Ethical Corporation, (Cora Ng and I) will be in New York next week for our Responsible Business Summit USA, next wednesday and Thursday in New York.
We've got some interesting CEO's and senior managers coming along to talk and network with a 100 or so senior managers.
Timberland, Mars, Veolia, Akzo Nobel, and Interface are all sending their bosses to come and take part.
This link will give blog readers a free PDF of our US briefing produced last year.
If you are coming to the conference, look forward to catching up. If not, enjoy the briefing.
Saturday, May 28, 2011
Friday, May 27, 2011
Private Eye increases pressure on Asia Pulp & Paper
The pressure is being turned up on our old friends at Asia Pulp & Paper.
As reported on the blog a couple of weeks back, and many times in the past, the company is engaged in a desperate 1990's style PR battle to stop big corporate customers cancelling supply contracts in the face of an ever-growing body of scientific and campaigner evidence of deeply nefarious activities in what remains of Indonesia's rainforests.
Despite spending a fortune on dodgy public relations and ever-dodgier lobbying (see this excellent New York Times graphic for details), the firm is attracting more and more rightfully negative media attention.
Despite the dangers of the web, for some campaigners, the increasingly intelligent Google search function enables anyone searching to see what APP is really doing in less than a second. Click here to see for yourself.
No company wants this kind of search result on Google. Except, it seems, APP.
The firm seems to be masochistically engaged in reputational suicide.
This is alongside the PR company, Cohn & Wolfe, who will now go down in public relations history as the firm so desperate for money it would even work with APP whilst other large PR firms walked away.
This is not a good long-term strategy for when C&W pitches to APP's former customers for work! This is particularly true given how much their name is now going to come up, in perpetuity, on the internet for dubious PR practices.
The latest media outlet to highlight the APP story is the best-selling UK magazine Private Eye, read by everyone who is anyone from the Prime Minister and UK CEOs downwards.
The Eye points out that:
"Deforestation champion Asia Pulp and Paper (APP) is up to its old green-washing tricks, assisted by its PR firm Cohn & Wolfe, part of Sir Martin Sorrell’s WPP empire.
APP’s managing director of sustainability (sic), Aida Greenbury, this month unveiled a new website, Rainforest Realities, which is designed “to provide a transparent and open forum for our stakeholders around the world to talk about the wide range of opportunities, challenges and issues we face together… We look forward to joining the conversation with you and hope that through this site, we can give you a window to see what is really happening every day within APP, as well as within the communities we serve in Indonesia’s rainforests.”
Desperate stuff. The reality, as everyone knows, is that APP’s impact on Indonesia’s rainforests is a disaster for trees, peatlands, endangered species and communities.
The new site is basically a blog where APP people and paid “independent” advisers post banalities about protecting jobs while ignoring the main allegations that have been made against the company for years by NGOs, customers and the media. Appropriately, the “biodiversity” and “eco innovation” categories were empty at the site’s launch." (end quote)
Private Eye goes on to point out that APP represents a major personal risk to WPP's CEO, Sir Martin Sorrell, given his public support of rainforest protection and various videos he has made for rainforest protection projects, including those supported by Prince Charles.
This kind of accidental hypocrisy, if not fixed, is of course perfect grist for a campaigner's mill.
The story they will highlight: The CEO of WPP says he supports rainforest protection, whilst his firm is paid by the principal destroyer of indonesian rainforest to spread mis-information at best, and downright lies at worst.
Even for a successful, likeable and popular CEO such as Sorrell, that's going to be tough to shrug off.
In other APP/Greenwashing news, APP and its PR advisers, according to the New York Times have been channelling money to self-declared "NGOs" such as the highly dubious outfit "World Growth".
The organisation, brainchild of a minor former Australian politician (who still uses a political/government title whilst not in office), is very active on the meetings circuit at the moment.
It appears to be a one man outfit comprised of Alan Oxley. Oxley also has a consulting outfit, ITS Global, which APP paid to 'audit' Greenpeace's research, and unsurprisingly, find fault with Greenpeace.
In the video linked above, Oxley says his firm is a technical consultancy. But World Growth proclaims him as a trade expert on its website. Must be a hard worker. He has some history as an anti-environmentalist.
I'm reading World Growth's new "report" at the moment. It claims companies working on sustainability and corporate sustainability have got it all wrong and need to re-assess CR.
I'm going to take a wild stab in the dark and hazard a guess that the reports 'findings' will chime almost exactly with the priorities of Asia Pulp & Paper and their advisers.
More on the report in another post.
As reported on the blog a couple of weeks back, and many times in the past, the company is engaged in a desperate 1990's style PR battle to stop big corporate customers cancelling supply contracts in the face of an ever-growing body of scientific and campaigner evidence of deeply nefarious activities in what remains of Indonesia's rainforests.
Despite spending a fortune on dodgy public relations and ever-dodgier lobbying (see this excellent New York Times graphic for details), the firm is attracting more and more rightfully negative media attention.
Despite the dangers of the web, for some campaigners, the increasingly intelligent Google search function enables anyone searching to see what APP is really doing in less than a second. Click here to see for yourself.
No company wants this kind of search result on Google. Except, it seems, APP.
The firm seems to be masochistically engaged in reputational suicide.
This is alongside the PR company, Cohn & Wolfe, who will now go down in public relations history as the firm so desperate for money it would even work with APP whilst other large PR firms walked away.
This is not a good long-term strategy for when C&W pitches to APP's former customers for work! This is particularly true given how much their name is now going to come up, in perpetuity, on the internet for dubious PR practices.
The latest media outlet to highlight the APP story is the best-selling UK magazine Private Eye, read by everyone who is anyone from the Prime Minister and UK CEOs downwards.
The Eye points out that:
"Deforestation champion Asia Pulp and Paper (APP) is up to its old green-washing tricks, assisted by its PR firm Cohn & Wolfe, part of Sir Martin Sorrell’s WPP empire.
APP’s managing director of sustainability (sic), Aida Greenbury, this month unveiled a new website, Rainforest Realities, which is designed “to provide a transparent and open forum for our stakeholders around the world to talk about the wide range of opportunities, challenges and issues we face together… We look forward to joining the conversation with you and hope that through this site, we can give you a window to see what is really happening every day within APP, as well as within the communities we serve in Indonesia’s rainforests.”
Desperate stuff. The reality, as everyone knows, is that APP’s impact on Indonesia’s rainforests is a disaster for trees, peatlands, endangered species and communities.
The new site is basically a blog where APP people and paid “independent” advisers post banalities about protecting jobs while ignoring the main allegations that have been made against the company for years by NGOs, customers and the media. Appropriately, the “biodiversity” and “eco innovation” categories were empty at the site’s launch." (end quote)
Private Eye goes on to point out that APP represents a major personal risk to WPP's CEO, Sir Martin Sorrell, given his public support of rainforest protection and various videos he has made for rainforest protection projects, including those supported by Prince Charles.
