Perception of CSR in the C-Suite

I just returned from the 2009 PR News CSR awards where several CSR programs were honored for employee engagement, CSR reports, community affairs etc.

All winners had the opportunity to say a few words from the podium and we were asked to respond to one of a few questions sent to us in advance. I addressed the question “In this tough economic environment, how do you get buy-in from the C-suite to invest in CSR ?”

It will probably come as no surprise that my thoughts were that, as CSR professionals, we need to evolve the perception of CSR in corporations and in the media. The tough economic environment is in part due to the failure to plan and operate sustainably. Together with our C-suite executives, we need to bring more sustainable thinking into our way of doing business. Philanthropy is still in the mix, but it is even more important to understand the social, economic and environmental impact our products and services have on the communities into which we sell them and then to act on that understanding to ensure sustainability.

A counterpart from Deloitte, a co-winner in the employee relations category, had a very similar message.

Next year I hope there will be an award category recognizing companies that have reviewed their core products and services though the lens of their sustainability objectives. And perhaps even a question for speakers to answer something like “how has your CSR team influenced the core product/service portfolio of your company to further your sustainability objectives”.

Congratulation to BT’s co-winner Deloitte in the Employee Relations category and to Agata Tyszkiewicz (CEO Publicist), Jeff Gluek (CMO Travelocity) and Rhonda Mims (President Corporate Responsibility, ING) my co-winners in the CSR Executive of the Year category. I am honored to be in their company.

Four Dimensions of Sustainability

Reducing negative impact on climate change is a challenge many corporations are trying to tackle. Many organizations are up for the challenge but many are unsure of where to begin among the myriad of activities on the table.

Due to these challenges, I’ve developed a white paper which I hope will provide more insight on how to navigate these challenges. The Four Dimensions of Sustainability evolved from my trying to put BT’s and other company’s many sustainability activities into a logical set of categories for a presentation I had to give.

I wanted to categorize these companies in a way that would be comparable across sectors and be applicable to companies at any stage in their CSR evolution. I wanted a framework that would encompass everything from lobbying on CAFÉ standards and green advertising through employee engagement to sustainable product strategies. . I presented it a number of times and received a very positive response so I was encouraged to put it together as a white paper.

The resulting framework that I developed can be used to address social and economic sustainability although I have used environmental examples to illustrate the framework in this first version of the paper. I plan to put together a future version of the paper focusing on social and economic examples. I hope this framework will go some way to helping companies understand the full breadth of areas they need to consider when developing a sustainability strategy and also provides a common lens through which outside observers can judge a companies credentials.

I am opening the white paper up for direct comments and suggestion – good or bad. The paper has been posted on a wiki so that you can suggest amendments and additions and collaborate in whatever comes next.

To download a PDF of the white paper, click here.

Paradigms for Sustainable Consumer Products

I have written before on the need for companies to develop new paradigms for doing business. I came close to one yesterday in my life as a consumer.

I have an up-market compact digital camera from Canon that died. I called Canon and as an alternative to an expensive repair they offered me an upgrade to a newer model at a good discount off the retail price. Part of the deal for the upgrade discount is that I return the broken camera to them for recycling the parts. I get to keep all my old accessories (including the battery and memory card) all of which work on the newer model.

Having been a product manager, I know that this isn't a trivial process for a company to implement. It requires an application to be developed and integrated with the company's other systems to track all the returned devices, service managers on the help desk need to be trained to explain the process to customers and changes have to be made to the logistics operation to receive the returned device and process it accordingly.

Nevertheless, this still isn’t quite where it needs to be. Ideally, I would be able to get my existing camera body repaired and upgraded to the latest features cost effectively. But with the balance between cost of labor and cost of materials that is unlikely. And of course I want my repair turned around quickly so it has to be done in the US and by hand whereas a completely new camera can be built with a high level of automation and in another country where labor rates are lower. So the economics just don’t favor repairs and ‘soft’ upgrades right now.

But I think I got the next best thing. I was impressed that my specific camera, with its serial number registered, was brought back into Canon’s supply chain in an auditable way and that I was incentivized to do that with a discount on the new model.

Smart Grid - Let’s not create an Energy Divide

Earlier this week I attended a joint GE/Google event in DC, Plug into the Smart Grid. The event had over 500 attendees and was literally standing room only. Just yesterday I received an invite to a Climate Group teleconference on Smart Grid. With the infrastructure spend and green spend in the stimulus package, a hot topic has become even hotter.

There are many great articles to read on Smart Grid across the Internet and Marc Gunther has written an excellent overview of the GE/Google event.

The focus on green energy, energy efficiency and consumer empowerment was invigorating. I did, however, believe that there was a sustainability angle missing. This was ensuring we do not create an energy divide. There was one question on the topic of protecting consumers and only one of the panelists responded.

