More on Sustainable Business (or CSR)
Sustainable business was discussed earlier in the document by the students as a key focus area. Here we go much further as, to a significant degree, it can be seen as one of the most important, if overlooked, parts of an expanded green economy.
It may not be commonly understood that, as mentioned in the “Mindsets” section below, sustainable business is a field. It’s a field which continues to evolve, with companies taking more types of actions, some of which can be surprising and a few even startling. It deserves to be recognized and its greater potential discussed, even with the appropriate respect for often-noted concerns and reactions. These include: (a) naivety, (b) “it’s all greenwash,” (c) “Let’s see them prove it” skepticism, (d) “No, it’s simply impossible,” (e)“No, they’re the very problem,” (f) “They might want to but their shareholders (or the marketplace) would never allow it,” (g) “But their motivations aren’t right,” (h) “There’s no economic theory to support it,” to (i) obvious inconsistencies with their other actions (with “their” being other companies, or even those same companies making claims for, or even doing, good things).
One major way to address some of these is to note the actual evidence for it keeps increasing, even if the presence of these efforts are mostly confined to certain journals and conferences in the field. When “corporate responsibility” does make the mainstream press, it’s usually its flip-side, or the “irresponsibility” of some, that gets the attention. And that reinforces existing beliefs.
If we’re going to even tentatively consider the positive side, typically that’s done by emphasizing the low hanging fruit, the easy parts, which is still what businesspeople are generally hearing. However, if we’re prepared to look beyond more efficient light bulbs and sealing window leaks (not that these aren’t important), we might see some surprises. We’re seeing corporate commitments and/or actions to:
- Achieve zero emission goals
- Buy green power (e.g. Google and Apple) (Plumer, 2018 and see the “Recommendations” section)
- The TBL framework (as described earlier in the Students’ section)
- Aligning their goals with the UNSDGs (also see the Students’ section)
- Sharing their trade secrets with competitors as a way to accelerate joint knowledge-creation to solve a tough environmental problem (e.g. Patagonia and environmentally damaging wet suits)
- Pressuring their suppliers to improve their whole chain’s performance (e.g. Walmart)
- Educating customers while also improving a supply chain to only purchase and sell sustainable seafood (Ocean Currents, 2012)
- Self-imposing a carbon tax to get ready for the future (e.g. Disney) (Gunther,2013)
- Protesting immigration sweeps (Tom Cat Bakery) (Rao, 2017)
- Hiring refugees and taking flack for it (Chobani) (Gelles, 2016)
- Coming out against unnecessary consumption of their own product (Patagonia again, in a full page New York Times advertisement, which still puzzles as it seems to go against basic business logic)
- Aiming for Net Positive, which means “a promise by business to put more intosociety than [it] takes out,” a “handprint” over a “footprint.” For example, Dell “announced its aim to make its overall positive impacts 10 times greater than its negative impacts by 2020” (Wheeland, 2016)
- Giving retail store employees off on Black Friday (REI) (Egan, 2017)
- Collecting ocean litter (a huge and increasing problem) and using it in theirproduct (Interface) (Elks, 2013)
- Besides the somewhat common job title, Corporate Sustainability Officer (CSO), we’re starting to see new roles within companies: Activism Manager, Design Ethicist & Product Philosopher, Chief Manifesto Officer
- In these political times, despite perhaps not necessarily wanting to (or even knowing exactly how), some are reacting to expectations from customers, employees, or even coming from the CEO himself/herself, and taking pro- sustainability public policy stands on issues like climate change (See summary of the “Letter to Senator Smith“ in Appendix I), gun control, gay marriage, transgenderism, civility, racism, dropping out of Presidential Advisory Boards, very visibly protesting removal of protected status from public lands (Patagonia, yet again, saying on their website: “The President Stole Your Land.”) (Taylor, 2017). These are risky steps to take and they can get it from both ends (e.g. Starbucks and racism) (Sorkin, 2018).
The Table discussed in Polsky (2015) in the “Morality” section below has many more surprising examples. A new online newsletter, “Brands Taking Stands,” tracks this kind of thing (Howell, 2018).
