Dilemmas in Responsible Investment

Dilemmas in Responsible Investment

By: Celine Louche and Stephen Lyndberg

ISBN: 978-1-906093-51-8

Publisher: Greenleaf Publishing

This review first appeared on CSRwire.com on 21st December 2011

Book Description

Dilemmas in Responsible Investment examines the problems responsible investment (RI) practitioners face daily. It emphasises the importance of asking the right questions as well as getting the right answers; and the importance of process as well as product. The authors pay attention to the diversity of opinion and variety of approaches available. They also raise fundamental questions about the very purpose of investment and the responsibilities of investors, both economic and societal.

Although dilemmas in RI are not always easily resolved, Louche and Lydenberg believe that they are also a source of valuable and necessary debate about the appropriate role of corporations in society and the ability of the financial markets to appropriately serve the societies in which they operate. Such dilemmas provide a valuable framework for public debate and can encourage the emergence of innovative answers and approaches.

Commentary

Social Responsible Investment sounds easy enough.

Step 1: Negative screening, positive screening, decide and place your cash where it will do what you want it to do.

Step 2: Review the financials with set values in mind and pick your portfolio.

Step 3: Against sin stocks, for the environment, what could be simpler?

When you read Dilemmas in Responsible Investment, you realize that it isn’t as simple as it sounds. While written for responsible investment practitioners, the book has much to teach anyone with an interest in how money makes the sustainable world go round.

Dilemma 1: Conventional Money Manager & Responsible Investment

You are a conventional money manager and have become interested in the responsible investment market. You advertise your responsible investment services and four different types of potential clients approach you.

A single working mother, passionate about sustainability issues with a modest sum to invest; a wealthy investor, who is toying with the idea of directing his investments towards a more environmentally friendly portfolio; a CFO for a small church with an endowment to invest and a focus on fairness and societal justice; and the head of the board of trustees for a large pension fund, pressured by retirees not to invest in companies that manufacture landminess.

How do you prepare for these meetings? You can either start with one general presentation for all four clients or tailor your response to each one's specific needs right? Or you can target your presentations with a focus on ethical issues or sustainability issues, highlighting business risk/opportunity elements and, therefore, potential consequences for your clients' return on investment.

Dilemma One is a taster for the series of progressively more specific and detailed dilemmas or case studies (12 in total), which teach us the detailed considerations that come in to play when responsible investment is the subject. This first dilemma shows how each potential responsible investor comes with certain expectations, a greater or limited understanding of responsible investment options and the need for investment practitioners to develop customized investment products to accommodate different needs.

Dilemma One may not sound that complicated, however, so let’s consider some other dilemmas that come up:

1. A client has read about a manufacturer of electronic games in China which has abusive labor conditions, and wants you to sell the stock. However, the company in question denies the allegations and the facts are not altogether clear. Sell, buy time to investigate or tell your client not to believe everything he reads?

2. Ten years ago, you sold a large successful company that was criticized for poor labor conditions, poor environmental record, discrimination in the workplace and more. In the two years, the company has apparently turned things around and is now talking CSR. Do you continue to stay away or recommend your clients to invest?

3. You want to develop a Responsible Investment product that will have global appeal. However, responsible investment standards are different in several countries and many have conflicting demands or standards. How do you balance local values and practices in a single new investment product?

4. Your client, an environmental foundation, wants you to hold back on any investments, which include use of nanotechnology. She fears that use of nanotechnology can be potentially harmful with unpredictable consequences for human health and the environment. Scientists are divided on the issue – there is no clear cut case against nanotechnology. Do you immediately sell all nanotechnology-related stocks or do you try to persuade your client that it is premature to exit?

This is but a small selection of the interesting questions posed in the field of responsible investment.

In the book, Dilemmas in Responsible Investment, Louche and Lyndenberg dissect these issues from multiple angles and offer possibilities for action and the implications of each. A fascinating read, like I said before, for anyone even remotely interested in understanding the connections between sustainability, ethics, financial services and our global economy.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en

Fighting Poverty Together

Fighting Poverty Together: Rethinking Strategies for Business, Governments and Civil Society to Reduce Poverty

By Aneel Karnani

Published by Palgrave Macmillan.

ISBN: 978-0-230-10587-4.

This review was first published on CSRwire.com on 24th October 2011

Description

Global poverty continues to be a major problem, one that has received much attention and resources for the last 60 years. The developed countries, international institutions such as the World Bank and United Nations, various aid agencies and civil society have contributed trillions of dollars to fight poverty; yet, there are more "poor" today than there were a decade ago. In this hard-hitting polemical, Karnani demonstrates what is wrong with today's approaches to reducing poverty. He proposes an eclectic approach to poverty reduction that emphasizes the need for business, government and civil society to partner together to create employment opportunities for the poor. He argues the only way they will ever be truly lifted out of poverty is to create jobs that provide financial support for entire local communities in developing nations.