This kind of accidental hypocrisy, if not fixed, is of course perfect grist for a campaigner's mill.
The story they will highlight: The CEO of WPP says he supports rainforest protection, whilst his firm is paid by the principal destroyer of indonesian rainforest to spread mis-information at best, and downright lies at worst.
Even for a successful, likeable and popular CEO such as Sorrell, that's going to be tough to shrug off.
In other APP/Greenwashing news, APP and its PR advisers, according to the New York Times have been channelling money to self-declared "NGOs" such as the highly dubious outfit "World Growth".
The organisation, brainchild of a minor former Australian politician (who still uses a political/government title whilst not in office), is very active on the meetings circuit at the moment.
It appears to be a one man outfit comprised of Alan Oxley. Oxley also has a consulting outfit, ITS Global, which APP paid to 'audit' Greenpeace's research, and unsurprisingly, find fault with Greenpeace.
In the video linked above, Oxley says his firm is a technical consultancy. But World Growth proclaims him as a trade expert on its website. Must be a hard worker. He has some history as an anti-environmentalist.
I'm reading World Growth's new "report" at the moment. It claims companies working on sustainability and corporate sustainability have got it all wrong and need to re-assess CR.
I'm going to take a wild stab in the dark and hazard a guess that the reports 'findings' will chime almost exactly with the priorities of Asia Pulp & Paper and their advisers.
More on the report in another post.
Tuesday, May 24, 2011
Some free briefings for blog readers: Working with NGOs and Heavy Industry and CR
If you take the time to read my whimsical ramblings on this blog a dose of more sober research is clearly called for a regular basis.
Luckily, the blog can help there too.
So here's a couple of ten page PDF briefings for blog readers, just one simple click away:
Working with NGOs (May 2011)
Corporate responsibility and heavy industry (March 2010)
As usual in our briefings we spend time looking at best and worst corporate practice, get the NGO views, analyse government action and generally look ahead.
There ought to be some sense in these, I hope they are useful.
We publish two of these kind of briefings ten times a year, so around twenty a year in total. Here's how to sign up to read them all. (Hey I had to sell somewhere in this post)
Here's a list of other briefings and features we plan to publish during 2011.
NB: Here's a sneak preview our new website. The finishing touches are being done as I type, it should be launched next week, finally.
Luckily, the blog can help there too.
So here's a couple of ten page PDF briefings for blog readers, just one simple click away:
Working with NGOs (May 2011)
Corporate responsibility and heavy industry (March 2010)
As usual in our briefings we spend time looking at best and worst corporate practice, get the NGO views, analyse government action and generally look ahead.
There ought to be some sense in these, I hope they are useful.
We publish two of these kind of briefings ten times a year, so around twenty a year in total. Here's how to sign up to read them all. (Hey I had to sell somewhere in this post)
Here's a list of other briefings and features we plan to publish during 2011.
NB: Here's a sneak preview our new website. The finishing touches are being done as I type, it should be launched next week, finally.
Closing the CR leadership gap
Paul Hohnen, a long-time contributor to Ethical Corporation has provided (with Eva Riera) some excellent analysis of how reporting frameworks and tools are beyond used by the leading companies.
His research shows that:
- The Global Reporting Initiative (GRI) has become the default standard for sustainability reporting. Launched in 2002, the GRI is referenced by 95% of the DJSI Super Sector Leaders, 78% of the FTSE4Good Global 100, and 70% of the Global 100 Most Sustainable Corporations.
- The AccountAbility 1000AS standard, another multi-stakeholder developed tool, stands out as the assurance standard of choice. It is used by 26% of the Global 100 Most Sustainable Corporations and also 26% of the DJSI Super Sector Leaders.
- Officially developed frameworks are referenced less frequently than GRI, but achieve nonetheless a creditable level of usage. (Global Compact, OECD Guidelines, ILO, CDP)
That's the good news. On the other hand, he points out that:
- Most leading companies fail to provide any detail or concrete evidence as to HOW they have used sustainability frameworks to embed CR into operations
- Companies are clearly having a hard time actually doing what they say they will do. Firms with a high carbon footprint, such as oil companies and airlines, might improve energy efficiency but overall emissions appear to be rising.
- If one widens the pool of candidates (the Global Compact claims over 6000 business participants and GRI just under 1900 reporters in 2010), the conclusion one cannot avoid is that the vast majority of the world’s companies appear either not to be using any of the recognised corporate responsibility frameworks, or doing so and not talking about it.
This last point is the key one for me.
We can, and should point out that leading firms such as those mentioned in the indexes and lists above (flawed though they may be) are not being transparent enough about integration measurement, progress and successes/failures, but at least most of them grasp the importance of sustainability.
The bigger worry, as I have mentioned before on this blog, is the gap that's opening up between the leaders and the rest. There's 500-1000 companies taking the agenda seriously. That's nowhere near enough.
This is a helpful state of affairs for the leaders in a tactical way, in that they get credit for being better than the others, and increasingly so.
But strategically, if recalcitrant companies lobby against helpful incentives or benefit from the uneven playing field, that's a major disadvantage to companies who are further down the road.
Governments don't appear to understand this. The rise tide must lift most boats, and regulation, enforcement and fines will pick up the rest. If that doesn't happen, aggressive lobbying by powerful minority forces will slow down progress and create disadvantage.
Clearly mandatory carbon reporting is coming. That's a given.
Mandatory sustainability reporting is a trickier beast to argue for. But after ten years of arguing against that, governments have let us down on sustainability to the point where I am wondering if it's the only lighter-touch regulatory approach that might encourage the laggards to raise their game.
It's a tough argument to make: Compliance never breeds innovation. But if a decade of exhortation fails, where do we go next?
I argued in our policy recommendations to David Cameron three years ago that there are structured ways to exhort, encourage and cajole companies to improve their thinking on corporate responsibility. Now, some of what we suggested is being put, patchily, into action by the UK Government.
(Here's a 3 minute audio clip of my colleague Peter Davis, talking about it)
I was never whole-heartedly convinced we had come up with enough solutions in our final report to the Conservatives that could deliver change.
I think it's high time we re-opened the debate on what Governments can do beyond regulation (and using it), to encourage business outside the leadership groups to get up to speed.
Clearly it's needed, as Paul and Eva's analysis shows us above.
I suggested recently on the blog that there are a couple of other options too:
1) CEOs need to join forces and put more pressure on Governments. We need more public statements and even yes, campaigns by industry and business groups to push Governments onto more of a front foot on sustainability incentives and policy.
2) NGOs and campaigners need to turn their attention also to emerging market firms that are becoming increasingly global. No business is immune from bad publicity. I'm not suggesting Greenpeace stops pressuring Nestle, but I am saying WWF and others should focus just as much on newer global firms than on corporate donors or existing relationships. A whole new round of pressure is needed on emerging market companies, if nothing else to help them see the opportunities ahead in sustainable business.
