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Wednesday, 14 December 2011

Myths About CSR in Developing Countries


By Wayne Visser
Part of the Quest for CSR 2.0 series.

Are concepts and models of corporate social responsibility (CSR) developed in the West appropriate for developing countries?

I decided to first tackle this question by setting out what I believe to be Seven Popular Myths about CSR in developing countries. Most of these myths exist as a result of the feeding frenzy that inevitably occurs every time the media has hunted down and sunk its teeth into one or other juicy story of corporate exploitation. They, however, become sustainable because they are spread by whole legions of largely well-intentioned people who have vested interests in promoting their particular brand of the truth about CSR.

The Seven Myths:
  1. Economic growth is not compatible with CSR.
  2. Multinationals are the biggest CSR sinners.
  3. Multinationals are the biggest CSR saviours.
  4. Developing countries are anti-multinational.
  5. Developed countries lead on CSR.
  6. Codes can ensure CSR in developing countries.
  7. CSR is the same the world over.
Let’s look at these myths each briefly in turn.

Myth 1: Economic growth is not compatible with CSR: What the Index for Sustainable Economic Welfare and Genuine Progress Index show is that GDP growth and quality of life move in parallel until social and environmental costs begin to outweigh economic benefits. According to this ‘threshold hypothesis’ – coined by Chilean barefoot economist, Manfred Max-Neef – most developing countries have yet to reach this divergence threshold. For them, economic growth and the expansion of business activities is still one of the most effective ways to achieve improved social development, while environmental impacts are increasingly being tackled through leapfrog clean technologies.

Myth 2: Multinationals are the biggest CSR sinners: On the ground in most countries, multinationals are generally powerful forces for good, through their investment in local economies, creation of jobs, upgrading of infrastructure, provision of basic services and involvement in community development and environmental conservation. There are always exceptions, of course, and these should be named and shamed. But they shouldn’t overshadow the overall positive role of big companies in developing countries. The cumulative social and environmental impacts of smaller companies, which operate below the radar of the media and out of reach of the arm of the law, are typically far larger than that of the high profile multinationals.

Myth 3: Multinationals are the biggest CSR saviours: Not only do large companies have limited influence over government policy, but most multinationals, despite large capital investments, provide only a minuscule proportion of the total employment in developing countries. The real potential saviours are small, medium and micro enterprises (SMMEs), including social enterprises, which are labour intensive and better placed to affect local economic development. If the social and environmental impacts of these SMMEs can be improved, the knock on benefits will be proportionally much greater than anything that multinationals could achieve on their own. This is why the work CSR for SMEs by Anahuac University in Mexico and Forum Empresa in Latin America is so encouraging and important.

Myth 4: Developing countries are anti-multinational: Developing countries are often caught in a no-man’s land of under-development in a competitive, monetized, global economy, and the sooner they can modernise and integrate, the better for them. Most often, developing country communities welcome multinationals and their CSR initiatives. This is not the same as saying the developing world should repeat the past mistakes of the developed countries, such as highly polluting industrialisation, nor that multinationals should not be required to be responsible and held accountable. But we should not deny developing countries the dignity of choice, whether it be Unilever products or Coca Cola, both of which have made significant progress on CSR in recent years.

Myth 5: Developed countries lead on CSR: There are countless examples of how developing countries are proving themselves highly adept at delivering the so-called triple bottom line of sustainability, namely balanced and integrated social, economic and environmental benefits. It is actually not surprising, since in developing countries, these three spheres are seldom separable – economic development almost inevitably results in social upliftment and environmental improvement, and vice versa. Whether it is South Africa’s King Code, which encourages integrated sustainability reporting, or A Little World, which uses mobile phone and biometric scanners to bring micro-banking services to the poor in India, a lot of the innovation in CSR is taking place in developing countries.

Myth 6: Codes can ensure CSR in developing countries: The past few years have seen a mushrooming of corporate responsibility codes, standards and guidelines, which developing countries are keen to adopt, if only to satisfy their Western partners. This standardisation trend is both inevitable and necessary in a globalising world—which is desperately searching for an alternative to command-and-control style business regulation in order to satisfy the governance and accountability void which still exists. But this codification tends to measure CSR activities, rather than CSR impacts on the ground. Developing countries need to move rapidly through this Strategic CSR approach in an Age of Management to a more transformative CSR approach in an Age of Responsibility.

Myth 7: CSR is the same the world over: One of the biggest fallacies is that, in a globalised world, CSR can somehow conform to a unitary model. Of course, we need universal principles, like the Global Compact, and perhaps even process frameworks, like ISO 14001. But standardised performance metrics, like those of the Global Reporting Initiative and the numerous sustainability funds and indexes, start to tread on shaky ground. The tendency is for developed country priorities – such as energy and climate change – to receive emphasis and for northern NGO agendas to dominate.

The antitdote to these CSR myths for developing countries is glocality – one of the five principles of CSR 2.0. The term ‘glocal’ – a portmanteau of global and local – is said to come from the Japanese worddochakuka, which simply means global localisation. Or more simply, ‘think global, act local’. The question is, do we see glocality in action, or do we just see corporations in developing countries mimicking the practices of the West?

About Wayne Visser

Dr. Visser is Founder and Director of the think-tank CSR International and the author of twelve books. In addition, Dr. Visser is Senior Associate at the University of Cambridge Programme for Sustainability Leadership and Visiting Professor of Sustainability at Magna Carta College, Oxford. Before getting his PhD in CSR, Dr. Visser was Director of Sustainability Services for KPMG and Strategy Analyst for Cap Gemini in South Africa. In 2011, he was listed as one of the Top 100 Thought Leaders in Europe & the Middle East. Dr. Visser lives in London, UK, and enjoys art, writing poetry, spending time outdoors and travelling. A full biography and much of his writing and art is on www.waynevisser.com.

Saturday, 10 December 2011

The Future Faces of CSR Activism


By Dr. Wayne Visser

Quest for CSR 2.0 Series No.9


The third principle of Transformative CSR, or CSR 2.0, is responsiveness. (We explored creativityand scalability in the last two posts). Some of the most important players in the responsiveness game – especially through cross-sector partnerships – are civil society organizations (CSOs, which I prefer rather than the term NGOs). Reflecting on how this sector is changing in the face of increased calls for responsiveness, I have distinguished 10 ‘Paths to the Future’ for CSR activism. I believe that CSOs acting in the CSR space will increasingly be:

  • Platforms for transparency – Undertaking investigative exposes & hosting disclosure forums;
  • Brokers of volunteerism – Providing project opportunities for employee volunteers;
  • Champions of CSR – Raising awareness and increasing public pressure for CSR;
  • Advisors of business – Offering consulting services to business on responsibility;
  • Agents of government – Working with or on behalf of regulatory authorities;
  • Reformers of policy – Pressuring for government policy reforms to incentivise CSR;
  • Makers of standards – Developing voluntary standards & inviting business compliance;
  • Channels for taxes – Receiving and deploying specially earmarked tax revenues;
  • Partners in solutions – Partnering with business/government to tackle specific issues; and
  • Catalysts for creativity – Creating social enterprises & supporting social entrepreneurs.

Let’s explore these ‘future faces’ of CSR activism in a little more detail below, drawing on examples from around the world of CSOs emerging roles.

