Activating Responsibility

Start dating - rules of (stakeholder) engagement

Can you remember the first time the two of you got together. The stolen looks, the uncomfortable moments of silence, the tripping over your sentences, the sweaty palms, the he-likes-me-he-likes-me-not thoughts, the private meetings when no one was looking, the awkward first kiss. Yes, I am talking about stakeholder engagement. Just as with any relationship in the early wooing and courting stages, stakeholder engagement is never easy at the start.

Most companies just don't know how to talk to activists and campaigners. Hey, make no mistake, activists hardly know how to talk to companies either. But they don't need companies to like them as much as companies need activists to like them. Or at least leave them alone and not target them.

Don't feel bad when they target you. It happens to the best of companies. Sometimes it makes sense and sometimes not. I remember seeing an anarchist kicking a Nike sign at the WTO riots in '99 - while wearing his Nike shoes and top...

But there are a few tips you should follow if you decide to engage and start courting. This is not an exhaustive list. Just a few tips to get you through those first uncomfortable early stages of stakeholder dating:

First, do your homework and find out a bit more about the NGO and what it regards as its 'bottom line' - it is unlikely to be financial! I was invited to speak to the global affairs team of a very large pharmaceutical while I was at Oxfam (I headed up the Access to Medicine Campaign for a while). I was shocked to hear that the majority of people at the company thought that Oxfam only worked on health issues. And this happened when Oxfam was in the middle of their Coffee Campaign! Dig around a bit first and find out what the NGO does and what its mandate is. Most are registered with a mission that states their focus and how they work. This will help you understand whether there is any potential for a longer term constructive relationship - or just a one night stand. Like with all first dates, you should try to know who you are dating--except if you like blind dates!

Second, respect the differences between NGOs by not lumping them all together in the same room for a consultation exercise - NGOs are proud and competitive too. You wouldn't want to be grouped together with a whole bunch of companies from different sectors and talk about issues unrelated to your individual business. Likewise, you should respect their differences and treat each one differently. Meet each one separately in an environment that works best to put them at ease. Meet them where they feel most comfortable - maybe at their place. Especially if you want to build the foundation for a long-term relationship. Following the rules of dating - don't bring all your prospective dates together in the same room. They might just start sizing each other up and you will be left with no date at all.

Third, don't make the mistake of thinking that you are the only company that is the target of an NGO’s campaigning efforts, or that the NGO doesn’t have other programs and projects that may have nothing to do with your business. Just as with the large pharmaceutical company I mentioned, most NGOs have numerous focus areas and different programs and projects to try and achieve their overall goals. And most large campaigning NGOs have various campaigns going at the same time. They might have one single broad focus, but it plays out in different campaigns and programs. For instance, Greenpeace is largely an environmental NGO, but they focus on climate change, oceans, forests, genetic engineering and nuclear issues. So your company might only be a small part of their focus and interest. Same with dating--a friendly smile does not mean they want to date. It might just be a friendly smile.

Fourth, start by talking, learning about each other and building trust rather than immediately expecting ground-breaking strategic partnerships. There might be a few obstacles to overcome - perceptions of what 'big business' is all about and a feeling that you want to 'clean' yourself by associating with them. Take it easy and just talk. Let them get to know you. Don't create expectations. Just listen and learn and see where this might take you. Again a good tip for dating as well--don't ask your date to marry you or expect 'the commitment' on the first date - it might just scare him or her off.

Lastly, remember that cash does not necessarily have the same currency for NGOs as it does when buying products or services from other companies. First and foremost NGOs want to affect change. But they don't always see money as the way to achieve change. Yes, some of them have huge budgets and operate like multinationals, but they generally have strict guidelines on receiving money from companies. For instance, Oxfam will not accept money from companies that fall within an industry they target in their campaigning. They might not even accept money for travel - never mind for a program. They would rather see you 'do the right thing' than pay them to do something. Okay, this one is less relevant for dating. Money generally impresses prospective dates!

