“Less Unsustainable” Not Good Enough
24 June 2014 at 10:26 am
The corporate sector needs an urgent rethink to even come close to achieving the social and environmental hallmarks of truly sustainable business, academics have warned a national CSR conference.
 Dr Leeora Black, Managing Director of the Australian Centre for Corporate Social Responsibility, reflects on the day's proceedings |
Keynote speakers at the CLab: Corporate Social Responsibility in the Laboratory, hosted by the Australian Centre for Corporate Social Responsibility (ACCSR), called for a systemic shift in the private sector and a rethink of business purpose.
“The triple bottom line sense of sustainability… it’s a tall order, and I’m going to suggest it’s not tall enough,” Professor Gordon Rands of Western Illinois University said.
“We cannot claim “we’re a sustainable company”– when all that any company has done so far is become less unsustainable…and that’s good! But it’s not enough, we’ve got to put aside the notion that becoming less unsustainable is acceptable and move to notion that we have to become truly sustainable.
“An organisation…cannot become and remain sustainable on their own, they have to help create a sustainability enhancing system in order to maintain their efforts at levels that will generate true sustainability…It’s not enough to think about the internal actions the company takes.
“Most businesses hit a sustainability wall. They see what else they could do to be less unsustainable, but know if they try and do it know they will incur costs their competitors are not going to incur and they will steal market share.
“So long as business opposes creation of such a system, it will not be brought about.”
Rands, a past President of the International Association of Business and Society, said government also needed to play a role through through policies for the creation of a sustainability-enhancing system.
“Governments and politicians do not have courage to create it,” he said. “The only way they can do it is with cover – [from business] a lack of opposition but also being a proponent of such actions.”
“There’s no time for delay.”
Professor Edward Freeman of the Darden School University of Virginia said progress could be achieved with a focus on purpose.
“We need to recreate the idea of purpose in our companies,” he said. “When profits represent purpose, we have a business model problem in my view…
“Human beings are complex, we’re not one dimensional economic maximisers.
“Great brands emerge because of the critical stakeholder relationships they have – the ability of great brands to get stakeholders to care about the brand and the company.”
Professor Andy Crane of York University, Toronto, said B-Corporations were a fantastic example of new ways of thinking about what types of companies were needed to achieve sufficient progress.
“The point about these companies is that it’s written into the company articles that it has a purpose that’s about satisfying multiple stakeholders, not just about shareholder value. Its in their DNA.
“Maximising shareholder value not a purpose. It’s a measure but not a purpose in itself.”
Crane discounted Corporate Social Responsibility and Creating Shared Value as the most effective means for advancement.
“The answer is not CSR,” he said.
“I don’t think CSR is going to get us where we need to go. It’s not solving the problems…inequality, climate change, water and food security.
“[CSR activity] is going up, but the impact is not as we might expect.
“Shared value… I don’t see it as a realistic solution to the problems we’re facing.
“It’s a simplistic idea, its exciting, it gets attention in the boardroom, but that’s because it doesn’t ask business to do anything different from what its already doing.
“Systemic change is not too big of a problem – it’s simply not the case.”
The conference, held in partnership with the International Association for Business and Society and ACCSR‘s new Not for Profit arm CSRconnect.ed, brought together scholars and CSR practitioners in Sydney for a dialogue on responsible business.
..has always been, and will continue to be, COLLABORATION. I agree regarding the point around 'purpose of business'. So many entities, both business, NGO, and even academic, continue to frame the benefits of pursuing sustainability as being positive for the company's finances (whether through cost reductions, enhanced reputation, or product & service innovation). An attempt to frame arguments in the "language of business". This is useful to a certain extent and audience, yet fundamentally conflicts with the topic of purpose being discussed here. However, where I think these professors are wrong is that the issue stopping the potential sustainability gains from being realised, is not in correctly defining and implementing a business' purpose. But rather collaborating and pursuing a united front (e.g. lobbying) with like-minded organisations, from both within and beyond their own sectors, to effect wider-societal change. The very structure of our society is such, including regulatory and non-regulatory (e.g. cultural), that it will indefinitely hinder the kind of change desired/required. Even the most sustainability-minded corporation will only be able to go as far as the system allows it to. Only by banding together and demonstrating to "the public" (i.e. both citizens and the governments they elect) the need and support of business for change, will the type and scale of changes required to create put us on the right track be realised. One example of a missed opportunity is a carbon market, specifically an ETS. The only way to get public and govt support for this, was for companies that can benefit from such a system (which IMO is almost every company without a direct vested interest in dirty industries) to create a coalition that publicly (and that part is critical) lobbies for implementing an ETS. The citizenry looks to government to lead, but government takes its cues (or orders lol) for the most part from business. A good example (although I'm not sure where this is at these days) is the Australian School of Supply Change Sustainability (or whatever it is called) being facilitated by Net Balance and the like. However my understanding of what its aims are is limited and outdated as I haven't been in contact with any of the founding organisations for some time.