Platforms for transparency – The role of CSOs as agitators for, and agents of, greater transparency seems set to continue. For example, in Senegal, Benin, and Guinea, CSO intervention has been critical in the development of a free press. And in India, Karmayog allows citizens to report specific instances of bribery and corruption on a live, public website.

Brokers of volunteerism – As companies increasingly see the benefits of volunteerism (greater job satisfaction, productivity, commitment and loyalty), CSOs are increasingly becoming people-brokers, as sources of projects for employee volunteers. For example, the Voluntary Workcamps Association of Ghana (VOLU) coordinates volunteers to help with the construction of schools, reforestation and AIDS campaigning.

Champions of CSR – While some CSOs remain sceptical about CSR, in many countries they are the main agents for promoting CSR. For example, in Iran, a group of CSOs have joined forces with the UNDP to promote CSR through targeted training for managers under the umbrella of the UN MDGs. And in Senegal, CSR awareness has grown mainly due to a CSO called La Lumière in Kédougou.

Advisors of business – A combination of genuine expertise, valuable perspectives and a crunch on funding means that many CSOs are turning to consultancy, working with and advising companies not only on specific social and environmental issues, but also more generally on sustainability and responsibility. For example, in Hungary, as opposed to the traditional role of watchdog, many CSOs engage in consultancy on CSR.

Agents of government – The phenomena of GONGOs (government organised NGOs), GINGOs (government-inspired NGOs), GRINGOs (government regulated/run and initiated NGOs) and PANGOs (party-affiliated NGOs) are becoming more widespread, no longer just seen in China. Even where governments are not setting up or running the CSOs, they are supporting them as key catalysts. For example, Belgian CSOs receive €3 government funding for every €1 they raised themselves.

Reformers of policy – Realizing that the ‘rules of the game’ need to change, CSOs are increasingly getting involved in legal reform. For example, in Indonesia, it was largely due to rising pressure from CSOs that the Law No. 40/2007 concerning Limited Liability Companies was introduced to make CSR mandatory.

Makers of standards – In an effort to raise the bar on voluntary action by companies, many CSOs are developing their own social and environmental codes and standards, then inviting business to comply with them. For example, in Israel, the Public Trust Organisation established The Public Trust Code, covering advertising, transparency, disclosure, service and product guarantees, honesty in contracts and privacy of information.

Channels for taxes – In some countries, the effectiveness of CSOs has earned them the ability to source tax dollars directly. For example, in Mexico, the FECHAC (Federation of the Chihuahuan Industry) is a CSO, set up after devastating floods in 1990, that is funded through a special annual tax on more than 38,000 industries. And in Romania, the 2% Law (in terms of the Fiscal Code) allows citizens to redirect 2% of personal income tax to a CSO.

Partners in solutions – Not only are CSOs collaborating with business more and more, but also with governments and multilateral agencies. For example, in South Korea, ‘Cross Sector Alliance’ is one of 5 approaches to CSR being promoted, while in Africa the New Nigeria Foundation provides a platform for mobilizing non-traditional resources through public-private partnerships. In Turkey, TUSEV promotes linkages between domestic and international CSOs and encourages CSR by putting foreign and domestic firms in contact with appropriate CSOs.

Catalysts for creativity – CSOs are increasingly expected to provide solutions, not just point out the problems, especially by launching or supporting social enterprises. For example, in Bangladesh, BRAC (formerly Bangladesh Rural Advancement Committee) has been crucial in the microcredit movement, and in Singapore, the National Trades Union Congress (NTUC) has 12 social enterprises and 4 related organisations that are owned by more than 500,000 workers.

However the future unfolds, it is clear that CSOs will be a significant player in the new landscape of responsible governance and accountability, both as a counter-balancing force and a partner to governments and business. In fact, I believe CSOs will be the responsive glue that holds society together in the turbulent years ahead.

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Friday, 9 December 2011

Could Less Consumer Choice Be A Good Thing?


By Dr. Wayne Visser

Quest for CSR 2.0 Series No.8


So you buy fair-trade or eco-friendly products, and you think that is a good thing, right? Think again. What if so-called ‘ethical consumers’ are the very ones standing between us a sustainable future?

I’m crazy, right? Maybe, but here is why I say it. By creating a premium-priced, niche market for ‘ethical consumption’, companies have been able to present a responsible front to the world, while leaving the vast majority of their products – which are, by implication, less ethical, less responsible, less sustainable – unquestioned and unchanged. At the same time, a small group of usually well-to-do Western consumers have been able to ease their conscience by feeling that they are making a positive difference.

Now let me be clear. I am not against organic or fair-trade or eco-friendly products per se. That wouldbe insane. Clearly, there are groups of producers – usually poor farmers in the Third World – that have benefited from these initiatives. What I am against is the voluntary nature and premium pricing of sustainable and responsible products. The combination of these two factors has ensured that, with one or two exceptions, these products have never gone to scale. As compared with the total and ongoing impacts of mainstream shopping habits, ethical consumption, laudable as it is, has remained marginal at best and totally insignificant at worst.

The UK’s Sustainable Consumption Roundtable says, ‘we know that there is a considerable gap – the so-called ‘value-action gap – between people’s attitudes, which are often pro-environmental, and their everyday behaviors’. We know the ‘value-action’ gap is partly explained by price and availability of alternatives, but there’s something else. Context matters as well.

To illustrate this, Timothy Devinney, author of The Myth of the Ethical Consumer, reports on a very interesting experiment he conducted while researching his book. The experiment took place at a coffee shop in central Sydney, Australia, over a period of several weeks. This coffee shop displayed a large and prominent sign indicating the products available, their prices and active specials. To this was added, quite obtrusively, another special, indicating: We have Fair Trade coffee! No extra charge. Just ask.

Here’s what he found. Unprompted, with only the sign to notify them of the availability of the ‘ethical’ alternative, less than 1% of customers bothered to ask for Fair Trade coffee, even though it was free. “When they prompted customers with a reminder that the ‘ethical’ alternative was available, the number of customers opting for the Fair Trade option rose to 30%. They then went a step further and took the customer’s privacy away: each time the clerk prompted a customer with the Fair Trade option, we ensured there was someone standing next to that person at the counter. In this situation, the number of ‘ethical consumers’ rose to 70%.”

This is a hugely important lesson: If we want to achieve scalability of sustainable and responsible products and services, we cannot leave it to the passive choices of customers. Context is critical, and a little bit of peer pressure goes a long way. But do we really want to resort to public embarrassment to achieve scalability?
The alternative is the trend towards ‘choice editing’. The idea of choice editing is likely to get free-market fundamentalists all in a tizz, but the fact is that manufacturers and retailers choice edit all the time – for example on quality, price, aesthetics and brand. The only difference is now we are asking them to add sustainability and responsibility to their list of criteria.

So who is doing choice editing? Well, outdoor clothing company Patagonia converted to 100% organic cotton in 1996, frozen foods retailer Iceland banned genetically modified food in 1997 and carpet manufacturer Interface has been using only renewable (green tariff) energy since 1998, so it’s not a new idea. The difference is now some of the big manufacturers and retailers are coming on board. For example, Unilever has committed to sourcing 100% of agricultural raw materials sustainably, Sainsbury’s only stocks Fairtrade bananas and Walmart has adopted an organic cotton and sustainable fish strategy.