Okay, one more tip. Don't expect them to agree with you on everything. And don't make this a prerequisite for your potential relationship. I love my wife to bits, but we only agree 80% of the time. That said, we don't let the 20% of the time we disagree define our relationship. Instead, focus the relationship on what you have in common and don't get stuck on the differences. It's part of being human - we are all different. And the same for companies and NGOs - we are all different. And I learned that I am wrong 20% of the time in any case. Just ask my wife.

By Henk Campher

links for 2007-08-09

• GreenBiz News | Businesses Embracing Green Procurement, Survey Finds
  According to a new survey from EyeForProcurement, more than 50 percent of companies have policies on greening their supply chain, and companies are nearly unanimous in their belief that green supply chains will only continue growing.
  (tags: Environment Supply Chain)
• World Business Council for Sustainable Development (WBCSD)
  On 15 August 2007, the WBCSD’s Water Working Group will launch the Global Water Tool at the Stockholm World Water Week. It’s a free and easy-to-use tool for companies and organizations to map their water use and assess risks relative to their global

And By Natural You Mean?

Estimated at over $200 billion in 2006, the green marketplace is steadily growing (Mintel, “Green Living,” 2006). With trendy vegan and organic restaurants popping up all over and organic clothing reaching the high fashion level—being green has officially shed its stereotyped “hippy” image and moved into the mainstream; as it is now the chic thing to do. But as more and more companies join the green movement, misconceptions about green products have become commonplace. The lack of labeling standards informing consumers what is and what isn’t a legitimate claim is creating great confusion. It’s hard to tell what terms such as “green,” “natural” and environmentally friendly” mean just from looking at the label. This lack of standards brings up the debate as to what companies’ claims are legitimate and which are just trying to jump on the “green” bandwagon to make a buck?

When I see a product that is labeled as natural, I typically assume that the ingredients are (1) safe and (2) derived from nature. But this is not usually the case. For example, many over-the-counter “natural” weight-loss supplements can have drug-like properties and cause serious health problems. Aveeno, which has a large ad campaign around the “science of active naturals,” has products that are marketed as natural but contain both natural and unnatural ingredients. What percentage of a product’s ingredients need to be derived from natural sources in order for it to be labeled “natural”? As is the case with other such green terms, this has yet to be determined as the term itself is not regulated.

However, as described in this week’s Chicago Tribune article, "Green!" individualized efforts to help standardize green claims are being undertaken by companies. The Consumers Union started eco-labels.org, which is a Web site that separates labels backed by third-party standards from those that are meaningless claims. Burt’s Bees is planning to lead the effort to standardize “natural” claims in beauty products. And Natural Home magazine is planning to educate its readers on how to determine which claims have clout and which don’t. The actions by these companies are a good first step, but, considering it took 20 years before standards for organic labeling were put in place and that was only after the government got behind the movement, a larger, more collective force is needed to get usable standards in place in a timely fashion.

By Cate MacGregor

links for 2007-06-01

• Nike Releases 3rd Responsibility Report - Forbes.com
  Nike Inc. released its third corporate responsibility report Thursday, highlighting its efforts to improve conditions for the company's 800,000 contract factory workers - such as eliminating excessive overtime and training them on their rights to unionize

Bad Science at the Smithsonian and How Business Can Help

This week reports surfaced that the Smithsonian Institute toned down an exhibit on climate change in the Arctic for fear of angering Congress and the current Administration.  I was shocked, thinking that an institution as reputed as the Smithsonian would report best science regardless of the political climate.  I had also assumed that the recent shift in the public’s awareness and attitudes regarding global warming would have removed the barriers for this type of censorship.  So I decided to explore current political leanings further.

A February 2007 Congressional Insiders Poll which surveyed 113 members of Congress including 20 Senators and 93 Representatives shows that a stark divide on the issue of climate change still exists.  When asked the question, “Do you believe its been proven beyond a reasonable doubt that the Earth is warming because of man-made problems?”, 95% of Democrats answered ‘yes’ compared to 13% of Republicans (down from 23% in 2006). 

I believe that this stance for many of these legislators reflects the will of the powerful constituencies they need to stay in power, in particular, the business community.  Many companies, afraid of the increased costs associated with implementing a climate change strategy, are lobbying against a needed legislative framework or other initiatives to combat climate change. 

