Follow up on the CSR conference in New York

If you did not get the chance to attend the "Sustainability: Leadership Required" conference organized by the Business for Social Responsibility back in November 2008 in New York, you now have the chance to get the highlights here.

You can find ideas and insights from business leaders on various current CSR-related topics such as:

1. measuring return on investment: "Sometimes CSR requires a leap of faith, and stories can be as useful as data in convincing decision-makers of the return on investment."

2. alleviating poverty: "The key to great community development projects is to create partnerships based on mutual trust and empathy and select great people to see them through."

3. carbon offsetting: "Efforts to achieve carbon neutrality need to be supported by a comprehensive footprint and clear communication of approach."

4. human rights: "To demystify human rights for non-experts, it’s helpful to break down the rights and categorize them in buckets like employee impacts, security impacts, and community impacts."

5. CSR in economic downturn: "Companies need to prioritize issues that are most important to business and stakeholders in order to maximize their resources and make the business case for CSR."

Great thanks to BSR for doing such a great job of making the works of the conference available to a wider public!

Photo credit: shubhangi athalye

Know your carbon footprint

Environmentally-conscious orange juice drinkers should know the recently released fact that the PepsiCo Tropicana 64-oz container has a lifecycle carboon footprint of 1.7 kg. Although I've always prefered fresh oranges, I find the idea of measuring and publicizing the carbon footprint of consumer goods very appealing.

This reminds me of the time when food products had no nutritionist informations on their labels. People used to buy and consume food without a slightest idea of what's inside. Today we take those labels for granted and some of us wouldn't even buy a product which lacks nutritional information. So I imagine a time when all goods will have carbon footprint information, and consumers would make choices based on it.

Good for PepsiCo to have established this practice. Hopefully, it will continue assessing the carbon footprint of its other products and other companies will follow. Because "everything we do or buy has a carbon impact and establishing a globally-recognized method of measurement is an important step in tackling climate change," says Tom Delay, chief executive of Carbon Trust, the UK-based organization that certified the footprint.

The state of business sustainability in New York

Leonard Shostak is an active member of the New York Corporate Social Responsibility Group. He acts as Partner and Business Development Consultant with Box of Rain LLC, a business development consulting firm in Brooklyn, New York. We discussed the meanings and aspects of sustainable business as they are understood, practiced and debated in the US, particularly in New York City.

LC: What does Box of Rain do?

LS: We help high-risk, high-tech businesses start up their operations. We coach them starting up, from developing a feasible concept to bringing their service to market. We help them identify appropriate partners that can help these businesses grow through effective long-term relationships.

LC: Do your clients strive to become socially and environmentally sustainable?

LS: Unfortunately, social responsibility is not high on many businesses agendas. Where our clients care about something other than their bottom line, it is the environment and not the community. Businesses’ commitment to their communities is rather rare nowadays. I remember back in my childhood Brooklyn was much more community-oriented. Local restaurants used to sponsor sports clubs and get involved in various community events. I believe local businesses have great potential to engage in their communities by supporting public education programs and sports clubs. They could opt for green offices, buying produce grown locally and power from a green source. I’d encourage businesses to explore this potential in depth. Businesses need to interact with their communities on a more physical level, especially now that it's something customers want.

LC: When did you personally realize the importance and difference associated with being a sustainable business?

LS: I first realized how different a sustainable company in 1995, when I started working for Caithness, a green power company. This is when I realized that being responsible to your employees and to the community around you is what makes a company special. By treating their people well, they have loyal employees, satisfied customers and steady revenues.

LC: What does it mean to be a sustainable business in New York?

LS: It means, first of all, doing many basic things, such as making sure the office lights and computers are turned off at night, waste is properly disposed of, public transit or environmentally-friendly cars are used, and employees are treated decently.

LC: What are the incentives of being a responsible business in New York?

LS: There are various tax incentives to encourage businesses to go green and many more will emerge in the coming years. One important incentive - reported by many businesses - has to do with higher staff retention. Sustainable companies benefit greatly from the loyalty and dedication of their staff.

There are few business education programs on this topic, so businesses are largely unaware of the benefits of incorporating sustainable practices. I hope this will change in the near future.

LC: What are the barriers to becoming a sustainable business in New York?

