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Wednesday, June 16, 2010

Public Trust – The Role of Business in Society?

I have spent some time listening to the discussions between climate change skeptics and proponents. One of my main takeaways is that there is rarely a thorough understanding of the science of the issue. Proponents can quote scientists and so can skeptics. I don’t believe that many of us though (myself included) have really done our own analysis of all the research papers and, even if we had, that we would know how to reach our own judgment on the sensitivity analysis, scenarios and balance of risks.

Most of us, on both sides, reach our conclusions based on whose advice we trust.

I feel the same as I follow the debate about the Gulf oil spill. How much oil is coming from the well? Could this incident have happened to any oil company or was BP more exposed to an accident like this than its competitors? Should we be using more dispersants or less? I hear conflicting opinions. The answers to these questions require a complex analysis and understanding of the issues and I don’t have the time or expertise to research each one for myself. So, I think that, as with climate change, we develop our individual opinions based on whose opinion we trust; a newspaper, a political leader, a company, a friend.

In a recent discussion about consumer purchase decisions at the 2010 Solutions Lab in D.C., I participated in a discussion on how consumers make purchase decisions. Few of us (again, myself included), look at the detailed sustainability credentials of a specific product. At best, we develop a level of trust in certain brands and incorporate that into our buying decisions.

This is why I think the trust in large organizations, government and companies especially, is so important. That is where we develop many of our opinions. And when that trust is low it is very unsettling for civil society. If this is correct, then companies have a responsibility to earn and maintain public trust, not just because their business depends on it, but because it is part of their role in society too.

Thursday, June 10, 2010

Gulf Oil Disaster - Reflect or Deflect?

On June 9, 2010, CSRWire Talkback orginally published the guest post below that I wrote to appear on their site.

There is a lot of anger at BP right now resulting from the Gulf oil disaster. Someone told me recently that she was so angry she could think of nothing else and was unable to sleep - and she lives in DC, far from the immediate impact. But I question whether this anger is being harnessed in the right direction.

I watched four fishermen being interviewed on TV last weekend. They were angry at BP for polluting the Gulf and harming the fish stock. They were gassing up their boat and motoring on round to the Texas coast to see if the fishing was better there. What an irony and what better example of allowing anger to deflect attention from one’s own complicity in the event.

I learned recently that 10% of our transport fuel needs are met by oil coming from deep sea drilling. Less gassing up of our boats and cars would go a long way to obviating the need for deep sea drilling. Our pursuit of the lowest priced gas every time we fill up is an incentive for lowest cost exploration and production and for taking short cuts. As consumers we have a share in responsibility for the industry that serves our needs and in how our buying behavior incentivizes it to act.

I have no doubt that in the fullness of time and due process, it will emerge that BP, and perhaps other companies and government, should have done things to avoid the disaster or to respond more effectively. I doubt though there were many, if any, people walking around in BP cognizant of the likelihood of this particular incident and maliciously or even consciously ignoring it. There is absolutely a value in media and public attention to punish ‘bad behavior’ in organizations. But what we must be sure of is that we are not allowing ourselves to blame this on a particular set of circumstances at one company, such that we can isolate this as an aberration and conveniently not reflect on our own organizations.

In my mind, the right channel for our energy is not endless anger at BP. Instead use that energy for everyone in the corporate world, and indeed in non profit and governmental organizations, to be thinking to themselves, what catastrophic event of equivalent consequence, that could be caused by a failure in my organization or in my sector, have I unconsciously overlooked – social, environmental, or economic? Of course it is difficult to know what you don’t know, but if ever there was a motivator for thinking creatively, the Gulf oil spill should be it. It may not even be anything to do with your job, but as employees we have the obligation to create the right culture by raising and addressing those questions.

I recall reading once that identifying sometimes irrelevant circumstances that are different from our own is a psychological method we all use subconsciously to distance ourselves from the personal tragedies we read about in the papers each day. It is tempting to think “that company” is different. But I have friends and colleagues at BP and they are good people.* Wherever you are, by definition the unexpected could happen at your organization too.

None of my comments should in any way be seen as reducing the responsibility of the main parties in this tragedy. The question I ask is how best should we channel our desire to see change? How are you using your frustration and anger from this disaster, to reflect or deflect?

* In the interests of full disclosure I should declare that I worked for BP in a sales engineering role from 1987 to 1989.

Kevin Moss is Head of Corporate Responsibility for BT in North America. He shares his thoughts about the intersection between business and sustainability on his blog, CSR Perspective. The views reflected here are his own and, as such, may not necessarily reflect the views of BT, or of any former or future employer

Readers: Take up Kevin Moss’ challenge. Tell Talkback how your company or sector can prevent catastrophe.

Tuesday, June 1, 2010

Enough Stick Already, Where’s The Carrot?

I hosted a table last week at the DC Solutions Lab 2010 on the topic of corporate stakeholder relationships and whether stakeholders incent corporations to act sustainably.

The breadth and quality of the discussion was impressive. I was struck with a consensus we reached that individuals, in their roles as customers, employees and stakeholder do not, for the most part, act on their declared values in their role as members of civil society. I am sure you could find many people filling up their Memorial Day Weekend gas tanks in a BP station (wearing their customer hat) while proclaiming their anger with BP (wearing their member of civil society hat).

I admitted to having bought a toaster oven on-line the previous night without paying any attention to the sustainability credentials of the various vendors.

There is a clear ‘stick’ incentive for companies not to end up with a disaster on their hands that leads to consumer punishment - the risk component of corporate responsibility. But much less evidence of the ‘carrot’ incentive - reward for good actions.

Participants expressed hope that up and coming generations would do more to reward corporations for being sustainable with their buying, employment and share-ownership behaviors. But we had not reached that tipping point yet.

As a CR practitioner, avoiding risk is important but ultimately it’s a weaker incentive to do better than responding to reward. Risk mitigation sets a baseline, but does not incent leadership. Who knows how many bad things CR departments across the corporate world have helped companies avoid? It’s hard to build a business case to do more based on what didn’t happen. But when customers, investors and prospective employees flock to you because you do good, go above and beyond….that will really accelerate sustainable behavior. Roll on the tipping point.

I am hoping to have someone lead a table on this theme at each Solutions Lab in the program. We have run one in each of DC and New York so far. You can see my full take on the conclusions here and from there track back to the raw notes taken during the meeting itself.