Commentary

Aneel Karnani, who shot to fame following his Wall Street Journal article that created online uproar in 2010 by provocatively denouncing CSR, remains true to his convictions in this book, Fighting Poverty Together: Rethinking Strategies for Business, Governments and Civil Society to Reduce Poverty. We have all got it wrong, says Karnani.

What we have been doing so far has not lifted the poor out of poverty, in fact, much of what we have done so far, well-intentioned or otherwise, has helped the poor to stay poor. Karnani uses the first chapters in his book to take the shine out of microcredit (which Karnani describes as being "touted as one of the newest silver bullets for alleviating poverty") and the Bottom of the Pyramid (BOP) theory, which Karnani says is "riddled with unrealistic expectations and false hopes for both businesses and the poor, empirically false, logically flawed and morally problematic." Both Muhammad Yunus and C.K. Prahalad, two of the most admired figures of modern social entrepreneurship and business thinking, suffer a miserable fate in Karnani's book.

Grameen Bank: A Failed Business Model

First, Karnani explains, The Grameen Bank model has not worked. Loans provided to the poor through Grameen Bank have not lifted them out of poverty. On the contrary, since most of the money loaned is used to fund consumption, and not the growth of new business ventures, microcredit has succeeded only in postponing the bitter pill of having to pay up sooner or later with money the poor don't have. Most of the people who use Grameen services are not entrepreneurs; they just want to make a living. Even if they do have some financing, they lack the necessary skills to grow businesses. Also, microcredit interest rates are extremely high, sometimes reaching up to 100% interest, making the overall proposition unattractive as a tool for lifting poor people out of poverty, he argues.

Similarly, he goes on, the Bottom of the Pyramid theory is untenable. The BOP market is grossly overrated, estimated at only $0.44 trillion and not $13 trillion as identified by Prahalad. Additionally, explains Karnani, the total number of people living at the BOP is also grossly overestimated. So, in a small market with a much smaller critical mass of poor people – who have close to zero disposable income to purchase anything other than basic needs – the fortunes to be made at the BOP are fallacy.

A Libertarian Approach

Even Hindustan Lever, hailed as a hero for introducing Annapurna iodized salt, has not succeeded in penetrating mass markets. All this microcredit and BOP thinking creates what Karnani calls a libertarian approach, romanticizing the poor through a belief that creating the right kind of opportunities for the poor will turn them into significant value-conscious consumers, entrepreneurs and savvy leaders of a new kind of egalitarian society. Instead, these initiatives according to Karnani are simply an extension of capitalist greed in which companies look to profit from creating new markets targeting poor people, often immoral and exploitative.

Unilever's Fair and Lovely is another example quoted by Karnani: Unilever portrays Fair and Lovely, a skin whitening product for women, as supporting "choice and economic empowerment for women." Karnani says its simply sustaining racist prejudices (while making lot of profit for Unilever).

Karnani: Don’t Give the Poor Microcredit; Give Them Jobs

The key to lifting the poor out of poverty, according to Karnani, is to regard them as producers and not consumers. Give them jobs, he says. Create employment opportunities. This is the role of business.

Governments have a role to play, too. By facilitating business growth and job creation, they can ensure provision of basic services for the poor. Civil society and NGOs must ensure businesses and governments do the right thing and provide equitable opportunities without exploitation.

For example, many of the products targeted at the poor are "harmful" and not in the self-interest of the poor.

Companies repeatedly try to introduce new products that not based on a true understanding of the poor and their habits. Initiatives, such as Shokti Ladies, developed by Danone in partnership with Grameen Bank, to distribute yogurt to the rural poor with an army of trained local women micro-entrepreneurs, were not successfully commercialized. Unilever's program for Shakti women, trained to sell Unilever products in remote parts of India, did not meet its objectives, according to Karnani. Almost every initiative targeted at improving the employability of the poor has not succeeded.

Instead, business and governments must act on their primary role as creators of conditions in which equitable employment can thrive in any country.

In a free market economy, businesses create employment opportunities and NGOs support them by providing extra skills. This is all fine as long as markets thrive. When markets fail, according to Karnani, governments must regulate to protect the vulnerable poor. However, "Too much falls through the cracks between the markets and governments. It is the role of civil society to fill this gap." NGOs must act as catalysts for change as well as watchdogs to help markets regulate themselves effectively.

Karnani's arguments are presented clearly and supported by select data and some case studies. They are also very cleverly organized to support his preferred regulatory-driven approach, assigning very distinct, non-overlapping, boundaries between the roles of business, government and NGOs. He further embellishes by providing data, stories and anecdotes to prove the failure of voluntary corporate responsibility, even in the more enlightened areas of conscious capitalism such as microcredit and BOP products, claiming these approaches are subordinate to a profit-mindset and not really about the needs of the poor.

