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Posts Tagged ‘corporate social responsibility’

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The changes experienced in sustainability over the last ten years or so have been nothing but phenomenal. More and more companies have embraced the need to act more responsibly and manage their impacts. What started as ‘doing less harm’ has turned into bottom line benefits as companies have found new ways to match managing the triple bottom line with shaving costs off the business bottom line. But you don’t cut yourself into growth and growth is the bread and butter of companies. And it’s the holy grail of sustainability – growing the business top line. That’s why we need consumers to come and join the party – they already do, just look at TOMS, Patagonia, Method, Seventh Generation, Dove and many more. What is missing isn’t the consumer but a better grip on what makes them tick – a sustainable brand they can trust, buy and advocate. In my new book I cut through the myths and noise to create a sustainable brand model, a fusion of product and branding. It’s when these two dance that we create consumer breakthrough and the magic happens. But let’s not get ahead of ourselves. Let’s simply create more sustainable brands – and this is the ‘how to’ guide that will help you get there.

Use the code Campher15 in the voucher section to get 15% discount!

Link to the book here – Creating a Sustainable Brand: A Guide to Growing the Sustainability Top Line

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Sustainability should be much simpler than what we make it out to be. It’s not very complicated – take actions today that leaves the world in a better or no worse place for future generations. But the devil is always in the details. And this made me think a little of what are the different levels of sustainability. And how the concept of sustainability and the current trends influence business in the future. I’m sure this is way too simple so feel free to chip in and help define the levels of sustainability. These are rough thoughts that was hatched during my daily commute on public transport and therefore very rough…

Why make these distinctions? Because it helps us know how to work with and help each company. They are all very different and needs to be treated differently. Many moons ago I had a client who asked me to help them become “like Timberland”. My response was pretty straight forward – “You know you are an extractive company, right?”

More importantly, it helps us think of the future of sustainability. We know what a sustainable future should or could look like – what role does business play in this future?

1. I don’t do sustainability

There are many companies out there who just plain do not believe in sustainability. They believe in one thing and one thing only – increasing their ROI for the next few days. Even a quarter is a long-term vision for them. They will campaign against anything that asks them to take their impact into consideration – climate change, labor rights, equality in the workplace etc. They will comply to local laws because they have to and not always because they want to. That’s why they lobby and fight against so many of these laws. They will take subsidies without thinking of their own responsibility. They will cut corners where they can – and in most cases stick within the law. They will sell you snake oil and call it green. They’ll do the minimum and think that is the actions of a responsible company. They will use meaningless words and phrases that sound cute but mean nothing like “the business of business is business“. I won’t spend too much time on these companies. Arguing with them is a losing fight. They see what they want to see and nothing we can say or do will make them change their ways. I won’t invest in them and I won’t work with them. There are just too many other companies trying their best and who needs counsel, help and support. Let’s rather focus on those who see the sustainability of their company and the world as linked to their business bottom line. In any case, I don’t believe these companies will survive for long. History shows us that companies that think this way eventually just die a slow death. Eventually society will see them for who they are – in it for themselves and not really part of society.

2. I act responsibly

Of course there are a range of companies who just aren’t sustainable. The nature of their business and/or their current business model means that they can act responsibly but the company itself cannot be seen as sustainable. They must change how they source or manufacture over time to become sustainable. It doesn’t mean that they can’t be good corporate citizens. Many if them are good citizens who act with great responsibility. I see them as the CSR group rather than the sustainability group – a small but important distinction. Let me use an industry as an example. Most companies in the extractive industry just cannot be seen as practicing sustainability. They take stuff from the grounds and can’t replace it. They can’t leave that specific world in the same or better place. It’s a stretch for them to claim that. I worked with a very well respected luxury goods company and they refused to use the word sustainability. When I asked them why their response was “Because we mine diamonds and can’t put it back. And eventually we will run out of diamonds.” When will they run out of diamonds? Who knows! But the principle is right. But they do incredible work – one of my top 5 companies when it comes to CSR. Incredible work. They do everything right when it comes to sourcing their diamonds, adding value in developing countries where they source from, refuse to buy rubies from Burma, lobby against unsustainable mining practices – they tick all the boxes. But the nature of their business means they take full responsibility of their impact and are incredible corporate citizens – just not sustainable. This is in no way knocking them. Many of these companies do incredible work in difficult circumstances and delivers a product we desperately need today (and tomorrow) – we can’t live without them. I am proud to be associated with them and to work with them. So many of them are shining examples of what responsible businesses could and should be doing. Those in the group who practice sustainability can learn from these companies on what true responsibility in communities and supply chains mean and how to measure and reduce your impact in the world.

3. I am sustainable

Sustainability is slowly but surely becoming mainstream. More and more companies are embracing the discipline of sustainability to build a better business for the future. They have practices that highlight what can be done to make business work and help secure our joint future. They source in ways that do not deplete these resources. They take action on their energy use and tackle climate change in action and voice. They treat workers with respect and speak out against injustices. They will help their suppliers to become more sustainable themselves. They will take responsibility for their products and empower consumers to take responsiblity where they have a joint responsibility – such as driving recycling with consumers. These are the companies who are the leaders of today. They believe in values adding value. They know their future business success is tied to the sustainability of the world around them. The way they operate, source and manufacture, ensures they still have the ability to operate this way in future – the resources are replenished to ensure a better or same tomorrow. The world will be a poorer place without them. In so many ways.

