CSR: Are You Running an Old Release?

A couple of weeks back I wrote a post on the three stage journey of corporate responsibility.   We are in the midst of the holidays when make believe is at the fore. I thought I would try my hand at a make believe all in one software package for all three stages of the journey,  that would ease the lives of us practitioners. Angel investors sought for release 3.5.  Software vendors feel free to tout your wares in a comment!

Release 1.0 –Give it Away Responsibly: For proponents of the traditional mode of corporate responsibility our first release provides state of the art management of the company’s philanthropy, community investment and volunteering. A full suite of reports are provided on applications for funding, grants provided, employees engaged etc.

Note: Alpha and Beta releases are no longer supported and should have been uninstalled.  Bugs resulted in recommendations for charitable giving that unintentionally reflected the personal value sets and causes of company executives . All these bugs were fixed in Release 1.0.

Release 1.1 – Added impact assessment, allowing user to track the impact of community investment initiatives of all types. Provides reports on value of philanthropic cost by impact.

Release 1.5 – A significant new functionality allowing the implementation of strategic philanthropy. The application analyses your markets, employee needs, products and core capabilities and favors causes and grant applications that are aligned with core business objectives and competencies.

Release 2.0 – Spending Responsibly:  Purchasers will receive all the features of release 1.0 plus a completely new application for applying corporate responsibility principles to all the situations in which a company spends its money. This includes a full suite of environmental management capability, carbon emissions, resource usage.  All tracking and management is available at the product and at the site level. Also covers HR concerns for the operation of the business, such as diversity, wellbeing, work life balance, ethics and corruption. The reporting suite produces an annual report aligned with multiple publicly available reporting structures such as GRI, UN Global Compact, CDP, ISO 14001.

Release 2.1 – Adds the additional capability to apply the company’s core values to suppliers.    Provides questionnaires, risk assessments, scoring system etc, all aligned with company values to help ensure your suppliers follow the same principles you do

Release 3.0 – Make Money Responsibly: Available now, but only recommended for the professional user. The capabilities of release 3.0 are encapsulated by the concept of Creating Shared Value (CSV).   This package will help you identify opportunities to make money at the intersection of profit and positive value to society or environment. It operates by analyzing the financial, societal and environmental implications of an investment and prioritizing those with double or triple bottom line benefits. The application conveniently ranks potential investments based on a combination of financial, social and environmental criteria. The user has unlimited flexibility to set the weightings for each theme, to reflect company values.

Release 3.5 –  Is in development. Release 3.5 will highlight those products and services in a company’s portfolio that are profitable but have a net negative societal or environmental impact.  Sadly at the moment we have been unable to find investment funding to complete the development.   Angel investors sought – past financial performance no indication of future returns, but peace of mind guaranteed.

Operating system requirements:  All releases require appropriately experienced and courageous users plus supportive top down and bottom up operating systems.

Amazon recently launched an app that allows anyone to collect competitive pricing data quickly and easily from a store shelf and feed it back to the company. I tried it myself. Amazon can act quickly to adjust their online pricing based on data from thousands of pairs of eyes. This has attracted a lot of criticism as predatory. But I could argue that it is nothing new. Amazon are just doing what the industry has been doing for years. Only they are doing it better and without the middle player of a research consultancy.

This has many characteristics in common with other ICT capabilities that cause concern. Something we have always done becomes a concern only when we can do more of it, more quickly.

Anyone with a bit of search engine savvy can fairly easily identify my wife, our home and work addresses, perhaps identify where our children go to school and possibly even work out when we are all likely to be out of the house together attending a school event. All the information was public previously, only now it is in one place and much easier to connect and search.

Tools such as cell phones, text and twitter give people the capability to mobilize for a riot. Mobilizing people to cause trouble was possible previously by face to face communication, letter writing, phone, email. Twitter just makes it quicker and less expensive.

So how to identify the dividing line between what is right and wrong when speed and ease are only differentiators ? To some extent it is about what you do with the new found accelerated capability. I like it when an old friend finds me, but not when someone with malicious intent does the same; I like carrot mobs, but not violent riots; I would like Amazon to counteract price gouging, but not put my favorite stores out of business. But we also have to accept that innovation with a broad range of outcomes is inevitable, and learn to live with the outcomes successfully, rather than resist them. And of course, ‘everything in moderation’ will always have its place too . Especially as we approach the holidays!

Happy Holidays!

Forbes has reported on twelve 2012 predictions for the telecom industry. Among the predictions, the primacy of India and China; emerging market companies will gain ground in rankings at the expense of companies from developed countries; focus on machine to machine interfaces (smart grid, logistics); mobile subscriptions will exceed 6bn (half in Asia Pac alone); global broadband penetration will surpass 10% (0.7bn I assume), installed PCs will pass 2 billion; continued focus on cloud computing

What does this mean for corporate responsibility and sustainability in 2012 ?