Alleviating Poverty: A New Blueprint

Aneel Karnani's blueprint is that governments should do their job, businesses should play along and NGOs should keep it all under control. It may just be, however, that while Karnani accuses many writers and public figures of "romanticizing the poor," he himself is indulging in some romanticizing about the role government can and will play.

Not every country can be Norway, highlighted as an example of a proactive, sustainability-minded government. And yet, the doubts about microcredit and BOP approach hold a certain truth. Data does show that the Millennium Development Goal of "eradicating extreme poverty and hunger" is still far from being achieved by 2015.

Fighting Poverty Together challenges current mainstream thinking and raises important questions about ways in which our developed societies can address the economic and moral issues related to poor people and how governments should act to correct market failures and inadequacies. The issues Karnani presents attack very specifically the "silver bullet solutions," which he maintains haven’t worked.

Over two billion people are still living on less than $2 per day. Karnani claims that the poor are misunderstood and that solutions to date have not met their true needs. Karnani's answer: create employment opportunities suited to the poor, ensure the poor have adequate access to public services, market beneficial goods to the poor at prices they can afford and use the power of government to protect the vulnerable poor. Appealing in its simplicity but, I feel, no less challenging.

Many questions remain as to how these solutions can be practically implemented on a scale large enough to make a difference.

Karnani makes it clear: "To significantly reduce poverty requires resources. Only the business sector and the government can provide resources on the scale needed." Perhaps the winds of change are blowing in Karnani's direction. The Arab Spring and Occupy Wall Street citizen uprisings have gained voice.

Time will tell whether these interventions create the kind of consensus Karnani advocates or if political consensus to eradicate poverty is just another romanticization of the will and capabilities of governments and business to act in the interests of anyone but themselves.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en

Childhood Under Siege

Childhood Under Siege: How Big Business Targets Children

 By Joel Bakan

Published by Free Press / Simon and Schuster.

ISBN: 978-1-4391-2120-7

This review was first published on CSRwire.com on 12th October 2011

Description

In Childhood Under Siege: How Big Business Targets Children, Joel Bakan reveals the astonishingly callous and widespread exploitation of children by profit-seeking corporations-and also society's shameful failure to protect them. The creator of the award-winning film and internationally best-selling book The Corporation, Bakan shows how corporations pump billions of dollars into rendering parents and governments powerless to shield children from a relentless commercial assault designed solely to exploit their unique needs and vulnerabilities.

Commentary

This book by Joel Bakan, Childhood Under Siege: How Big Business Targets Children is a true eye-opener and a "must read" by everyone who is in government, business, a parent, or simply a concerned citizen. As a mother of two under fifteens (and a corporate responsibility professional, I am familiar with some of the phenomena Joel Bakan exposes, particularly with regard to marketing to children and corporate greed. But Joel Bakan goes much further than this—demonstrating how business interests place our children (and ourselves) at risk. A clear denunciation of self-regulated corporate responsibility, Children Under Siege is a wake-up call for regulators, corporations and parents and as important a motivator for action as we could require. It there is one book on your reading list, make it this one.

One theme running throughout this book is regulation and enforcement versus voluntary activities of corporations to do the right thing. Joel Bakan clearly comes down on the side of regulation (despite inadequacies of enforcement in many cases), demonstrating that "corporations, as large, powerful, and dominating institutions, deliberately programmed to exploit and neglect other in pursuit of wealth for themselves, are central players in causing environmental and social harms and fomenting injustice across the globe."

The author's indictment of the pharmaceutical industry is nothing short of frightening. Story after story of how pharma companies promote prescription of psychotropic drugs to young children, resulting in permanent behavioral and mental disorders in children are horrifying. Drug companies, according to Joel Bakan, seeing a lucrative market in child prescriptions, rush to create drugs to treat apparent child medical disorders such as ADHD, without due disclosure of their sometimes fatal side-effects, and promote these drugs aggressively to physicians, when all the while, other causes of behavioural problems in children such as dysfunctional homes, abuse, learning difficulties, poor nutrition and more may be the true non-medical causes of their symptoms and demand a treatment not dependent upon psychotropic drugs. Pharma companies hire armies of "cheer leaders" to hawk drugs to doctors, promoting drug sales at the expense of what's best for chid (and adult) patients.