4. I help make the world sustainable

This fourth category is the one that bugs me the most. It’s the most challenging and most complex. Maybe I should break it up into more levels of sustainable businesses, but for now I will keep the three distinctions of this group here.

The easy part is identifying those social innovators and entrepreneurs who focus on developing a business solution to a social problem. They are different from group 3 mentioned above because the nature of the products and services of group 3 is not aimed at a social problem but more about the “wants” of people. Most of the purchases of today are not because we need it but because we want it. We think we need a tablet but we don’t really need it, we just want it. A smartphone is a luxury and not a need. How many pairs of shoes do you need versus how many you want? Companies who are in group 3 still sells products in the “want” category but do so by taking responsibility for their actions and impact by making sustainability part of how they source, manufacture and take responsibility for their final product (waste etc). The social innovators focus on creating products and services society needs – new ways to get clean water to the poor, medicine people need to survive, nutritional products aimed specifically at groups in need, renewable energy solutions in challenging environments, energy-efficient cars (it’s more of a need than want if you only have one car!) – and much much more. They link the need of society to new product or service development and build a business around that. In some cases they might be a non-profit but the principle is still providing a tradeable solution to societal needs – micro-financing is a classic example.

Some of the companies in this category falls outside of this social innovation group though. They are still innovators but they actually focus on the want and not on the need. They develop new products and services that still deal with the current consumer behaviour of buying more stuff that is cool. They tap into the pop culture and fashion of the day and gives it a unique spin by giving it a social value over and above the hip new product. Think of TOMS. The product they sell isn’t unique and neither did they bring a product to life that deals with a specific societal need. They tapped into the mainstream consumer market by creating a cool new “I-want-that” product that has a huge societal benefit attached to it. The business model is very unique but the product itself is not. The concept itself is not that unique either. It is a logical evolution of cause marketing coming into maturity. From attaching a cause to a product to the cause becoming central to the product concept development itself.

The 3rd and last group in this category is the one I struggle with the most and my ideas are still only half-baked here so please feel free to rip it apart. But humor me for a moment.

All of these businesses in this group and the other categories still work within the system we know – sell more products and services to consumers. It operates within the current system. The challenges we face as a society today is challenging this system though. The question being asked is whether we can continue to expect these levels of consumption and be a sustainable world? I’m not talking about a narrow definition of sustainable consumption. Sustainable consumption debates have focused on selling more sustainable products and taking responsibility for your product post-consumer- whether it is how they are manufactured or used. The premise remains the same – sell more stuff. Sell stuff to increase ROI by creating new markets or pushing market share.

Is this system itself sustainable though? Can we really expect to build a more sustainable future by maintaining the same credit levels and expecting people to continue to buy more things? Let me give you an example… Are we any closer to sustainability if every single pair of shoes sold in the world now and in the future is made by TOMS? If we buy TOMS at the same rate of growth – does that make the world sustainable? TOMS might have a great business model but the world can’t handle buying at the same level we’ve had over the last 10-30 years – even if it is TOMS…

That is the essence of the challenge for companies – how to change the business model to remain profitable in a world that needs lower consumption levels and somehow keep investors happy. This would be the next level of business and sustainability. But this is a balancing act that is asking a lot…

The honest truth is that I have no clue how we can do this. Like I said, it’s just something that is bugging me at the moment. Somewhere the answer lies and I believe that good businesses, and society in general, will come up with an answer. We don’t have much of a choice as the runaway levels of consumption is not sustainable. And neither is the continuous pressure on the business bottom line via squeezed margins and market share. We’re close to a tipping point.

This goes way beyond the “Shared Value” concept. Shared Value argues we look at where business and society intersects and finding the joint value in that relationship to drive business and societal benefits. But what if the real value is to share less?

I don’t have the answer. But it’s worth exploring the options as doing nothing might not be an option for much longer.

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I’ve seen this add a few times on my telly – a group of employers asking people to write to some politician to get him to vote against the proposed health care reform. I’m not going to give this specific group any more free time but the NY Times has an article on the broader topic of businesses using their dough to stop health care reform. It’s irritated the living hell out of me. To those businesses and business associations behind these efforts, would you mind answering the following few questions to help me dig deeper into you as a responsible company and/or business association?

