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Archive for the ‘impact’ Category

Everything is green nowadays. It’s the talk of the town. Newspapers are full of the latest green apocalypse heading our way. Bloggers blog green left, right and center – with fonts and pictures to match. Activists are up in arms about green washing and washing our greens. Governments want to govern what green means. The celebs and stars shine their special green glow all over us. Business jockey to out-green each other. And consumers are turning green with envy when the Joneses outdo them with the latest hybrid, organic, recycled, wind powered and turtle free cup of joe.

It’s not a bad thing. Saving our planet before it burns is not a bad idea. Even if it won’t happen in the next year or 50 – depending on who you believe. Having a tree dedicated to you somewhere in the DRC ensures you a retirement spot one day. And some of the ideas even save us some money! Switching light bulbs save us money – even if we can save more by switching it off. Getting 60 MPG is not to be sneezed – especially with the high gas prices. Although most small European cars can do that on flat tires.

But not everyone cares about the changes in our climate or the validity of the latest eco-friendly product. It’s pretty much a worry of the more privileged parts of society – the rich and middle class societies. You don’t switch to CFL lightbulbs if you don’t have electricity. You don’t really care about organic food if you have to worry about where the next meal is coming from. Or worry about renewable energy if you don’t have a roof over your head. But you might become greener even if you don’t care. Governments will continue to green the things we buy. Activist will continue to put on their green campaigning hats. Business will continue to grow and make greener products. And bloggers will continue to out-green each other to be the next Big Green Voice of Authority. All of this will continue to make everything we use and buy greener than before – even if we don’t care or want it.

But green means almost nothing outside of the big markets – mostly in the West. There are bigger issues facing people in places like Burundi, Zimbabwe, Niger and Liberia. They continue to struggle to survive each day. The cheapest bidder always wins when you live off less than $1 a day. And you don’t know if there will be a tomorrow if you live in Malawi or Botswana – HIV, TB or malaria can strike at any time. And who cares about the rainforest if you could be killed by a landmine in Angola or a warlord in the Democratic Republic of Congo. Or care about sustainable farming when you have no food in Somalia.

The number one aim is to survive. If that means eating the last Rhino or chopping down the last tree for firewood – then so be it. Planning for day 2 comes when you manage to get past the survival stage. But this doesn’t mean you are going to start farming in a sustainable way. Or buy renewable energy for your manufacturing plants. Nope, you are now just planning for day 2 – securing tomorrow and competing with your neighbor. India, for example, continues to argue that they will start thinking of their impact on the climate once they are allowed to create as much trash per capita as the US – read: ‘you stuffed up your environment to create wealth, why can’t we?’ The alternative, of course, would be to pay the developing countries to play the game. We know where that debate will end up. They can’t solve trade and aid – imagine eco-aid for sustainability at a large enough global scale…

It is only when you don’t have to worry about might happen to you tomorrow – food, security, health, housing, job etc – that you can start worrying about tomorrow itself. Green debates will remain a rich and western debate and concern – unless we start dealing with these more immediate concerns that the majority of the world population still face day after day.

It doesn’t mean it is right. It’s just the way the world rolls. We can’t talk about sustainability without looking at dealing with poverty, diseases and the quest for survival so many in Africa and elsewhere struggles with each day. We must balance all three pillars of CSR and sustainability to make it work – economic, environment AND social. So often, and too easily, we forget about that third pillar. It’s three pillars to help us focus but it is one single strategy when we implement.

And this is where business plays such a crucial role. They can create and deliver the products to deal with the diseases and hunger, they can advocate and lobby for the political changes needed, and they can invest in countries who need the economic lift and hope for a better future. Governments will play the political game, activists will be crucial in highlighting the problems and help run programs on the ground. But they can’t create wealth, they can only fight poverty. Each one plays a key role. Governments provide the supporting framework, NGOs fight poverty and deliver during these emergencies and business (large and small – multinational and the woman selling fruits in the market) grows the economy to bring a sliver of hope. And in this hope lies the future of sustainability. But we are not there yet.

In the meantime, newspapers will chop down trees to print their green stories, bloggers will use computers and networks created and supported by nonrenewable energy and conflict minerals, activist will spread the word flying all over the world – and push up their emission count, governments will continue to make war over oil, celebs and stars will drive their stretch limos and live in their big houses, business will continue to confuse eco-friendlier with eco-friendly, and consumers… well, they’ll continue to buy what they want. Green or not.