His research shows that:
- The Global Reporting Initiative (GRI) has become the default standard for sustainability reporting. Launched in 2002, the GRI is referenced by 95% of the DJSI Super Sector Leaders, 78% of the FTSE4Good Global 100, and 70% of the Global 100 Most Sustainable Corporations.
- The AccountAbility 1000AS standard, another multi-stakeholder developed tool, stands out as the assurance standard of choice. It is used by 26% of the Global 100 Most Sustainable Corporations and also 26% of the DJSI Super Sector Leaders.
- Officially developed frameworks are referenced less frequently than GRI, but achieve nonetheless a creditable level of usage. (Global Compact, OECD Guidelines, ILO, CDP)
That's the good news. On the other hand, he points out that:
- Most leading companies fail to provide any detail or concrete evidence as to HOW they have used sustainability frameworks to embed CR into operations
- Companies are clearly having a hard time actually doing what they say they will do. Firms with a high carbon footprint, such as oil companies and airlines, might improve energy efficiency but overall emissions appear to be rising.
- If one widens the pool of candidates (the Global Compact claims over 6000 business participants and GRI just under 1900 reporters in 2010), the conclusion one cannot avoid is that the vast majority of the world’s companies appear either not to be using any of the recognised corporate responsibility frameworks, or doing so and not talking about it.
This last point is the key one for me.
We can, and should point out that leading firms such as those mentioned in the indexes and lists above (flawed though they may be) are not being transparent enough about integration measurement, progress and successes/failures, but at least most of them grasp the importance of sustainability.
The bigger worry, as I have mentioned before on this blog, is the gap that's opening up between the leaders and the rest. There's 500-1000 companies taking the agenda seriously. That's nowhere near enough.
This is a helpful state of affairs for the leaders in a tactical way, in that they get credit for being better than the others, and increasingly so.
But strategically, if recalcitrant companies lobby against helpful incentives or benefit from the uneven playing field, that's a major disadvantage to companies who are further down the road.
Governments don't appear to understand this. The rise tide must lift most boats, and regulation, enforcement and fines will pick up the rest. If that doesn't happen, aggressive lobbying by powerful minority forces will slow down progress and create disadvantage.
Clearly mandatory carbon reporting is coming. That's a given.
Mandatory sustainability reporting is a trickier beast to argue for. But after ten years of arguing against that, governments have let us down on sustainability to the point where I am wondering if it's the only lighter-touch regulatory approach that might encourage the laggards to raise their game.
It's a tough argument to make: Compliance never breeds innovation. But if a decade of exhortation fails, where do we go next?
I argued in our policy recommendations to David Cameron three years ago that there are structured ways to exhort, encourage and cajole companies to improve their thinking on corporate responsibility. Now, some of what we suggested is being put, patchily, into action by the UK Government.
(Here's a 3 minute audio clip of my colleague Peter Davis, talking about it)
I was never whole-heartedly convinced we had come up with enough solutions in our final report to the Conservatives that could deliver change.
I think it's high time we re-opened the debate on what Governments can do beyond regulation (and using it), to encourage business outside the leadership groups to get up to speed.
Clearly it's needed, as Paul and Eva's analysis shows us above.
I suggested recently on the blog that there are a couple of other options too:
1) CEOs need to join forces and put more pressure on Governments. We need more public statements and even yes, campaigns by industry and business groups to push Governments onto more of a front foot on sustainability incentives and policy.
2) NGOs and campaigners need to turn their attention also to emerging market firms that are becoming increasingly global. No business is immune from bad publicity. I'm not suggesting Greenpeace stops pressuring Nestle, but I am saying WWF and others should focus just as much on newer global firms than on corporate donors or existing relationships. A whole new round of pressure is needed on emerging market companies, if nothing else to help them see the opportunities ahead in sustainable business.
Monday, May 23, 2011
Joel Makower is right about green marketing
Joel argues that green marketing is over. I believe he is right.
You should read his piece as to why.
Joel argues that it's been tried long and hard enough by enough mainstream brands that we now have the evidence to make the case that it doesn't work.
That's true for sure.
Rather than find that depressing, I think it's a reason to celebrate.
Why? Because sustainable business is only going 'mainstream' if it delivers products and services with a broad range of benefits. Just look at the evidence.
Green alone, like any other single factor, is just not enough.
It's been said for years. Consumers are inherently ahead of 'green' marketers.
They respond to quality, price, utility, practicality and yes, some emotion.
That means sustainable companies and their output will never be 'green'.
It will just be better, smarter, more innovative business.
Hooray for smarter business, not greener products.
You should read his piece as to why.
Joel argues that it's been tried long and hard enough by enough mainstream brands that we now have the evidence to make the case that it doesn't work.
That's true for sure.
Rather than find that depressing, I think it's a reason to celebrate.
Why? Because sustainable business is only going 'mainstream' if it delivers products and services with a broad range of benefits. Just look at the evidence.
Green alone, like any other single factor, is just not enough.
It's been said for years. Consumers are inherently ahead of 'green' marketers.
They respond to quality, price, utility, practicality and yes, some emotion.
That means sustainable companies and their output will never be 'green'.
It will just be better, smarter, more innovative business.
Hooray for smarter business, not greener products.
Brands and consumer behavioural change
This audio recording from our Responsible Business Summit a couple of weeks ago might be of interest.
It's an audio clip of about ten minutes with Richard Reed of Innocent talking about his experience at Innocent Drinks and how the firm has tried to influence new customers and existing consumers. Some valuable lessons for other businesses.
It's an audio clip of about ten minutes with Richard Reed of Innocent talking about his experience at Innocent Drinks and how the firm has tried to influence new customers and existing consumers. Some valuable lessons for other businesses.
What's going with China's "museum of philanthropy"?
Paul French in Shanghai reports that:
China has two key objectives: (among many admittedly)
1) To present itself as a country that is developing charity and philanthropy and not to mention the level of government control of NGOs or the rather wild self-promoting excesses of its new philanthropists (see my last column on Chen Guangbao)
2) To build China as a cultural powerhouse through the construction of thousands of new museums dedicated to pretty much any and everything.Charity and culture by executive order from Party Central in Beijing.
And so the city of Nantong in eastern China's Jiangsu province is to get China's (and perhaps the world's) first museum of philanthropy. 30,000square metres at a cost of US$41 million of galleries devoted to philanthropy, according to Yang Zhanli, Nantong's deputy mayor.
It should be ready to open to the long lines of obviously excited visitors in 2014.
About half the cost will be shouldered by the tax payers of Nantong (who haven't really been consulted very closely about this) and the rest from donations.
Crucially deputy mayor Yang idetitied these donors to a museum of Chinese philanthropy as coming from Hong Kong, Macao and Taiwan (i.e. not the PRC itself) - this is code for 'we're touching up some local investors for a little tribute to the emperor'.