Let’s look at Walmart in a little more detail to illustrate the point. Walmart set a target to purchase all of its wild-caught fresh and frozen fish for the U.S. market from Marine Stewardship Council (MSC)-certified fisheries by the end 2011. They are also working work with Global Aquaculture Alliance (GAA) and Aquaculture Certification Council (ACC) to certify that all foreign shrimp suppliers adhere to Best Aquaculture Practices standards in the U.S and by 2009, they were already halfway there.

Speaking to the Wall Street Journal, George Chamberlain, president of the Aquaculture Alliance puts the move in perspective: “The endorsement drew attention; Wal-Mart buys more shrimp than any other U.S. company, importing 20,000 tons annually – about 3.4% of U.S. shrimp imports. With Wal-Mart's nod, we went from trying to convince individual facilities to become certified to having long waiting lines.”

Walmart also made a commitment to phase out chemically-treated textile crops. By 2008, Wal-Mart was the largest buyer of organic cotton, with more than 10 million pounds purchased annually. They are also the world’s largest purchaser of conversion cotton – cotton grown without chemicals, but waiting to be certified as organic. Former CEO, Lee Scott, was under no illusions about the ripple effects when he made the strategic choice-editing decision: “Cotton farmers can now invest in organic farming because they have the certainty and stability of a major buyer. Through leadership and purchasing power, all of us can create new markets for sustainable products and services. We can drive innovation. We can build acceptance. All we need is the will to step out and make the difference.”

The question is, since not everyone has the size and economies of scale of Walmart, should we pin our hopes on voluntary choice editing? Or should we be lobbying for a different, and arguably more effective, form of choice editing, namely good, old-fashioned government regulation? The state regulates to ensure the health and safety of products, so why not for sustainability as well?

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Thursday, 8 December 2011

The Creative Destruction Revolution

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.7

One of the key theories on creativity is creative destruction. The concept is most associated with Joseph Schumpeter, following his 1942 bookCapitalism, Socialism and Democracy, in which he described creative destruction as ‘the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one ... [The process] must be seen in its role in the perennial gale of creative destruction; it cannot be understood on the hypothesis that there is a perennial lull.’

The idea, of course, is much older. In Hinduism, the goddess Shiva is simultaneously the creator and destroyer of worlds. In modern times, the German sociologist Werner Sombart described the process in 1913, saying ‘from destruction a new spirit of creation arises; the scarcity of wood and the needs of everyday life ... forced the discovery or invention of substitutes for wood, forced the use of coal for heating, forced the invention of coke for the production of iron.’ Even Marx and Engels had a go at describing the process in their Communist Manifesto, stating that ‘constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. ... All that is solid melts into air.’

The idea of melting solids is very similar to the metaphor used by sustainability and social enterprise thought-leader, John Elkington, to explain the disruptive changes going on in the world. In an interview with him, he explained: “What happens in an earthquake? The land become thixotropic; what was solid suddenly becomes almost semi-liquid. I think we are headed towards a period where the global economy goes into a sort of thixotropic state. Key parts of our economies and societies are on a doomed path really, and I think that’s unavoidable. I think we’re heading into a period of creative destruction on a scale that really we haven't seen for a very long time, and there are all sorts of factors that feed into it—the entry of the Chinese and Indians into the global market, quite apart from things like climate change and new technology.”

As to what this means for business, Elkington believes that “all of these pressures are going to mobilise a set of dynamics which are unpredictable and profoundly disruptive to incumbent companies, so some companies will disappear. I think most companies that we currently know will not be around in 15 – 20 years, which is almost an inconceivable statement. But periodically this happens and there’s a radical bleeding of the landscape. We’ll find this sort of reassembly going on. Over a period of time we’re going to have some fairly different products, technologies, business models coming back into the West, and I think it’s going to be quite exciting, but quite disruptive.”

We see all kinds of examples of creative destruction in corporate sustainability and responsibility. For virtually the whole of the 20th century, the biggest companies in the world were the oil and motor giants – companies like Exxon, BP, General Motors and Toyota. But the 21st century, with growing concerns over energy security and climate change on the one hand and the rising geo-political and economic power of the East on the other, are ushering in a new era. Already in 2006, the richest man in China was reported to be Shi Shengrong, CEO of the solar company Suntech, and the richest women, Zhang Yin, made her fortune from recycling. A 2010 report published by the Pew Environmental Center found that in 2009, China invested $34.6 billion in the clean energy economy, while the United States only invested $18.6 billion.

This explosive growth was brought home to me when, at an event of the Women In Sustainability Action (WISA) in Shanghai where I was speaking in June 2010, I got talking to a supplier of wind turbines to Europe. Simply put, he cannot keep up with the demand. He is turning customers away because there is already 12 months of orders in the pipeline. Even Germany, an early leader in the clean-technology space, can no longer compete with China in this sunrise industry. It is no coincidence that while Obama’s energy reform bill was being scuppered by the U.S. Congress, Malaysia was creating an Energy, Green Technology and Water Ministry. And while the British company BP was virtually on its knees, in May 2010, the Korean company, Samsung, unveiled an eye-watering investment plan to ‘future-proof’ the company by sinking $21 billion into its green technology and healthcare businesses. It claimed the investment would generate $44 billion in annual sales and 45,000 new jobs by 2020.

Make no mistake – creative destruction is happening. The only question is which companies will survive the sustainability and responsibility purge and surge?

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Wednesday, 7 December 2011

What can Web 2.0 teach us about CSR?

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.6

By May 2008, it was clear to me the evolutionary concept of Web 2.0 held many lessons for corporate social responsibility. At the time, I declared: "The field of what is variously known as CSR, sustainability, corporate citizenship and business ethics is ushering in a new era in the relationship between business and society. Simply put, we are shifting from the old concept of CSR – the classic notion of ‘Corporate Social Responsibility,’ which I call CSR 1.0 – to a new, integrated conception – CSR 2.0, which can be more accurately labelled ‘Corporate Sustainability and Responsibility.’"

The allusion to Web 1.0 and Web 2.0 is no coincidence. The transformation of the Internet through the emergence of social media networks, user-generated content and open source approaches is a fitting metaphor for the changes business is experiencing as it begins to redefine its role in society. Let's look at some of the similarities.

Web 1.0
  • A flat world just beginning to connect itself and finding a new medium to push out information and plug advertising.
  • Saw the rise to prominence of innovators like Netscape, but these were quickly out-muscled by giants like Microsoft with its Internet Explorer.
  • Focused largely on the standardised hardware and software of the PC as its delivery platform, rather than multi-level applications.

CSR 1.0
  • A vehicle for companies to establish relationships with communities, channel philanthropic contributions and manage their image.
  • Included many start-up pioneers like Traidcraft, but has ultimately turned into a product for large multinationals like Wal-Mart.
  • Travelled down the road of "one size fits all" standardization, through codes, standards and guidelines to shape its offering.

Web 2.0
  • Being defined by watchwords like "collective intelligence," "collaborative networks" and "user participation."     
  • Tools include social media, knowledge syndication and beta testing.     
  • Is as much a state of being as a technical advance – it is a new philosophy or way of seeing the world differently. 

