In it together

In all the talk about visionary leadership, let’s not forgot the daily reality that business is about ‘making the numbers’.

One emerging theme this month is the importance of accounting and reporting. Sorry, sounds dull, I know, but stick with me as I explain why…

This month’s guest writer, David Grayson – long-time advocate that responsible business is good business – makes a vital point that the best CSR managers of the future will be those that really understand the business. Passion to save the world, I might add, is not enough without learning to speak the language of business.

And that language is about earnings, production targets, investment pay-back periods, efficiency ratios and the like. In fact everyone’s favourite new business guru, Unilever’s Paul Polman, himself makes the point that no one would be listening if his company’s numbers – and its share price – were not on the mend.

Just look at some of the stories we highlight this month: Microsoft is setting an internal price for carbon, to improve decisions about resource efficiency; Nike is measuring 50% lower product defects from lean supply chains; Puma is putting a monetary cost of its total environmental footprint into its accounting system.

Meanwhile in the run-up to Rio+20, banks like Standard Chartered are pushing for the value of natural capital to be included in investment decisions, while insurer Aviva is calling with others for improved triple-bottom-line reporting.

Last month I extolled the virtues of the Millennium Development Goals in focusing on a few clear numerical targets and thereby succeeding in moving the needle on the dial – cutting infant mortality, improving access to safe drinking water, et al. And I called for companies to get behind the push at Rio+20 for a new set of Sustainable Development Indicators, so the vital contribution of business can be directly included, measured and reported.

By next month the Earth Summit bandwagon will have decamped from Rio, and hopefully we’ll have a better idea who is talking the language of “numbers plus vision” as the best way forward.

This article first appeared in Corporate Citizenship Briefing

As companies decide what role to play at Rio+20 in June, Mike Tuffrey warns that a big opportunity could be missed

MDGs. SDGs. Rio+20…. Join the club if you (like me) sometimes get confused about the alphabet soup of UN-led global diplomacy. But a really important process is underway that could lead to a successor set of international commitments, following the Millennium Development Goals in 2015. The Earth Summit in Rio de Janeiro in June could give that process a powerful jump-start in the right direction. And business needs to be at the table.

The urgency of this is underlined for me, as we pull together our monthly round-up of news stories on corporate responsibility and sustainability for Briefing. They capture the progress – and sometimes pitfalls, conflicts and set-backs – as companies, NGOs and governments muddle along. Trouble is, too many involve trade-offs: a few steps forward, a few back; gains here, losses there. The sense of genuinely moving forward overall isn’t there…. hence the interest in a new global framework for sustainability.

To recap, the MDGs have done great job. Originating as the name suggests at the turn of the new millennium in 2000, they focus on specific issues with clear targets for 2015. They address basic issues like hunger, primary education, water and sanitation, child and maternal health, and HIV/Aids. They have powerfully focused attention and genuinely moved the needle on outcomes – albeit patchy, some more than others, some regions more than others.

So what’s next?

The Colombian Government has strongly proposed a broader set of issues, in subject clusters like climate, agriculture, and land use. A coalition of NGOs has put up a proposal too. But so far, little from companies on what business wants.

Now the UK Prime Minister David Cameron has been invited by UN Secretary-General Ban Ki-moon to chair a UN panel on what should follow. Some are suggesting unpicking the current environmental catch-all in MDG 7 to include commitments on greenhouse gases and deforestation. Others say topics like human rights, international security and debt relief need hard-wiring in.

Business ought to be saying: let’s have a strong and clear economic pillar to complete the sustainable development ‘trinity’ of social, environmental and economic areas. So far, few seem to be articulating that and spelling out what the individual economic growth objectives and enablers should be, and what the concrete targets could be.

My point is simply that companies – individually and through their business associations and partnership intermediaries – need to get stuck in now and physically at Rio in June too. Otherwise a big opportunity will be missed for another generation.

This articles first appeared in Corporate Citizenship Briefing

The prevailing consensus in business used to be that government is the problem. What we need is lower taxes and less regulation, and we’ll create the jobs and money that you need to keep your voters happy. You can trust us – take a look at our corporate responsibility report where you can see all the good things we are doing. (But just in case, we will still maintain well-funded public affairs departments to lobby and fend off unwelcome interventions.)

I say “used to be” because we hear rather less of that rhetoric now, at least from corporate leaders, if not from certain politicians. Perhaps the billion dollar bail-outs for banks and motor companies gave some pause for thought.

But has the reality actually changed? Have companies developed an alternative view about the proper role for government? Are they welcoming, indeed lobbying for, the right sorts of intervention? Alas, the evidence is still sparse.

Of course the previous mind-set was a reaction against the era of ‘big government’ when a civil servant could credibly claim “the gentleman in Whitehall really does know best” (Douglas Jay, 1937). And no one in the mainstream is now arguing for a return to those days. With only five Communist countries left and one of them – Cuba – even embracing a visit from the Pope, it really is time for business to move on from cold war attitudes too.

