When CR and Business Objectives Conflict
A touchy subject I know. It is all the rage to focus on Creating Shared Value and on building momentum through identifying the positive intersection between corporate responsibility/sustainability and business success. But, while I believe there is plenty of ground to be gained in that area, we are kidding ourselves if we think that it is the whole picture. There are major economic/societal challenges to be solved such as the consumption society and pressure for continued GDP growth, and tactical issues in every company too. I even know that many of my own behaviors are not truly sustainable even though I am committed to trying to achieve sustainable lifestyles globally.
I am speaking on Friday at the Ethical Corporations New York conference on this exact topic. I prepared this graphic for my presentation. I call it the Business Impact-o-meter and it indicates the impact of corporate responsibility on the business. When companies and practitioners start in this race we tackle compliance. In fact, ethics department in many companies are not there to make ethical decisions at all. They are there to ensure compliance. We accelerate next into the risk avoidance zone – I have characterized these two areas on the inner scale as ‘CSR1.0’.
Leading businesses and practitioners have now moved with enthusiasm into the zone of intersection between sustainability and business benefit. The real leaders are racing ahead into the zone of neutral business impact, trying to build markets to turn business neutral initiatives in business benefit opportunities. This is the zone of CSV – creating shared value. One could argue that this is simply a specialized marketing/business development role.
Sometimes we have to be brave though and move into the red zone on the business impact-o-meter. We need to call out activities in our business that make money but that contribute negatively to society or the environment. Disney did it when they announced they would stop taking advertising for products that did not meet nutritional standards on childrens’ channels.
One way to address this business/sustainability conflict is to become a b-corporation where positive societal and environmental outcomes are a legally recognized component of a company’s mission. Conflicts can be addressed by the board and profits sacrificed to meet societal or environmental needs. But lets face it, most of us work in companies that are not likely to becoming registered b-corporations any time soon. So I think it is valuable to spend some time creating some safe spaces where these dilemmas can be discussed. We need to develop case studies for successful resolution that give the practitioner confidence and tools to use, based on examples where these dilemmas have been successfully addressed.
That is a discussion I hope to start in my session at the Ethical Corporation conference on Friday. Next week I hope I can bring you some more thoughts on how you might be able to progress some of these issues in your organization.