A former drug rep from the Eli Lilly Company admits that he promoted an Eli Lilly drug, Zyprexa, despite the drugs causing side—effects of weight gains and diabetes and being banned from use for children. Eventually, after having boosted Zyprexa's sales to over $1.2 billion, Eli Lilly was called to account and paid a $615 million criminal fine for unlawful behaviour. The fine is a "paltry sum when compared to the company's gains from the drug". Eli Lilly is not the only drug company, however, to have engaged in similar unlawful activity – Abbott, Merck, Biovail, Cephalon, Pfizer, Bristol-Myers-Squibb, Purdue, Aventis, Serono Labs and Bayer are all listed on Joel Bakan's "rap-sheet" for having been fined hundreds of millions of dollars for deliberately misleading doctors, providing kickbacks, marketing drugs for unapproved uses and price fixing . All these fines have hardly dented big pharma's profitability but have left many people's lives destroyed, with many children among them.

But this is only scratching the surface – the manipulations and manoeuvrings of pharma companies in false marketing, use of ghost-writers to provide apparently independent endorsements of drug benefits and cleverly positioning clinical trials to deliver results which favour their drugs are all part of the behind-the-scenes machinations which are so prevalent, despite most drug companies publishing Corporate Responsibility Reports, that, Joel Bakan maintains, self-regulation is ineffective.

Similar stories can be found in Childhood Under Siege relating to the marketing industry. In fact, the book starts off with mind-shattering stories of the child-targeting video games market which "ramps up media violence, cultivates addiction, cynically exploits social network friendships, sexualizes girls and promotes hyperconsumerism." Manipulation of children's emotions and carefully crafting strategies to hook kids into the most vile media violence as well as other addictive online attractions may make big money for corporations but they also make big problems for society, by immersing kids in a world where "violence is fun, especially when it is cruel and sexualized… and that as human beings, we are naturally prone to be violent and brutal."

Another key theme running throughout the book is the issue of parental responsibility. Joel Bakan makes the case that parents should be vigilant but in most cases, they are up against a system which limits the choices they can make and the possibilities available to them to protect their children. The "social conditions" in which parents are able to choose what's best for their children severely limit real choice and freedom of action. The education system, asserts, Joel Bakan, is heavily influenced by corporate interest with reliance on standardized testing which in 2008, created a demand for 45 million test to be produced and graded each year in the No Child Left Behind program, generating $1 billion revenue for the testing industry. The growth in the EMO sector (Education Management Organizations) has led to "narrow utilitarian purpose of preparing children to be future workers" instead of providing them with a fully rounded education which encourages them to broaden their minds and realize their potential. With regulators passing education reforms, and big business interests gaining large profits, parents face an uphill struggle in going against the system.

Other issues addressed by Joel Bakan in Childhood Under Siege include the widespread cases of child labor in the U.S.A. where it is still legal for children to work at the age of 12, and the scandals around the ongoing use of BPA, promoted for years as safe by the American Chemistry Council after clear evidence to suggest its adverse health effects. These case studies are important reading and illuminate the tangled web of corporate interest and its influence on government policies and the lives of people.

For those of us who like to believe that corporations are truly committed to responsible practices and the true spirit of sustainability, Joel Bakan's book is a harsh reality check. For those of us who have suspected that corporations are less responsive to the wellbeing of humanity, the book is still a shocker. There is no sense here of sensationalist headlines, but more of a well-researched deep-dive into the negative aspects of corporate behavior that never get shared in corporate sustainability communications. Read it. Think deeply about it.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices   Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en

We First

We First: How Brands and Consumers Use Social Media to Build a Better World


By Simon Mainwaring

Published by Palgrave Macmillan.

ISBN: 978-0-230-11026-7

This review was first published on CSRwire.com on 13th September 2011


Description

A social media expert with global experience with many of the world’s biggest brands —including Nike, Toyota and Motorola—Simon Mainwaring offers a visionary new practice in which brands leverage social media to earn consumer goodwill, loyalty and profit, while creating a third pillar of sustainable social change through conscious contributions from customer purchases. These innovative private sector partnerships answer perhaps the most pressing issue facing business and thought leaders today: how to practice capitalism in a way that satisfies the need for both profit and a healthy, sustainable planet. Mainwaring provides case studies from companies such as P&G, Walmart, Starbucks, Pepsi, Coca-Cola, Toyota, Nike, Whole Foods, Patagonia and Nestlé as well as a bold plan for how corporations need to rethink their strategies.

Commentary

Simon Mainwaring's book, We First: How Brands and Consumers Use Social Media to Build a Better World, is the kind of book that makes you think. What's even more daunting, it drives you to form an opinion. I read (and review) many sustainability books and most are the kind you just agree with. They tell you how to be greener, or more social, or create more shared value, or how to put a sustainability strategy together and why. They are informative, enlightening and often very well-written. But they don't really require you to form an opinion because most of the content is rather non-controversial. You either agree with "sustainability" or you don't and the book you read reinforces your own start-point.