LS: Personal mindset. People just don’t want to be bothered. Americans are overconsuming energy by leaving their lights on during the day, running air-conditioning at freezing temperatures, or keeping their computers on for days. Another important barrier is the cost factor that can be associated with retrofitting equipment or changing procedures.

LC: Can you think of an industry in New York that could really use some improvements in their business practices from the sustainability perspective?

LS: The first which comes to mind is the entertainment industry. As consumer, I think bars and clubs could recycle more and significantly reduce their energy consumption. Outside heating for people that wait to get inside is plain outrageous.

LC: Thank you!

Going green in Queens

Tomorrow an important event will take place in Queens, New York. I'm talking about the Green Business Summit, a business-to-business gathering to promote green business standards and practices among the local business community. This event is hosted by the Queens Chamber of Commerce, Econventions and the Queens College and over 1000 people are expected to attend.

It is noteworthy that the borough of Queens - in the face of the Queens Chamber of Commerce - is leading the city in this effort, while similar events are expected in other boroughs.

The main idea behind these series of events is to demonstrate businesses that going green is not always costly. Often, green practices can save lots of money. For example, restaurants can have their used vegetable oil picked up for free, for use in bio-diesel fuel; or any business can save on air-conditioning by putting plants on a building’s roof or painting it white. All that is needed is the desire to make a positive impact, or, at least, reduce the negative one.

Favorite ideas on the eve of Obama's inauguration

While looking for a place to watch and celebrate Barack Obama's inauguration tomorrow, I was skimming through the current issue of New York magazine, and, instead, came across some great ideas to solve our big problems. I want to share my favorite ones with you and ask you what you think:

1. CEO Ebay. To save companies money on CEOs' astronomical pay, the candidates, short-listed by boards, make their bids proposing the amount they are ready to accept for the job. The candidate with the lowest bid becomes CEO.(Idea by Selena Maranjian of Motley Fool)

2. WHITE WIDE WORLD . To cool the planet, paint everything in white, especially roofs because white color reflects sun's rays. In addition, changing the color of roofs in US could offset 300 million tons of carbon dioxide = annual emissions of 75 million cars. (Idea by Hashem Akbari of Lawrence Berkeley National Laboratory.

Corporate Service Corps: an advanced CSR model from IBM

At a panel discussion held at the MIT Enterprise Forum of New York City, Stanley Litow, IBM's Vice President, Corporate Affairs and Corporate Responsibility, talked about the Corporate Service Corps program. The presentation made quite an impression on the panel's audience, particularly because it was accompanied by a personal account of a former Corps IBM-er. You can find details and related resources on the program here.

The idea of the program is to send teams of IBM's top leaders to developing countries to work with local organizations on specific projects aiming to spur economic development through information technology. The concept brings to mind the US federal Peace Corps program. IBM funds the program and reaps multiple benefits in terms of growing economic talent and building business development opportunities. Employees benefit by aquiring new skills and expanding their network. The partners in the host countries enjoy free real-time skill transfer and stronger communities. In implementing this program and identifying relevant field projects, IBM has teamed up with several specialized non-profits.

I think IBM's Corporate Service Corps is a state-of-the-art CSR program. It is embedded in the company' core operations, is multi-dimensional in its impact, simultaneously benefits several groups of stakeholders (employees, communities, governments) and leverages existing resources provided by non-profits. What do you think? Do you think this program has the potential to be taken on by other companies in the IT and other industries?

Shell: defying environment and ethics

Below is George Mobiot's interview with the CEO of Shell, a global oil and gas company with a controversial environmental and ethical record.

Ethics: why not the truth?

Today I attended one of the Workshops for Ethics in Business a program of Carnegie Council for Ethics in International Affairs. For details on today's luncheon panel check out this web-page .

One of the panelist was Art Kleiner, editor-in-chief of a management magazine and author of The Age of Heretics: A History of the Radical Thinkers Who Reinvented Corporate Management (2nd ed., 2008, Wiley) which, by the way, has an excellent chapter on CSR. He voiced some interesting insights on the significance and meaning of ethics both in the business and government worlds. In his words, ethics represents "a set of decisions you are easier to sleep with at night." Many organizations, including companies, at some point in time, have faced or will face uncomfortable truths, be it about their product, their service or the world they operate in. Two basic options are available: to tell the truth or to hide the truth. Both bear loads of risk although of different nature. Tabacco companies, fast-food restaurants, auditing firms and investment banks chose the latter option. Cell phone companies are making a choice as I write.

