As aptly captured by Time magazine, 2011 was the 'Year of the Protestor.' From the Arab Spring to the UK riots to the Occupy Wall Street (OWS) demonstrations, 2011 witnessed an outpouring of popular discontent aimed at governments and businesses alike. But while OWS dominated headlines here at home with its anti-capitalism message, a quieter, but just as transformative story was taking shape in parallel: that of businesses leading the charge to make the world a better place for the majority. It is a variety of capitalism that would have been fundamental to Adam Smith but is exceptional among capitalists in the 21st century.
With little fanfare, corporations are responding to social challenges - from poverty, to environmental degradation and access to technology. 2011 may one day be remembered as the year when CEOs began to address many problems of society and the year when sustainability joined profit as a driving force of decision making in corporate boardrooms and value creator for corporate stakeholders.
Below are seven influential actions in 2011 that captured this emerging shift in business' relationship with society and caught my eye. With Rio +20 taking place this summer, look for the trend to continue in 2012.
1. Michael Porter and Mark Kramer's Creating Shared Value
The leading voices encouraging businesses to embrace corporate social responsibility (CSR) over the past two decades, Porter and Kramer published perhaps their most influential research to date in 2011. Their report is a pragmatic "how-to" for companies to integrate social challenges into their corporate fabric and thereby increase profits, shareholder value and long-term sustainability for their businesses.
2. Making the Business Case for Social Responsibility
Until this year, the economic benefits of incorporating sustainability in business practices remained largely unknown. As a result, CSR has been seen mainly as a PR tool, helping drive brand imaging. That is about to change thanks to two new Harvard Business School studies. In one study, three Harvard professors showed that over the last eighteen years the stock performance of companies that embraced environmental and social policies greatly outperformed similar companies that did not have the same ethics. Another study revealed that companies that successfully engage in CSR benefit from cheaper bank loans and higher levels of investments.
3. Rethinking the Role of Business
Calls for transforming business are coming from CEOs themselves. In an influential book published on the eve of Harvard Business School's 100th anniversary, business leaders across the world describe their visions for creating a more sustainable capitalist system by transforming their businesses into models of social responsibility.
4. Nestle: Encouraging Sustainable Agriculture
Nestle is one of the first major companies to embrace Porter's Shared Value Concept across its entire operations. In 2011, it operationally launched Nescafe Plan, a $331 million global initiative to boost productivity, sustainability and incomes of millions of farmers across the world. This year alone, they planted 4 million coffee trees in Columbia and began mentoring 10,000 cocoa farmers in Indonesia, the third largest producer of cocoa in the word.
5. Vodafone: Leveraging Cell Phones to Empower Women
Earlier this year Vodafone trained a group of women in Qatar, many of whom were never allowed to hold a job before, to operate their own Vodafone shop. The program is the first of its kind in traditionally conservative Qatar and the greater Middle East, and has empowered its owners and their customers to become more economically independent. In Egypt, Vodafone helped increase female literacy rates from the national average of 70% to 98% in the village of Siwa. These are just two of the dozens of projects within a larger global campaign launched by Vodafone, Hillary Clinton and the United Nations to empower women across the world.
6. GE's Ecomagination
A division of GE, Ecomagination, is leading the charge in providing finance for start-ups developing clean technologies and infrastructure. Over the summer, GE awarded its first Ecomagination Challenge Awards, a contest that will distribute $200 million to innovative start-ups. Going even farther, GE also established a $20 million fund to scale and commercialize the products identified by the challenge. The contest has turned the traditional R&D model on its head - moving energy and infrastructure research away from labs of governments or large companies into the outside entrepreneurial community.
7. Dow Chemical: Revitalizing Michigan's Battered Economy
Earlier this year, the US Small Business Administration partnered with Dow Chemicals and other businesses to establish a $130 million investment fund in Michigan that "will seek investments that would create jobs, diversify the state's economy and generate a profitable return." Dow's $15 million investment represents a growing trend of businesses partnering with Governments to address investment short falls in everything from infrastructure to small businesses. The CEO of Dow is encouraging other companies to pool their financial resources to help create jobs across the country, a move that will benefit companies, cash-strapped governments and ultimately, American workers.
So, as we enter 2012 perhaps we can be grateful for those corporations and individuals who have acted for the improvement of our society for all. As we enter an election year where the theme will be to divide us, it might be worth remembering that those being demonized are in many cases part of the solution not the problem.
Lynn Forester de Rothschild is CEO of EL Rothschild, LLC and the co-Chair of the "Better Values, Better Markets" Task Force at the Henry Jackson Society in London. You can follow her onFacebook, Twitter, and at Ldereport.com.
Follow Lynn Forester de Rothschild on Twitter: www.twitter.com/LdeRothschild
Parker J. Palmer: Real-World Change Can Come From Within
And this is supposed to be evidence of a new era of Corporate Social Responsibility. Go figure...