Well, an ongoing issue with digital divide as some have broadband connected PCs and some only mobile phones. I suspect that in some ways this will always be an issue. As new services roll out they will inevitably be picked up first by those who are wealthier and already have better access. But there is a big positive in here too. 6bn mobile phone subscriptions in a world of 7bn people. Sure, some people have more than one mobile subscription, but overall this reflects a majority and ever increasing proportion of the population with connectivity of some sort. Mobile may not provide the same service as broadband, but with companies from emerging markets growing it becomes more likely that the services offered will be built to meet the needs of the population of those markets. This means more opportunity to deliver services such as education, health and economic value creation to help improve the lives of people.

And as cloud computing expands, the gap in between the processing value of my PC and the capabilities of a connected mobile device diminishes.

But also in 2012 as we see more and more connected consumers from emerging economies we will see growing aspirations to replicate our unsustainable lifestyles. Let’s hope that the opportunities afforded by ICT to support improved lifestyles at lower environmental cost will be enough to compensate. I hope that emerging economies will leapfrog Western society in this regard and be more successful at developing sustainable lifestyles. I hope that in the not too distant future, we in the Western world will be looking at today’s emerging economies as role models where they have reached our levels of wellbeing but we have learned from their levels of sustainability.

Machine to machine interfaces sounds so dry and tedious. But it is exciting. I think of throwing my clothes in the laundry and scanning the bar code on the box of detergent. The washing machine reads the chip in the clothes and shoots off to the cloud for advice on the optimum (lowest) washing temperature for the washing powder and clothing combination. At the same time, the washing machine checks the electricity pricing with my provider and using my preset preferences, determines when it will wash my clothes, for even lower carbon emissions and cost. My wife’s electric car has signaled to home and to the smart grid that it is close to home and needs a recharge. Our home energy control system takes that into account too as it knows from our on-line calendar that we are going out to a party shortly and need the car, so it delays the wash until the car is charged.

Lets just hope that that wash load didn’t include a clean shirt I need for the party !

This is only one example, but the possibilities of machine to machine interaction are endless and we can only start to imagine where they might take us.

2012 is only the next step, but it is going to be an exciting year.

ICT services impact our every day lives from how we work, to how we travel to how we make purchasing decisions for our daily needs. In this video series, I examine all of these elements from inside executive offices, to transportation systems, inside grocery stores and even teleworking in my own home.

In this fourth episode, I explore how ICT enables home owners and developers to lower their carbon footprint and other components of their environmental footprint, enabled by creating homes that are connected internally and connected with the outside world.  For this video, I visited the Department of Energy’s Solar Decathlon where I spoke to the winners from University of Maryland.

I have a penchant for simple models and frameworks.  In developing a presentation recently I used what I perceive as a three stage evolution of the corporate responsibility journey;  (1) how we give it away, (2) how we spend it and (3) how we make it.   The “it” of course is  money.

Stage 1; How we give it away. The traditional mode of corporate responsibility delivered through philanthropy, community investment and volunteering.  We make a profit and then we find ways to give it away for the good of society, sometimes referred to by the phrase ‘giving back to the community’, which carries the unfortunate (and I hope incorrect) implication that we took it away in the first place.     Strategic philanthropy is an enhancement in which giving is aligned with core business objectives and competencies.

Stage 2;  How we spend it.   All the ways in which we spend money. These are the realms over which we have the most direct control. This includes environmental management of our operations, energy and carbon footprint reduction, HR related issues such as diversity and employee wellbeing and  business practices such as bribery and corruption.   Another component of Stage 2 is looking along our supply chain (where we also spend a lot of our money) and influencing our vendors to align with our values.

Step 3; How we make it   This is where the most advanced companies are now exploring as they build sustainability into their core strategy for making money. Unilever, P&G and GE come to mind.  Stage 3 is encapsulated by the concept of  Creating Shared Value (CSV); identification of  opportunities to make money at the intersection of  profit and positive value to society or environment by analyzing  the financial, societal and environmental implications of an investment and prioritizing those with double or triple bottom line benefits.

The challenge for Step 3 is how we address the dilemma of what to do where profits and positive value to society do not intersect. What to do if portfolio components or potential investments are delivering a return for investors but do not bring net positive societal/environmental value. Perhaps in software terms this is Release 3.5. Status; ‘under development.’

By Niall Dunne, Chief Sustainability Officer, BT

 On July 4^th 2011 while we Americans were celebrating Independence, the British were still working hard and Niall Dunne joined BT as our new chief sustainability officer to lead on climate change, and sustainable development and strategy.  Niall had spent the past decade leading sustainability practices in Saatchi & Saatchi and Accenture, and in building their credentials and reputation in the sustainability area. He is already having a marked impact in BT.   In this blog post he shares his perspective on the upcoming UN Framework Convention on Climate Change COP 17.

