Do you think the world will be a better place this tomorrow? What about next year? What about in 15 years?
The answer is: Yes, it can, but not with business as usual according to Michael Green in his TED talk How We Can Make the World a Better Place by 2030. In this data-driven talk he explains how we need to make changes to the way governments, businesses, nonprofits, and even individuals operate.
He argues that achieving the audacious United Nations Sustainable Development Goals is possible, but only if we start looking at root cause issues. As an example, instead of trying to get people out of poverty, we need to change the systems that allow poverty in the first place.
Doing Actual Harm While Trying to Talk About Doing Good
As an example of a company still doing harm while trying to do some good, H&M attempts to laud its own sustainability efforts, but it does so while producing over 600 million pieces worth of “fast fashion” manufactured in plants with skeptical safety standards and paying less-than-livable wages to over 850,000 people on earth. Less than .2% of its clothing is recycled and only 13.7% of it uses organic cotton. As Linda Greer, director of the health program at the Natural Resources Defense Council shared: “Fundamentally, there is a disconnect between the idea that you are selling a tremendous amount of clothing in fast fashion and that you are trying to be a sustainable company“.
Shannon Whitehead of Factory 45 critiques H&M more accurately “there is no amount of ‘Conscious Collections’ that can make up for the human rights and environmental damage already done.”
In other words, hurting the environment and people during production of products and then trying to make up for that with sustainability reports and green campaigns is not solving the root cause issue.
However, if a company instead sources products along a sustainable supply chain and treats employees fairly then it can it do less harm. And since markets reward corporate responsibility, they are still able to give to important long-term environment and social initiatives. On the other side, Patagonia is a company that doesn’t want you to buy new clothes unless you really need them, has rigorous sustainability standards, and continues to give money to social and environmental causes. In the tech industry, Intel does not use conflict minerals and still has massive employee giving and volunteering campaigns. It has also placed a massive emphasis on creating more energy friendly chips.
But H&M can’t get all the blame here. Customers, uneducated about their practices, have flocked to their products making them some of the most valuable brands in the world. As Howard Shultz, CEO of Starbucks shared in a passionate HBR article “it’s time to rethink how companies, both public and private, assist the communities we serve.”
This is precisely what Michael and Anand are trying to get across in their previously mentioned talks: We have to build better systems that reward responsible behavior at all levels, do less harm, and still enable us to do more good.
In a passionate talk, famed philosopher Slavoj Zizek talked about this idea years ago, and you should watch his talk to learn about what he calls “cultural capitalism”: The notion that when you buy something that is bad for the environment, you can be absolved of your responsibilities because the company makes you think you are also doing good in the process, even if the purchase is unknowingly doing harm. One example of this is Tom’s Shoes, which doesn’t actually help anybody, and in fact, it creates dependencies, erodes dignity, and hurts local employment – all while driving excess sales of products that also create a negative environmental impact.
Bright Spots: Some Companies Are Already Thinking This Way
Patagonia, perhaps the gold standard in this conversation, continues to improve its sourcing, supply chain, employment, and environmental practices, all while giving to sustainability initiatives AND mobilizing its customer base to do the same.
Patagonia is not alone. When I attended the Corporate Citizenship Conference sponsored by the U.S. Chamber of Commerce in Fall 2015, I was a bit surprised to see that many were already modeling this very idea. The conference’s theme was “Connect the Dots: How businesses solve global challenges locally” and speakers explored how companies can integrate corporate social responsibility initiatives throughout all layers of the company and across every business unit.
“Corporate citizenship is not about giving more money and more product, it is about transforming businesses to operate responsibly” – Kathy Pickus, Divisional Vice President, Global Citizenship and Policy, Abbott
Throughout the conferences, corporate social responsibility professionals highlighted that while they are able to do more good through donations and skills-based volunteering, they are increasingly working with their business units to do less harm, including things like:
- Analyzing environmental impact, human rights, and income inequality in their supply chains, like Patagonia.
- Getting business units to report — and pay — for environmental impact, like Microsoft‘s pay-for-energy program which is making a notable impact.
- Addressing income inequality, like Salesforce.
- Holding business leaders accountable, including tying executive and board compensation to green targets.
In a standout plenary session, The Root of It All: Navigating Interconnectedness of Social Challenges, leaders from Intel, Abbott, and Deloitte assembled to share best practices for integrated efforts that solve for root cause, something which businesses are experts at doing. In this panel William D. Eggers, Global Public Sector Research Director at Deloitte and Author of The Solution Revolution talked about the major accomplishment of halving malaria deaths this past decade.
Key to this reduction in malaria deaths were partnerships between corporations, foundations, nonprofits, governments, social entrepreneurs and schools to attack root cause issues. Beyond giving financial capital, corporations were able to accelerate these initiatives by also contributing human capital to accelerate these initiatives.
Indeed, most business leaders believe that sustainability issues can provide short and long-term bottom line benefits, including innovation, market development, marketing, and employee engagement and retention, and there is a plethora of research highlighting how businesses benefit by being socially responsible.
As Howard Shultz shared in HBR:
This is not just about philanthropy… Companies that hold on to the old-school, singular view of limiting their responsibilities to making a profit will not only discover it is a shallow goal but an unsustainable one. Values increasingly drive consumer and employee loyalties. Money and talent will follow those companies whose values are compatible with their own.