Dou Yepei, vice minister of civil affairs for Jiangsu (i.e. the we'll have no jasmine on my watch minister) said the museum ws an important step in 'promoting Chinese philanthripic culture and a way to raise peole's awareness of social responsibility.' Though they could have just built a new school or a hospital...
Our ten page briefing on CR in China from last year is here.
China has two key objectives: (among many admittedly)
1) To present itself as a country that is developing charity and philanthropy and not to mention the level of government control of NGOs or the rather wild self-promoting excesses of its new philanthropists (see my last column on Chen Guangbao)
2) To build China as a cultural powerhouse through the construction of thousands of new museums dedicated to pretty much any and everything.Charity and culture by executive order from Party Central in Beijing.
And so the city of Nantong in eastern China's Jiangsu province is to get China's (and perhaps the world's) first museum of philanthropy. 30,000square metres at a cost of US$41 million of galleries devoted to philanthropy, according to Yang Zhanli, Nantong's deputy mayor.
It should be ready to open to the long lines of obviously excited visitors in 2014.
About half the cost will be shouldered by the tax payers of Nantong (who haven't really been consulted very closely about this) and the rest from donations.
Crucially deputy mayor Yang idetitied these donors to a museum of Chinese philanthropy as coming from Hong Kong, Macao and Taiwan (i.e. not the PRC itself) - this is code for 'we're touching up some local investors for a little tribute to the emperor'.
Dou Yepei, vice minister of civil affairs for Jiangsu (i.e. the we'll have no jasmine on my watch minister) said the museum ws an important step in 'promoting Chinese philanthripic culture and a way to raise peole's awareness of social responsibility.' Though they could have just built a new school or a hospital...
Our ten page briefing on CR in China from last year is here.
Friday, May 20, 2011
Should NGOs have "senior account managers"?
My friend and colleague (he is a contributing editor to Ethical Corp) Brendan May makes an excellent point on his blog about big NGOs losing their edge.
One key message that should give large NGOs who veer between campaigning and partnering with large companies in the post is Brendan's point that:
"The growing dominance of fundraisers and corporate marketing staff in big NGOs is becoming a real concern. What they gain in funds they lose in policy expertise. For every hour spent helping companies with their PR they lose an hour achieving change at ground level."
Here's the full posting link below
It's well worth a read if you work with NGOs or partner with them:
Conservation International gaffe tarnishes us all
One key message that should give large NGOs who veer between campaigning and partnering with large companies in the post is Brendan's point that:
"The growing dominance of fundraisers and corporate marketing staff in big NGOs is becoming a real concern. What they gain in funds they lose in policy expertise. For every hour spent helping companies with their PR they lose an hour achieving change at ground level."
Here's the full posting link below
It's well worth a read if you work with NGOs or partner with them:
Conservation International gaffe tarnishes us all
Thursday, May 19, 2011
Collaboration, innovation and opportunity in greener buildings
Have you ever wondered why our buildings are not becoming greener, faster?
One reason is industry collaboration, or lack thereof.
Another is accountability and the lack of clarity in the industry as to who is responsible for what.
These podcasts below, taped this week are all about tackling those issues.
Given the percentage of carbon emissions that come from our buildings, discussing solutions to the problems, as we attempt to do in these podcasts, ought to be of some interest to readers:
The business case for greener construction at Skanska
Skanska's Noel Morrin on collaboration in green building and cost savings
One reason is industry collaboration, or lack thereof.
Another is accountability and the lack of clarity in the industry as to who is responsible for what.
These podcasts below, taped this week are all about tackling those issues.
Given the percentage of carbon emissions that come from our buildings, discussing solutions to the problems, as we attempt to do in these podcasts, ought to be of some interest to readers:
The business case for greener construction at Skanska
Skanska's Noel Morrin on collaboration in green building and cost savings
Anyone for innovation in team building? Here's an alternative option
If that's a little to feisty for you, here's a day out for the board perhaps:
Prudential and IPad apps for corporate responsibility reporting
Prudential, the UK financial services group, has launched their latest CR report also in IPad format.
This means you can download their app, and browse the report on your mobile tablet device.
I'm torn on this one. On the one hand, new technology ought to be embraced by companies looking to communicate CR.
On the other, who is going to download this? More importantly, who will keep reading it?
The chances are, the sceptic in me says, that five SRI analysts who invest in the firm might download it, look at it once and then delete the app.
I'm not sure who else would read it, except the odd person in the Prudential CR team.
I'd love to be wrong about that. And see stats next year on the thousands of Ipad users who did use it, even just once. But I'm a little dubious.
One web marketing expert, the CEO of eConsultancy.com, said at a conference recently that most firms who make apps should perhaps instead focus on making their corporate websites better, rather than playing with a technology most IPad users will never see or use.
(To be fair to Prudential, their web reporting is pretty nice to look at, easy to read and simple to navigate. Although as usual with finance firms, stakeholder engagement outside the firm appears fairly negligible when you browse the website)
I can't help thinking that the eConsultancy CEO advice applies to CR reporting. But that doesn't mean companies shouldn't experiment. I'm just not sure a CR report is the best content for an app.
Apps are for a constant flow of new and useful information. Or silly games. This is neither. Perhaps its the right idea, but with the wrong content.
They are also using a technology called "Flashbook", which is worth a look if you work on reporting. This 'page turn' technology, whilst improving hugely in recent years, is still just a little too slow, clunky and hard to use compared with a good old PDF. It's nearly good enough, just not quite there yet.
Before judging further, I'd better download the Prudential app on my IPad and take a look. More on the results of that later in the week when I've had a chance to do that.
Not to be churlish about experimentation, we should say "well done" to Prudential for embracing new technology. It's worth a go I suppose, if you can market the site to interested stakeholders.
Perhaps though, all the time and expense might have been better put to use working with outside parties to put together say, some interesting essays and independent think pieces on the future of their industry and the issues at hand.
That's something I might actually read, as a opposed to flicking through a CR report for five minutes. If regularly updated, that's an app I might even keep.
The question is, of course, is that a role for a company like Prudential to take? I'd argue it could be, if the output was sufficiently industry-challenging, constructive and informative about the future of finance.
This means you can download their app, and browse the report on your mobile tablet device.
I'm torn on this one. On the one hand, new technology ought to be embraced by companies looking to communicate CR.
On the other, who is going to download this? More importantly, who will keep reading it?
The chances are, the sceptic in me says, that five SRI analysts who invest in the firm might download it, look at it once and then delete the app.
I'm not sure who else would read it, except the odd person in the Prudential CR team.
I'd love to be wrong about that. And see stats next year on the thousands of Ipad users who did use it, even just once. But I'm a little dubious.
One web marketing expert, the CEO of eConsultancy.com, said at a conference recently that most firms who make apps should perhaps instead focus on making their corporate websites better, rather than playing with a technology most IPad users will never see or use.
