Corporate Responsibility’s Changing Fortunes
Steve Lippman stevelippman@hotmail.com
Last summer, the cover of Fortune magazine blared the provocative question, “Can Wal-Mart Save the World?” Yes you read right, that’s “save the world” not “pave the world”….
The writer behind the magazine’s thoughtful examination of Wal-Mart’s expanding environmental initiatives was Marc Gunther, a senior writer at Fortune who became interested in the field of corporate responsibility in 2001 after writing a cover story about the role of religious faith in the workplace. (Gunther expanded that piece into a 2004 book titled Faith and Fortune: How Compassionate Capitalism is Transforming Corporate America.)
For the last year, Marc has carved out a full time beat writing about the impact of business on society for Fortune and in a weekly column for CNNMoney.com. For my money, Marc is one of the very best journalists writing about the world of corporate social responsibility, but don’t take my word for it, you can judge his work for yourself at his blog and posting of recent articles at http://www.marcgunther.com/.
A longtime friendly observer of the field of socially responsible investing, Marc agreed to answer questions and share some of his perspectives for this issue of Investing for a Better World.
IFBW: The tagline on your website/blog is “Corporate America: Making the World a Better Place…Or Not”. On balance, do you think corporate America is making the world a better place?
I think we are in the middle of a remarkable moment when it comes to what society expects of business and how business is changing to meet those expectations. Business is fundamentally a responsive institution and is responding to customer pressures, employee desires, and new regulation as the social expectations of business are rising.
It’s not that today’s CEOs are in any way nicer or kinder people than the CEOs of 20 or 30 years ago. The changes are occurring because you can’t be successful as a company in the U.S. today if you are perceived as being out of step with where the country is going. If you are Wal-Mart and if you are perceived as not helping solve social and environmental problems, it’s going hurt your business. That’s encouraging to me because it suggests that the whole movement to reform business in its many forms is a very powerful movement and even a company as big as Wal-Mart can’t resist. I give a lot of credit to NGOs and social investors who work to push business in a more progressive direction.
Whether you look at environmental issues, social issues like labor rights down the supply chain, workplace issues like the treatment of gay and lesbian employees, in all these areas we really have seen quite dramatic changes in corporate America in the last five to ten years. I’d argue that business is way out ahead of the political establishment in terms of dealing with the big global issues that we all worry about, like global warming, poverty, and healthcare. Washington seems paralyzed and polarized, while business actually seems able to make decisions.
However, particularly on the environmental side, the question is whether business is changing fast enough to deal with the scale of the problem. I think the answer is no. To deal with our environmental problems, we certainly have to consume differently and it’s my sense that we probably have to consume less, and yet business is all about selling us more.
IFBW: You write for mainstream business publications primarily: Fortune and CNN Money. How do your editors and readers typically respond to the stories you write? What aspects of the CSR agenda do they find most persuasive and about what do they seem most skeptical?
It’s interesting because when you write about corporate responsibility, it’s hard for people to put you into an ideological pigeon hole. Sometimes I get e-mails from liberals telling me I’m much too trusting of business and on the same column I’ll get e-mails from conservatives telling me it’s not Dell’s problem to worry about electronic waste and asking why I am holding them accountable for that. I position myself politically as a pro-business progressive, though I don’t know if that’s an oxymoron or not.
Among the business press in general, I think there’s a lot of skepticism about CSR, though I don’t think a lot of it is well thought out. Often you’ll hear people say, “Why is that corporate responsibility? They’re just doing it to make money,” as if those two things were somehow in conflict.
Partly it’s a problem of language. I happen to think it is corporate responsibility for GE to sell water desalinization equipment even if they make money doing it. I think perhaps we should move from the language of corporate responsibility to the language of “sustainability.”
Sustainability is living your life or running your company in a way that leaves the world better off when you are done than when you started. More specifically it means protecting the resources we have for future generations and also encompasses issues of social fairness and social justice. To be truly sustainable, a person, company, or economy can’t exist in a highly volatile or unstable world, so sustainability means figuring out how to deal with issues as far reaching as global poverty and AIDS.
I think it’s a very powerful word because it will hold companies and individuals to very high standards in terms of how they go forward, but it’s also a word that is becoming acceptable in the business world. It takes into account profits as well as preserving the environment and doing good for the world.
If sustainability is a goal for corporations, I think that leads the conversation to interesting places, because I don’t know of any corporation of any scale that is today conducting its business in a sustainable way. Virtually all of them are consuming resources and fossil fuels that are in limited supply, virtually all of them are creating waste. So if you talk about sustainability, you are pushing business in what I think is a radical but also a useful direction.
IFBW: A year ago you wrote a story about both the promises and limitations of Wal-Mart’s green initiatives. What’s your latest thinking about how people who care about sustainability should think about Wal-Mart? How seriously is the company moving down the path towards sustainability?
A year after writing that story I feel as strongly as I did about their good intentions but I have some doubts about their capacity to get things done as quickly and effectively as they would like to. My impression is that they have not put the resources behind their environmental initiatives to get where they want to go.
More generally, I think Wal-Mart is struggling to find a balance as they try to do the right thing for their customers, employees and the rest of us. Low prices is their DNA and I think that’s what got them out of whack, because I think they squeezed their employees and suppliers to deliver low prices. The challenge for them is seeing if you can change your DNA to have a more balanced approach to the business.
IFBW: So far, 2007 has seen a surge of interest in climate change in particular, but broader sustainability issues as well. Are we in a green bubble likely to pop or a permanent shift in how mainstream society expects businesses to operate?
You ask if we are in a green bubble likely to pop or a permanent shift in the way society expects businesses to operate, and I think the answer is yes, both. There was an internet bubble in terms of media attention and investment dollars from 1999 to early 2001, then the bubble popped, the froth went away, but we’re still obviously in a world where the internet matters more than ever. I think we’re going to see the same thing around environmental and sustainability issues. I’m sure there will be startups that fail, I’m sure there will be people that lose money investing in ethanol, but I also think once you start going down the road, you can’t really turn back. Once you’ve taken environmental issues seriously and really looked at what’s going on, it’s hard not to stay concerned.
Via RSS Feed