Further, some of these corporate actions are not necessarily in areas that are close to their core business, breaking yet another rule.
Things have even proceeded so far in the gun control area with banks like Citigroup and Bank of America restricting financial services such as credit cards and loans to “gun makers that do not comply with age limits and background checks…sell high-capacity magazines and ‘bump stocks’…”, “…selling to people younger than 21…”, or selling “AR-15-style rifles,” that some Congressmen are threatening action against their “social activism.” They are pressuring financial regulators and threatening legislation (Rappeport, 2018).
Looking at the possibilities another way, Table 3 shows a range of exiting concepts similar or related to, or sub-fields within, sustainable business and CSR that show the scope of still-outside-the-mainstream interest in this area. A few of the concepts included probably would be outside this paradigm, such as the coop-oriented Mondragon Model (Mondragon’s Corporate Model, n.d.), but are included to show an even greater sense of the available alternatives. (The late Prime Minister of The United Kingdom, Margaret Thatcher, made the famous statement: “There is no alternative,” or “TINA.” There actually are many.) Even those concepts outside the CSR paradigm could conceivably lend a compatible insight to an evolving CSR field.
Table 3
Concepts Similar to Sustainable Business/CSR or Other Alternatives to Business-as-Usual
- Natural capitalism
- Compassionate capitalism
- Conscious capitalism
- Inclusive capitalism
- Circular economy
- Values- or Purpose-driven companies
- Social business
- Shared value
- Business-for-good
- Business as an Agent of Positive Benefit
- B Corps or Benefit companies
- Regenerative economics
- Fair trade (already practiced in Montclair)
- Coops including the Mondragon Model
- Transition Towns
- Sharing economy
- Local living economy
- Gandhian economics
- Humanistic economics
- Bottom-of-the-Pyramid
- Eco-economy
- Social enterprise/innovation
A few of these are discussed immediately below and a few come up in the “Recommendations” section.
B Corps
B Corps are a form of business organization for companies that seek to “redefine success
in business…using business as a force for good” (B Corp, n.d.-a), “…to use the power of markets to solve social and environmental problems” (B Corp, n.d.-b). Their “Declaration of Interdependence” states they are: “…purpose-driven and create benefit for all stakeholders, not just shareholders,” and that companies “act with the understanding that we are each dependent upon another and thus responsible for each other and future generations” (B Corp, n.d.-c).
B Corps are “for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency” (B Corp, n.d.-a). They state: “…one day all companies will compete to be best for the world…” (B Corp, n.d.-b).
There are currently nine B Corp-certified companies in New Jersey: Helpsy, Jetty, The Soulful Project, goodDog, AeroFarms, The National Society of Leadership and Success, Common Interests, Natural Systems Utilities, and Herbalist & Alchemist (B Corp, n.d.-d). One of them, Jetty, which offers surf clothing, says on its B Corp page: “It was created on a shared love of surf, art, travel, skate, and music.” Then it adds the mysterious line—interpretable in multiple ways: “Jetty wanted to draw their own line—and it’s a good thing, too, because coming from New Jersey, there was certainly no line to follow” (B Corp, n.d.-e).
7 Fronts of Mount Sustainability Framework
This is a framework developed by the sustainable pioneer, Interface Corp., a manufacturer of carpets, to describe their journey from the earliest, easiest sustainability steps, towards the more difficult ones they know they will have to face. At the summit, is Mount Sustainability.
Their “easiest” front is “Eliminating Waste.” Their second “easiest” is “Zero Problem Emissions.” Their final front goes “beyond the wall of the factory,” to “inspire change in [both] customer behavior and changing business culture more broadly,” and is called “Redesign Commerce” (The 7 Fronts of Mount Sustainability, 2015). The latter was one reason their late CEO, Ray Anderson, was on the speaking circuit so much (he spoke twice in New Jersey, and one of his senior managers met with former NJDEP Commissioner Bob Shinn to talk about the importance of pursuing sustainability and how Anderson was re-orienting his company to try to do that. Anderson also took advice from some leading environmentalists, and co-chaired the multi-sector President’s Council on Sustainable Development, under President Clinton, which developed many recommendations for national sustainability policy.