(To be fair to Prudential, their web reporting is pretty nice to look at, easy to read and simple to navigate. Although as usual with finance firms, stakeholder engagement outside the firm appears fairly negligible when you browse the website)
I can't help thinking that the eConsultancy CEO advice applies to CR reporting. But that doesn't mean companies shouldn't experiment. I'm just not sure a CR report is the best content for an app.
Apps are for a constant flow of new and useful information. Or silly games. This is neither. Perhaps its the right idea, but with the wrong content.
They are also using a technology called "Flashbook", which is worth a look if you work on reporting. This 'page turn' technology, whilst improving hugely in recent years, is still just a little too slow, clunky and hard to use compared with a good old PDF. It's nearly good enough, just not quite there yet.
Before judging further, I'd better download the Prudential app on my IPad and take a look. More on the results of that later in the week when I've had a chance to do that.
Not to be churlish about experimentation, we should say "well done" to Prudential for embracing new technology. It's worth a go I suppose, if you can market the site to interested stakeholders.
Perhaps though, all the time and expense might have been better put to use working with outside parties to put together say, some interesting essays and independent think pieces on the future of their industry and the issues at hand.
That's something I might actually read, as a opposed to flicking through a CR report for five minutes. If regularly updated, that's an app I might even keep.
The question is, of course, is that a role for a company like Prudential to take? I'd argue it could be, if the output was sufficiently industry-challenging, constructive and informative about the future of finance.
Monday, May 16, 2011
Puma attempts some serious research on sustainability impacts
Puma announced today that it's done some serious measuring of its supply chain and other environmental impacts.
Here's a BBC news article that I shamelessly edited below, and the original press release from Puma.
The company has worked with PWC and Truscost to map some costs in its operations. Apparently the CEO was excellent on Channel Four news tonight.
Here are some highlights from Puma's research with consultants on impacts:
• Combined cost of the carbon & water in 2010 was 94.4m euros ($134.3m; £82.8m)
• Included supply chain in calculations
• Impact of greenhouse gases equivalent: 47m euros
• Water use: 47.4m euros.
• Suppliers make up more than 87m euros of total
• Outsourced processes (embroidering and printing) now subject to same environmental and social standards as own manufacturing processes
• Set a target of reducing its carbon, waste, energy and water use by 25% by 2015
• Puma CEO said simply offsetting carbon was not enough: "The primary objective has to be not to emit the carbon [in the first place]".
• Next phase of its “EPnL” will include the cost of waste and land-use change
This is clearly useful work. One might quibble with bits of the methodology, no doubt (one always can) but this is good baseline work. You can't manage without measuring as the old cliche goes.
Of course, the labour standards campaigners will say this is a distraction from improving wages, labour conditions, poverty alleviation etc. And as we know greener is only half the story (not sure if anyone told a lot of the folks in the US that yet).
There's a lot more to be done, and the social side is much harder, given the subjectivity of development, emerging economies and so on.
But this raises the game for other brands: It won't be long before baseline studies such as this are the norm, rather than the exception.
Here's the Channel Four news item with Puma's CEO on YouTube.
And here's Mallen Baker's take on it. He asks some important questions about how the numbers were calculated and concludes some of them are close to made-up.
I take Mallen's point here. Trucost and PWC have made some broad sweeping assumptions it's clear. I'm pleased Puma have started down this road though, since only by doing so will they eventually arrive at more accurate numbers. Some environmentalists will call it greenwash, but it's at least a start.
Here's a BBC news article that I shamelessly edited below, and the original press release from Puma.
The company has worked with PWC and Truscost to map some costs in its operations. Apparently the CEO was excellent on Channel Four news tonight.
Here are some highlights from Puma's research with consultants on impacts:
• Combined cost of the carbon & water in 2010 was 94.4m euros ($134.3m; £82.8m)
• Included supply chain in calculations
• Impact of greenhouse gases equivalent: 47m euros
• Water use: 47.4m euros.
• Suppliers make up more than 87m euros of total
• Outsourced processes (embroidering and printing) now subject to same environmental and social standards as own manufacturing processes
• Set a target of reducing its carbon, waste, energy and water use by 25% by 2015
• Puma CEO said simply offsetting carbon was not enough: "The primary objective has to be not to emit the carbon [in the first place]".
• Next phase of its “EPnL” will include the cost of waste and land-use change
This is clearly useful work. One might quibble with bits of the methodology, no doubt (one always can) but this is good baseline work. You can't manage without measuring as the old cliche goes.
Of course, the labour standards campaigners will say this is a distraction from improving wages, labour conditions, poverty alleviation etc. And as we know greener is only half the story (not sure if anyone told a lot of the folks in the US that yet).
There's a lot more to be done, and the social side is much harder, given the subjectivity of development, emerging economies and so on.
But this raises the game for other brands: It won't be long before baseline studies such as this are the norm, rather than the exception.
Here's the Channel Four news item with Puma's CEO on YouTube.
And here's Mallen Baker's take on it. He asks some important questions about how the numbers were calculated and concludes some of them are close to made-up.
I take Mallen's point here. Trucost and PWC have made some broad sweeping assumptions it's clear. I'm pleased Puma have started down this road though, since only by doing so will they eventually arrive at more accurate numbers. Some environmentalists will call it greenwash, but it's at least a start.
Burson Marstellar and Facebook/Google case shows the need for PR firm audits
Have you ever done a values audit on your public relations firm?
More and more companies will probably starting thinking about undertaking one, if recent news is anything to go by.
I'm talking of course, about the story that broke last week around Burson-Marstellar.
In case you've been away, or busy, here's the story as the Daily Beast broke it:
"Burson and Facebook have been taking heat after The Daily Beast revealed Thursday that Facebook had hired Burson to run a "whisper campaign" against Google, urging reporters and bloggers to write negative stories about Google's social networking practices. Burson even offered to help a blogger write an op-ed and to place the article in various publications.
The Burson flacks pitching the story would not tell reporters who their client was—something that rarely happens, and which violates professional guidelines set out in the Code of Ethics of the Public Relations Society of America (PRSA), a professional association for PR people."
And here's BM's statement in response to the media furore that, for once, was justified:
"Facebook requested that its name be withheld on the grounds that it was merely asking to bring publicly available information to light and such information could then be independently and easily replicated by any media. Any information brought to media attention raised fair questions, was in the public domain, and was in any event for the media to verify through independent sources. Whatever the rationale, this was not at all standard operating procedure and is against our policies, and the assignment on those terms should have been declined. When talking to the media, we need to adhere to strict standards of transparency about clients, and this incident underscores the absolute importance of that principle."
I've been arguing for years that the giant firms such as WPP and Omnicom, among others, that own the big PR, lobbying and marketing firms need to raise their game on basic business ethics.
Their clients, the big corporates, should hire or fire these firms based on their values, their codes of conduct and ethical behaviour. They do the same with contract manufacturers, for example, so why not PR and marketing firms?
In the new world of 24 hour web connections and social media, today it's easy to argue that your communication company represents as much of a risk to your reputation as a factory in China.