People always make better decisions when they understand the relationship between the cause and effect of their actions. Humanity’s evolutionary story to date has largely been one of better decisions and innovation enabled through a clearer understanding of our environmental constraints and opportunities.  However, if we want our evolution to continue to be a success story we need to fundamentally transform the dynamics of supply and demand globally and create systems that will work and scale for a planet projected, by the UN, to have 10 billion human inhabitants by 2050.

One of the major issues with globalization is that its complexity means that our once symbiotic relationship with the environment has become opaque; we can no longer see the implications of our every day decisions, resulting in humanity and the environment being at odds with each other.

However, one of the major benefits of the globalisation mind-set is the interconnectedness that it has fuelled. Never before have we been as connected to our global neighbours; never before have we been so socially attuned to the needs and aspirations of others or so empowered to reach out to them.

Our communication technology is the driving force behind this shift and it’s this technology that has the power to deliver the transparency needed to restore the clarity required for better decision making.

If we are to evolve still further and realize our greatest potential, we must embrace technology’s ability to restore transparency to the every day lives of people, in both the developed and developing worlds.

Crucially, we must make our consumption behaviours transparent to provenance and impacts.  As affluence and consumption grow globally, we must urgently move away from the excessive resource demands of the last one hundred years to a much more collaborative and conscientious form of consumption.

The opportunity for business is to help customers manage the complexity of purchasing and lifestyle decisions in a way that makes acting on their values easy.

Similarly, on the supply side we must again embrace technology’s ability to move us away from “supply chains” to “supply loops”. Here again transparency and traceability are key allies in ensuring we optimize our global supply networks & begin to drive efficiency & eradicate waste.

To date, the greater focus of efforts via the United Nations Framework Convention on Climate Change (UNFCCC) has been on regulation and achieving political consensus to influence supply-side impacts. Tackling demand-side impacts from consumption and accelerating innovation has, for the most part, been sidelined.  We need an holistic approach that is transparent across national and international systems of production and consumption, which gives clear line of sight to the resources we need to manage for the benefit of all nations and all ecosystems.

This needs innovation – of technologies and systems change – to influence demand-side impacts through efficient solutions that can scale to help our rapidly increasing population cope with resource constraints and the implications of climate change.  We welcome initiatives from the UNFCCC to create open innovation policy frameworks to incentivize and accelerate collaboration to solve common climate-change challenges.  They should facilitate investment to develop, share, and scale relevant intellectual property.

Whilst the frameworks are needed to enable rapid leap-frogging to more sustainable technologies and to accelerate change where possible, we should also seek to leverage those approaches that have already been proven to drive transparency.  For example energy labelling of white goods, such as fridges and washing machines, using a simple A-G rating system in the UK, or the Energy Star rating in the US, has driven strong consumer demand for more energy efficient appliances.

There is phenomenal potential for digital technology to activate the kind of transparent labelling and create social currency that could be utilised to celebrate a more conscientious and collaborative energy efficient lifestyle, both in the developed and developing world.

People already use smart and intuitive devices to enable new ways of doing things in their daily lives. Through digital technologies we know far more about the people we share this small planet with than ever before.  The opportunities to harness digital technologies to enable more sustainable lifestyles are everywhere; in our energy, transportation, and food systems, in our built environment, between machines and between individuals.  We need to support these innovations and the collaborative and transparent behaviours that bring out the best of in people; that help them connect to one another and that help businesses, governments and individuals aspire to a ‘one planet lifestyle’ for all.

Collaboration, innovation and transparency are central in successfully tackling the consumption challenge driving climate change and the UNFCCC’s latest report COP17 needs to take crucial steps in these areas to accelerate positive changes.

On Monday last week I attended an excellent roundtable organized by the World Environment Center (WEC) and Dow at the National Press Club in DC. The topic was Creating Shared Value (CSV) and the excellent keynote presentation was by Mark Kramer, one of the authors of the January 2011 paper on the topic in the Harvard Business Review.

CSV is a hot topic in the field that I gather, from this blog post by Aman Singh,  and others I have read, and was covered widely at BRC and NetImpact too. The WEC event was excellent with great speakers all around, including John Bee of Nestle, who put a comment on my blog only two days earlier (thanks John!). A great mix of for-profit, academic and not-for-profit and a valuable balance of time allowed for Q&A and open discussion.

CSV offers a wonderful opportunity for progress at the intersection of profitability and meeting societal and environmental needs. I feel sure that it will result in new ways for companies to think about how they invest, where they expand, what they sell.

Studying industrial management at university many years ago I recall looking at various frameworks developing strategy and creating innovation. Such tools as SWOT analysis and market expansion approaches (geographic or adjacencies) come to mind. I even recall learning about using nature’s processes as inspiration for innovation!

