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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.


  1. Interesting perspective, Kevin. I think many of us would admit that there are times when our actions don't reflect our personal values, whether it's a product we buy, company we invest in, or a client/company we work for. But on the whole, I am encouraged that socially responsible investments continue to grow and the demand for certain environmentally preferred products keeps increasing. It's also important to note that consumers, when surveyed, consistently affirm their interest in greener products. They also have higher expections for the way companies operate with regard to the environment. My firm, Cone, just released findings from a recent survey we conducted on consumers' expectations of companies. The results underscored their desire to engage with companies on their sustainability and CSR initiatives. Here's a link to the survey findings:

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