Aron Cramer analyses the international growth of CSR practices.
Corporate responsibility, which emerged in the early 1990s as concerns about globalization rose in developed economies, is finally maturing into a truly global movement.
The signs are everywhere:
* The Chinese State-Owned Asset Supervision and Administration Commission (SASAC) issued a directive to Chinese companies to integrate CSR into their businesses
* Petrobras of Brazil won the Readers’ Choice award for best sustainability report at the recent GRI conference
* In the Middle East, Queen Rania of Jordan has launched the Arab Sustainability Leadership Forum, and Abu Dhabi issued a sustainability report for the emirate in May of this year
This reflects the shift in influence that is reshaping the world’s economy and political architecture more generally. If the geopolitical world is shifting to what Fareed Zakaria calls “the post-American world,” the sustainability debate is rapidly moving into a “post-Northern world,” to one that is being shaped outside Europe and North America.
This is a very healthy development. It means that CSR is no longer dominated by concerns about what globalization means for more developed economies – although that remains very important.
It reframes CSR as a way of leveraging business activities to meet the most important global challenges we all face – together. This coincides with a general shift in the way CSR is conceptualized.
Businesses have begun to look at how CSR can generate value creation. This latest idea means the development of new markets, products and services that create top-line benefit, and build sustainability into the business, rather than just as a coat of “sustainability varnish” layered on top of an existing business model. This shift to value creation leads directly to the question of what kind of social value is most important. That question can only be answered by looking to local economies, cultures, and priorities. This is where the globalization of CSR is most significant.
We are entering into a period of history that looks very different than the recent past, which has been marked by relatively stable economic growth, large numbers of people brought out of poverty, and the peaceful rise of China, India, and other major emerging economies.
New conditions loom just ahead.
Resource scarcity, coinciding with growing urgency to act on climate change, and the need to generate additional economic growth, present either a perfect sustainability storm, or a more compelling case to manage our economies differently. Increased energy prices means that the basic sustainability of production models reliant on distributed supply chains will remain viable. Procter & Gamble recently acknowledged that the value chains that made economic sense in the 1990s may not work as we move into the 2010s.
Ubiquitous computing, alongside the rise of social networks and biotechnology advances, promise greater openness, health and productivity, and also challenge us to take on an ever-changing set of privacy questions. An increased recognition that CSR is not what we do “in spite of government,” but instead how business makes appropriate contributions as part of complex systems, means that understanding the boundaries between public and private sector actions becomes more important. Ultimately, we face questions about what levels of consumption can be supported by six billion people…and whether we can build economies that are based on more value, and less “stuff.”
The good news is that we have the world’s attention. The challenge is that we have to show that we’ve earned it, and that we know what to do with it. There are six keys to success, for companies wherever they are operating:
* Focus on business-relevant sustainability issues. Beginning in the mid-1990s there was a tendency to take on every issue under the sun in the name of CSR. Now, to take just one example, China Mobile’s CSR strategy is tied to new market development, focusing on products that serve rural villages is being welcomed in Pakistan, where it has made a major acquisition.
* Integrate sustainability into core business functions. Effectively done, CSR is thoroughly integrated into all aspects of a company’s operations, rather than being added on to the PR department’s functions. In Japan, Nissan has developed a comprehensive CSR management system that provides integrated into unit and individual goals. Nike has also brought corporate responsibility staff back into core business functions.
* Make sustainability a driver of innovation. ICICI Bank in India has developed banking services that push it into new markets and expandi its customer base, while Fuji Xerox has said that focused sustainability initiatives have led to more than 200 patents for that company.
* Measure and communicate progress. Amidst the rising tide of green claims, the risk of cynicism and backlash is high. And that’s true for audiences inside as well as outside companies. The best antidote is to set meaningful targets, and measure their true impacts.
* Build new coalitions and partnerships. Kleiner Perkins, one of Silicon Valley’s leading venture capital firms, formed a relationship with Environmental Defense, asking the NGO to assess the environmental impacts of its investments.
* Look for the policy angle. While many CSR challenges emerge from governance failures, it is tempting to write off the public sector in the search for solutions. This is a critical mistake to make. Whether on water, migration, or climate, it is impossible to envision lasting solutions that don’t involve strengthening the public sector’s contribution. In that light, global businesses have a strong interest in helping see that happen, through appropriate engagement to strengthen public governance mechanisms.
The sustainability agenda is now the world’s agenda. Over the past fifteen years, we have worked hard to make that happen. CSR is on the verge of maturing from a promising prodigy into an accomplished virtuoso. The need has never been greater, and the network has never been wider.
By the time of CCB200, we will all be much better off if we can make it happen.
Aron Cramer is President and CEO of Business for Social Responsibility (BSR) (www.bsr.org), which he joined in 1995. In 1991, he was practicing law in a private law firm. During his time practicing law, he grew disenchanted with how the highly adversarial legal system tended to focus on binary win-lose outcomes. At the same time, the fall of the Berlin Wall, and the initial stirrings of the internet (this was San Francisco after all) made clear that the world was changing. The rise in attention to the global economy, the Rio Summit, and the promise of an open world put sustainable development firmly on the agenda, and showed that business could create social value alongside economic value. After joining BSR as the founding head of its human rights program, Aron opened BSR’s Europe office in 2002, and returned to San Francisco to head the organization in 2004. BSR now works from six offices in the US, Europe and Asia.
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