1. Could you please spend this money on providing your workers with decent health care?

I am always amused by companies being able to spend so much money to lobby for a cause they so strongly belief in but not always spend the same amount of money on a good cause – helping their workers get good health care in this case. It’s not unique to health care though. Many companies spend millions of dollars to keep their interests riding high. Sometimes this is a good thing because it has broader societal and/or environmental benefits as well. For instance, a company that I admire but that will remain nameless used the need for health care reform as their first time dipping their toes into the lobbying field. In this case they were (and remain) worried that the spiralling cost of health care will undermine one of their fundamental commitments – providing all their employees with decent health care. They lobbied because their commitment to their workers could be under threat in the long-term. Good on them. But so often companies do not lobby for something that can be seen as a broader societal good. Vested interests and an irrational fear of change drive their lobbying agendas instead of putting the money towards addressing those issues that requires attention. Do remember that most governments do not write policies and legislation purely for the fun of it but rather because something is dramatically wrong. Lobbying against it will not solve the problem. It will only extend the pain until it becomes unbearable and then we all pay. Please ask yourself a very simple question the next time you want to lobby on another “anti” platform – Am I being part of the solution or not? Come up with solutions instead of being anti change. Being negative might be easier but it is not a sign of a responsible company. Either in CSR and sustainability or business in general. Business thrive by making things happen and finding new solutions (through products, services, operations etc.) Unfortunately the general business approach to lobbying undermines this fundamental business principle.

2. Could you please stand up and name yourself?

Why do so many companies hide behind alliances and business associations? They are first to claim they are so green or they do so much for their local communities but when it comes to the lobbying stuff they tend to be quiet and hide behind an association where they can huddle without being seen. Why? Is it because you are not 100% convinced that you are right? Or that you do believe that maybe society will see (now or in the future) that your lobbying position is actually not in their interest? In this case it is very convenient to hide behind an alliance because your own workers might actually see that you support something that is NOT in their interest. You’ll notice that these ads are by employers and not by employees. Why? Because employees will benefit from these changes while employers are arguing that they won’t. Convenient isn’t it? It’s easy for the employer to stand up and take a stand while hiding behind a wall of secrecy called “alliance”. Guess what? Most US employees do not have the same luxury. Their alliance is the union and most employers fight the unions with every ounce of power they have. So it is okay for employers to be free to join any “union” they want but not for the employees. Double standards if I have ever seen one and not a sign of a responsible company or business association. It’s not only health care though. It’s almost every issue where society or the environment might be threatened by the status quo. Climate change… Why are some companies sponsoring critics to argue against climate change without making any scientific arguments of their own in public? Maybe because being open and honest about what you believe in might not be popular. No one ever said transparency will be easy but that is the cornerstone of a responsible company. Own what you believe in please. Don’t be ashamed of what you believe in. Come out the closet and be loud and proud of who you are even if others might not agree with you. That is a sign of responsibility.

3. Could you please find a name that works?

The organization that fronts these businesses and business association pulled one of the oldest tricks in the book – get a snappy name no one can argue with… “Employers for a Healthy Economy.” As if anyone who do not agree with them are arguing against a healthy economy. It’s just greenwashing with another name. Claiming one thing when really you can’t claim this to be unique or even true. It is misleading and does not deal with the issue you are tackling. It would be like a single car manufacturer starting an alliance called “Manufacturers for Safe Cars.” Duh! Please use a name that is relevant and true and not something that plays into populist hands or misleading. Misleading people and false advertising – not signs of a responsible company or business association.

4. Could you please keep better company?

A good way of judging whether an initiative is looking at who are the alliance partners. Many stood out but one in particular… the US Chamber of Commerce. I won’t go into details of how many companies have left the US Chamber of Commerce because of their out-of-touch position on climate change but their position on health care reform is interesting to say the least. As a conservative lobbying association one would predictable expect the Chamber to be against health care reform – but they go further than just being against reform. The Washington Post reported in November 2009 on how the Chamber “proposes spending $50,000 to hire a ‘respected economist’ to study the impact of health-care legislation … would have on jobs and the economy.” That’s the nice part – nothing wrong with a study to inform us. But what if they already decided what the outcome should be? In the email exchanges they made their intentions clear and assumed the outcome of the study by saying that “the economist will then circulate a sign-on letter to hundreds of other economists saying that the bill will kill jobs and hurt the economy. We will then be able to use this open letter to produce advertisements, and as a powerful lobbying and grass-roots document.” Nice… Sounds like climate skeptic type research to me. They sure know how to pick their partners don’t they? I wonder if they used this research to back up their claims in those ads on television? It seems as if some people just don’t get the basic methodology of sound research. Responsible companies and business associations do not predetermine the findings of their research. They do their research and then make up their minds.

5. Could you please refrain from lying?

My point above on question 4 should clear this up for you. Did you solicit a study that had to fit their “facts” into your already defined position or did you do a proper study? Anyone who starts a sentence off with “In fact…” generally tells the opposite right after that statement. A responsible company and business association will not lie. It will tell the truth even if it isn’t what they wanted to hear. Furthermore, a responsible company/association will not have research targeting a predetermined outcome. Any study initiated and/or supported by a group with a vested interest should be taken with a pinch of salt. It reeks of the “favorite hamburger/coffee/pizza” stuff you see on television. Really people, stop treating us like idiots. If you fund a study or a survey and “tweak” questions to ensure the “facts” support your position… Not a sign of a responsible company or business association.

A responsible company and business association will be transparent, open and honest even when they are wrong. More importantly, a truly responsible company will not join an alliance or association who can not display these principles of responsibility. Are you hustling the truth or are you a responsible company? Your choice. I’ll decide where to put my pen and money once I get an answer.

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