CSR 2.0
  • Being defined by "global commons," "innovative partnerships" and "stakeholder involvement."
  • Mechanisms include diverse stakeholder panels, real-time transparent reporting and new-wave social entrepreneurship.
  • Is recognising a shift in power from centralised to decentralised; a change in scale from few and big to many and small; and a change in application from single and exclusive to multiple and shared.

So what will some of these shifts look like? In my view, the shifts will happen at two levels. At a macro-level, there will be a change in CSR’s ontological assumptions or ways of seeing the world. At a micro-level, there will be a change in CSR’s methodological practices or ways of being in the world.

Macro Shifts

The macro-level changes can be described as follows: Paternalistic relationships between companies and the community based on philanthropy will give way to more equal partnerships. Defensive, minimalist responses to social and environmental issues are replaced with proactive strategies and investment in growing responsibility markets, such as clean technology. Reputation-conscious public-relations approaches to CSR are no longer credible and so companies are judged on actual social, environmental and ethical performance (are things getting better on the ground in absolute, cumulative terms?).

Although CSR specialists still have a role to play, each dimension of CSR 2.0 performance is embedded and integrated into the core operations of companies. Standardized approaches remain useful as guides to consensus, but CSR finds diversified expression and implementation at very local levels. CSR solutions, including responsible products and services, go from niche ‘nice-to-haves’ to mass-market ‘must-haves.’ And the whole concept of CSR loses its Western conceptual and operational dominance, giving way to a more culturally diverse and internationally applied concept.

Micro Shifts

How might these shifting principles manifest as CSR practices? Supporting these meta-level changes, the anticipated micro-level changes can be described as follows: CSR will no longer manifest as luxury products and services (as with current green and fair-trade options), but as affordable solutions for those who most need quality of life improvements. Investment in self-sustaining social enterprises will be favored over cheque-book charity. CSR indexes, which rank the same large companies over and over (often revealing contradictions between indexes) will make way for CSR rating systems, which turn social, environmental, ethical and economic performance into corporate scores (A+, B-, etc., not dissimilar to credit ratings), which analysts and others can usefully employ to compare and integrate into their decision making.

Reliance on CSR departments will disappear or disperse, as performance across responsibility and sustainability dimensions are increasingly built into corporate performance appraisal and market incentive systems. Self-selecting ethical consumers will become irrelevant, as CSR 2.0 companies begin to choice-edit; i.e., cease offering implicitly ‘less ethical’ product ranges, thus allowing guilt-free shopping.

Post-use liability for products will become obsolete, as the service-lease and take-back economy goes mainstream. Annual CSR reporting will be replaced by online, real-time CSR performance data flows. Feeding into these live communications will be Web 2.0 connected social networks, instead of periodic meetings of rather cumbersome stakeholder panels. And typical CSR 1.0 management systems standards like ISO 14001 will be less credible than new performance standards, such as those emerging in climate change that set absolute limits and thresholds.

As our world becomes more connected and global challenges like climate change and poverty loom ever larger, businesses that still practice CSR 1.0 will (like their Web 1.0 counterparts) be rapidly left behind. Highly conscientised and networked stakeholders will expose them and gradually withdraw their social licence to operate. By contrast, companies that embrace the CSR 2.0 era will be those that collaboratively find innovative ways tackle our global challenges and be rewarded in the marketplace as a result.

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Sunday, 6 November 2011

Can We Break the Spell of CSR Curses?

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.5

Looking back, we can see that the 1990s were the decade of CSR codes and standards – from EMAS and ISO 14001 to SA 8000 and the Global Reporting Initiative. But these were just a warm up act compared to the last 10 years, when we have seen codes proliferate in virtually every area of sustainability and responsibility and all major industry sectors. So much so that in the A to Z of Corporate Social Responsibility, we included over 100 such codes, guidelines and standards – and that was just a selection of what it out there.

This spawning of CSR codes and standards is typical of Strategic CSR, emerging from the Age of Management. At its heart, this is the drive to relate CSR activities to the company’s core business (like Coca-Cola's focus on water management) by turning these into formal management systems, with cycles of CSR policy development, goal and target setting, programme implementation, auditing and reporting.  All good and well, but where does this leave us?

My belief is that Strategic CSR – like its predecessors Defensive, Charitable and Promotional CSR - has brought us to a point of crisis. Specifically, all these approaches are failing to turn around our most serious global problems – the very issues CSR purports to be concerned with – and may even be distracting us from the real issue, which is business’s role causal role in the social and environmental crises we face. This failure is due to what I have called the three Curses of CSR 1.0, namely that it is incremental, peripheral and uneconomic. Let’s look at these briefly in turn.

Curse 1: Incremental CSR

One of the great revolutions of the 1970s was total quality management, conceived by American statistician W. Edwards Deming and perfected by the Japanese before being exported around the world as ISO 9001. At the very core of Deming’s TQM model and the ISO standard is continual improvement, a principle that has now become ubiquitous in all management system approaches to performance. It is no surprise, therefore, that the most popular environmental management standard, ISO 14001, is built on the same principle.

There is nothing wrong with continuous improvement per se. On the contrary, it has brought safety and reliability to the very products and services that we associate with modern quality of life. But when we use it as the primary approach to tackling our social, environmental and ethical challenges, it fails on two critical counts: speed and scale. The incremental approach to CSR, while replete with evidence of micro-scale, gradual improvements, has completely and utterly failed to make any impact on the massive sustainability crises that we face, many of which are getting worse at a pace that far outstrips any futile CSR-led attempts at amelioration.

Curse 2: Peripheral CSR

Ask any CSR manager what their greatest frustration is and they will tell you: lack of top management commitment. Translated, this means that CSR is, at best, a peripheral function in most companies. There may be a CSR manager, a CSR department even, a CSR report and a public commitment to any number of CSR codes and standards. But these do little to mask the underlying truth that shareholder-driven capitalism is rampant and its obsession with short-term financial measures of progress is contradictory in almost every way to the long-term, stakeholder approach needed for high-impact CSR.

So what we are left with is an approach to CSR which allows each company to set their own voluntary objectives and targets, which appear responsible, but lack the scale and urgency needed to reverse our social and environmental crises. CSR remains peripheral in another sense as well, because it is only a handful of big-branded companies that find themselves in the CSR spotlight. What about the millions of small and medium sized enterprises. By and large, CSR passes them by, despite their collectively bigger impacts.

Curse 3: Uneconomic CSR

Which brings us to Curse 3. If there was ever a monotonously repetitive, stuck record in CSR debates, it is the one about the so-called ‘business case’ for CSR. That is because CSR managers and consultants, and even the occasional saintly CEO, are desperate to find compelling evidence that ‘doing good is good for business’, i.e. CSR pays. The lack of corroborative research seems to be no impediment for these desperados endlessly incanting the motto of the business case, as if it were an entirely self-evident fact.

The rather more ‘inconvenient truth’ is that CSR sometimes pays, in specific circumstances, but more often does not. Of course there are low-hanging fruit – like eco-efficiencies around waste and energy – but these only go so far. Most of the hard-core CSR changes that are needed to reverse the misery of poverty and the sixth mass extinction of species currently underway require strategic change and massive investment. They may very well be lucrative in the long term, economically rational over a generation or two, but we have already established that the financial markets don’t work like that; at least, not yet.