We First is different. After making the case for sustainability, author Simon Mainwaring goes on to suggest how companies should make a contribution in a way which engages consumers for good and even form a "Global Brand Initiative" through which brands can collaborate to build a better world. At first glance, given the state of capitalism today, these ideas are rather utopian. All this makes you wonder if Mainwaring is making a serious contribution to the sustainability discussion or whether his proposals are so prophetic that, just maybe, they are the next phase of sustainability that is waiting to happen.

In his book, Mainwaring introduces concepts such as contributory consumption, "a new paradigm for free market capitalism" in which every purchase incorporates a contribution to society. Mainwaring himself writes, "Many corporate executives might reject it as fanciful or just plain silly," but counters with the notion that it is "nothing less than the logical extension of current forms of corporate social responsibility, rooted in economic pragmatism and marketing logic."

Others might say, however, this is somewhat divorced from the current thinking, which is taking sustainability to a shared value business model that does not rely on the goodwill of corporations or consumers but a fundamental change in the way products are designed, marketed, distributed and sold? This is a fascinating debate and, as I read We First, I felt compelled to give these concepts and proposals some serious thought.

But let's back up a little. We First gradually leads us towards these concepts. The book starts with a view of current ills of capitalism and the growing impact of social media and consumer activism, followed by an exposé on why capitalism must move from selfish pursuit of profit to the empowering and engaging pursuit of purpose ("Consumers want a better world, not just better widgets") and how corporations should leverage this massive social movement towards a more just system.

Creating sustainable capitalism, then, should be developed based on economic, moral, ethical, environmental and social domains. Walmart is Mainwaring's poster child for this worldview through "the company is still transitioning to a true model of sustainability in the way We First proposes." Ultimately, Mainwaring says, "capitalism should be both enduring and life-giving." All this should be based on a strong bedrock of values.

Mainwaring then introduces three pillars of change: government, philanthropy and the private sector, explaining the strengths and weaknesses of each, concluding that the private sector must take its place alongside government and charities, as it has vast resources that are needed. It's here the argument for consumer activism starts to emerge. Companies, after all, only exist as long as they have consumers. The growth of the Internet ("the single most important driver of corporate responsibility") is enabling citizen media to have a voice.

So far, much of what we read in We First is similar to what we can read in other pro-sustainability literature. The author now turns to the role of brands. Citing Pepsi Refresh as the new model of the transformation of brands and business, Mainwaring goes on to define how brands can engage consumers and involve them in "meaningful cause investments." There are of course many examples of cause marketing that have been wildly successful, though I believe this is far from mainstream today. We First proposes that mainstream it should become, and more importantly, that's what consumers want.

Achieving "Brandhood" means sharing stewardship of the brand with the community, engaging in philanthropic activities and being socially responsible. "Consumers are now in a position to co-create – with corporations – the world we want to live in." Social media can link brands and consumers to good causes and socially responsible shopping options. Ultimately, We First proposes a social contract between brands and consumers with a 10-point charter made up of positive commitments that represent "We First" capitalism.

The logical outflow of this social contract is contributory consumerism where both corporations and consumers donate to good causes as they consume, leading to the development of a Global Brand Initiative, a federation of brands that work together to advance CSR and charitable donations.

Mainwaring says: "The evolution of revolution is contribution." We First capitalism, as proposed, engages consumers in partnership with corporations to ensure consumption in the new capitalism has some element of contribution to society.

So that's the proposal. Like it? Believe it can work? Worth fighting for? Is this the same as creating "Shared Value" from a business-model-driven kind of sustainability strategy or is it an enhanced, modern form of Social Giving 2.0, wrapped in a framework of engagement and collaboration? I will leave you to draw your own conclusions.

As you are contemplating these questions, I recommend you read We First, which presents many examples of approaching-"We First" actions by corporations and interesting arguments for We First capitalism, which, even if the utopian state is not achieved, certainly offer corporations, and consumers, new ways of thinking from which we could all benefit.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en

Corporate Social and Human Rights Responsibilities

Corporate Social and Human Rights Responsibilities:
Global, Legal and Management Perspectives


Edited by Karin Buhmann, Lynn Roseberry and Mette Morsing

Published by Palgrave Macmillan

ISBN: 978-0-230-23089-7

This review was first published on CSRWire.com on 22nd August 2011


Description

Corporate Social and Human Rights Responsibilities: Global, Legal and Management Perspectives – what has the law to do with Corporate Social Responsibility? Do Business Responsibilities for Human Rights (BRHR, with an acronym introduced in the book) differ from CSR? This book challenges the separation between CSR and law. It also demonstrates that BRHR may be gradually separating from CSR through emphasis on state obligations. Authors from around the world discuss how businesses engage in CSR and human rights, and how governments and intergovernmental organizations may support businesses in taking responsibility.

