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In today’s world of digital communication and global reach, consumers are often faced with an array of uncomfortable choices. What should they do, when faced with evidence that the T-shirt they bought was actually manufactured by a factory worker in Bangladesh under intolerable working conditions? Should they boycott the fashion retailer? Or should they relieve their conscience by donating to a charity campaigning for workers’ rights in Asian sweatshops?
Such dilemmas are even more complex, when the victims are not even human, but endangered animal species living in dense tropical jungles, where palm oil or other agro-business interests are reducing their forest habitat and driving them to the edge of extinction. Even the most ardent wildlife supporter, would find it hard to completely give up the habitual use of conventional shampoos, detergents and personal care products to make their modest contribution towards a sustainable supply chain for palm oil, to name just one example. However, such is the complexity of our market driven society, where consumers, manufacturers, financiers, and raw material suppliers all play their part in creating unsustainable scenarios, which are a threat to mankind itself, as it races towards the 9 billion population level.
From a corporate perspective, the range of cumbersome choices is even more complex. Companies are facing a staggering number of regulatory restrictions and external pressures, ranging from new sustainable accounting procedures, such as triple bottom line to fundamental market transformations, such as those for commodities like cacao, cotton and timber.
What model can companies use to guide them through this maze of operational change and reputational risk?
If they turn to the field of Corporate Social Responsibility, it will become apparent that the term CSR covers a multitude of ideas and activities, which are often quite ad-hoc and have little relevance to the core business. It is a known critique of the CSR concept, that it has many different interpretations depending on industry and cultural perspective. Therefore, CSR as a framework does not offer a structured and long-term direction for a company committed to reducing its impact on the environment and enhancing biodiversity.
To direct the corporate vision and mission towards social and environmental responsibility, one needs to take a much broader view of the organisation and its operating arena. Only a few truly transformational thought leaders, such as Peter Senge and his theory of Systems Thinking can provide strategic direction. By looking at the entire eco-system, in which a company operates, it can determine all the interconnected areas and actors, from tropical rainforests and local forest communities to suppliers, resellers and consumers across the globe. Such an inclusive global mindset will involve much ‘organisational learning’, which implies breaking down many mental and financial roadblocks along the way. It will require building a truly inspirational vision, with top management buy-in, to ensure the implementation of a common goal.
To find such inspiration, corporate leaders should look at the emerging theory of Creating Shared Value, which was developed by two leading business strategists, Michael Porter and Mark Kramer. The essence of Shared Value is simple and motivating, by proposing that companies can create social value by adapting their business activities. The fundamental principle of Creating Shared Value requires a given business activity to generate both economic and social value, thus dismissing the common notion that economic prosperity and social progress are mutually exclusive.
The diagram shows that companies can share value with society via three channels:
- Market based
- Supply Chain based
- Local Community based
This framework is perfectly suited for both environmental and social impact, as the global conservation community is now recognising that the social aspects of their work, from local community involvement to consumer behaviour change, are crucial to the survival of endangered species, such as rhino, tiger, elephant and their regional habitats.
The systemic change needed to achieve a society based on Creating Shared Value is by nature iterative: only a step by step process will bring us to ’reinventing capitalism’, as Porter and Kramer call this evolution. At a business level, these steps include: 1. Clearly identify the Shared Value, often by using the expertise of an NGO partner, and integrate in the corporate mission 2. Measure the social value created and 3. Communicate the benefits to all stakeholders, so that both financial and social standing are enhanced.
Any person can become an eco-supporter by changing their patterns of consumption and any company can become an eco-business by recognising its impacts on its wider eco-system and adapting its operating practices. Whether on a personal or corporate level, systemic change always requires self-scrutiny and sacrifice in order to achieve a lasting legacy. The challenge to reduce our environmental footprint is there for each one of us.
Barbara de Waard (email@example.com) is the founder of Biodiversitybusiness, a consultancy promoting the integration of biodiversity and business.