The way I see it, that leaves us with three options for taking CSR forward, which I like to think of as the Parrot, Ostrich and Phoenix scenarios.

The Way of Parrot is to tell it like it is: recognise the limitations of CSR and admit to its primary role as a business tactic for reputation management. The Way of the Ostrich is the status quo: pretend that CSR is working and that more of the same will be enough. The Way of the Phoenix is the transformative agenda: reconceptualise CSR as a radical or revolutionary concept that challenges the intransigent business and economic model and offers genuine solutions to our global challenges. The Way of the Phoenix is what I call Systemic CSR, or Transformative CSR, or CSR 2.0, and is what we are just starting to see rising from the ashes of the previous ages, as we enter a new Age of Responsibility. This rather more positive agenda is what I will explore for the remainder of this blog series.

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.


Saturday, 5 November 2011

Exposing the CSR Pretenders


By Dr. Wayne Visser

Quest for CSR 2.0 Series No.4
Industrialism created a limitless appetite for resource exploitation, and modem science provided the ethical and cognitive license to make such exploitation possible, acceptable, and desirable. – Vandana Shiva
Can Big Tobacco ever be responsible? British American Tobacco (BAT) have engaged in extensive stakeholder consultation exercises and, since 2001, their businesses in more than 40 markets have produced Social Reports, many of which have won awards from organisations as diverse as the United Nations Environment Programme, PriceWaterhouseCoopers and the Association of Certified Chartered Accountants. BAT has also been ranked in the Dow Jones Sustainability Index, the FTSE Ethical Bonus Index and Business in the Community (BITC) Corporate Responsibility Index, and they funded Nottingham University’s International Centre for CSR.

Yet this is the industry where, in 1994, the CEOs of 7 of America’s largest tobacco companies[1] testified before the House Subcommittee on Health and the Environment of Congress, all denying that cigarettes are addictive. They lied under oath. And this is the business that, according to the World Health Organization, kills more than AIDS, legal drugs, illegal drugs, road accidents, murder and suicide combined.’ Of everyone alive today, 500 million will eventually be killed by smoking, and while 0.1 billion people died from tobacco use in the 20th century, ten times as many will die in the 21st century. Isn’t responsible tobacco an oxymoron?

Of course, it’s not just Big Tobacco. What about Big Oil? This is the industry that set up and funded the Global Climate Coalition (GCC) to lobby against the emerging consensus of climate science and policy development until it was embarrassed into disbanding in 2002. A 2007 report by the Union of Concerned Scientists, entitled Smoke, Mirrors & Hot Air, documented how ExxonMobil adopted the tobacco industry’s disinformation tactics, as well as some of the same organisations and personnel, to cloud the scientific understanding of climate change and delay action on the issue. According to the report, ExxonMobil funnelled nearly $16 million between 1998 and 2005 to a network of 43 advocacy organisations that seek to confuse the public on global warming science.

Or what about BP? In 2000, the company reportedly spent $7 million in researching the new ‘Beyond Petroleum’ Helios brand and $25 million on a campaign to support the brand change. Greenpeace concluded at the time that ‘this is a triumph of style over substance. BP spent more on their logo this year than they did on renewable energy last year’. Antonia Juhasz, author of The Tyranny of Oil (2008), is similarly sceptical, claiming that at its peak, BP was spending 4% of its total capital and exploratory budget on renewable energy and that this has since declined. That’s even before we factor in the Texas City refinery explosion in 2005, or the catastrophic Gulf spill in 2010, or BP’s ongoing investments in the Alberta tar sands. Isn’t sustainable oil a contradiction?

While many of these examples – and I could cite countless more, from automotive, agricultural, chemicals and other industries – are a little more than the familiar toxic mix of old-fashioned dirty lobby tactics, many companies today in engage in far more subtle and seemingly plausible campaigns of misdirection – investing in environmental management systems, producing sustainability reports, and performing supply chain audits. Each of these actions is, on its own merits, laudable and to be encouraged; applauded even. But all too often, they are used as a smokescreen to mask the more damaging impacts and irresponsible practices of business.

Behind these actions lies a pervasive driver. According to the UN Global Compact and Accenture’s 2010 CEO survey, three corporate attributes – brand, trust and reputation – were consistently cited by CEOs as their primary reason for acting on sustainability. Simply put, CSR or sustainability are seen as a means of promotion in an Age of Marketing. As we saw in the BP case, ‘greenwash’ has become one of the popular labels applied to this kind of PR-driven misdirection by companies on environmental issues.

The word was coined by environmentalist David Bellamy in the 1980s and plays off of the concept of ‘whitewashing’ – literally painting over the cracks to cover up inherent faults. In 1999, the Oxford English Dictionary added the term, defining it as: ‘Disinformation disseminated by an organisation, so as to present an environmentally responsible public image; a public image of environmental responsibility promulgated by or for an organisation, but perceived as being unfounded or intentionally misleading.’

Jose Lopez, EVP of Operations of Nestle admits that ‘there is probably out there an environment for pretenders, for the greenwashers. It’s going to get harder and harder to tell apart the greenwasher from the real guy. The reason is, we have a lot of information on what constitutes good sustainability practice,’ i.e. it’s easier to copy apparently credible behaviour.

One classic example was an advert run by Shell which has a picture of a factory with flowers coming out of the smoke-stacks and claiming: ‘We use our waste CO2 to grow flowers’. There was a grain of truth in the claim, as in the Netherlands the company did capture CO2 and use it in floral hothouses. However, since Shell only used 0.325% of its CO2 output in this way, the Advertising Standards Authority banned the advert, following complaints.

As a result of this kind of greenwash, the UK’s  Committee of Advertising Practice (CAP) Code, enforced by the Advertising Standards Authority, created a clause for environmental claims in 1995. Since 1998, it has also published a non-binding ‘Green Claims Code’, advising advertisers on how best to make good claims. Despite this, greenwashing complaints, the majority of which are upheld, continue to rise year-on-year. One rather fun, yet informative, publication is ‘The Greenwash Guide’ by Futerra.

Of course, this kind of PR-spin does not only apply to environmental issues. After the launch of the UN Global Compact, companies started to be accused of ‘bluewash’ – a reference to the blue of the UN logo and business using association with the United Nations to appear more responsible than they really are.  Likewise, although I haven’t heard the term, I can imagine the ‘redwash’ brush being applied to companies claiming social, community or labour responsibility that masks their real negative impacts on society.
Let’s be clear, I’m not into corporate witch hunts or evil empire theories, but isn’t it time we stop giving credit to industries and practices that tick superficial CSR and sustainability boxes, while doing little or nothing to change the underlying irresponsibility and unsustainability of their industries? Many companies are stuck in an Age of Marketing, with promotional CSR as their modus operandi, and it’s time that we exposed them, so that we can separate the CSR pretenders from the ‘real mccoys’.

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.


[1] Philip Morris U.S.A., RJ Reynolds Tobacco Company, U.S. Tobacco, American Tobacco Company,  Lorillard Tobacco Company, Liggett Group, Brown and Williamson Tobacco Company

Friday, 4 November 2011

Is Philanthropy a Smokescreen?