Instead companies need to take a proactive stand on the issues and by doing so will benefit in the long run.  By addressing climate change now, companies will:

1. help curb future risks associated with climate change that are estimated to be much more costly than a present day solution,
2. give them a voice in helping shape any legislation so that it will best benefit their needs and
3. boost their reputations as responsible corporate citizens.   

Companies have a responsibility to help solve the problem towards which they are contributing and this includes working with politicians to share good science and create the necessary legislative framework to bring about change.  And hopefully this will in turn release government-funded organizations like the Smithsonia from the fear they feel about speaking out on climate change.

By Mindy Gomes Casseres

links for 2007-05-24

• Groups call for removal of Exxon Mobil director, company said to ignore climate change - International Herald Tribune
  A group of institutional investors and shareholder advocates is calling for the ouster of a member of Exxon Mobil Corp.'s board of directors, saying the oil giant is putting itself at financial risk by continuing to ignore global climate change.
  (tags: environment reporting governance)

What are you afraid of?

Recently I've become aware of a certain trend within corporate responsibility conferences and discussions.  When asked about their company's corporate responsibility activities, corporate leaders launch into a presentation of their company's employee volunteer activities and/or their community involvement programs.  I'm the first to say that these are critically important components of any company's efforts to become a good corporate citizen. But really, haven't we heard this all before?  According to one study, as many as 85% of companies have an employee volunteer program and the average age of these programs is 11 years.  At this point, employee volunteer programs are standard operating procedure so why do companies insist on highlighting this particular element of their CR platform?  Is it because there is virtually no risk to sharing this information?  Certainly no one can criticize a company that is building schools or health clinics in poverty-stricken areas.  And no one can question the value of employees volunteering their time with literacy and hunger programs.  But talking about volunteer programs is quickly becoming an effective method for managing risk at a CR conference or discussion full of peers and competitors.

It's time to move on to other critical CR issues.  I would rather hear about a company's efforts to find innovative solutions to critical environmental, human rights or supply chain issues, not only best practices, but also the challenges and lessons learned while plowing new ground.  Clearly some of this information may be proprietary - which I respect - but not everything is and the CR community could benefit enormously by moving the discussion away from the safety of employee volunteerism to the frontiers of other equally important CR issues.  I, for one, would be interested to hear what you have to say.

By Christine Riley

Making money while doing good?

When my friends and I graduated from college, we had to ask ourselves the perplexing question: would I rather do good or bring home a handsome paycheck? But fortunately, I have found that this may not be an either or scenario. It seems like you don’t necessarily have to sacrifice a nice paycheck for the greater good to work at a non-profit nor do you have to sacrifice your conscience and work for corporate America. The good news is that today, some companies appear to be successfully combining both worlds—making money while doing good (New York Times, “Businesses Try to Make Money and Save the World”).

M.B.A. students are even preparing themselves for such careers that combine their passion to do good with business by pursuing sustainable enterprise programs or ecoM.B.A.s. Business schools are responding to students’ desire to incorporate the two worlds by providing a more holistic approach to studying business—one that takes financial, environmental and social issues into account—which enables their students to do good through business. For instance, San Francisco’s Presido School of Management incorporates sustainability into all aspects of its curriculum. And an increasing number of business schools are joining Net Impact, a nonprofit that promotes corporate responsibility.

Since the combining of for-profit money-making strategies and nonprofit missions are appearing in both for- and non-profit companies, graduates are finding jobs at companies across the board—from Kashi to GE to non-profit Community Loan Funds. With this growing “fourth sector”, composed of “organizations driven by both social purpose and financial promise that fall somewhere between traditional companies and charities,” there is quite a selection of organizations and companies that appear to meet the criteria of doing well by doing good.

But how do you know if a company is actually doing the good work that they advertise? I think it takes a lot of research and talking to people within an organization in order to get a more accurate sense of what they’re all about.  

Green Jeans or Green Washing?