Facebook, like Apple, seems to feel the firm is above all this corporate responsibility stuff. They will soon find out, as both firms have been recently, they are more vulnerable than anyone else due to their visibility.
We'll be running a big special report in Ethical Corporation magazine in September on PR firms, their owners, clients and business practices. We'll be arguing it's high time PR, lobbying and marketing firms got to grips with values, ethics and codes of conduct.
The rest of business has them coming out of their ears. About time WPP and Omnicom, etc, jumped on board, before they are pushed.
More and more companies will probably starting thinking about undertaking one, if recent news is anything to go by.
I'm talking of course, about the story that broke last week around Burson-Marstellar.
In case you've been away, or busy, here's the story as the Daily Beast broke it:
"Burson and Facebook have been taking heat after The Daily Beast revealed Thursday that Facebook had hired Burson to run a "whisper campaign" against Google, urging reporters and bloggers to write negative stories about Google's social networking practices. Burson even offered to help a blogger write an op-ed and to place the article in various publications.
The Burson flacks pitching the story would not tell reporters who their client was—something that rarely happens, and which violates professional guidelines set out in the Code of Ethics of the Public Relations Society of America (PRSA), a professional association for PR people."
And here's BM's statement in response to the media furore that, for once, was justified:
"Facebook requested that its name be withheld on the grounds that it was merely asking to bring publicly available information to light and such information could then be independently and easily replicated by any media. Any information brought to media attention raised fair questions, was in the public domain, and was in any event for the media to verify through independent sources. Whatever the rationale, this was not at all standard operating procedure and is against our policies, and the assignment on those terms should have been declined. When talking to the media, we need to adhere to strict standards of transparency about clients, and this incident underscores the absolute importance of that principle."
I've been arguing for years that the giant firms such as WPP and Omnicom, among others, that own the big PR, lobbying and marketing firms need to raise their game on basic business ethics.
Their clients, the big corporates, should hire or fire these firms based on their values, their codes of conduct and ethical behaviour. They do the same with contract manufacturers, for example, so why not PR and marketing firms?
In the new world of 24 hour web connections and social media, today it's easy to argue that your communication company represents as much of a risk to your reputation as a factory in China.
Facebook, like Apple, seems to feel the firm is above all this corporate responsibility stuff. They will soon find out, as both firms have been recently, they are more vulnerable than anyone else due to their visibility.
We'll be running a big special report in Ethical Corporation magazine in September on PR firms, their owners, clients and business practices. We'll be arguing it's high time PR, lobbying and marketing firms got to grips with values, ethics and codes of conduct.
The rest of business has them coming out of their ears. About time WPP and Omnicom, etc, jumped on board, before they are pushed.
Can (social) media sites for corporate responsibility survive?
I've been pondering this question since another media site for sustainability pointed its feet at the sky and said "I'm out".
This one being JustMeans, the site that ran for a couple of years until recently, when economic reality appears to have kicked in.
If you look at the site now you can clearly see the firm is no longer really in meaningful business.
It's not the first site of its kind to be launched with some degree of fanfare, and fall by the wayside within two years.
Of course, most of these sites and media entities I have seen come and go in the last decade have all suffered from the same problem: A business model that drives cashflow.
Right now it's still old school products like subscriptions, conferences and reports that keep us in the black, and give me time to write this blog, plus a bit of ancillary revenue like our live debates, editorial sponsorship and so forth.
The future is online, as every social media pundit pretending to be worth their salt will tell you.
But what does that mean? So far, in classic sustainability sense, ie economic, no-one has worked out how to do it. Lots of people try, but the cashflow escapes them, even if they then delve into face-to-face products, like events, because usually they don't know that business well enough to make it work.
The attitude often seems to be: "build it and they will come", but they, particularly in this field, often don't have much money, and if you don't have a good product to sell them you've really got a problem.
Sustainability, if you can call it a business sector (arguably more a trade!) is not alone of course. All sorts of B2B and B2C websites have come and gone in the last 15 years.
Who might deliver online only and win/survive then?
These guys, the 2 degrees network, seem to think they have a chance.
Their PR firm just called me to ask us to write about them, but lacked any kind of compelling hook, or story to do so.
I know they have a reasonable database already (12,000) but what will make them sustainable?
Recurring subscriptions and corporate deals to drive online networking seems to be the business model.
The plan seems to be to create a kind of LinkedIn for sustainability, with active moderation and 'working groups'.
These seem to be webinars and hosting corporate content and reports etc, in PDF format.
Of any of the new media businesses I have seen come and go in the space since 2001 (anyone remember Business Ethics magazine, or Tomorrow magazine? Halcyon days..) 2 degrees network may have the best chance of any of them.
The question will be: What do you need to do online that continues to drive in corporate individual cash and business licenses/deals in a sustainable way?
Webinars are known to bore people, and as a stand-alone product don't really work financially unless sponsored. Alone, they are clearly not enough to sustain a business. Many have tried.
I suppose we'll find out in the next couple of years. LinkedIn is apparently set soon for an IPO valued at $3.3 billion. But then they have 100 million members.
2 degrees seem to have a huge team, presumably all being paid wages, so cashflow must be a pressing concern.
I hear Tesco has asked suppliers to use it, and no doubt pay to do so. I imagine other large corporates are being given the same pitch.
If it works, it could be very interesting. But busy executives need a reason to engage online, even in a private forum.
The question is, can a website log-in compete with a conference call or phyical meeting? I have my doubts at the moment.
Good luck to them if they can make it work. Not sure I would put my money into such a firm right now, but we'll see what happens.
This one being JustMeans, the site that ran for a couple of years until recently, when economic reality appears to have kicked in.
If you look at the site now you can clearly see the firm is no longer really in meaningful business.
It's not the first site of its kind to be launched with some degree of fanfare, and fall by the wayside within two years.
Of course, most of these sites and media entities I have seen come and go in the last decade have all suffered from the same problem: A business model that drives cashflow.
Right now it's still old school products like subscriptions, conferences and reports that keep us in the black, and give me time to write this blog, plus a bit of ancillary revenue like our live debates, editorial sponsorship and so forth.
The future is online, as every social media pundit pretending to be worth their salt will tell you.
But what does that mean? So far, in classic sustainability sense, ie economic, no-one has worked out how to do it. Lots of people try, but the cashflow escapes them, even if they then delve into face-to-face products, like events, because usually they don't know that business well enough to make it work.
The attitude often seems to be: "build it and they will come", but they, particularly in this field, often don't have much money, and if you don't have a good product to sell them you've really got a problem.
Sustainability, if you can call it a business sector (arguably more a trade!) is not alone of course. All sorts of B2B and B2C websites have come and gone in the last 15 years.
Who might deliver online only and win/survive then?
These guys, the 2 degrees network, seem to think they have a chance.
Their PR firm just called me to ask us to write about them, but lacked any kind of compelling hook, or story to do so.