By Dr. Wayne Visser

Quest for CSR 2.0 Series No.3
“I believe it is my duty to make money and still more money and to use the money I make for the good of my fellow man, according to the dictates of my conscience.” —John D. Rockefeller Sr.

The Rockefeller story is a good one to introduce the Age of Philanthropy, not only because of John D.’s iconic status as a tycoon and philanthropist, but also because his life and views on charity embody much of the philanthropic attitudes that still prevail today in business. At the heart of the Age – and its chief agent, Charitable CSR – is the notion of giving back to society. Rather interestingly, this presupposes that you have taken something away in the first place. Charitable CSR embodies the principle of sharing the fruits of success, irrespective of the path taken to achieve that success. It is the idea of post-wealth generosity, of making lots of money first and then dedicating oneself to the task of how best to distribute those riches, by way of leaving a legacy.

In 1970, the respected US economist Milton Friedman published an article in the New York Times Magazine (13 September) entitled ‘The Social Responsibility of Business is to Increase Profits’. In it, he called the ‘doctrine of social responsibility’ a ‘fundamentally subversive doctrine in a free society’ and argued that ‘there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits, so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud’. As such, he came to define one end of the spectrum of opinion on CSR: the purist, stockholder (or shareholder) view, a view which was once again given an airing in the Wall Street Journals’ ‘The Case Against Corporate Social Responsibility’ article on 23 August 2010. Despite his hard-line view, Friedman does allow some concessions, saying:
“It may well be in the long run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government. That may make it easier to attract desirable employees, it may reduce the wage bill or lessen losses from pilferage and sabotage or have other worthwhile effects. Or it may be that, given the laws about the deductibility of corporate charitable contributions, the stockholders can contribute more to charities they favour by having the corporation make the gift than by doing it themselves, since they can in that way contribute an amount that would otherwise have been paid as corporate taxes.”
Although Friedman calls this ‘hypocritical window-dressing’ when done under ‘the cloak of social responsibility’, he concedes that these practices may be justified if they contribute to shareholders’ interests. Hence, he is setting out an early version of what today is more popularly called ‘strategic philanthropy’ – the practice of social responsibility only when it is aligned with corporate profitability. Three decades later, academics Michael Porter and Michael Kramer have given this concept more structure and credibility – and with considerably less malice directed towards CSR. In their 2002 Harvard Business Review article, ‘The Competitive Advantage of Corporate Philanthropy’, Porter and Kramer argue that:
“Increasingly, philanthropy is used as a form of public relations or advertising, promoting a company’s image through high-profile sponsorships. But there is a more truly strategic way to think about philanthropy. Corporations can use their charitable efforts to improve their competitive context – the quality of the business environment in the locations where they operate. Using philanthropy to enhance competitive context aligns social and economic goals and improves a company’s long-term business prospects. Addressing context enables a company not only to give money but also leverage its capabilities and relationships in support of charitable causes.”
Without a doubt, strategic philanthropy represents an evolution of more ad-hoc approaches to charity, and there will always be a place for philanthropy in responding to the most urgent and desperate unmet needs of society. Even so, we have to question the appropriateness and effectiveness of philanthropy in addressing the root causes of our biggest global challenges, which have more to do with the Achilles heel of Western capitalism itself, namely the environmentally unsustainable and socially inequitable growth and lifestyles that it spawns. How, for example, does so-called ‘philanthrocapitalism’ address the Western consumption, production and trade practices that are wreaking havoc with the world’s ecosystems and many of the world’s poorest communities? By and large, it doesn’t.

I believe ‘giving back’ after the fact is just a smokescreen, notwithstanding the generosity that it shows and the benefits that result. Would you agree?

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.


Thursday, 3 November 2011

Is Greed Still Good?

By Dr. Wayne Visser

Quest for CSR 2.0 Series No.2

If CSR isn’t working, could it be because it pales into insignificance in the face of a much more pervasive force at work in business and society, namely greed? After all, “greed is good!” So declared the fictional character Gordon Gekko in Oliver Stone’s 1987 film, Wallstreet. “Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms – greed for life, for money, for love, knowledge – has marked the upward surge of mankind.” I wonder if today, nearly 25 years and a $7 trillion global financial meltdown later, we are finally ready to lay this powerful myth to rest?

We have lived through an Age of Greed and come out the other side bruised and battered, disillusioned and angry. But are we any wiser? Ever since the first financial derivatives were traded on the Chicago Mercantile Exchange in 1972 and the casino economy really got going, it seems like ‘greed is good’ and ‘bigger is better’ became the dual mottos underpinning (at least one popular version of) the American Dream. The ‘invisible hand’ of the market went largely unquestioned, despite its self-pleasuring habit. Incentives – like Wall Street profits, traders’ bonuses and CEO pay – became perverse, leading not only to unbelievable wealth in the hands of a few, but ultimately to global financial catastrophe.

With the world still reeling from the ensuing global recession, and threatening to slip into the ‘double-dip’ doldrums, I find myself compelled to ask many difficult questions: Was this, as Lehman Brothers trader Larry McDonald suggests in his book of the same name, just ‘a colossal failure of common sense’? Was it the greed of ‘bad apples’ like Lehman’s CEO Dick Fuld, or the banks and their insatiable bonus-driven traders? Or was it the pervasive culture of greed in Wall Street as a whole? What about the greed of politicians and governments who were happy to benefit from growth-on-steroids? And what about Main Street? Wasn’t the public – we, the people – more than happy to greedily lap up those subprime loans?

All this begs the larger question: Is capitalism itself fundamentally flawed? Are we really talking about endemic greed, built into the free-market system – a system which not only allowed, but encouraged the fantasy of double-digit profit growth and an endless bull market? Will capitalism, with its short-term, cost-externalization, shareholder-value focus always tend towards greed, at the expense of people and the planet? Will the scenario of ‘overshoot and collapse’ that was computer modelled in the 1972 ‘Limits to Growth’ report (and reaffirmed in revisions 20 and 30 years later) still come to pass? Has Karl Marx been vindicated in his critique (albeit not in his solution) that, by design, capitalism causes wealth and power to accumulate in fewer and fewer hands?

Perhaps the trillion-dollar question for me is not whether capitalism per se acts like a cancer gene of greed in society, but whether there are different types of capitalism, some of which are more benign than others. To date, the world has by and large been following the Western, Anglo-Saxon model of shareholder-driven capitalism, and perhaps this is the version that is morally bankrupt and systemically flawed.
Interestingly, a 2010 Pew poll of the American ‘millennial generation’ (currently aged between 18 and 30) showed that just 43% still describe capitalism as positive, while the same percentage now describe socialism as positive. Management guru Charles Handy seems to agree. Speaking to me, he confessed:
I’ve always had my doubts about shareholder capitalism, because we keep talking about the shareholders as being owners of the business, but most of them haven’t a clue what business they’re in. They are basically punters with no particular interest in the horse that they’re backing, as long as it wins.
If we can learn one thing from the Age of Greed, it is that we have immense power to make change happen on a monumental scale, and with lightning speed. Greed has proved to be a high octane fuel in the rocket engine of globalization. But ultimately, it was an economic missile without a moral guidance system. I am under no illusions that the Age of Responsibility will vanquish greed. No doubt, the selfish gene will continue to spark our evolution. And yet, if we are successful, the Age of Responsibility will provide capitalism with that much-needed moral compass and Transformative CSR (more about that later in this series) will provide business with a mission-critical social purpose. 