The key social/economic sustainability issue in the ICT sector is the digital divide. There are 'haves' and 'have nots' in the ICT world, influenced by such things as prosperity, education, geography and age. Being on the 'have not' side of that divide (not having good access to a computer, broadband line and knowledge of how to use it all) is a self-reinforcing economic and social disadvantage.

As the intelligence of the smart grid is being designed all the participants need to ensure that we do not create an energy divide. And we cannot leave all the responsibility to the regulator. The corporations involved must take a leading role too. As much as we highlight the economic and green benefits of a smart grid, we need to pay corresponding attention to social sustainability matters to ensure we do not inadvertently widen existing social divides by adding an energy divide.

How far is too far?

I’ve been thinking a lot about legal issues and the impact on CSR. As I’ve written my past two posts, CSR Debate and Legal Doesn’t Equal Sustainable, there has been yet another issue that has come to mind.

If the legal framework defines acceptable business practice, it is only an incremental step to see legal consequences as an acceptable cost of doing business. So if the fine for breaking the law is outweighed by the commercial benefit, then it makes sense to break the law and pay the fine. Adding a component of risk assessment, and assuming you only get caught and found guilty a small percentage of the time, can make quite a compelling commercial equation for a company to knowingly break the law.

It is often quoted that there is no such thing as standing still in business. A company that sees only legal construct as defining good and bad is on this logical pathway to self destructive behavior. So what should we be doing instead?

Businesses should view following the law as only the minimum we need to do. Ethical companies and the executives within them should be staying well on the safe side of the law. Whiter than white should be the legal related objective, supported by an ethical approach that aspires to exceed and perhaps even to lead the legal definition of right and wrong. And, through our business dealings, our vendor engagement processes and our employment approach from the highest levels down, we should let our business partners and colleagues know that flying close to the wind with regard to the law is not an acceptable business or personal practice. That way we become the check and balance on each other’s ethics and we embark on an upward spiral into mutually supportive business relationships and public trust.

The CSR Debate

In his recent column in The Financial Times, Stefan Stern implied that it is okay for businesses to employ child laborers and pursue environmentally unsustainable activities so long as it is within the law and it is in the interests of being competitive. He seems to also invoke the words of Sir Terry Leahy, chief executive of Tesco (the UK’s leading retailer) as implying Sir Terry would be in agreement.

Having been a product manager with a clear set of P&L objectives in previous roles, I am fully aware of the business imperatives of cash and profit. However, I do not see the mismatch that Stefan observes between CSR and what managers have to do every day of the week. As I see it, every CSR initiative should have a clear and commercially compelling objective, whether it is employee retention, risk mitigation, customer loyalty, cost reduction or others. Additionally, every manager should be worrying not only about today’s profit but about tomorrows and next year’s profit too. Using up a resource faster than it is being replenished might deliver short term returns, but will compromise tomorrow’s business.

That isn’t to say that there isn’t sometimes a short term disadvantage when one company acts responsibly and its competitors act irresponsibly. I recall a negotiating game from my early training in management that demonstrated that if individual parties work together for the common good then all end up better off. But if either tries to undermine the other’s trust to gain at the other’s expense, both end up worse off. In the CSR world that is where leadership and common standards come in.

Contrary to Stefan’s views, I think our current recession demonstrates we need to be thinking more rather than less about the longer term implications of our decisions in the business world. To characterize CSR as do-gooders and “babies, dolphins and forest” is a disservice to the debate and will ultimately lead us to the lowest common denominator.

Legal Doesn’t Equal Sustainable

This past Friday I spoke at the Conference Board’s Leadership Conference on Global Corporate Citizenship. On my panel, I joined speakers from Bloomberg, Mott MacDonald and Truist to discuss the CSR programs our organizations have run outside of the USA.

I focused on some of the contrasts I have observed between the US and the UK and how I see them having influenced differing corporate approaches to sustainability. I raised contrasts in roles of government and corporations, sense of community obligation, cultural attitudes and political differences.

The area of contrast that interests me the most is the impact of the more legally driven and litigious nature of the American business world. I have come to believe that the prominence of law as a business guide has led us to a point where legal and illegal is often seen as defining good and bad. We see this all the time with politicians such as former Illinois Governor, Rod Blagojevich and other prominent personalities, defending their actions by claiming they did not break the law, as if that defines that their actions are okay.

Accentuating the impact is the strongly advocacy-based culture in which we operate, which I do not think is supportive of good sustainability action. An advocacy-based approach requires each party to take sides, present only their best perspective, and wherever possible undermine the position put forward by the other party. Sustainable thinking requires seeing both sides of an issue, resolving problems holistically and looking for solutions that none of the participants may have conceived of alone.

Of course, I believe a strong and transparent legal structure is an absolutely necessary partner to a well functioning commercial environment. But it serves a specific function and in the US in particular, we would be well served to go out of our way not to confuse it with distinguishing between good and bad and not to let its methods define our approaches to sustainability.