global ethics

Introduction

Government officials, academics, corporates, NGOs, associations, journalists and students and consultants gathered to discuss about Corporate Social Responsibility. A consensus among participants quickly expressed that Geneva has the right ecosystem for CSR and for such an event on global ethics and social innovation. Among the key concepts discussed during the workshop:

• what is genuine CSR, as opposed to “a lot of communication and little responsibility”.
• how to be able to hit the triple bottom line.
• Concepts of Shared Values
• An emotional appeal to consuming
• Hard facts about CSR, how to know them ? What is the true situation of companies ?
• Has it become more difficult to “hide behind communication” and do “green washing” or “social washing” ?

Definition of CSR

It is always important to define CSR. Some students attending the workshop mentioned to us that many of their peers do not know what CSR means at all. There is still a lot of room for improvement to clarify the CSR concept. There is a lot of terminology issues, with English vocabulary being not understood. For instance, in countries like India, Latin America, the relationship between business ethics and CSR is not understood the same way.

CSR cannot be an anglosaxon push, it has to be local, from the roots movements to succeed.

Definitions worth looking at, include ISO 26000, the European Union definition, GRI G4 guidelines.

The panel suggests key points to put some structure and help the CSR understanding.

1. CSR is a process.
2. Treating stakeholders ethically and responsibly.
3. CSR wider aim and longer term view is sustainability
4. Integrity of the institution, i.e. the way profit is made, instead of “profit at any cost”

I- CSR : an historical perspective to explain the current situation

How to do business in a responsible way ? How to overcome greed ? are topics which have been very documented. It is not new. What we know about CSR today is built from hundreds yeards of work.

CSR actually is not a new topic. In Geneva for instance, Calvin said yes to economy but in a social and environmentally responsible way. This has continued with the development of capitalism, the anti apartheid movement.

Then we have seen the rise of CSR reporting with all sorts of reports. The priority became the reports. Deviation happened with corporates producing reports not reflecting the true picture of their companies.

II- CSR Nowadays

Enterprises realise that they cannot do CSR alone. We cannot ask one actor, one market players to do CSR if its competitors are not doing CSR as well. Everybody has to be a citizen, to create social value of work and compete in a fair way. In some cases, it means making less profit or less money.

Corporates, present at the panel, have explained to us, that when they do proper governance and good CSR, they “lose” some of their business to other companies who are less vigilant about CSR, their sourcing… This leads in turn to some form of short term competitive advantage to the least responsible companies. It is at least the way it is perceived.

There are certain difficulties to explain to sales departments for instance, who are losing customers or deals, that this is for the good of the company and that in the longer term it is good for the business. Sales individuals are very rarely incentivised properly to support the company’s overall CSR objectives.

This advocates a holistic approach, not at the enterprise level, but a wider lobbying effort at the industry level. It is not only a company which needs to become better at corporate responsibility, but the entire system that needs to change.

This is particularly true for SMEs. SMEs (up to 10000 employees) are special and have special needs in terms of CSR. That is the reason why special literature and White Papers exist for SMEs.

Examples of good CSR practices, mentioned during the workshop

Encouraging spontaneous movements:

Huge Climate Change March in New York

Companies:

Safaricom in Africa

McKinsey

Unilever

Nike

Starbucks

IKEA

Timberland

III- CSR future outlook

Should CSR be top down or a bottom up ?

Students participating in the workshop challenges the efficiency of top down approach. They consider that most students don’t know what it means when they finish faculty. It is a big problem. It is probably not taught properly.

CSR has to be endorsed by CEO and top management to have any chance of success.

That said, if CSR is only a top down approach, it fails miserably. It cannot be English only and it cannot be perceived as a top down approach.

Different shifts happen simultaneously

1- Rise of the reputation economy.

In certain business, we estimate that up to 60% of value is driven by reputation.

2- Difference in what attracts younger employees.

A shift with the new generation. Employees who are 20-30 years old today are less driven by money and profit and more driven by purpose and by the cause.

3- A shift in leadership with the rise of the holistic approach

Companies like Unilever or McKinsey exemplify this holistic approach.

More and more companies understand that doing good mean good business.

This changes the way supply chain is organised, what they do with profit, how they invest.

4- The rise of impact investing

Rockefeller divests from fossil fuel.

Google divests from companies denying climate change.

This represents opportunities for all of us to explore.

Contacts:

Yves Zieba, 0041795611054, yveszieba@ik.me