I'm starting to wonder if consumers are paying attention to the message behind the message, especially when it comes to basic items like blue jeans.  In the last few months, two jeans companies, Diesel and Levi's, both launched product marketing campaigns focused on the environment.  Diesel, the Italian jeans maker, launched 'Global Warming Ready', a campaign that depicts fashion-forward models posing in post-global warming scenes.  When you go to the website, you can get tips on how to combat global warming such as 'using your old jeans as insulation for your house' or 'having sex' to keep warm.  Plus there's a video that portrays sexy urbanites still looking chic  and which includes the counter-intuitive slogan 'Hold on.  Global warming cannot stop our lives!' (Diesel Global Warming Video) as opposed to a more pressing call to action like curbing energy consumption.

Diesel defends its tongue-in-cheek campaign saying that it's designed to raise awareness and spark  conversation through its controversial images.  Viewers might find this believable if there were actually signs that the company is committed to managing its own footprint.  There is no information on the website or in news reports regarding Diesel's environmental footprint or steps it is taking to mitigate its impacts.  Moreover, Diesel doesn't even seem to be thinking about it.  In a Washington Post article, Diesel's creative director, Das, states that "We are a fashion brand. We want to sell product.  We don't do anything more or less."

Contrast Diesel's campaign with that of Levi's eco jeans.  These jeans are made with 100% organic cotton, include a coconut shell button, and have an indigo finish produced with potato starch, mimosa flower and Marseille soap.  And they are manufactured on a certified, dedicated line.  The creation of this product builds on Levi's long history of corporate responsibility accomplishments, beginning with its commitment to ethical manufacturing.  The advertising campaign associated with the jeans, however, is too understated and presumes that the target audience is aware of Levi's reputation.

What happens in situations like this when an important call to action is being promoted by a company that has yet to demonstrate its own willingness to act?  The backlash has been mild to say the least.  A few blogs have picked up the news, but little has been written in the mass media about whether this is a case of greenwashing.  This suggests to me that consumers and the media are not looking at the message behind the message -- and are therefore likely to be greenwashed when it comes to certain "sustainable trendy products."

by Mindy Gomes Casseres

New Wave of Environmental Activism

Finally, signs are there that Americans have grown increasingly impatient with the lack of environmental leadership in Washington and with the slow pace that corporate America is taking to address climate change issues. Many Americans now realize that they have to be the change they envision by taking some kind of action - from purchasing eco-friendly products and making lifestyle adjustments to investing in companies that are environmentally responsible.

Many of these trends were affirmed in the newly released 2007 Cone Consumer Environmental Survey.  The study found that interest in the environment among Americans has grown by nearly one-third over the past year and that close to half of those surveyed said they have purchased environmentally friendly products within the last twelve months.

From my personal vantage point in Seattle, it seems like everyone I know is a tree-hugging environmentalist. I look no further than my local neighborhood where every household now has three separate trash cans: one for compost waste, another for recyclables and a third for regular garbage. Judging by the overflowing compost and recycling cans on the curb every Wednesday, it’s clear that my neighbors are the change they envision.

The growing interest in the environment may partly be due to Al Gore, Leonardo DiCarpio and the Oscars. But I think it’s got more to do with freaky weather – and the fact that in just about every pocket of this country - from the Northeast to the Gulf Coast and Southern California - locals are beginning to witness the real affects of climate change first hand.

Rather than feel helpless, people will change their behavior to preserve the environment. But as the Cone survey found, 93% of Americans also expect companies to do their part. Someone should tell that to the current Administration, although it’s doubtful whether it would lead to any meaningful requirement of U.S. utilities and businesses to reduce greenhouse gas emissions. So more and more, people are flexing their own muscles to get companies to adopt environmentally responsible practices.

The increasing popularity of socially responsible investment (SRI) funds proves this point, with assets in these funds growing four percent faster over a ten-year period than the entire universe of managed assets in the U.S., according to the 2005 Report on Socially Responsible Investment Trends. At the end of 2005, the total amount invested in some type of SRI fund was approximately $2.3 trillion.

In addition to delivering respectable returns, these funds also offer investors something very special: the opportunity to play an activist role and push companies to be more accountable for their environmental impacts. There is clear evidence that the SRI community is beginning to use its leverage more effectively to advance an eco-agenda. 

Next posting I'll talk more about the latest trends and results of shareholder activism.  Stay tuned.

By Liz Gorman