If you doubt it, our round-up of news stories this month shows governments remain centre-stage: in India, an attack on patent rights but also subsidies for wind farms; in China, requirements for (unnecessary?) animal testing plus a vigorous defence of airlines against EU carbon taxes; meanwhile the UK-US Partnership for Global Development, promoted at the Obama-Cameron meeting in Washington, explicitly “builds on the power of the private sector to help change lives”. At the same time, three stories about pollution from off-shore drilling in the Atlantic, Gulf of Mexico and North Sea remind us that companies can’t be relied on even to get the basics right all the time.

So what should be the right approach? Here’s my mini-manifesto for a change to a productive and profitable relationship between the sectors.
1. Business should explicitly welcome an active role for the public sector. Governments have always set the ‘rules of the game’ and need now to create the space for socially-committed companies to do the right things. That means more regulations to prevent free-loading irresponsible firms that cut corners and compete unfairly.
2. Governments must enable business to act for the long term good of their shareholders and society as a whole, and counteract short-termism. When carbon emissions are damaging our future environment and essential resources like water are becoming scarce, current market mechanisms need regulation if the true costs of future damage are to be priced in now.
3. NGOs must help create the ‘public space’ for business and government to work together, through their influence with citizens and access to the media. The temptation to cry foul and fear the worst remains strong, given past behaviours, but helping build a trusting space to find solutions through partnership is vital.

Most of us roughly know what a long term sustainable and equitable future could look like; getting there sometimes seems impossibly hard. One thing is for sure – we won’t make it if we continue to regard any of our ‘partners’ as part of the problem.

For some of us, reading Schumacher’s Small is Beautiful was a formative moment in deciding what to do with our lives and careers*. ‘Big is bad’ is therefore almost an article of faith.

If so, the crop of stories we’ve reported on this month might cause concern, since they illustrate what is arguably the next big priority for corporate responsibility and sustainability practitioners: going to scale. (Oh dear, sounds large).

You’ll be familiar with the CSR/SD journey our companies often travel. First, we figure out what we should be doing, and formalise it into a policy. Next we go to work in our own back yards, implementing it: energy in the offices, water in the factory, safety in the workforce and so on.

Then we ask: is it working and making a real difference? And we realise that the big impacts are not so much in our own operations but in the supply chain and when our products and services are used. Gulp. This is getting big.

So now we have a pilot or two, to test out possible approaches. And finally we go public with a BHAG – a big hairy audacious goal. Like Coke’s water neutrality, Unilever’s 100% sustainable sourcing from agriculture, or GSK eliminating terrible diseases like elephantiasis.

And so we discover that big ambitions are not wrong, just because they are big. In fact, achieving them requires many many small ‘bottom-up’ human-scale actions (which is what Schumacher was really saying anyway).

That’s what makes the new Nike moment – Apple’s belated conversion to the cause of sourcing responsibly – so exciting. The moment Nike similarly ‘got it’ became the point supply chain audits became the norm. This new moment is the point that millions of consumers, in love with their iPads and iPhones, could get in touch (pun intended) with the consequences of their purchasing choices.

Whether ‘could’ becomes ‘will’ depends on where Apple CEO, Tim Cook, decides to take the company, post Steve Jobs. This could be a big moment.

* In my case, it was a first edition, back in 1970s, given to me in my teens by an uncle, who was a successful Quaker businessman.

This article first appeared in Corporate Citizenship Briefing

The issue of leadership – and responsibility – is very much in the air. As I write, the plutocrats are meeting in Davos, debating the future of capitalism; the Republicans are struggling to find a credible presidential candidate; bankers and EU governments are trading insults about who should take a haircut and how much fat cats should be paid – and all the while, Western economies bump along the bottom, at best.

Whether in business or government, our times call for exceptional leaders. So Briefing’s guest columnist this month – Matthew Gitsham from Ashridge – asks a very pertinent question: is a new generation of CEOs starting to emerge, bringing new direction to our great corporations? To his list, I’d add Indra Nooyi, CEO of Pepsi, and Sheryl Sandberg, COO of Facebook – with the pointed observation that just getting greater diversity among our leaders would go a long way to improve things.

But my own experience in various leadership roles tells me there are very real limitations in what a leader can achieve. In fact the ‘chicken and egg’ question applies here: which comes first – an organisation ready and able to be led or a leader capable of doing it?

Certainly, a leader can stop things happening – a bad leader without vision is a killer of initiative and innovation. But a good leader without followers – and people who act as the vanguard and pathfinders ahead of the leader – won’t achieve much either.

As Disraeli famously said: I must follow the people. Am I not their leader?

As a leader you can set a direction, articulate a vision, call for action and remove barriers, but you can’t run ahead of what the organisation can actually deliver.

Behind all the inspiring stories that cross our news desk each day here at Briefing are dedicated CSR and SD managers, pushing good practice in their companies; only some of them have so-called inspirational leaders.

At the end of the day, yes, we need good leaders. But without committed people right down the line making things possible they can’t achieve the scale of change with the necessary urgency. To misquote Bismarck, leadership is the art of the possible.

This article first appeared in Corporate Citizenship Briefing