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.

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.