BSR Overview - Innovative Strategies - Measurable Impacts - Karen Mahlab Reports

Earlier this month I spent three days closeted in the 2006 Business for Social Responsibility conference in the Grand Hyatt New York. Here are some of my take homes from the terrifically varied and accomplished speakers and sessions.

“The sound of one hand clapping” is how Dick Parsons, the Chairman and CEO of Time Warner explained the relationship between Business and Society – the message obviously being that one needs the other. His view is that as people become more aware of how Corporations effect the world and how little control the individual has, that movements such as Corporate Social responsibility arise to counteract the rage. The CSR movement is an attempt to move back to stakeholder comfort and trust.

And so launched the Plenary Session.

The conference theme of Innovative Strategies – Measurable Change attracted close to 1000 participants from countries across the globe, largely CSR practitioners from the world’s largest corporations.

Headline speakers included Daniel Vassella, Chairman and CEO of Novartis, Neville Isdell, Chair and CEO of Coca Cola, Amory Lovins CEO, Rocky Mountain Institute (and “hero of the Planet”) and the inspiring Majora Carter Founder of Sustainable South Bronx. Breakout Group speakers offered a stunning array of the worlds most progressive thinkers in the CSR area.

There is no doubt that no matter at what stage individual companies are at with CSR, they are all looking at what it brings to the discussion about the way to do business seriously in the future.

BSR (the conference organisers and consultants in the area) revealed 10 major trends that are front of mind and likely to occupy business and CSR practice over the years to come. They include:

– Major shifts in energy consumption and production
– Technology Change and accelerating pace of change
– Ecological limits and resource scarcity come to the fore
– Heating up of debates over trade liberalisation VS protectionism
– Growing political and economic influence of China and India
– Decline of US “soft power” and influence
– Increasing income gaps between rich and poor – declining middle class
– Global aging and urbanisation
– Extended product stewardship and liability expectations
– Heightened role of supranational organisations and global laws.

Accountability, sustainability, climate change, ethics and new business opportunities were all on the conference agenda and discussed deeply.

The focus was also quite clearly on the profit motive with clear recognition that CSR is enlightened self-interest and a distancing of philanthropy as a separate and distinct area of endeavor.

CSR principles being applied more and more broadly within corporations appears to be an area of opportunity and threat for CSR practitioners who are already struggling with where in the corporation the “CSR” responsibilities should sit and what those responsibilities encompass. As one speaker pointed out the ideal of CSR is that it would disappear into the culture of an organisation and just be called “good management”.

Over the three days there were a number of innovative messages that added depth to the often-superficial discussions around CSR.

Firstly, as the major trends indicated, climate change issues and how they effect the world economies are front and center of the minds of Corporations. In many cases Corporations are taking the lead where governments are lagging. Amory Lovins, one of the Keynote speakers, from the Rocky Mountain Institute who has been named as Times Magazines “Hero of the Planet”, highlighted this. Lovins delivered what he called some “high brain velco” examples of opportunities for solutions to world climate ails and proposed a “non violent overthrow of engineering” to offer new products such as carbon fibre cars (lighter cars mean less energy use to get them going) and diagonal pipes (rather than right angles). It sounds basic but it all made sense. I left his session with a sense of optimism rather than gloom.

His paper at www.rmi.org/images/other/Climate/C97-13_ClimateMSMM.pdf explains more about his views “Climate: making sense and making money” It’s a paper dating from 1997 but still acutely relevant.
Amory also put an excellent case forward against nuclear power as the main solution to climate change by illustrating the development and cost benefits of alternative energies.

Interestingly, 25% of all sessions at the conference had some link to climate change issues.

Secondly, innovative companies are looking at how they can expand their markets into the 4.5 billion people in the world who fall in the category of being at “the bottom of the Pyramid”, to quote Stuart Hart and C.K. Prahalad’s book on the subject. In a long term collaboration with SC Johnson, Hart is pioneering a multi layered process to involve some of the worlds poorest people in developing new products and services for SC Johnson – whose brands include Baygon, Preen and many others. Their test project is now in 3 of Africa’s poorest slums and is moving out of the first phase with some pest reduction programs developed and delivered in by those people living in the slums. Fortune Magazine had a reporter in on the session so we should see some interesting discussion around this project, which is due to roll out in about 12 months to India.

Third, measuring the intangibles in the balance sheet of a company.
The day the conference began the UK based Financial Times was quoting the big 4 Accounting firms who had come out explicitly to say, as a group for the first time, that standard accounting procedures were lacking as they do not include intangible variables such as brand reputation, customer satisfaction, trade marks or R and D in the balance sheets.

Measuring intangibles is the Holy Grail of CSR and many people such as Baruch Lev and Jonathan Lowe are looking into the area. Pro Bono Australia will write a more in depth article on this in a later edition.

These thoughts are just the tip of the veritable iceberg. The conference sessions are currently being posted to the BSR website at www.bsr.org and I would highly recommend you download those sessions that interest you.

As a general comment, the discussion has moved beyond whether companies should or shouldn’t do CSR, to how and what they can be doing. Thriving communities equal thriving companies and the more the world is linked (for good or bad e.g. climate change) the more we have to collaborate both across and within the sectors. The BSR conference offered sessions on many interesting ways companies across the world are doing this.