I know they have a reasonable database already (12,000) but what will make them sustainable?
Recurring subscriptions and corporate deals to drive online networking seems to be the business model.
The plan seems to be to create a kind of LinkedIn for sustainability, with active moderation and 'working groups'.
These seem to be webinars and hosting corporate content and reports etc, in PDF format.
Of any of the new media businesses I have seen come and go in the space since 2001 (anyone remember Business Ethics magazine, or Tomorrow magazine? Halcyon days..) 2 degrees network may have the best chance of any of them.
The question will be: What do you need to do online that continues to drive in corporate individual cash and business licenses/deals in a sustainable way?
Webinars are known to bore people, and as a stand-alone product don't really work financially unless sponsored. Alone, they are clearly not enough to sustain a business. Many have tried.
I suppose we'll find out in the next couple of years. LinkedIn is apparently set soon for an IPO valued at $3.3 billion. But then they have 100 million members.
2 degrees seem to have a huge team, presumably all being paid wages, so cashflow must be a pressing concern.
I hear Tesco has asked suppliers to use it, and no doubt pay to do so. I imagine other large corporates are being given the same pitch.
If it works, it could be very interesting. But busy executives need a reason to engage online, even in a private forum.
The question is, can a website log-in compete with a conference call or phyical meeting? I have my doubts at the moment.
Good luck to them if they can make it work. Not sure I would put my money into such a firm right now, but we'll see what happens.
Thursday, May 12, 2011
China: The Problem with GONGOs
By Paul French, China editor, Ethical Corporation, in Shanghai
As my current China Column is on the showy Chen Guangbiao, China’s most notorious philanthropist who blasts cash at the needy with personal appearances and self-promotion, I thought I’d try and explain why the Chen style of charity seems to be more high profile than traditional charitable bodies working behind the scenes.
Now Chen and his nouveau riche like may lack humility but then this case pops up from the Red Cross and perhaps he doesn’t look so bad.
Imagine you work for a body that sounds rather like a charity, that solicits donations from people and corporations in the manner of a charity, has flag days like any normal charity, that sometimes does work that looks a lot like charitable work but that when there’s a problem suddenly declares itself a government department. That’s, apparently, the Shanghai Red Cross.
Bloggers in China are now calling for a full investigation into just what exactly the Shanghai Red Cross is after a microblogger posted a receipt from a lunch held for 17 people by the Shanghai Red Cross totaling 9,859RMB (about US$1,500.)
But apparently it’s OK; Red Cross Shanghai is in fact a government body with a government-provided administrative budget that doesn't come from donations. Tian Yongbo, a former publicity officer for Red Cross Shanghai (and like many publicity officers in China a sufferer with severe Tin Ear Syndrome) then told the concerned bloggers, "Our annual budget from the government is too much to be used up, so why would we use donations?" Yes, when you’re called the Red Cross and you’ve got money left over in this year's budget what else to do with it but blow it on a right regal lunch for 1,500 bucks.
But the online community is not pacified and is calling for a full audit of the Shanghai Red Cross's expenses (including gifts, entertainment, food, etc.), a halt in donations and officials (technically government employees and many also members of that other big organisation that runs China) to be reprimanded.
Of course the case raises the core issue of charity in China - non-profits aren't allowed to operate independently of the government, so charities end up looking a lot like the usual corrupt and graft ridden self-serving government departments everyone in China has come to know and love so well.
It doesn’t do much for charity either, the Shandong Business Daily newspaper held a poll that found that 90% of respondents had lost faith in the Red Cross. The other 10% had gone to a Red Cross lunch presumably to help then use up their budget.
As my current China Column is on the showy Chen Guangbiao, China’s most notorious philanthropist who blasts cash at the needy with personal appearances and self-promotion, I thought I’d try and explain why the Chen style of charity seems to be more high profile than traditional charitable bodies working behind the scenes.
Now Chen and his nouveau riche like may lack humility but then this case pops up from the Red Cross and perhaps he doesn’t look so bad.
Imagine you work for a body that sounds rather like a charity, that solicits donations from people and corporations in the manner of a charity, has flag days like any normal charity, that sometimes does work that looks a lot like charitable work but that when there’s a problem suddenly declares itself a government department. That’s, apparently, the Shanghai Red Cross.
Bloggers in China are now calling for a full investigation into just what exactly the Shanghai Red Cross is after a microblogger posted a receipt from a lunch held for 17 people by the Shanghai Red Cross totaling 9,859RMB (about US$1,500.)
But apparently it’s OK; Red Cross Shanghai is in fact a government body with a government-provided administrative budget that doesn't come from donations. Tian Yongbo, a former publicity officer for Red Cross Shanghai (and like many publicity officers in China a sufferer with severe Tin Ear Syndrome) then told the concerned bloggers, "Our annual budget from the government is too much to be used up, so why would we use donations?" Yes, when you’re called the Red Cross and you’ve got money left over in this year's budget what else to do with it but blow it on a right regal lunch for 1,500 bucks.
But the online community is not pacified and is calling for a full audit of the Shanghai Red Cross's expenses (including gifts, entertainment, food, etc.), a halt in donations and officials (technically government employees and many also members of that other big organisation that runs China) to be reprimanded.
Of course the case raises the core issue of charity in China - non-profits aren't allowed to operate independently of the government, so charities end up looking a lot like the usual corrupt and graft ridden self-serving government departments everyone in China has come to know and love so well.
It doesn’t do much for charity either, the Shandong Business Daily newspaper held a poll that found that 90% of respondents had lost faith in the Red Cross. The other 10% had gone to a Red Cross lunch presumably to help then use up their budget.
Tuesday, May 10, 2011
Peabody Energy and Coalcares.org: One of the best hoax sites you'll see
Check this out, Coalcares.org. A hilarious hoax site satirising how the coal industry tackles, well, just about any sustainability issue. The tab on renewable energy is one of the most amusing. Enjoy. Who says environmentalists have no sense of humour? More on the site, here.
12 minute video on Peak Oil
Here's a good short punchy video news report on the current peak oil debate. I don't know how accurate the predictions are, but if you are interested in the issue it does bring you up to speed on some of the latest thinking, and concerns by some experts.
Reflections on the Responsible Business Summit 2011
As I mentioned in an earlier post, we held our big annual conference, the Responsible Business Summit and awards last week. Here's a list of the awards winners.
Here's the link to the twitter hashtag, so one click shows you what everyone was saying.
Here's what I recall from it, as briefly as possible:
1) It's clear to me that more companies are wanting to know the detail of what best practice in elements of corporate responsibility looks like. But it's also clear that out of say 100,000 or more 'transnational' companies out there, we're seeing serious/semi-serious engagement from less than 1000 of the largest.
That's not to say there are not lots of smaller, innovative companies out there who care deeply, there are. We just don't focus on them. I'm thinking we should do so much more. Innovation often comes from much smaller firms as we all know.