In this book, you will find a group of exciting chapters written by management scholars, lawyers, CSR practitioners and business ethicists. Drawing on cases from around the world, they want to set a new agenda regarding divergence and convergence between CSR, BRHR, and the law.

Commentary

The interrelation between CSR and law is a fascinating subject and one which many have written about. It's kind of chicken and egg, inferring on the practice of CSR a potential to drive standards which ultimately level the playing field for entire sectors and markets while understanding the power of law has the potential to drive more responsible practices of business which have previously been considered entirely voluntary. Some say CSR and the law are completely opposed. Some say they feed each other. Most companies do not understand the complexities of human rights in relation to their business and have tended to associate human rights with governments rather than businesses, despite the many connection points between what businesses do and how this affects people and societies. Partly as a result of the strong focus placed on human rights through the work of John Ruggie and the Protect, Respect, Remedy framework, more businesses now understand a human rights position is an essential part of their CSR framework.

Corporate Social and Human Rights Responsibilities adds a set of perspectives to this entire field, which is still in evolution—and some are quite fascinating and far-reaching for business. The book is a compilation of contributions that were developed for the CSR, Business Responsibilities for Human Rights and International Law Conference, organized by the University of Copenhagen in 2008, supported by the CSR-progressive Danish government. This was an attempt to strengthen the legal influence of CSR on management decisions while retaining the fundamental principle of CSR as a voluntary management policy. (Sort of having your cake and eating it too.) This was also at a time when the Danish Government introduced the pioneering Financial Statements Act in which large companies were required to report on sustainability or provide reasons for not doing so. The contributors in this volume include international lawyers, economists, investment management specialists, accomplished academics and a representative of Danish commerce—an impressive group delivering an equally impressive set of informative, thought-provoking papers.

The book is in three parts: first, an overview of the relationship between law and CSR including discussion of the United Nations Global Compact and the Human Rights Framework developed by John Ruggie; second, regional examples about the way businesses adopt responsibilities for human rights as part of CSR; and third, a view on law and management with CSR Codes of Conduct and more.

An important concept which falls somewhere between CSR and the law is "reflexive law" which, in layman's language, is the way law promotes industry self-regulation, e.g. requiring companies to disclose on sustainability but not prescribing the performance standards they should adhere to (such as the Danish Financial Act mentioned above). This is also the principle upon which the UN Global Compact rests (though it is not a legally binding framework): beyond a declaration to uphold principles, the key commitment companies make is to publish an annual report of their progress. Andreas Rasche, Professor in Business and Society at Warwick Business School, makes the point that criticism of the Global Compact is based on a misunderstanding of the mandate of the UNGC and classifies the UNGC as a "necessary supplement" to more existing and emerging regulatory efforts in the business environment linking business and civil society through learning events, dialogue events and partnership projects and acting as a "moral compass." He describes the UNGC as the largest corporate citizenship initiative in terms of size while admitting there are almost no "empirical insights on the implementation of tem principles in corporations."

Karin Buhman, Associate Professor of Law at the University of Copenhagen, writes about multi-stakeholder public-private regulatory forums, of which the UNGC is one, which function at the level above national lawmaking. She writes that while such bodies are clearly not conventional law-making institutions, they do have normative ambitions. She also points to the UNGC's "reflexive" approach as one of the ingredients in its success.

In another piece, Jette S. Knudsen, Associate Professor at Copenhagen University, looks at the organization of CSR as a means of corporate control (subtitled "From do-gooding to mainstream?"). Using HP and Ben and Jerry's as core examples, with some reference to IBM, Nike and others, Knudson looks at offensive CSR (clear link to business strategy) and defensive CSR (no clear link to business strategy), the role of boards in shaping the CSR agenda and position of CSR management within companies. Ultimately, he shows CSR will grow in importance to boards, and CSR managers need to be much more "business savvy." No surprises there.

One of the more fascinating articles is by Dominique Bé, deputy head of the European Social Fund, who compares the way human rights are reflected and upheld in corporate Codes of Conduct and International Framework Agreements (IFAs). The first IFA was between Danone and the International Union of Food (IUF) back in 1988 in which agreements on social responsibility and employee rights were reaffirmed. IFAs are not collective agreements, though they are often established with union bodies. However, there is no legal requirement for companies to sign an IFA. Most IFAs therefore build on the commitment of signatory MNEs to respect them worldwide, over and above adherence to national regulations – a kind of voluntary acceptance of a legally binding agreement, going beyond the unilateral nature of corporate Codes of Conduct.

Another interesting article by Lauren Caplan, counsel to an investment company, refers to the way CSR considerations are or are not integrated into the process of raising capital. The author notes the lack of disclosure in corporate social responsibility reports on risks relating to corporate social responsibility. No surprises there either.

