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.

CR Conferences – Horses for Courses or The Good, The Bad and The Ugly?

I have just come to the end of speaking at a series of five corporate responsibility conferences/events in close succession. It seemed like a lot. In fact, my esteemed colleague @Dstangis even suggested on Twitter that I am attending so many conferences that perhaps I don’t have enough work to do! In practice, it probably represents only half the of what I could have gone to and I have to miss some I would very much like to attend. The budget only goes so far.

Seems to me that that the conferences fit into one of three categories that define the flavor of the event, and for me, will help me determine which I prioritize going forward. Those categories are defined by who is leading the conference: (1) mission driven organizations (2) schools/students and (3) conference organizations.

I have found that conferences driven by mission driven organizations and schools (or student) organizations in the CR space are the most valuable. They tend to have a better defined objective, clear flow of events and better organized panels. Those organized by mission driven organizations are the best for me for networking and learning from peers. Those organized by schools and students are without doubt the most energizing and motivating. Students tend to ask more challenging questions with little worries for the ‘people in glass houses’ concern that those of us in corporations might have when we consider challenging each other in public foray.

I have not been as impressed with events led and organized by conference companies. I have seen less interest from the organizers in the flow of the event and in the participants in the panels. I have also discovered that it is a bad sign when the panelists are not contacted by the facilitator in advance of the conference to ensure the different presentations fit together appropriately.

Last year I attended the Unconference in DC and am looking forward to attending again this year. This is a completely different conference format in which participants together determine the agenda at the beginning of the day. They are running in multiple locations this year with the new title Solutions Labs. I have some ideas for the Labs, which I will share shortly in a post.

I would be interested in hearing others perspectives on the CR conference circuit. Any you particularly recommend (unbiased perspectives welcomed, no self promotion please :-) )?

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.