The latter option is the easiest and the most popular because it makes the pain go away fast. But it does not change the underlying structures so the pain will be back tenfold in the form of environmental, economic, social and political crises. Why not go for truth? What does it take to instill the ethic where it is easier to tell the truth? asks Art Kleiner. And his answer is: it takes these three things: consciousness, discipline and empathy. It only sounds simple. In reality, to achieve consciousness, discipline and empathy in an organization is a pretty daunting task, and not many companies are known to have that. But maybe we can look the truth in the eye and start taking more sustainable types of risk.

CSR reporting: mandatory vs. voluntary

The news that the Danish government made it mandatory for about 1,100 companies to produce annual CSR reports generated varied reactions among bloggers. Opinions range from very optimistic to rather skeptical. On one hand, this regulation is likely to encourage more CSR practices. Elain Cohen, author of reporting blog, thinks this initiative will "prove the point that reporting is a catalyst for action. If you have to report, you first have to do something to report about."

On the other hand, the quality of CSR reports written merely to comply with a governmental regulation will likely be poor. Mallen Baker argues that because of the estimated 3 hours needed to produce such a report, "this may be CSR reporting, but not as we know it. De facto, it is the barest of summaries of what a company is, or is not, already doing without metrics, without case studies, without detail."

So, is the Danish government's CSR policy initiative worth being lauded and replicated elsewhere? Knowing how the government works, I think the companies would be better off if motivation and/or pressure to invest in becoming a responsible citizen and produce good CSR reports would come from non-governmental entities, such as employees, shareholders, consumer groups and activists. Therefore, in countries with higher level of centralization and/or weak civil society, this maybe a good idea. For higly decentralized societies such as the US, such a policy is unlikely to garner much popular support.

Green Apple: facing increased scrutiny

You might be like me in believing that Apple's new Macbook is the greenest laptop out there. This is what the commercial implies anyway. Or, you might even think Apple is the greenest company ever, according to a recent survey. Not exactly, competition and environmentalist say. They perceive Apple's Macbook ad as a misleading marketing ploy and argue that Apple's environmental record lags behind the industry's green leaders such as Dell and Hewlett Packard.

So what exactly is wrong with saying you are the greenest of them all? Presumably, Apple's ad aimed to increase its sales among eco-conscious consumers and restore its slumping share price. Why not use a little green marketing to achieve this objective? The problem is that once you claim to be the greenest you'd better be ready to prove that in face of increasing scrutiny. For instace, as a result of the ad and the scrutiny that followed, we now know that Asustek laptops are, in fact, the greenest of all. And that Apple is behind its competition in reducing greenhouse gas emissions or using clean energy.

Overall, more green competition is good, particularly for us, consumers. I wish many other companies and industries would reach a similar level of concern for environmental impact.

Better vs. bigger: a sustainability lesson from private companies

I found the book Small Giants by Bo Burglingham insightful and inspiring. It is about successful companies that chose to remain privately owned and faithful to their mission and values. If you have a hard time identifying such a company - they are rarely in the news - the book familizarizes you with 10 such small American giants, including two in the New York area, CitiStorage Inc. in Brooklyn and Union Square Hospitality Group in Manhattan.

What makes this companies great? Burlingham identifies several factors, which, in combination, generate a certain distinctive mojo. Despite great pressure to grow fast (brought about by success), the founders/owners opted for gradual growth, thus retaining control, freedom and creativity in all actions. Each of these companies is deeply rooted in and shaped by its community. A small giant cultivates intimate relationships with customers and suppliers, and builds exceptionally humane workplaces. And all these companies are led by leaders deeply passionate about the business.

How socially responsible are these companies? Because of their organic ties to their communities, they are creative and extremely effective in their CSR approaches. Because they are free of external stakeholder pressure to maximize returns, they don't exploit the marketing potential of their social investments and don't talk much about them. They do it because 'it feels right and brings tremendous satisfaction'. Even Milton Friedman rests his case regarding social involvement of privately owned companies. Since so many of us are seriously questioning the sustainability of the mainstream model of doing business, maybe we could look for inspiration in the small giant model.

Do you know any "small giant" in your area? Please share you experience and what you think makes it different from others!