All in all, the book Corporate Social and Human Rights Responsibilities does what it promises and more. It provides some engaging perspectives on CSR, human rights and the law, as well as some detailed discussion of the finer issues most CSR practitioners would be wise to have on their radar.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en

The Green Executive

The Green Executive: Corporate Leadership in a Low Carbon Economy


By Gareth Kane

Published by Earthscan.

ISBN: 9781849713344

This review was first published on CSRwire.com on 8th August 2011



Description

The Green Executive: Corporate Leadership in a Low Carbon Economy provides everything you need to know to develop a winning sustainability strategy and the leadership skills you require to implement that strategy.

The first part of the book explores the business case for action taking into consideration opportunities, threats of inaction, risks of action and the ethical dimension. This is followed by an overview of global environmental problems, including the big three: climate change, resource depletion and toxic materials, and global solutions – including eco-efficiency and industrial ecology. The third part translates these large-scale solutions into practical actions for a single business ranging from simple housekeeping measures through to innovative business models. The final, crucial part introduces the sustainability maturity model and provides an insight into how the highest level of that model can be achieved.

A range of personal views is provided in the form of 18 exclusive interviews with senior level executives from a wide range of sectors including retail, transport, manufacturing, logistics and the service sector, from small businesses through to international giants like Canon, BT, Marks & Spencer, National Express and GlaxoSmithKline.

Commentary

Having attended a fascinating webinar where Gareth Kane, author of The Green Executive: Corporate Leadership in a Low Carbon Economy, presented some of the key themes of his book, I knew I was going to be in for a treat. There are many books around that talk about what it means to be green, how to do it and what insights can be gained from all of them. What's so appealing about the way Gareth goes about presenting this subject is not only his skill in covering all aspects of green and sustainable business with clarity but also his very down-to-earth, pragmatic and plain language approach.

The Green Executive is structured logically: first comes the business case for becoming a green executive, next an explanation of what creating a sustainable economy actually means, then the actions required and finally the processes that need to support the actions. Each chapter closes with a helpful summary and is followed by an interview with a range of senior executives from a diverse group of companies. Each chapter is fairly short and almost can be taken as a standalone lesson in sustainability.

Rather than using this review to describe the details of how to become a green exec (yes, sometimes you just have to buy the book!), I thought I would share some of the insights from company execs. Here are my faves:

"The mainstream consumer wants performance and value and sustainability." Peter White, Procter and Gamble.

"Initially we wanted to develop a feel good factor among the staff." Julie Parr, Muckle LLP.

"The sustainability programme saved Northern Foods £2 million last financial year." Paula Widdowson, Northern Foods.

"We launched 31 new products during the recent recession." Nigel Stansfield, InterfaceFLOR.

"Give responsibility for sustainability to someone with a real passion for it." Sally Hancox, Gentoo Housing Group.

"The most important driver is to protect and enhance our brand." Richard Gillies, Marks and Spencer.

"Reputation has become a much more important part of the corporate structure than it was in the past." James Hagan, GlaxoSmithKline.

"The single most important quality in this game is perseverance." Roy Stanley, Tanfield Group.

"We've received many awards for reporting, diversity, and for specific sustainability projects." Chris Tuppen, formerly BT.

"Senior management commitment is essential." Roberta Barbieri, Diageo.

"Our next big challenge is water." Stephen Little, The Sage Gateshead.

"We have been instrumental in the development of hydrogen fuel cell vehicles." Martin Blake, Royal Mail.

"You have to start breaking all the old rules of business." Vic Morgan, Ethical Superstore.

"We see the low carbon future as a really exciting, positive future." Nick Coad, National Express Group.

"We have found it very useful to get an external set of eyes to come in and do an audit – this gave us an action plan of how to move forward." Glen Bennett, EAE Ltd.

"A big challenge is to motivate middle management. The top level management can be committed, the general staff can be committed but middle management have sales targets, costs targets and organization to run…." Surrie Everett-Pascoe, Canon Europe Ltd.

"Sustainability is fast becoming a reputational issue for our clients." Chris Jofeh, Arup.

The Green Executive is an essential book for those who want a leadership view of how to make a business sustainable, from how to address the risks to how to exploit the opportunities. The book is nicely populated with models, frameworks and ways to advance, and is pitched exactly right to make it interesting without getting bogged down in academic texts. Using tools that include Gareth Kane's Sustainability Maturity Model or his summary of new and emerging green markets, green executives may just become a mainstream feature of business.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en

Embedded Sustainability

Embedded Sustainability: The Next Big Competitive Advantage 

By Chris Laszlo and Nadya Zhexembayeva

Published by Greenleaf Publishing

ISBN: 978-1-906093-58-7

This review was first published on CSRwire.com on 29th July 2011

Description

 

In Embedded Sustainability, authors Chris Laszlo and Nadya Zhexembayeva explain and predict how companies can better leverage global challenges for enduring profit and sustained growth. They introduce the marquis concept of embedded sustainability: the incorporation of environmental, health, and social value into the heartbeat of the product life-cycle with no trade-off in price or quality – no social or green premium. This book helps readers to comprehend and implement the notion of embedded sustainability. At its best, embedded sustainability is invisible, similar to quality. In addition to delivering socially and environmentally conscious products for consumers, it is capable of considerably motivating employees. Most of all, it enables smart companies to create even more value for both their shareholders and stakeholders.

