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The CSR scene has matured

05. August 2011

Wie hat sich die Nachhaltigkeits- und CSR-Bewegung in den letzten Jahren entwickelt? Vor welchen drängenden Fragen stehen CSR-Manager in Zukunft? Gibt es aktuell eine Renaissance philanthropischer Aktivitäten und welche Bedeutung hat Leadership? Diese und weitere Fragen stehen im Mittelpunkt eines Interviews mit Lord Michael Hastings, KPMG Global Head of Citizenship and Diversity.

Adam Smith wrote in The Wealth of Nations that - “All for ourselves, and nothing for other people, seems...to have been the maxim of mankind.” There is no space in this sentence for a moral compass or business ethics. With all my heart I hope you disagree: Why do you think corporate responsibility is of critical importance today?
I think what has changed dramatically since those words were first written are two fundamental realities. One is the media-based interconnectivity in the world. It was so much easier in previous centuries and previous generations to disregard the complexities, the pain, the sufferings, and even the disasters that affect other parts of the world. Nowadays, daily media shows us an imperfect world where - no matter of how successful we are - we come in contact with those who are distressed, impoverished, in need, are losing their jobs, or being affected by corruption. We see the downside of mankind that you would never be able to see without global media. The second thing that has changed is this impact on a new generation that is jeopardized by the downsizing of industry, and the industrial impact on the climate in particular. These youth have shown that they are familiar with taking steps to protect natural habitats, to conserve wildlife, and to stop deforestation because they understand the impact of carbon dioxide. Those two combined factors have changed the way in which we think about our responsibilities.

How do you think the corporate sustainability movement has evolved in the past 10 years?
We’ve all become more aware and learned our lessons. We are able to see today the impact of different sides of human behavior on natural habitats. It is now expected that business performance is also about responsible business action and not just about revenue generation of shareholder returns. The individuals who today have responsibility within businesses are fully aware of the costs and must decide what the consequence of decisions are compared with sets of decisions. They have an opportunity to protect and preserve our natural environment and to ensure that people’s ways of life are not lost.

What do you see as the most pressing challenges to bring the movement to true scale?

I think that it is a combination of those who still hold the power and pull the strings of business - those are the investors and shareholders, the financial houses, and those with government responsibility. They all share a common vision for business - that it has to build shared value. That is what will drive real long-term opportunity, and not so much applying pressure on whatever company is in line. Would you get the same results without pressure? Would you get the same level of awareness and commitment? You wouldn’t. It is by creating shared value.

Last year, the Global Compact presented its Blueprint for Corporate Sustainability Leadership. In your view, what are the characteristics of a sustainability leader in 2011?
The important first characteristic is an intelligent awareness of the challenges to the stability of the natural environment, and challenging the constructive characteristics of communities that are struggling for basic supplies of shelter, food, water, etc. I expect business leaders to not just reduce their costs and risks but above all to answer a wide array of concerns about the way in which their businesses function, the way in which social development is affected, and how the talents within are affected.

The second thing that I would expect is that a business leader’s attitude toward the next generation has to become passionate. Finally, currently successful leaders are expected now to be givers.   
In summary: I want leaders that are highly intelligent, very aware, politically astute, understanding of society, interconnected, as well as philanthropic and generous. This is a big shift in expectations but it is the right thing to do.

As you just mentioned: Do you see a renaissance of philanthropy?
I do see that shift. If you want evidence, you can look at the website of the organization “Committee Encouraging Corporate Philanthropy”. It is the only organization in the world that gives you substantial data on corporate giving and what differences it makes inside and outside the companies.

The level of awareness is rising in large companies. But how is the situation in small and medium enterprises? What has to be part of a blueprint for companies entering the field of CSR?

It is the responsibility of leaders of any company size to ask themselves if they are stakeholders in the community where they positioned their business. They have to ensure that the community is functioning. If the community isn’t working well, if it is criminal, if people are intimidated, if it is difficult for people to get to work, if the water isn’t safe, etc., then the responsibility of the business is to support local organizations in improving prospects.