I think of CSV as a variation of this theme – a new way of looking for market expansion and innovation opportunities. By itself, that is business as usual as far as I am concerned.  We need more than that for CSV to be substantive in the world of CSR and sustainability. I believe there are two components that need to be highlighted;

• Included initiatives must be shown to have a net positive impact on society and the environment.  Identifying a single societal or environmental good that derives from a business opportunity is not by itself sufficient. That’s just good marketing.

• Proponents of CSV must address the question of what to do when profit does not align with societal or environment good. Just addressing the intersection of good with good (good profit with good societal contribution) is not sufficient. The hard question is addressing the conflicts when the two do not align. In fact, if CSV diverts attention away from that hard question it could serve to be more of a liability than a benefit in the field

CSV is a great start point to build support for the wider role of the business in society. But to be of sustainable value to corporate responsibility we must see it as the start point and not the end game.

(See Marc Gunther’s thoughts on the topic “Shared Value; Is there a there there” here)

Last week I proposed that sustainability is analogous to economics.  The thought was triggered during the GreenGov panel that I was moderating. The panel represented the full gamut of professional organizations in the field; Ira Feldman on the board of the International Society of Sustainability Professionals (ISSP), Valerie Patrick on the board of the Association of Climate Change Officers (ACCO),  Teri Yosie has recently completed a collaboration with  Net Impact,  and myself on the board of the Corporate Responsibility Officers Association (CROA).

The ISSP, CROA and NetImpact have all recently taken a look at the competencies required by the practitioner from different perspectives. All reports are available free on-line.  A very brief summary of each and some thoughts……….

In Structuring and Staffing Corporate Responsibility the CROA has categorized competencies into Knowledge, Skills and Attributes (KSAs) shown at a high level in the chart below. The KSA were derived from interviews and from a review of the job descriptions of practitioners. The focus, as might be expected, is on the full scope of the corporate responsibility practice from sustainability through philanthropy. A more detailed treatment in the report looks at how those skills align differently to different roles within the broader CR practice.

The ISSP’s 2010 Competency Survey Report categorizes skills into ‘soft’ and ‘hard’. In the chart below I have listed the skills under each heading in order of importance as derived by the ISSP’s survey.  The focus is on sustainability professionals. The report identifies the relative importance of the skills identified, with some substantial differences in importance between the top one to five skills in each category and those further down the chart

Only last week, Net Impact together with the World Environment Center released  Business Skills for a Changing World, spotlighting business skills required when teaching sustainability in business schools. Using data from interviews with sustainability executives in global companies, NetImpact and WEC identified an innovative and thought provoking categorization of inside–out skills, outside-in skills and traversing skills.  This report is targeted at the broader scope of business school students of all disciplines and functions, rather than sustainability/CR practitioners specifically.

The range of approaches indicates the continuing evolution of the field.  But going back to where I started, it confirms for me the idea that sustainability is analogous to economics.  The NetImpact/WEC report addresses the sustainability equivalent of equipping business school students to understand economics.   The ISSP and CROA reports represent the skills required by the various sustainability practices. Although sustainability distinctions are less well evolved, as an illustrative example, this might be  akin to differentiating between the skills is required of perhaps an accountant and a financial advisor, both practitioners in the ‘economics’ field.

And integrated reporting – where does that fit in ?   More about that another time

I would welcome your thoughts.

ICT services impact our every day lives from how we work, to how we travel to how we make purchasing decisions for our daily needs. In this video series, I examine all of these elements from inside executive offices, to transportation systems, inside grocery stores and even in my own home.

In this third episode, I explore how ICT enables telework to help organizations lower its carbon footprint, support work-life balance and reduce real estate expenses.

There is a very valid question of whether telecommuting simply shifts the carbon burden from the office to the home. If the use of energy in the home for one person is less efficient than in the office, does it outweigh the benefits of the avoided commute?

BT completed a detailed analysis of that question in collaboration with GeSi which you can see on page 41 of this report ‘Evaluating the carbon-reducing impact of ICT” For a detailed analysis of that question and a quantified conclusion that there is a significant net carbon benefit.

We like to say that Corporate Responsibility is about ‘beyond compliance’. What about sustainability ?

Earlier this week in preparation for my panel at GreenGov I re-read the President’s Executive Order on Federal Leadership in Environmental, Energy, and Economic Performance (aka sustainability).  

The cl0sing paragraph Section 20 para (c) reads “This order is intended only to improve the internal management of the Federal Government and is not intended to, and does not, create any right or benefit, substantive or procedural, enforcable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. ” BARACK OBAMA    The White House Oct0ber 5th 2009

So its official, by Presidential Order.  Sustainability is about ‘beyond compliance’ too !