 

Commentary

 

Although I didn't, in many ways, it makes sense to start reading this book at the penultimate chapter, Chapter 9, entitled "The world in 2041." Now, 2041 is not all that far away, but the description of the fictional young Jake Marstreng attending an interview with "Septad Corp" is as futuristic as the best sci-fi movies, as surreal as the best fantasy productions and as realistic as the best documentaries on National Geographic. It's a future which is so far-fetched as to be a perversion of the authors' imagination and yet so possible as to be just around the corner. Detailed descriptions of the radically changed global economy, sci-fi lifestyles and new technologies are truly exciting: solar cell conversion of light into electricity, PCB destruction using photozymes, Virtual Retinal Display contact lenses, 3-D virtual conferencing, vertical farms using hydroponics and crop stackers powered by methane digestion, vehicles powered by solar photovoltaic thermoelectric generator hybrid systems, construction incorporating zero-energy technologies and hydro botanic water treatment and more. And all this happens after the Water Wars and the Dark Years. All that's missing is Dr Spock (who, in 2014, is probably Indian, Chinese or Brazilian). Reading Chapter 9 helps you make sense of what Embedding Sustainability is all about. It's not another shmoozy look at how companies are "doing well by doing good." It's not another collection of glowing MNE case studies that have more reputational value than sustainability substance. It's not a how-to-succeed-at-sustainability-in-3-days recipe. It is a highly intelligent (and intellectual) roadmap of the gearshift in corporate thinking and actions that are needed to transform sustainability bandaids into sustainable business.

  

Chris Laszlo and Nadya Zhexembayeva do a magnificent job of whetting our appetites for creating sustainable value. They describe the book as organized around "central themes of business strategy and change management, with two bookends." The first "bookend" is about the mega-trends that are driving the new business environment and the last "bookend" is about a future vision of business and some of the key questions we often wrestle with as we move forward on the sustainability journey.

 

The authors shape the mega-trends around three core issues: declining resources, radical transparency and increasing expectations, offering compelling arguments relating to each. For example, blue fish tuna has become so rare that a single adult fish fetched $396,000 at an auction in Tokyo; use of Google Earth to view the plantations where bananas are grown by Dole; the sale of 190,000 organic cotton yoga outfits by Walmart in the first 10 weeks of launch; or Sourcemap.org which exposes environmental impacts of anything manufactured.

 

Now convinced, the heart of this book provides an excellent backdrop for envisaging sustainable value creation. Seven key drivers are discussed: risk mitigation, efficiency opportunity, factor of differentiation, pathway to new markets, protect and enhance the brand, influencing industry standards and driver of radical innovation. However there are many paths to Rome and strategic approaches may differ from company to company. Embedded Sustainability then takes us on a journey of strategy development using three strategic frameworks: Porter's Generic Strategies, Kim and Mauborgne's Blue Ocean Strategy and Clayton Christensen's Disruptive Innovation, showing how all these can have their place in the ways in which companies create superior sustainable value.

 

Finally, even if you are on board so far, there is still much to debate. The final chapter of this book is an articulation of some underlying questions (the authors' "starter-kit of Big Picture questions"):

 

1. Growth or No growth? Is growth itself sustainable?
2. What is the role of government and the nonprofit sector? Can regulation achieve what voluntary initiative cannot?
3. Stopping the bad or creating the good? Is your agenda bright green or dark green?
4. Having or being? Is a moral awakening imperative?
5. Evolution or revolution? Can we expect a global breakdown and rebuild to occur within a few decades?
6. Restoring or transforming nature? Should we aspire to the preservation of nature in its untouched state or use our technologies to "fix" and "improve" nature?
7. Fear or enlightened self-interest? Are we motivated to change by fear or by positive images of the future? Does inspiration drive us more than the threat of an impending disaster?

 

Embedded Sustainability: The Next Big Competitive Advantage truly stretches our minds and turns sustainable value into a compelling direction which is within our capability, though not without fundamental repositioning of the way we perceive sustainable value and the routes to achieve it. This book is both delightful and frightful. The vision of an accessible sustainable reality created by Chris Laszlo and Nadya Zhexembayeva is delightful. The effort needed to get there is frightful. But, no gain without pain, right?

 

 

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en