Why CSR fails:  It’s not an auditing tool or a PR activity – it should be your fundamental business ethos!

I have just finished a book chapter dedicated to my views on this point and the question that keeps arising in my head after reading pages and pages of audited CSR reports /Sustainability/ Environment and ethics reports using UN Global Compact Principles, ISO Guidance Standard on Social Responsibility, ISO 26000 or Global Reporting Initiative (GRI) Guidelines is:  How is all of this relevant to the business operation, the business organizational culture and the local communities the business impacts both upstream and down stream?  Is it working? How well? The fact that it is still the prerogative of “big companies” who get access to networks is an issue for this new business belief.

You pay an annual “financial commitment to join the UN Compact”  though it is a small amount. The Global Reporting Initiative is a non-profit organization with less than 5000 companies sharing their reports.  Many of the companies who are “global sponsors” of GRI are well known Auditing firms “Goldman Sachs, Deloitte, Ernst & Young, KPMG and PwC” who will also make a lot of money auditing for this new trend as GRI recommends that sustainability reports are externally assured. Right now these are volunteered disclosures but they are lobbying governments to make it mandatory. Do Accounting firms “volunteer” their expertise to audit as a benefit to CSR?  There is big monies involved in some major initiatives[1] like:

• United Nations Principles for Responsible Investment: 800+ signatories, $22 trillion in investment capital

• Investor Network on Climate Risk (INCR): 90+ members, $9 trillion

• Carbon Disclosure Project: 50 purchasing organizations and 551 institutional investors, holding US$71 trillion in assets under management

• Institutional Investors Group on Climate Change (IIGCC): 70+ members, $6 trillion

• Interfaith Center on Corporate Responsibility (ICCR): 300 members, $100 billion

 

We tend to look at this topic as a communication platform [2] or  a method to create value (albeit long-term for the firm)[3]. Most Boardrooms are thinking this concept will get them brownie points in the marketplace through corporate legitimacy[4]. A Global CSR Survey by APCO show that 60 percent of those surveyed say that based on negative news about the CSR of a firm, they have decided to boycott the firm’s products or services.[5] This also shows customers are more reactive about CSR than being proactive. Education may have role to play!

I think we need to approach this business in a much more focused manner – not just from at a systematic strategic level not a need/opportunity/cause reactionary mode. I believe employees should be also empowered at the local level to get involved because they are the closer stakeholder in proximity than customers.

1. What is this CSR ethos and why are you choosing this philosophy?  It’s OK to be personally motivated – as long as the organization is there for the journey. Hence by all means support cancer research, HIV studies, local schools but try and embed the philosophy in the organizational culture. Remember the easiest thing to give is money, the hardest is time (volunteering hours) and skills and network access (to media to promote the cause and not the company and transfer skills to people using your staff competencies). True in 2010, BP could have been more “caring” following its oil spill in the Gulf of Mexico – but so could any of the other owners of oil rigs (there are 1200 owners of active leases)[6],  including the US Government whose coast and people were affected (remember it took Obama 12 days to visit). Too much time was spent bickering and pointing fingers.

2. Who are you impacting? CSR should not just impact the company but everyone in the value chain!  Based on proximity – TMT needs to be first involved, and then employees, investors, suppliers, distributors and the last is the customer. In today’s world we are in a hurry to tell the customer first! What would happen if the customer turned it around and said “Hey P&G – great that you salute all those Moms – your Olympics commercial has brought tears to many eyes – but how many Moms do you have in your organization and what have you done for them?”. Or ask UniLever – “You believe that young people are beautiful – love the “real beauty” campaign – how many teenage girls of your employees have you worked with to let them know this?”  Or let us ask Apple/Nokia/Samsung/Sony “You say you use environmentally friendly manufacturing…what are you doing about reverse distribution? When you ask customers to upgrade – how are you making sure that used up Apple products are not polluting landfills?”.

3. Be focused: You can’t run a business that solves everything so you make choices. This does not mean you cannot “moonlight” – it means like any business decision you debate and open up the discussion. Why are you partnering with whom? How transparent have they been with your resources?  A few years ago we were given a talk but someone who worked for a prominent NGO. They were told a certain company wanted to donate millions close to the year end to open a school in Central Africa using the latest IT technology. The money was available now or they would lose it because of the accounting year if the NGO would not take it. The NGO took it knowing (1) they did not have the contacts in the conflict zone to open the school with less than 30 days (2) knowing that they would have to “trust” a partner with political contacts to hope that the project would get implemented (3) there was at that time no infrastructure to create an IT enabled school where there absolutely no basic necessities.  Such projects often take years to implement. The speaker was very articulate when she said – the irony was that the company never asked them after that year – did the school come up and was it working well. They had got their PR high and were content with that.

There is so much to do in this area, so little time and so few who have got involved. We need new firm start-ups to consider these issues when they begin their organizations and older one to retrain as it calls for change and maybe courage too. We need education institutes from school onwards to embed this concept of what is CSR? So the kids will become enlightened consumers and not slaves to “Consumerism”. They but with purpose, with ethics and with certainty. The products represent the organization and the organizational values and that of the person who buys the product.