This is where you start. Any business can do that. You start with the questions: How can your company return investment to its stakeholders? What are the organizations that might require the business’s attention? What can be done to improve the performance of local activists?
In the wake of the financial crisis, many have talked about the need to shift from short-term profit maximization to long-term sustainable value creation. What has to change to make this happen on a broad scale?
There is a need to understand financial behavior and the consequences of decision making. There are regulation based processes that are necessary to limit profit-taking and to encourage responsible investment. There is nothing wrong with good investments but irresponsible, high-risk investments are not necessarily a good idea. Decisions nowadays are far too interconnected and this has to be taken into consideration. It has to be part of everybody’s DNA in how they approach their work. Do I simply work to get through the day or do I see work as part of the contribution of experiences and expertise to build a more constructive society? How do I see my role in what I’m doing? It is more than the pure function of acquiring money and getting the check at the end of the week or the month. The thing is to recognize that with the money I earn and the tax I pay, I’m also delivering social value to those with limited resources and existential value to those with no resources.

Would a correlation between the compensation of the managing directors and sustainable performance indicators be a good idea?

Absolutely. Building sustainability performance criteria are critical mechanisms that were previously performed by financial values. Now they can be made according to environmental values as well as social values. The thing is - and this is what the UN Global Compact has to talk about - that it should be transparent, published, and accessible to outsiders.

That case also gives us a lesson in corporate governance. In some earlier interviews, you called for a radical shakeup of corporate governance. What exactly is your opinion?

The conversation about corporate reporting is about those who have governance responsibility for businesses making the maximum amount of data and information possible available to the public and showing the easiest way to integrate environmental, social, and governance information about their company. How can they be held accountable? They have to do it through public opinion, shareholders, stakeholders, the media, as well as supportive organizations. That’s what I mean by inclusive corporate governance: transparency of the mechanisms, accountability to the information, and the responsibility of the leadership to deliver value.

In 2010, we saw BP’s share price drop more than 50 percent following the Deepwater Horizon oil spill. Looking at the business sector that BP is in, what advice would you give the company for rebuilding trust and becoming a sustainability leader?
BP is a very compelling example because it was linked to a substantial environmental catastrophe. BP at least has put itself to the task of repairing the damage. It dedicated its leaders, its resources, and its technical experts to get things right. Mistakes and accidents happen in every industrial, business or service organization. What is important is how we learn from a catastrophe of that extent and act accordingly.

How shall a company find balance between giving information and doing marketing?
That is a delicate issue because the more a company reveals about itself, it is going to provide the best possible gloss on how it is doing it. The answer is: It needs to be honest, it needs to be transparent, and it needs to be accountable. Two of the best examples in my opinion are the work of Unilever and Nestlé. As food and drinks production companies, they clearly understand the impact they have on the water that they extracts from the environment for products. Both have committed themselves to the responsibility of a shared value. That means in their daily work they focus on how they can enable production facilities to recover the water that is used rather than let it be lost. Shared value shows how we return value beyond the products or the services that we get.

What are the crucial - and probably uncomfortable - questions the CSR community has to answer in the near future?
That is a very good question. I think the issue should shift away from a department of the organization that deals with responsibility and business engagement. Instead, there should be an expression of how the company as a whole has corporate responsibility. It should be its leaders, its board members, and its employees who feel the burden and the opportunity to handle corporate responsibility. Instead of being the function of a department, it should be an inspiration and integrated into the bloodstream of the company. To get there, we need people leading those departments who have a very strong sense of global connectivity and a very strong sense of responsibility and values. But I’m confident and I do see that the corporate responsibility scene has matured.

Das Interview ist zuerst im Global Compact International Yearbook 2011 erschienen und wurde mit freundlicher Genehmigung des Herausgebers zur Verfügung gestellt.

Weiteres zum Thema

Lord Michael Hastings of Scarisbrick ist Global Head of Citizenship and Diversity bei KPMG.

KPMG ist Mitglied im UPJ-Unternehmensnetzwerk.

Schwerpunktthemen der diesjährigen Ausgabe des Global Compact International Yearbook sind der UN Blueprint for Corporate Responsibility, Eco-Labels und Standards sowie ein ausführliches Dossier zur Einführung des ISO 26000 SR Standards. Mit Beiträgen u.a. von Lord Michael Hastings (KPMG), Sasha Courville (ISEAL), Marc Lee (SustainAbility) sowie Prof. Josef Wieland (FH Konstanz). Außerdem veranschaulichen best practice Beispiele von 44 Unternehmen aus verschiedensten Teilen der Welt die Integration der zehn Prinzipien des Global Compact in das jeweilige Unternehmensumfeld. Herausgeber ist die Mediengruppe macondo in enger Zusammenarbeit mit dem UN Global Compact Büro in New York.

Weitere Informationen zum Yearbook