CSR Lessons For CEOs
A few days ago, my fellow Forbes.com contributor Paul Klein published an interviewwith Business for Social Responsibility (BSR) President and CEO Aron Cramer. The flagship organization in the corporate social responsibility (CSR) field is celebrating its 20th anniversary at its annual conference in New York. I was fortunate enough to continue the conversation with Aron Cramer. We highlighted some of the insights from the conference and we dug into the history of the field and the direction it should be headed. Here is my conversation with Aron:
How did Business for Social Responsibility start?
BSR got started by a number of strands that were woven together actually. But primarily there were members of the Social Venture Network who had created an organization that was really for individuals and that’s what SVN was and still is today. Some people, with Josh Mailman being one in particular, said wouldn’t it be great for to have an organization for companies in addition to a network of entrepreneurs who are concerned about corporate responsibility? The word “sustainability” wasn’t used much in those days. It was called CSR.
So that’s the short version. The organization was set up as a counterpoint to traditional business lobbying organizations in Washington. So it started with the mission to provide a progressive voice to influence public policy. Simply put, a year or two in, people concluded that that wasn’t really working well so it was re-launched in 1994 as an organization that would provide direct assistance to companies to help them become more sustainable in their own operations.
How have CSR and sustainability changed in the past 20 years?
I think they have gotten more serious. The story over the last 20 years is how CSR has grown up and become a mature issue in terms of how companies are thinking about it with boards of directors taking it seriously. CEOs like Marc Bolland [of Marks & Spencer], Paul Polman [of Unilever], and Mark Parker at Nike see it being central to their company’s future. It’s gotten more grown up in that it is something that is designed to influence core businesses [such as] product development and marketing, and deliver real business value. There’s a long way to go but you can say that it was an idea that was based on a philosophy that should have worked 20 years ago, to one now where there are a lot of examples of CSR’s impact. It does make a difference not only in creating a better world but also stronger, more resilient businesses.
With the State of Sustainability report that BSR just released, what findings were expected and what came as a complete surprise?
Our report this time around is really designed to reflect our thinking about things rather than to provide an objective survey of things. The one thing I think that is an important point that people might not assume is that the sustainability community needs to think more about the things that are not sustainability issues per se but are changing our world, and think about how things can be translated into more progress for sustainability. The obvious example is information technology. What does it mean? What does it mean that we can shop digitally? Biotechnologies are another huge issue. These are things you don’t hear discussed at sustainability conferences as frequently as you might sustainability reporting, supply chain management. But ultimately they may have more of an impact on how sustainable our economy is. This is not necessarily a surprise but it’s something we want to call attention to.
The other thing we want to call attention to is the need for more powerful collaboration. Integration needs to continue to happen but a real, truly sustainable economy will depend on a fundamental change in systems. That only happens through collaborations beyond a single company and a single sector. It requires a lot of players coming together to try to make those fundamental changes happen.
Yesterday at the lunch discussion about sustainability, you mentioned that CSR reporting has plateaued. How so and how can we get out of that state?
Reporting remains important but I don’t think it has plateaued in terms of its impact. There are a couple of things that I think should change. Companies that produce reports need to make them compelling for readers. I think very few people read reports at this point. Now, it may be that the presence of a report doesn’t always provide affirmative value, but the absence of a report would be a very large problem. So I’m certainly not saying that reporting should stop but I would like to see them more widely read.
The other thing that I think really should evolve is more relevance for investors, more relevance for a business audience and there I think integrated reporting is an idea which if done right – and the cement is not yet dry in terms of how it’s going to be shaped – but if done right it could make a major contribution in that direction.
What about the Global Reporting Initiative (GRI)? Obviously it’s the benchmark in reporting. What role can the GRI serve in helping get over this plateau? Or should it not serve that role and just continue to be the benchmark?
GRI is interesting because if you look at almost any aspect of the sustainability world you could have a lot of different initiatives and a lot of different standards. But reporting is actually the exception and the GRI has very successfully provided the de facto standard for sustainability reporting, which is great.
A couple of things the GRI could do: One is to continue to update and streamline the reporting process. Some of that is happening with the G4 process right now. The GRI can also do what it is doing with respect to integrated reporting. It can express its support for integrated reporting. If integrated reporting ultimately is adopted very widely, then the role of the GRI at a minimum will change fundamentally. I’m pleased the GRI has accepted the notion that the next wave might come from the integrated reporting committee as opposed to the GRI. It’s embraced that, it has supported that and I think that shows that it’s more interested in positive outcomes than its own particular piece of pie
Yesterday morning you asked Marks & Spencer CEO Marc Bolland an interesting question. You noted that not every company has a CEO like him and you asked what he would advise CSR practitioners who are facing some resistance to the notion of sustainability. I’m sure you get asked that question a lot as well. What would be your advice on how to get a CEO onboard?
Business relevance is obviously crucial. CEOs have a lot of influence but they are also under a lot of pressure from markets and from their investors. Their tenure is getting shorter, so there has got to be relevance. At the same time I think Marc was right, speaking in terms of a legacy. CEOs provide direction and leadership and they want to create a legacy. I think the sustainability world shouldn’t be shy to encourage CEOs to think big. We should encourage CEOs to see that actually, sustainability produces a company that has real meaning. I think that’s what CEOs like. They want to think big, they’re not technicians tinkering in a garage, they want to really steward their organizations and provide a sense of direction. Sustainability can be a part of that. I think the sustainability community can sometimes be reluctant to think big and I think more of that is helpful.
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