“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.