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[1] GR! (2012), A new phase: the growth of sustainability reporting, Available: https://www.globalreporting.org/resourcelibrary/GRI-Year-In-Review-2010-2011.pdf

[2]D.S. Simon Productions (2012), The Growing Importance of Corporate Social Responsibility for Reputation Management: The Occupy Wall Street Survey,  Available: http://www.client.dssimon.com/demo/OWSsurvey13.pdf

[3] McKinsey & Company (2009), McKinsey Global Survey Results: Valuing corporate social responsibility, Available: http://commdev.org/files/2393_file_McKQ_Valuing_Corporate_Social_Responsibility.pdf

[4] Carl-Johan Hedberg and Fredrik von Malmborg (2004), THE GLOBAL REPORTING INITIATIVE AND CORPORATE

SUSTAINABILITY REPORTING IN SWEDISH COMPANIES, Corporate Social Responsibility and Environmental Management, 10, 153–164

[5] APCO Worldwide (2004), Communicating CSR: Talking to People Who Listen, Available: http://www.apcoworldwide.com/content/pdfs/Global_CSR_Study_Sept2004.pdf

[6]Deep Sea News (2010), Oil Platforms in the Gulf: How Many and Who Owns Them?, Available: http://deepseanews.com/2010/06/oil-platforms-in-the-gulf-how-many-and-who-owns-them/

Education – What are we doing wrong?

What is the purpose of an education? I have always loved asking provoking questions in class. I remember last year asking all my classes, “How many of you would like to be farmers?” In a class of 120 students, there were a few embarrassed laughs, looks of incredulity and finally…one sheepish voice says “We are management students – why would we be farmers?”

So why would are our future generation aspire to be farmers? Especially as we know there is a rash migration to urban spaces teetering on the brink of exploding. According to the UN World Food Program, 870 million people do not have enough to eat and 98 percent of them live in developing countries. Take for example Africa. As we see more urban migration, basic staples like maize, rice and wheat need to be brought in from outside the continent, overcoming large trade barriers. The cost is above US$20 billion pa—and what is more scary is that demand is projected to double by 2020 (World Bank, 2012). Urban farming (urban agriculture) could be one smart method.

Keep in mind that by 2015, the size for the global organic food and beverage market is expected to touch $104.5 billion (Markets and Markets) and this is despite the fact The American Academy of Pediatrics is unsure of the benefits of organics. GCC is buying vast tracks of farm land in Africa and for food security. We are seeing a global shift in dietary habits (more meat, diary, more expensive foods, and processed foods)! Waste management, sustainable food management and crisis management are important topics in this area. Did you know that 3/4ths of world food sales are processed foods and the largest manufacturers hold over a third of the global market (Alfranca, Rama and Tunzelmann 2003) [1]? Did you know a study in 2008 found out that over 50% of water and 30% of food was wasted? This was a study authored by Stockholm International Water Institute, the UN Food and Agriculture Organization, and the International Water Management Institute. I am not even going to touch on technology, security and environment management for this area. But if the importance of farming is not realized – then how will we “manage”? Even worse – why should an education system teach our young to look down on any profession?

So getting back to my original question – the purpose of education is to educate. According to its Latin roots, it means to a breeding, a bringing up, a rearing and the purpose is to lead forth,  take out;  raise up, erect.  When we educate – we need to train our students to lead – to come out with ideas, opinions and follow them through. I am worried we are getting so “bookish” and tied down to curriculum that is at least 20 years out of date that we are missing the world turn! I am not the only one – Sir Ken Robinson talks about how schools kill creativity (TED, 2006; RSA 2012). I think we need to redefine education and see how much policy, accreditation and ranking lists should influence choice of schools and universities.

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[1] Alfranca O, Rama R, Tunzelmann N (2003) Technological fields and concentration of innovation among food and beverage multinationals. International Food and Agribusiness Management Review 5.

Social Media – Managing your Public Profile

We have heard enough about Facebook and privacy settings but a recent run-in with Kevin Pietersen made me think what are we doing about educating employees about what is OK and not OK with respect to social media? When are personal opinions no longer personal and liable because they have become public? While I think it takes a tremendous amount of courage to embrace social media for the older people – it takes more foresight to know when to stop or where to stop!

Lewis Hamilton (@LewisHamilton), the 2008 F1 World Champion recently managed to get into a “twitterscopic” scandal when he accused his team mate Jenson Button of “unfollowing” him when Button never followed him in the first place! Hamilton has over 1.1 million followers. This was after he disclosed data on qualifying lap times that was thought to be confidential at the Belgian Grand Prix last month!

Kevin Pietersen (@kevinpp24), has close to 785,000 followers and was a pioneer in social media when he used twitter way back in 2004. He was named England Twitter Captain in 2008! The South African born, English cricket player was subjected to tremendous scrutiny and every “unfollowing” of a celebrity was subject to debate (isn’t it personal choice?). Kevin is media savvy, having trademarked his initials  KP™, uses Youtube and Facebook but still social media opens the door to challenges. His tweet on Nick Knight earned him a fine of  £2,500 by the England and Wales Cricket Board (ECB). He then also had to deal with a “parody” or “Spoof” twitter account (@kevpietersen24) which had up to 11000 followers! He was nearly dropped from the English team for his text comments to the South African players which allegedly made some "derogatory" references to then England captain Andrew Strauss. Yet we know from marketing – controversy brings in more followers!

Or take the case of Amanda Todd, a 15 year old Canadian girl who was cyber-bullied. She put a 9 minute video of her story on youtube using flashcards and died less than a month later on October 10, 2012 (http://www.youtube.com/watch?v=IyHX7wMJBY0)

I guess all this really raises several questions. (1) Social media is public space even if you are putting personal accounts and opinions – how can you protect yourself? (2) Privacy is actually your right but when you go online to social media – you give it away – are we aware of this? (3) For corporations, how are they managing the challenges of educating employees on acceptable and unacceptable social media behavior? Is it in their contracts? Since Social media is evolving – what training is given? (4) How is Education making our kids more savvy as to what they should and should not disclose? (5)What opportunities lie for activists in making the social media sphere more safe?