What nonsense, the main complaint was not anti-capitalism but anti-fraud and anti-corruption against the financial industry, essentially your namesake.
You're putting "lipstick on a pig" with the cosmetic "trends". A good beginning in solving the current problems is to put the top banksters in jail for financial terrorism or use the RICO Act.
Paper-Less,
And People-Less.
A corporation is set up to deliver a product or service and make as much money doing that as possible to increase shareholder value. It is not set up to be the Salvation Army. If shareholders want to help the poor, give them more dividends by creating more proift and let them donate it to organizations that are better suited to helping the poor.
And which elements of society should these burdens be placed on? I mean, if the corporations don't want to pay taxes on their profits, refuse to invest in the economy of the country, just where is the money going to come from.
And actually, corporations just like any business, should be actually DOING something. Artificially pumping up temporary numbers isn't a business plan. Neither is destroying the world's economies with financial scams like derivatives.
But that's just me.
Other elements/groups in society should take care of social problems. They vary from government to charitie to individuals depending on the issue.
Corporations are doing something and that is running their businesses trying to make money for shareholders. If they are artificially pumping up their numbers as you suggest, it is up to shareholders to get new management, not government.
The highest paid CEO in the USA is the head of a health care company that made 130 million $ in 2011, while seniors go blind or die because of diabetes since they lack coverage. To important CEOs, safe in their alibi of "shareholder value", it is an embarrasement to even ask them to have some scruples.
There are many countries in the world where this behaviour is totally unacceptable:
- from the conservative side, because this behaviour is in direct opposition with the teachings of the New Testament : the core message of Christianity.
- from the leftist side, these actions are unacceptable because of solidarity and considerations of common good.
Until there is a different mentality in the US big business world (and this might take 20 or 30 years), the only way to deal with big corporations is with the only language they understand : the Big Stick. Thats what they do to other people, so that is what they deserve themselves.
What many of us are against is Banana Republic crony ways of making money.
There's only one jobs program that doesn't need government involvement at all.
There's only one jobs program that makes every corporation in the US part of the solution
There's only one jobs program that costs nothing.
There's only one jobs program that works in one day.
National Hiring Day - This is a day that corporations are encouraged to hire new employees. Corporations are called on to put patriotism first and help their country in
hard times. Those corporations that cannot hire, are asked to stop firing for that month.
http://wp.me/p5S9X-nv
Republicans should love this because it's outside the government and voluntary. Democrats should love this because it helps those needing jobs. Independents should love it because it helps all with little sacrifice from any one corporation, group, or person. Corporations should love this because with just a hire or two they become part of a collective country wide jump start of the economy.
There has never been a time In American History where hiring people would hurt corporations less, and help the country more.
Why help? Because its good business, because they need customers with jobs, because the government has done a lot for them, because they are sitting on all time profits, because they will have a hard time spinning greed over patriotism, because one job is not that big a deal for them....
Do you think taking a wish list to this congress is a workable idea? Really?
Strangely I get both sides on National HIring Day - either corporations can never be questioned - or they are too evil to ask. Really?
This is far from naive - it would be as good for business as it is for those hired.
What's naive is thinking old solutions that never worked will work now, that somehow the government that is at a stalemate can resolve the jobs problem, or that corporations that beg the government for tax breaks, influence, etc. etc. are somehow exempt from any responsibility to that country, or that customers will continue to support companies that refuse any initiative to help, or that businesses that don't see the economic writing on the wall, and refuse to change, will somehow still prosper.
Greed alone, is a loosing business plan in the real world.
Corporations can step up for their country, and most will if given a chance. Let the President call for a National Hiring Day, and you'd get about 100-200 thousand new jobs.
For those who comment, let's let corporations step up and speak for themselves , don't make excuses one way or the other. Let the media say why they can't cover non political solutions to the jobs problem, when they discuss the jobs problem daily.”
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You're raising a strawman here. The problem isn't specific individuals. The problem is the system itself, and it doesn't matter how nice or generous some specific individuals are, the system still needs changing. We need to get wealth influence out of politics -- separation of wealth and state, if you will.
1. If companies can send thousands of jobs overseas, they can hire one American on National Hiring Day.
2. If companies can get millions in tax breaks and subsidies from the government, they can help it in return by hiring one American on National Hiring Day.
3. With companies sitting on all time high profits, they can hire one person on National Hiring Day - which by the way, would help them in return.
4. McDonalds hired 60,000 last May in their own National Hiring Day, surely other companies can hire one person on a nationwide National Hiring Day.
5. If Google can make 40 million available for charity, they can hire one person on National Hiring Day.
National Hiring Day - This is a day that corporations are encouraged to hire new employees. Corporations are called on to put patriotism first and help their country in
hard times. Those corporations that cannot hire, are asked to stop firing for that month.
http://wp.me/p5S9X-nv