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I’ve always been sceptical about CSR rankings and ratings. Partly because there are just so many of them. It sometimes feels as if we have a ranking and rating system for every company. Just find the one that fits your needs and away you go! But this also underlines a deeper problem with rankings and ratings – is it even possible to have a ranking or rating system capture all the differences and diversity amongst businesses?

Citizen IBM had a good piece on how CSR Rankings Can Be Improved. They capture some of the key problems I have – from the needs to acknowledge the differences in industries to the need for continuous improvements to full transparency in the criteria used. But I don’t think they went deep enough – and I would like the scratch the surface a little bit more.

Firstly, as Citizen IBM mentions, the differences between industries should be acknowledged. But it goes deeper than purely the differences between those who manufacture and those who offer services. And it’s these differences that makes it even more difficult to take rating systems seriously. Let’s remove the obvious difference for a moment – let’s exclude for the sake of argument services companies and only focus on companies who manufacture.

Even within manufacturing the differences are just too steep to make a single standard rating workable. Most rating systems looks at the impact of the manufacturing process – environmental impact, workplace practices, financial performance,  governance etc. Most companies within manufacturing can be judged according to these, right? Well, just hang on for a minute there…

What most of these rating systems focus on, measure and rate are the impact of the process and not the impact of the actual product delivered by the manufacturing process. Let me give you an example, it is possible for a tobacco company to have excellent CSR practices in their manufacturing process and therefore rank better than say a pharmaceutical company. But the actual product delivered by the pharmaceutical company is vastly different than those from a tobacco company – the one contributes to the health of society and the other do the opposite.

Now it will be easy to exclude tobacco companies – and many do. However, the basic principle remains. The extremes are easy to differentiate – and we can exclude tobacco and arms manufacturers. But what about comparing the products of an oil company to a pharmaceutical company? How do we judge the end product and the impact of that end product? Especially when we start bringing in the idea of sustainability – leaving the future world in a better or no worse place. How do you rate a product that positions us better for the future against a company who serves an immediate need but at a high environmental and sustainability cost? How do you rate a software company who connects sustainable solutions to a company whose software is used for warfare? The differences in what the products deliver becomes complicated and makes comparisons complicated and almost impossible.

Even within a single industry it is complicated and problematic – how do you differentiate between an energy company that produces only oil to one that only produces solar or another “green” energy? And what about a traditional oil company spending more and more on alternative energy? How do you judge the future impact and value of the product or service?

The approach to ratings also undermines a key development in CSR over the last few years – finding the opportunity of mutual responsibility or shared value between the company and its stakeholders (or society at large). Companies are increasingly seeing CSR as a way to create new opportunities that will be beneficial to both the business bottom line and the needs of society. But the approach of rating systems doesn’t allow for this to be reflected because they focus on the impact of operations and not the business model and approach to CSR. You can (and will) therefore have companies who practice CSR the old way (ticking boxes, compliance etc) have a higher rating than companies who seek new ways to create product and service solutions that will benefit both society and the business itself. Too many ratings take a “tick the box” approach instead of looking at innovation, opportunity, mutual responsibility, societal benefit etc.

And it goes even deeper than that…

The drive towards a common standard has another unwanted impact – individual criteria might mean a company have excellent rankings on some but fail on others. Especially those areas where their major impacts are. Let’s say a company rates highly on governance, philanthropy, financial performance and the environment but their major impact is actually on human rights. And let’s say this company then operates in countries where child labor or forced labor are fine. The fact that they have great rating in all but one will most likely give them a good rating overall. But they fail in the area that matters most to their specific company as it intersects with society. Again, the standardization of ratings therefore fail to acknowledge the area of major responsibility and impact of the company.

That’s my biggest problem with ratings and rankings. They focus too much on the process and too little on the impact and value of the actual products and/or service delivered and those areas of major impact and responsibility. A single standard rating and ranking to compare all companies cannot capture these differences adequately. Rankings and ratings go for the lowest common denominator and fail to truly rate those who benefit society today and tomorrow and fail to acknowledge the differences in impact between different industries – or even different companies within an industry.

Frankly, I don’t rate ratings and rankings that much…

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