Biodiversity
Turning to biodiversity, how could sustainable business possibly be a positive force for a tough nut like that? It might seem that there couldn’t be any connections upon which to make a positive business case for voluntary corporate protection of biodiversity. Sustainability originally gained entry into business in large part through paradigm-friendly ideas like eco-efficiency, or making your product with less waste. Money could be saved, a very non-threatening idea. While other arguments have been added to this one, most are still consistent, albeit expanding, on the “It’s-just-better-business” motive (e.g. good reputation, avoiding fines, better employee morale).
But how could saving critters, bugs, and plants possibly qualify as “better business?” What’s the connection and where’s the pay-off? It’s worth exploring as the endangered species crisis, while not well known, is one of the most serious environmental issues we have, and therefore deserves special attention in a New Jersey green economy initiative.
There actually are a number of positive business: biodiversity connections. Most are discussed immediately below.
Earlier in this document in the “Pricing Nature” section, there was discussion of natural capital assessment of the state’s economy, with a call for an update and expansion. However, natural capital can be looked at from the perspective of a firm, as well, and some companies have started to look at their dependence on ecosystems (Waage, 2013). One that did, Puma Sneakers, found that factoring in the damage they had been causing, and placing a value on that, they really were losing money (Zeitz, 2011).
Another approach is the work of the Wildlife Habitat Council (WHC), which teaches and advices corporate landowners on how to improve it for purposes of conserving biodiversity. They even have a certification program for it (WHC, n.d.-a). WHC, which has a large corporate membership base, has identified a number of “common business needs that can be supported by conservation,” including some that “can contribute to business management targets with positive bottom line outcomes.” The latter includes employee engagement, government relations, and what it calls “nature-based solutions” (WHC, n.d.-b).
However even well-intentioned corporate efforts can benefit from knowing ecological relationships. Google suffered a loss to an otherwise good reputation as a corporate neighbor by allowing its employees to express their love of feral cats on its property by setting up feeding stations—at the expense of burrowing owls. The overall program was supposed to stop the cats from hunting, but did not (Steitfeld, 2018).
There is an early ecosystems market sub-field, called Payments for Ecosystem Services. The principle is “those who benefit from healthy natural environments pay those who own or control those environments to provide particular ecosystem services, like clean water, biodiversity habitat, or carbon sequestration” (Forest Trends, n.d.).
Forest Trends states: “Our research…shows that innovative financial approaches based on markets, payments, and investments…can…deliver significant conservation results.” Also, they “hope [their] work will inspire others to support pioneering conservation finance as one of many ways to turn environmental degradation into environmental stewardship.” One of the results of their work can be to help “policy makers…create more enabling environments.”
Forest Trends, working with a UCLA Law Professor, James Salzman, found that “about $36 billion are exchanged for activities that provide or ensure ecosystem services, such as carbon capture, water filtration, and biodiversity conservation” (Thiel, 2018).
In the area of international affairs, the Treaty, the Convention on Biological Diversity (CBD), has developed the “Business and Biodiversity Pledge,” which companies can take. According to the CBD, “the pledge provides an opportunity for business leaders to call attention to the importance of biodiversity and ecosystem services for businesses and to reaffirm their commitment to take positive action in support of biodiversity” (CBD, n.d.).
Sections of the actual Pledge are unusually bold:
- We, the undersigned business leaders…are joining together to emphasize the importance to businesses of biodiversity and the ecosystem services it provides, the key role that businesses can play in conservation and sustainable use…and the urgency of addressing global biodiversity loss and ecosystem degradation
- Businesses have an important contribution to make in the…three objectives of the CBD: the conservation of biodiversity, its sustainable use, and the fair and equitable sharing of benefits from genetic resources
- Taking actions…can generate tangible benefits to businesses, including a more reliable supply of materials and products, cost savings and protection against natural disasters
- Part of the “Call for Action” includes: “Acting as ambassadors for responsible stewardship of biodiversity, focusing on the economic opportunities and solutions, and helping to strengthen and disseminate the business case for better integration of biodiversity considerations into decision-making by businesses (CBDb, 2016).
