform existing organisational structures that have been designed to resist change. This is where public policy could play a role with a few interventions at the root of the problem, such as obliging corporations to retain a certain percentage of profits to be used for innovation to address a public need.
–
Some executives do get some of these ideas already, including some in the fields we specialise in in at Lifeworth Consulting. One of these is the traditionally stuffy luxury sector: they have a margin and mandate to innovate… and some recognise that, and work with us or have joined the Authentic Luxury Network we established (http://www.authenticluxury.net). The other area we work on is the non profit and governmental sectors’ strategies on business and finance. Not known for innovation either, some execs get it too.. including some who I worked with at WWF-UK a few years back to conceive of what has become The Finance Innovation Lab, to structure a dialogue about what a fair and sustainable financial systems might look like and how we might create pathways for people in all professions to play a role in those systems’ realisation (http://www.thefinancelab.org).

So will design thinking save us? Not in itself, but its growing popularity creates a space for more creative energy, more holistic thinking and systemic approaches applied to real action. As such it could save us from being such an ‘age of stupid’.

Cheers, Jem Bendell (sections from the JCC co-written with Lifeworth Consulting’s Ian Doyle).

Ps: Thanks to Ian Doyle and Bernise Ang for pushing me last year to explore design thinking more fully!

“Sustainable Fashion. The future of Luxury “

June 3, 2010, at midday.

Registration required: http://events.constantcontact.com/register/event?oeidk=a07e2ohoocub7bd368f

Why listen to Jem? http://www.nytimes.com/2008/11/26/style/26iht-luxury08-bendell.18173199.html

What else do we do on this? http://www.lifeworth.com/consult

Want to read about the topic? http://www.deeperluxury.com

Want to work on this topic? http://www.authenticluxury.net

If you would like a seminar on this topic for your own organisation, email connect[at]lifeworth.com to arrange a time to discuss.

See Jem in a CNBC documentary on this topic:

Click here to view the embedded video.

More info on these CSR Thursday lunchtime talks is at www.corporateresponsibility.ch