So what do you think, can we collectively give up our greed addiction?

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.


Sunday, 9 October 2011

The Death of CSR



By Dr Wayne Visser

Quest for CSR 2.0 Series No.1

My opening questions to you, dear readers, are: Has CSR failed? And if it has, should we kill it off before it misleads and distracts too many people from the changes we really need business to make? Or can we reinvent the concept and the practice of CSR?

First let me say what I understand by CSR. I take CSR to stand for Corporate Sustainability and Responsibility, rather than Corporate Social Responsibility, but feel free use whichever proxy label you are most comfortable with. My definition is as follows:
CSR is the way in which business consistently creates shared value in society through economic development, good governance, stakeholder responsiveness and environmental improvement.
Put another way:
CSR is an integrated, systemic approach by business that builds, rather than erodes or destroys, economic, social, human and natural capital.
Given this understanding, my usual starting point for any discussion on CSR is to argue that it has failed. In my book, The Age of Responsibility, I provide the data and arguments to back up this audacious claim. But the logic is simple and compelling. A doctor judges his/her success by whether the patient is getting better (healthier) or worse (sicker). Similarly, we should judge the success of CSR by whether our communities and ecosystems are getting better or worse. And while at the micro level – in terms of specific CSR projects and practices – we can show many improvements, at the macro level almost every indicator of our social, environmental and ethical health is in decline.

I am not alone in my assessment. Indeed, Paul Hawken stated in The Ecology of Commerce in 1993 that ‘If every company on the planet were to adopt the best environmental practice of the ‘‘leading’’ companies, the world would still be moving toward sure degradation and collapse.’ Unfortunately, this is still true nearly 20 years later. Jeffrey Hollender, co-founder and former CEO of Seventh Generation, agrees, saying: ‘I believe that the vast majority of companies fail to be ‘‘good’’ corporate citizens, Seventh Generation included. Most sustainability and corporate responsibility programs are about being less bad rather than good. They are about selective and compartmentalized ‘‘programs’’ rather than holistic and systemic change.’

In fact, there is no shortage of critics of CSR. For example, in 2004, Christian Aid issued a report called ‘Behind the Mask: The Real Face of CSR’, in which they argue that ‘CSR is a completely inadequate response to the sometimes devastating impact that multinational companies can have in an ever-more globalized world – and it is actually used to mask that impact.’ A more recent example was an article in the Wall Street Journal (23 August 2010) called ‘The Case Against Corporate Social Responsibility’, which claims that ‘the idea that companies have a responsibility to act in the public interest and will profit from doing so is fundamentally flawed.’

This is not the place to deconstruct these polemics. Suffice to say that they raise some of the same concerns I have – especially about the limits of voluntary action and the ‘misdirection’ that CSR sometimes represents. But I also disagree with many of their propositions – such as the notion that CSR is always a deliberate strategy to mislead, or that government regulation is the only solution to social and environmental problems.

Be that as it may, there are a number of ways to respond to my assertion that CSR has failed. One is to disagree with the facts and to suggest that things are getting better, not worse, as do the likes of Bjørn Lomborg in his Skeptical Environmentalist (2001). That is his and your prerogative. However, I find the evidence – some of which is presented below and which is widely available from credible sources like the United Nations-both compelling and convincing.

Second, you might argue that solving these complex social, environmental and ethical problems is not the mandate of CSR, nor within its capacity to achieve. My response is that while business certainly cannot tackle our global challenges alone, unless CSR is actually about solving the problems and reversing the negative trends,what is the point? CSRthen becomes little more than an altruistic conscience-easer at best; a manipulative image-management tool at worst.

My approach – and the essence of the book – is to say that while CSR as it has been practised in the past has failed, that doesn’t mean that a different kind of CSR – one which addresses its limitations and reforms its nature – is destined to fail in the future. What do you think? Are my arguments unjustified?

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Monday, 26 September 2011

State of the art research on CSR (Amazon review)


Five Star review, by Gustavo Endara

I am currently writing my Master Thesis on Corporate Social Responsibility in the Automobile Sector. I just finished reading this book and I think it is a masterpiece. It contains the latest developments on CSR as well as insightful resources that offer a better understanding of the topic. Every chapter of the book has a case-study and several examples that enhance the reading. Visser takes us in a comprehensive trip into the different stages (ages) of CSR and develops an extensive analysis of the reasons why CSR should be rethink. At the end of the book, Visser presents new developments that I am sure will reshape the entire CSR-debate and will lead to the developing of optimized CSR-business practices. This book is very useful and will be one of my main sources of information and inspiration for my dissertation.

Friday, 23 September 2011

Harvard Business Review Interview with Dr Wayne Visser

Extracts from an interview with Dr Wayne Visser conducted and published by Harvard Business Review (Polish edition).

How does CSR 2.0 differ from the CSR 1.0 concept ?

CSR 2.0 is different from CSR 1.0 in a similar way that Web 2.0 is different to Web 1.0. It is based on a more collaborative, innovative and empowering approach, which challenges the more centralised, standardised and tokenist practises of the past. Underlying CSR 2.0 are the principles of responsiveness to problems, creativity and scalability of solutions, glocality of methods (combining global and local sensitivities) and circularity of design (i.e. cradle to cradle production, creating zero emissions and waste and net positive impacts).

Why has the old model discredited itself ?

CSR 1.0 suffers from three fundamental problems, namely that changes remain incremental (voluntary and gradual), peripheral (not integrated into the business) and uneconomic (not consistently rewarded by the market). The reason for these ‘curses’ is that companies are not challenged to transform their core business to be fully responsible and sustainable, but rather they are able to co-opt the CSR agenda while setting their own voluntary targets and often making minimal changes to ‘business as usual’.

Can you give an example from business of the old model of CSR?

The ‘ages and stages’ of CSR describe the different approaches and levels of maturity in CSR that we find associated with five overlapping economic ages. Hence, we see defensive CSR in the age of greed, charitable CSR in the age of philanthropy, promotional CSR in the age of marketing, strategic CSR in the age of management and systemic CSR in the age of responsibility. The first four ages and stages are what I call CSR 1.0, while the fifth is what characterises CSR 2.0. The book cites over 300 organisations, which collectively form a mosaic of regressive, evolving and progressive CSR in practice. To give a sample of ‘the good, the bad and the ugly’, the book explores the following cases in considerable depth: Lehman Brothers (reflecting the age of greed), Standard Oil (the age of philanthropy), BP (the age of marketing) and Cadbury’s (the age of management).

Is this distinction really necessary? Are those differences really so significant that we need a new concept?  Or maybe this is just another marketing trick to make the CSR idea shine again?

In much the same way as a doctor should judge their success or failure by whether the patient is getting healthier or sicker, CSR should be judged by whether the wellbeing of the planet and its people is improving or deteriorating. Today, we have mountains of data that show that, on most social and environmental issues, things are getting worse, not better. I am not arguing that CSR should be replaced, but rather that it should rapidly evolve into a practice that is more effective in meeting its implicit goals of creating a better world.

