Let me be contentious. Many contentious industries – particularly those in the extractive sectors (mining and mineral, oil and gas) and other unpopular industries (chemicals and nuclear power) make an enormous contribution to the betterment of society. Let’s sing their praises and be thankful they exist. Without them and the energy, raw materials, products and services they deliver there can be no development or technological advances to tackle the manifest social and environmental challenges we face.
So why are they contentious? Because they are big? They make lots of profit? Because they use up natural resources and are perceived to be dirty and dangerous? Because they operate in one place and the benefits go elsewhere and there is a lack of transparency and governance? Probably yes to all of these points at least somewhere and at sometime across all, so-called, contentious industries. Standards that were the norm 10 to 30 years ago are rightly no longer acceptable. These industries have often been behind the curve of society’s changing expectations. They are typified by massive infrastructure that takes time and money to upgrade. It takes a huge effort to modernise thinking and culture but leading companies in these industries are now at the forefront of change through their adoption of corporate responsibility and sustainable development policies.
Companies such as Alcan/RioTinto, Shell and BP are making conscientious efforts to drive sustainable development into the mainstream of the way they do business. DuPont is an exemplar of the drive for eco-efficiency and the chemical industry’s new Responsible Care Global Charter is encouraging members to advance sustainable development and engage with stakeholders on global issues.
Companies will always make mistakes. They are in high risk activities that are by and large managed remarkably well with only the occasional accident. But like the aviation industry when things go wrong they receive a high profile. Each event is learnt from and operations made safer. All companies have an Achilles heel of legacies but by and large responsible companies are moving in the right direction. They are not only cleaning-up their act but engaging in serious debate on the role of business in society. They are addressing how, through their activities, they can be part of the solution to global issues such as climate change, deforestation, biodiversity and poverty alleviation.
In doing so they are setting new standards for their industry and showing to other sectors what can be achieved. The Extractive Industries Transparency Initiative (EITI), the many mining and minerals standards, Forest Stewardship Council standards, Anglo American’s HIV policy and Shell’s biodiversity standard are but just a few examples.
How do we know when a company is serious about corporate responsibility rather than using it as a ruse to improve reputation? Critical features that show they are serious are when we see:
Going beyond skin deep – as evidenced by serious changes to commitments, policies, processes, KPIs, reporting and continuous improvement in environmental and social performance.
Portfolio evolution – in the face of new understandings of impact on health, climate or biodiversity, they are moving to new products and services that address fundamental concerns in a fundamental way, for example: oil to gas to renewable energy.
Engaging on the big issues – understanding how they can be part of the solution, showing industry leadership in tackling them and setting new standards.
The big question is ‘Is it enough?’ Almost certainly not. The problems are so huge and the world is in a hurry. So much more is needed and even the best companies cannot do it alone. Multi-stakeholder solutions are the only way. But at least the companies showing these signs are in the game.
Many of the problems associated with these industries are not just down to the multinationals but more often to government-run national industries. Government sanctioned activities such as clearing rainforest for soya or bio-ethanol are also highly contentious. Arguably activist focus and regulation would be equally well directed at addressing these issues.
But what of other industries often cited as contentious such as gambling, tobacco, alcohol and arms? The arms industry is in a separate category. I am a firm believer that there is no such thing as good or bad technology – it is how it is used, the motivations for using it, and its impact, that determines whether good or bad comes from it. That goes as much for guns as it does for nuclear power, GMOs, morphine, dams or even salt in food. Suffice to say here that arms manufacture is not an area normally associated with the corporate responsibility debate.
The gambling, alcohol and tobacco industries on the other hand are right in there. All provide products and services that society – or large sections of it – have deemed acceptable and desirable. Their common feature is that their products are optional – use is down to individual choice. All are seen to be okay in moderation, but all suffer from being addictive and potentially overwhelming to the individual and society when taken to excess.
Many of the gambling, alcohol and tobacco companies such as Camelot, Diageo and BAT regard themselves as being responsible operators and leading the corporate responsibility debate in their industries. They have values and principles, and rightly say that they are operating legally and providing products and services that society, or at least large sections of it, clearly wants. So why are they contentious?
If tobacco farmers are well-treated and given much needed livelihoods in subsistence areas, distillers’ factories are run eco-efficiently and have sound health & safety standards, casinos are only sited where governments decree and products are labelled properly – what is the problem? Aren’t they contributing to sustainable development and acting responsibly?
The issues are not about whether these companies are legal and making an important economic contribution but, instead, the issues are centred around:
Marketing – are they doing enough to stop the targeting of young and vulnerable customers?
Health – products are too often used in excess despite evidence of the risks;
Social impact – net health care costs, litter, anti-social behaviour and even, some would say, moral decay.
It is for reasons such as these that many feel uncomfortable with companies in these sectors claiming the mantle of corporate responsibility and sustainable development. To me the test of legitimacy for this mantle is how well a company exhibits the critical features listed above. I know where I stand on each. But then I’m biased and prejudiced. And that’s the problem. When it comes to companies of contentious industries of whatever sort, try as we may to be objective, how we judge their actions – as ruse or redemption – is inevitably through the eye the beholder.
During his time with Shell, Mark Wade was recognised internally and externally as a key player and architect of Shell’s sustainability journey. He now works with senior executives in major corporations, helping them understand the operational and strategic importance of sustainability to value creation. He may be contacted at wademark@tiscali.co.uk; 01580 714 968; 07957 579 500
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