Ethics Trumps Sustainability

I posted a blog in January "sustainability is over-rated" in which I posited that sustainability was just one of the principles against which Corporate Responsibility can be judged and practiced. A number of people commented that we should focus on action and not worry too much about terminology. Call me obsessed, but I cannot let it go at that. I believe more and more that ethics underpins sustainability and that we must be able to speak to ethics to be able to resolve some of the most challenging sustainability issues we will face in the future.

The broadly accepted principle of sustainability asks that we use resources in a manner that satisfies current needs without compromising the needs or options of future generations. Who says that the needs of the yet to be conceived, their children and their children’s children ad infinitum, are valued equally highly with the needs of those alive today? The answer is that our predominantly accepted code of ethics tells us that.

If being sustainable turns out to be easy, this might not matter. However, if being sustainable turns out to require behavioral change and perhaps sacrifice, we will need to be able to articulate and defend the ethical foundation on which it is based. To illustrate, I like to look at another view of the world……..

At BSR last year, many others and I listened to an inspiring plenary highlight by Zhang Yue Chairman and CEO of BROAD air conditioning in China. We all felt so good listening to a fantastically successful Chinese businessman talk about all he achieved through his environmentally friendly business approach. But you could hear the sharp intake of Westerners’ breath when he stated that of course he fired any employee who had more than one child, because more than one child per family was not consistent with a sustainable population and planet. This contrast in values is fundamentally an ethics question.

I recently read Practical Ethics by Peter Singer. It provided me with a structure to step back from my inherited values and look at them from an external perspective. I have not changed my views (that much!), but I understand them and their heritage much better. I also learned that our approach to sustainability is rooted in ethics and that some of our most difficult dilemmas, in particular when two good outcomes compete in a zero sum game, need to be sorted with the help of ethics, before we can apply sustainability correctly.

Encouraging Signs in the Marketplace

One of the most important stakeholders influencing corporate behavior is investors. Recent alignments between mainstream financial market organizations and corporate responsibility organizations are good reason to be encouraged. Of course, SRI’s have always been at the intersection of that space. For example, Calvert with their mission of ‘Integrating sustainability into capital markets for the health of the planet and its people.’ But I am referring here to financial organizations that are not mission driven in the same way.

Last year, Thomson Reuters acquired ASSET4 an investment research provider and offered an ESG/CSR information service.

In addition, last year, in August, Bloomberg launched a new ESG data service. I attended a compelling presentation about the service given by Curtis Ravenel at the annual members meeting of The Climate Group in New York last week. In the opportunity I had for a quick glance, BT seemed to fare well in the aggregate score.

NASDAQ has been running a CRD Analytics since June 2009 “a benchmark for stocks of companies that are taking a leadership role in sustainability performance reporting and are traded on a major US stock exchange”.

NYSE Euronext has partnered with the Corporate Responsibility Officers Association (of which in the interests of full disclosure I should say I am a governing board member) to accelerate professionalization of best practices in corporate responsibility. NYSE Euronext and CROA just released a joint CR practices survey across the member companies of NYSE Euronext.

Of course investors need to understand the data (Bloomberg’s analysis alone has 101 data sets) to be able to act on it. And as we know, good transparency doesn’t always correlate with good practices. But I think these initiatives (and others I have probably missed) are encouraging building blocks.

Employee Engagement – Harness Momentum

This is one of a series of posts on employee engagement.

I see employee engagement as having two roles; as an end in itself and as a mechanism to achieve change.

As an end in itself, employee engagement serves to improve morale and enhance retention and recruitment. In that respect, the first role can be accomplished through leadership from the top and building momentum, both of which I’ve addressed in earlier posts from this series. But for the second role, as a vehicle to achieve change in support of the organizations overall CR objectives we need to harness that momentum.

Whereas building momentum calls for flexibility across business boundaries and what I termed ‘allowing the trivial’, harnessing momentum is the time to leverage this energy without losing it.

So, how do you harness momentum? I have used three interrelated approaches outlined below to help achieve this:

• How the Individual Fits - Help the individual understand how their contribution fits into the whole. Look for ways to draw a quantified linkage between action as an individual and the objectives of the organization. In an ideal world our people will know what activities have to occur, and by when, to meet corporate responsibility targets, so they can put their actions in context.
• Materiality – action on trivial impacts help build momentum. It is not necessary to stop those activities, but when harnessing the momentum it is the time to help people understand where the material business impacts are and how they can influence those impacts.
• Functional Application – challenge the business units in the company to examine how they can impact the organization’s sustainability objectives within their core business activities and use the feedback from that to breakdown the objectives into functionally appropriate targets and objectives.

Earlier this week I attended an office party in our New York office catered wonderfully by one of our CSR partners, Project Renewal. I was humbled when two graduates of Project Renewal’s Culinary Arts Training Program told me what a great boost it was to their confidence to be invited in to speak to and work with us. But what great boost our own people get from organizing and participating in these programs. Joe Murphy, a colleague who volunteers with Project Renewal told me that every time he volunteers “I feel better than the person who gets the free meal.”

As corporate responsibility practitioners we must make sure that we harness this momentum to enable real change in underlying problems and not allow it to be a pressure release valve that enables us to allow the underlying problems to perpetuate.