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

Saturday, 17 September 2011

The CSR 2.0 Principle of Circularity - Industrial Ecology

Towards the end of the 1980s, a concept called ‘industrial ecology’ emerged. It was popularized in 1989 in a Scientific American article by Robert Frosch and Nicholas E. Gallopoulos, in which they declared: ‘Why would not our industrial system behave like an ecosystem, where the wastes of a species may be resource to another species? Why would not the outputs of an industry be the inputs of another, thus reducing use of raw materials, pollution, and saving on waste treatment?’ Hence, the idea of industrial ecology is that businesses should not only look at the life cycle impacts as individual entities, but rather look for ways in which to link up with other businesses to minimise their impacts. For example, there is a Danish industrial park in the city of Kalundborg where a power plant, oil refinery, pharmaceutical plant, plasterboard factory, enzyme manufacturer, waste management company and the city itself all link together to share and utilise resources, by-products, energy and waste heat.

Another concept that was gaining popularity around the same time was ‘cleaner production’, which resulted in the UNEP Declaration on Cleaner Production in 1998. Later, this evolved into the concept of ‘sustainable consumption and production’, which was defined at the UN’s 2002 World Summit on Sustainable Development as an approach ‘to promote social and economic development within the carrying capacity of ecosystems by addressing and, where appropriate, de-linking economic growth and environmental degradation through improving efficiency and sustainability in the use of resources and production processes and reducing resource degradation, pollution and waste.’

The University of Cambridge Business Primer on Sustainable Consumption and Production (2007) gives an example to underscore the importance of creating more sustainable industrial processes. On average, the report says, a gold wedding ring weighs 6,000 kilograms. The enormous discrepancy between the actual retail product and the remaining weight is explained by accounting for all the materials used and the waste created during the production life cycle of the ring. The gap between a gold ring’s actual, physical weight and its ‘resource weight’ highlights the scale of physical and financial impacts that are associated with the creation of apparently simple, everyday products. The report concludes that ‘the increased cost that results from the difference between sustainable and unsustainable production is not good for anyone. It is not sustainable financially – such low resource efficiency is wasteful and inefficient. And it is not sustainable socially or environmentally – hazardous or damaging waste products are produced systematically, and resources are increasingly depleted.’

Recognising this challenge, the EU government  has begun working with business to create ‘product roadmapping’ as a way of systematising what might otherwise be a more organic, haphazard approach to developing products and the policies that support them. ‘Integrated Product Policy’ (IPP) is how government describes conducting life cycle assessments with a view to potential policy interventions. The IPP of the EU, adopted in 2003, aims at reducing the environmental impact of products, instead of specific industries or processes. Two familiar products with diverse impacts were chosen by the EU to demonstrate IPP. One was a mobile phone, put forward by Nokia; the second, a teak garden chair proposed by Europe’s largest retailer, Carrefour. The result of the exercise showed that, for Nokia, energy consumption is the greatest impact, both during manufacture of components and during use – when chargers left on ‘no-load’ consume electricity constantly.  It was estimated that, if 10% of worldwide subscribers unplug their chargers once their phone is fully charged, enough energy would be saved to supply 60,000 European homes for one year.

About the blogger

Dr Wayne Visser is the Founder & Director of CSR International and the author of 9 books on CSR, the most recent of which is The Age of Responsibility: CSR 2.0 and the New DNA of Business. He researches, writes, trains and teaches corporate sustainability & responsibility around the world, including at Cambridge University, Magna Carta College, Oxford and La Trobe Graduate Business School, Melbourne.


This is an extract from Chapter 10 of The Age of Responsibility: CSR 2.0 and the New DNA of Business For more information and ongoing updates, follow the The Age of Responsibility Blog

Copyright 2011 Wayne Visser