What is the background behind CSR 2.0?

I wanted to explore the paradox of CSR (by which I mean ‘Corporate Sustainability and Responsibility’). The paradox is this: Over the past 20 years, since I started working in this field, we have witnessed a mushrooming of CSR practices; and yet we are categorically and catastrophically failing to reverse the world’s worst social, environmental and ethical trends (income inequality, biodiversity loss, climate change, corruption, pick your crisis). Hence, I wanted to write a book that looked at why CSR has failed so far, and what we can do to make sure it succeeds in future. 

Can you explain the connection between CSR 2.0 and web 2.0? Are there any examples?

The transformation of the internet through the emergence of social media networks, user-generated content and open source approaches is a fitting metaphor for the changes business is experiencing as it begins to redefine its role in society. (For a table of similarities, see my “inspiration” piece on CSR 2.0). I do also look at the role of social media in CSR. For example the use of Facebook and Twitter in stakeholder engagement (e.g.  Greenpeace’s  campaign against Nestle’s Kit-Kat in 2010) the emerging practices of open source solutions (e.g. GlaxoSmithKline’s Patent Commons, the GreenXchange , WBCSD’s Eco-Patent Commons) and crowdsourcing (e.g. OpenEyeWorld’s sustainability expert exchange).

Explain the 5 principles of CSR2.0. Can you give examples?

Underlying CSR 2.0 are the principles of responsiveness to problems, creativity and scalability of solutions, glocality of methods (combining global and local sensitivities) and circularity of design (i.e. cradle to cradle production, creating zero emissions and waste and net positive impacts). I also illustrate emerging best practice across the five principles of CSR 2.0 with cases: A Little World (for the principle of creativity), Wal-Mart (scalability), the Corporate Leaders Group on Climate Change (responsiveness), AIESEC (glocality) and Patagonia (circularity).

Are any of the principles more important than other?

They are equally important.

In the CSR 2.0 era, will there be changing  consumer expectations? How will they be changing? 

We have a paradox and a problem here. The paradox is that, while ethical consumerism has been on the rise since the late 1960s (the first Organic label in the UK dates back to 1967), over the same period we have seen an explosion of the materialistic, throwaway society (the average “life” of a mobile phone in the UK is 9 months). So, I expect consumers to become more conscious and for ethical consumerism (fair trade, organic, etc.) to grow. But we cannot rely on this. Over forty years has shown us that we will never get to scalability unless there is choice-editing (setting minimum sustainability and responsibility requirments), either by companies (e.g. Wal-Mart is moving to 100% organic cotton and Marine Stewardship Council certified fish) or by government.

What is the role of stakeholders in the new model of CSR?

There has been an undoubted shift away from the idea of exclusive shareholder interest towards a broader, more inclusive model of multi-stakeholder responsibility. However, in the ranking of stakeholder interests, shareholders (and the financial analysts that proxy for them) are still driving corporate behaviour towards short-term, narrowly-defined financial measures of success. Even in academic circles, we still see the Friedmanite view being resurrected, as evidenced by the article on 23 August 2010 in the Wall Street Journal called ‘The Case Against Corporate Social Responsibility’. The CSR 2.0 Principles of Responsiveness and Glocality are all about being more stakeholder-driven.

Do you think CSR initiatives are a material manifestation of the human need to act ethically? Or they are just a result of the morality of people who undertake them?

Although there is undoubtedly a moral or ethical dimension to any CSR activity – and leaders of companies can tap into this – I believe it is dangerous to make morality a prerequisite, or else we get stuck in the Age of Philanthropy. In fact, it is about something far more fundamental than individual ethics. It is about surviving and thriving as a society and a planet. The reason to engage is CSR 2.0 is that our current model of CSR (and indeed of unbridled growth and shareholder-driven capitalism) is deeply flawed. It is broken. Not only is it inefficient, it is destructive – to our economies, our communities and our environment. So CSR 2.0 becomes a way of striving for a better life. I don’t think that’s a moral drive; that’s simply a human drive.

What steps can a company undertake to adjust to the new CSR reality occurring today? Where  to begin?

The place to begin is to understand which Age and Stage the company is in, and to plot a path to move rapidly through subsequent stages (or even to leapfrog) to the Transformative CSR approach in an Age of Responsibility. The precise change strategy will depend on the company and its context. The Age of Responsibility is premised on the dual practices of admission and ambition. Admission requires a genuine acknowledgement that business as it is practiced today is not sustainable and responsible, i.e. it has a net negative impact on society and the environment (as CEO of Interface puts it, we are all ‘plunderers’). Examples of companies that have faced up publicly to this truth include Interface, Seventh Generation and Patagonia. Ambition, on the other hand, requires that companies set audacious goals to reach sustainability, such as Wal-Mart committing to zero waste and 100% renewable energy, or Unilever planning to double the size of the business, while halving its environmental impacts.

What are the key advantages of the new model and why business should be interested in this change? 

The advantage lies in the fact that we are just entering a second industrial revolution. You can’t get to 80-90% less carbon in the economy by 2050 without completely reinventing the way we do business and organise society. And in any great transition, there are spectacular winners and catastrophic losers. Adopting CSR 2.0 is simply a preparation to be on the winning side. Already, the market for sustainable and responsible products and services is estimated to be $750 billion by 2050, and that number will grow. It is no coincidence that China is investing double what the US is investing in clean technologies. As the CEO of Unilever, Paul Polman, says, "This world has tremendous challenges. The challenges of poverty, of water, of global warming, climate change. And businesses like ours have a role to play in that. And frankly, to me, very appealing."

Can an individual employee or consumer have an impact on changing to a new model of CSR?

Ultimately, all change starts with individuals. We are all change agents in our own right. The challenge is to focus our efforts in ways that we can be most effective. My research suggests that there are four types of change agents: experts, facilitators, catalysts and activists. For some, their biggest impact will come through contributing specific knowledge and expertise, others will empower people (colleagues, children, friends, etc.) to make a difference; some will influence organisations, while others will exert social pressure through civil society involvement. Our buying choices will also create change, but we need to be more demanding. We should not accept having to pay more for sustainable and responsible products. We have to work for changes that will make doing the right thing the easiest and most sensible choice in the world.

Monday, 19 September 2011

CSR - A New Narrative (Amazon review)

I thoroughly enjoy Visser's book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. His systems thinking approach to such an important topic was refreshing and much needed. Rather than arguing for specific changes, he laid the groundwork for the types of changes that need to occur in order for CSR to evolve into its potential.

Visser's book has been very helpful to me in framing key issue and providing an in-depth historical overview.

The key distinctive of his book that is transformational is his recognition and use of narrative. I heard Tony Blair speaking in Kosovo last year about the need for that country to 'rewrite' its narrative in a way that gave confidence to investors to start returning to their country. I think Visser's approach has this potential for those working in the field of CSR. That is, it makes possible the 'rewriting' of the narrative of CSR in a way that shows a brighter future. 

This book will influence the future of CSR. It will help to shape the future DNA of business. 
It has already changed me. 

Brian Richards
Skopje, Macedonia

Link to the original Amazon review