Biomimicry
Finally, there’s the idea of biomimicry, mentioned above, developed by Rutgers University graduate Janine Benyus, of using nature as either a literal physical, metaphorical, or inspirational guide by which to design products. The Biomimicry Institute defines it as “an approach to innovation that seeks sustainable solutions to human challenges by emulating nature’s time-tested patterns and strategies.” It expresses the “core idea” that “nature has already solved many of the problems we are grappling with” (The Biomimicry Institute, n.d.). The idea is that “as there’s no waste in nature,” why not learn from it?
Morality: Is a Corporate Conscience Even Possible?
What about morality and the above-charge that even if companies do the right thing, it’s not for the right reasons? Besides, it is thought morality is either irrelevant in an amoral or worse marketplace, counter-productive for companies to show when their competitors won’t, impossible, or even ridiculous to contemplate?
FDU ISE’s “First Annual Survey of New Jersey Business Sustainability,” summarized in Appendix I, found, surprisingly, that “believing that it is the right thing for the world was by far the investment motive most related to implementing sustainability practices.” Relatedly, the fourth most important “enabling organizational condition that most strongly explained the extent of sustainability practices were” “deeply-held company sustainability values.”
One of that study’s recommendations, which were presented by one of its co-authors to the audience at an SBI meeting, was “Don’t be afraid to go beyond just the narrow financial ‘business case’ in discussions about sustainability.” (Usually, that’s all that is done.) Another of its finding was: “Values for community benefit also seem to matter a great deal to New Jersey business leaders.”
While the data in this Survey were self-reported, it seems silly to ignore this unexpected gift or not test it out.
Polsky and Aravkar (2013), picking up on this Survey, discussing messaging to business, quoted from it: “Not everything has to be couched in terms of ‘cost savings.” It also quoted FDU ISE Executive Director Joel Harmon: “The fact that the business leaders we surveyed seemed to be investing in sustainability as much because it was the right thing to do as for pragmatic reasons was a little surprising but very gratifying to those who see the potential for business to strengthen society while helping the bottom line.”
Polsky and Aravkar suggest “…we might ask ourselves, how could the business version of ‘having a heart’ help New Jersey companies and the state’s economy in general take big steps towards forging a Green Economy?”
Further, Polsky (2015) wrote a three-part series exploring whether a corporate conscience is emerging, however “ridiculous” or “naïve” that may seem. He cited many points of evidence for it, including a Table in its own Appendix (I guess the author likes Appendices) in the first of the three parts that lists many surprising actions businesses have taken, in a large range of areas that do not appear to have an obvious or compelling traditional profitability motive.
Focusing on the less developed social areas here, there were commitments or actions involving: (a) inequality (as examples, the Aetna CEO, “after reading” about inequity, “gave his lowest paid employees a 33% raise,” and a Bon Appetite executive did something similar for pickers because “having a food system that keeps prices artificially low by enslaving workers in not acceptable…” (b) peace-building; (c) animal rights; (d) worker, migrant worker, human rights, and child labor; (d) free speech; (e) gay rights; (f) sick leave; (g) disaster assistance; (h) occupational safety; (i) homeliness; (j) race relations; (k) veterans’ health and jobs; (l) intellectual property; and (m) health.
For more details, see the Table called “Beyond the Business Case Mainstream Company Actions,” including the environmental ones. There is no assurance, of course, that all of these commitments were kept without incident, that a profitability motive was completely lacking, or that any of the companies making them are perfect.
Polsky speculates in this series: is something happening here that we’re missing?
Since this article was written, we have seen more of these unexpected initiatives, such as some of the actions mentioned at the start of this section, particularly the political ones.
Is it time to add morality to the other, accumulating arguments for companies to embrace more sustainability actions?