In my last blog I explored the shortcomings of the current model of Capitalism with CSR thought-leader Dr. Wayne Visser. Today I look at how CSR can evolve to address these shortcomings so that the benefits can be shared more universally and without exhausting our natural resources in the process.
It is very clear that while the activity on CSR or sustainable business over the last 20 years we have more activity than ever before and yet it doesn't stack up with the observable and measurable trends (see Reality Check), so something is not working.
Dr. Visser has identified three "curses of CSR" where we're still failing. As someone who has worked, consulted, advocated and critiqued in this space, these resonate with me:
- The incremental approach -- We do get continuous improvement, but it is slow, gradual and moves in steps. But we know the problems are large, urgent and need bold action. This approach "lulls us into a false sense of security that we're making progress when we're actually falling behind."
- CSR is still peripheral -- In most companies it sits in HR or PR or a sustainability department. But that means it's not integrated into the core business and functions. It is also peripheral in the sense that it is always the big branded companies that we're talking about. What about the hundreds of millions of small and medium sized enterprises? What are they doing? What's their impact on the planet and society?
- Uneconomic. Although many talk about the business case for sustainable development and CSR, and there are benefits in reputation (social license to operate, recruitment and retention) and reduced costs associated with risk (such as lower insurance rates based on lower accidents and reduced claims), the market does not consistently reward (pay more) for sustainable and responsible behavior. And they do cost more now, in part because the true costs of unsustainable products are not factored in; our pricing mechanism doesn't add in the cost that our economic activity imposes on society and the environment.
Dr. Visser uses the metaphor of CSR 1.0 and CSR 2.0, and it is more than just a clever way to talk about the evolution because the ways the web is changing parallel his thoughts about CSR.
When the web went from 1.0 to 2.0 it changed in a number of fundamental ways; it went to scale. 46 million users in 1996 went to more than a billion by 2006. The second thing is it became far more interactive. The first version of the Internet was all one-way communication, whereas now it is about user-generated content, interactivity, constant innovation, beta-testing, and so on.
With this in mind, what are the hallmarks of a truly sustainable company (or organization)? And how can we test to see if a company is really practicing something transformative? Dr. Visser identifies five ways:
- Creativity (C) -- Are they embracing innovation, social enterprise and imagination as a way to solve the biggest social and environmental challenges that we have. The problem with codes and standards is that they tend to create a 'tick box' approach to compliance and that's not getting us where we need to be.
- Scalability (S) -- Are the solutions going to scale? We must move from wonderful case studies and pilot projects to universal application. Good or even best practices must be shared across companies, industries and globally. Sometimes that means 'choice editing' -- when companies make choices for consumers based on their values, i.e. refusing to offer both sustainable and unsustainable products, such as Walmart exclusively selling Marine Stewardship Council certified fish or CVS removing tobacco products form their shelves. Doing so is risky (CVS estimates the potential lost revenue of taking this stand may be as high as $2 billion).
- Responsiveness (R) -- Is the effort really responding to the needs of stakeholders or is it just a kind of public relations effort? Unilever's strategy to 'double in size, halve our environmental footprint and lift a billion people out of poverty' is genuinely responsive to the issues of the day (environmental degradation and the human condition).
- "Glocality" (2) -- combining global principles with local application in a way that meets both sets of needs.
- Circularity (0) -- Does the effort help us move to a circular economy where we get to zero waste? Visser points out that "We used to think this was just a dream, but there are more and more companies -- Fuji Xerox in their Asian operations has now reached 98.5% recycling of their products. We have companies like Interface with their 'mission zero' -- zero environmental impact by 2020."
So this is how we can start to measure against the 2.0 or transformative approach.
Thank you to Dr. Visser for sharing his time and thoughts with me. I have long admired his work.