Scary Thoughts on Business and Social Change

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by: Idris Mootee

The idea of sustainable development is
Halloween stories for corporations. Asking about what it would take to
transform a company into a genuinely sustainable operation raises all sorts of
uncomfortable questions in any strategy discussions. Questions like: What sort
of society do we want? What kind of world do we want our children to live in?
How do we best meet people’s needs and drive social change? I have many
informal discussions on this topic with senior executives and once those
macroeconomic issues are touched, people get nervous because there are no
simple solutions.

How could we compete in that social climate
let alone dealing with the hyper-competition?  What will the shareholders
and the institutional investors think?” Will people see this
skeptically (probably yes)? Can we measure progress?

Business decisions are mostly driven by
short-termism. Companies are, for the most part, not seeing enough of the
distant horizons and scenarios. I have not seen a single case that a director
get kicked out of the board because they spend too much time focusing on
immediate results, and not enough visualizing what role a company might play in
a more sustainable future? I have not seen one case. The discussion of
sustainability strategies is inevitably about the long-term – about
aspirations, corporate intent, not achievements. It should be part of any
company’s long term strategy. CEOs prefer to talk about achievements – what’s
actually been done rather what should be done. Both are important.

We understand this is a double-edged sword.
When BP unveiled its ‘Beyond Petroleum’ brand a few years back, it was making a
clear statement of future intent (to its customers, staff, shareholders and
investors) – not suggesting it was about to close down the pumps next week. For
those who recognized this applauded the strategic vision and the courage of the
board. But for its critics, the whole rebranding was simply a marketing
exercise. Greenpeace was quick to seize it, countering with its own rebranding:
“BP – Burning the Planet” – claiming that the oil giant spent more on
the new brand than its entire annual budget for renewables (that is also true).
A little unfair, perhaps, given the fact that campaigners had been challenging
the oil majors for years to declare an intention to transform themselves into
sustainable energy companies – but then communication is sadly all too often
about impact, not accuracy and dialogue.

Peter Barnes (co-founder of social venture
group Working Assets) wrote a book called Capitalism 3.0 calling for a
fundamental change in the way our economy is structured. He believes that our
current version of Capitalism 2.0 is failing to generate the environmental,
social and economic returns that are vital to create a sustainable future. A
new approach is needed to simultaneously protect our natural resources and
reduce poverty. I would add that we need to create better efficiency in
distribution of wealth. Without that, there will always be global conflicts that
prevent us going forward.  Is this impractical? I don’t know. Think
climate change, corporations are not doing enough to limit the emissions of
carbon into the air because air is free, and the same can be said about water.

Let’s think about another idea of social
change. Young people who weren’t not born to rich parents often struggle to pay
for college or children that require special medical care cannot afford them, I
throw those numbers out there you will find it scary. Why can’t we redefine our
stock exchanges as part of the commons? In exchange for the right to issue
publicly traded shares and the privilege of limited liability, larger
organization would be required to deposit 0.5% of their shares in a fund every
year for ten years? Why can’t the larger oil companies that made billions
deposit 1% of their profits when they exceed certain return ratio to a fund
that support alternative transports? What can’t the top them large software
companies that are sitting on billions of cash pay a small dividend every year
to a fund that provide affordable computers to the inner cities kids so they
can learn and stay away from troubles?

I think every corporation (large or small)
must have a social change component in their long term strategy. ‘Corporate
social responsibility’ sounds nice, but in itself is virtually big meaningless
bullshit. It is time to act. I believe this is a test that every global brand
needs to pass. I hope it happens sooner. Please share your thoughts?

Happy Halloween!!

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