Building More Bright Spots: External Pressure Is Forcing Companies to Become More Responsible
While companies like Patagonia, Microsoft, Salesforce, and Unilever have come out with inspiring sustainability initiatives, the truth is, most companies haven’t followed… but they’re going to have to start.
The Harvard Business Review, in a landmark decision to include each company’s environmental, social, and governance (ESG) performance in its ranking of top CEO’s created a shocking change in the ranking of the world’s top CEOs. As one example Jeff Bezos, on purely financial metrics, would have been #1, but with ESG factoring at only 20% in the decision making, he was listed at #87.
To quote the conclusion of the article written by Adi Ignatius,
“top performing CEO, Rebien Sørensen… dismisses the purists who argue that ‘the business of business is business.’ As Sørensen puts it, ‘I would change that to say the business of business is business–but with a long-term perspective.’ And in that calculation, social and environmental issues are critical.“
Other media outlets, like Newsweek, have also started to measure companies based on their “Green” factor. As more and more is made public about the ills created by companies, their employees and consumers will react and force them to do less harm.
In fact, research from Harvard Business School shows the corporations recognize a material gain by investing in sustainability:
“…new evidence on the value implications of sustainability investments [shows that] firms with good ratings on material sustainability issues significantly outperform firms with poor ratings on these issues“
Another report from Brookings shared the Millennials could upend Wall Street and corporate America because of their focus on “Emphasis on corporate social responsibility, ethical causes, and stronger brand loyalty for companies offering solutions to specific social problems“.
Taking Action: How to Get Companies to Support the Sustainable Development Goals by Doing LESS Harm AND Doing More Good
Beyond the moral imperative that top CEO’s like Howard Shultz of Starbucks express as to why companies should strive to become sustainable, it’s also clear that there are bottom line benefits to doing so.
“It is no longer enough to serve customers, employees, and shareholders. As corporate citizens of the world, it is our responsibility — our duty — to serve the communities where we do business”– Howard Shultz in HBR’s Invest in communities to Advance Capitalism
At Pyxera’s Global Engagement Forum in Fall 2015, Stan Litow, Vice President of Corporate Citizenship and Corporate Affairs at IBM, shared that any business decision must factor in sustainability. On a panel with Mark Kramer, Co-Founder of the Shared Value Initiative, he declared that it is in the best interest of every company to do less harm, and any decision that does harm in the interest of short-term gains is short-sighted and bad business.
To help companies understand what they can do to think long-term, Pyxera shared an insightful visual linking all of the Sustainable Development Goals to broader issues in a way that can help foster more partnerships.
DO MORE GOOD:
|#1: No poverty||Look at giving and employment opportunities.||Corporate Social Responsibility (CSR) and Human resources and development teams|
|#2: No hunger||Leverage power of network to fight hunger||Operations|
|#3: Good health and well-being||Use communication prowess and global networks to accelerate initiatives||Marketing and Communications|
|#4: Quality education||Invest in education programs||CSR|
|#6: Clean water & sanitation||Empower philanthropic initiatives||Every business unit|
|#17: Partnerships for the Goals||Use vast networks and create connections||Leadership|
DO LESS HARM:
|#1: No poverty||Examine supply chain and sourcing partnerships that fund corrupt governments and unfair labor practices||Sourcing and Operations|
|#8: Decent work and economic growth||Work with ethical suppliers and pay fair wages||Human Resources|
|#10: Reduced inequalities||Give equal opportunities and don’t discriminate||Human Resources|
|#12: Responsible consumption & production||Improve sourcing strategies and reporting||Supply Chain, Production, and Customer Delivery|
|#13: Climate action||Become carbon neutral||Every business unit|
|#14: Life below water||Don’t pollute and examine supply chain for pollutants and toxins||Every business unit|
|#15: Life on land||Don’t pollute and examine supply chain for pollutants and toxins||Every business unit|
These tables above provide just a cursory look at the Sustainable Development Goals and the most common business units in companies. The truth is, every company is incredibly unique and needs to take a critical look at its practices on its own.
A resounding message from the Engagement Forum was that everybody, at every level, should seek to educate themselves on the Global Goals and identify ways to make an impact in their personal life and professional position.
One of the major challenges in getting all businesses to rally behind the goals is to get them to first understand that their future success lies in us achieving these goals together.
To help with this, consumers, employees, governments, and global development organizations need to start speaking the language of business when they talk about sustainability. As Blair Taylor, Chief Community Office of Starbucks recently shared, “to be sustainable, your efforts must be anchored in the tenants of corporations – meaning they must make business sense.”
There are at least 7 research-backed reasons as to why companies should be more sustainable, and as quoted above, there is real evidence that doing so has a material and positive benefit to the bottom line. Deloitte just released new research explaining that “social impact has evolved from a pure PR play to an important part of corporate strategy to protect and create value.”
According to Business Fights Poverty, “Given the ambition of the SDGs, and the essential role that business must play with others in achieving them we must take stock and reflect deeply on what it will take to get there, and we must do that together.” To help, Business Fights Poverty has released a report and kit to help all businesses: Business and the Sustainable Development Goals: Building Blocks for Success at Scale.
In Summary, to return to one of my favorite panelists during the previously mentioned Corporate Citizenship Conference, Kathy Pickus said that “If we keep trying the same models, we’re going to get the same results. Who better than the business community to take some risks.“