2) CEOs are best without a speech: Our various and varied business bosses really relaxed when we asked them NOT to prepare much, if anything, and have a discussion instead. They made more unguarded remarks, which are always the best.
3) Bosses are becoming more open, to a degree. But suited corporate execs still say a lot less than they should about what they are getting wrong and learning from.
4) There's still a lot of mainstream bosses out there who don't see the link between sustainability and strategy and want to pretend it's not there. Those that do, such as Kraft and Unilever, are doing so because they can see how sustainability can directly affect their business.
5) TNT's Peter Bakker was excellent, and probably got the best reception due to his honesty and forthright comments. I hear he is stepping down as TNT CEO this year, so it will be interesting to watch where he goes next.
From the breakouts I was moderating, a few take-aways:
Measuring socio-economic impact: This session with Standard Chartered and my colleague Peter Davis, who wrote a report on the topic for us, was fascinating. It brought home to me once again just how vital this issue is. Still though, we don't see many companies beyond Anglo American, Standard Chartered, Heineken, Unilever and SAB Miller doing really in-depth research on their socio-economic footprint. It seems like a huge opportunity for business to understand cause and effect. So on the one hand it was great to hear what the leaders are doing, on the other worrying that so few other companies grasp how important this area is for them.
Media: What makes a good story?: This session was great fun. I was able to give the Economist, Financial Times and the Times a bit of a grilling. What came out of it? From a practical point of view, here's the post on it from our management blog last week. One point I thought was interesting was the bafflement on the part of the older journalists on the panel when asked about their responsibility to write about CR issues. They don't see a link between sustainability policy/strategy in their businesses and editorial output. This is not a new thing, but still a question no major media business is really prepared to address yet.
Tax justice: What does a responsible corporate tax position look like? This was a good session, mainly because our two speakers disagreed. John Christensen of the Tax Justice Network feels there is an open and shut debate about stopping tax evasion: Governments simply need to show some backbone and shut down havens. Mallen Baker felt that campaigners demonising companies via direct action is preventing the needed mature debate from taking place. Corporate responsibility reports say nothing about Tax, pointed out Christensen. That's because CR teams have no input at all on tax policy, pointed out Mallen Baker. That doesn't mean of course that more companies should not be using CR reports to offer a view on tax. They certainly should in my view. It might make the City read them in more detail at least.
Finally: How to get marketing and branding directors on board
This was a good session with Henkel and Brendan May, UK Chairman of the Rainforest Alliance and founder of the Robertsbridge Group. We also had excellent contributions from both Coke and Bacardi (yes, as moderator I did make a bad joke about their combination). The view of the room was that marketing/branding can be brought on board, but the key, unsurprisingly is taking a tailored approach in their own language, and making sure their teams are not biasing consumer research with the wrong kind of questions, which has been known to happen.
I could of course only attend the sessions I moderated, along with a couple of others. But there was a real buzz around the 450 attendees at the event, much more so than last year. In terms of content and real management tips, I think it was the best conference we've ever held in ten years of hosting them.
So while corporate CR budgets are still frozen or remain limited in 2011, there's room for great optimism in my view. Despite government weakness and focus on short term economic issues, companies, at least some of the 1000 largest and small innovators, are getting on with implementing policy and developing challenging targets. I believe two factors are key for helping more firms engage in 2011/12:
1) CEOs need to join forces and put more pressure on Governments. We need more public statements and even yes, campaigns by industry and business groups to push Governments onto more of a front foot on sustainability incentives and policy.
2) NGOs and campaigners need to turn their attention also to emerging market firms that are becoming increasingly global. No business is immune from bad publicity. I'm not suggesting Greenpeace stops pressuring Nestle, but I am saying WWF and others should focus just as much on newer global firms than on corporate donors or existing relationships. A whole new round of pressure is needed on emerging market companies, if nothing else to help them see the opportunities ahead in sustainable business.
Here's the link to the twitter hashtag, so one click shows you what everyone was saying.
Here's what I recall from it, as briefly as possible:
1) It's clear to me that more companies are wanting to know the detail of what best practice in elements of corporate responsibility looks like. But it's also clear that out of say 100,000 or more 'transnational' companies out there, we're seeing serious/semi-serious engagement from less than 1000 of the largest.
That's not to say there are not lots of smaller, innovative companies out there who care deeply, there are. We just don't focus on them. I'm thinking we should do so much more. Innovation often comes from much smaller firms as we all know.
2) CEOs are best without a speech: Our various and varied business bosses really relaxed when we asked them NOT to prepare much, if anything, and have a discussion instead. They made more unguarded remarks, which are always the best.
3) Bosses are becoming more open, to a degree. But suited corporate execs still say a lot less than they should about what they are getting wrong and learning from.
4) There's still a lot of mainstream bosses out there who don't see the link between sustainability and strategy and want to pretend it's not there. Those that do, such as Kraft and Unilever, are doing so because they can see how sustainability can directly affect their business.
5) TNT's Peter Bakker was excellent, and probably got the best reception due to his honesty and forthright comments. I hear he is stepping down as TNT CEO this year, so it will be interesting to watch where he goes next.
From the breakouts I was moderating, a few take-aways:
Measuring socio-economic impact: This session with Standard Chartered and my colleague Peter Davis, who wrote a report on the topic for us, was fascinating. It brought home to me once again just how vital this issue is. Still though, we don't see many companies beyond Anglo American, Standard Chartered, Heineken, Unilever and SAB Miller doing really in-depth research on their socio-economic footprint. It seems like a huge opportunity for business to understand cause and effect. So on the one hand it was great to hear what the leaders are doing, on the other worrying that so few other companies grasp how important this area is for them.
Media: What makes a good story?: This session was great fun. I was able to give the Economist, Financial Times and the Times a bit of a grilling. What came out of it? From a practical point of view, here's the post on it from our management blog last week. One point I thought was interesting was the bafflement on the part of the older journalists on the panel when asked about their responsibility to write about CR issues. They don't see a link between sustainability policy/strategy in their businesses and editorial output. This is not a new thing, but still a question no major media business is really prepared to address yet.
Tax justice: What does a responsible corporate tax position look like? This was a good session, mainly because our two speakers disagreed. John Christensen of the Tax Justice Network feels there is an open and shut debate about stopping tax evasion: Governments simply need to show some backbone and shut down havens. Mallen Baker felt that campaigners demonising companies via direct action is preventing the needed mature debate from taking place. Corporate responsibility reports say nothing about Tax, pointed out Christensen. That's because CR teams have no input at all on tax policy, pointed out Mallen Baker. That doesn't mean of course that more companies should not be using CR reports to offer a view on tax. They certainly should in my view. It might make the City read them in more detail at least.
Finally: How to get marketing and branding directors on board
This was a good session with Henkel and Brendan May, UK Chairman of the Rainforest Alliance and founder of the Robertsbridge Group. We also had excellent contributions from both Coke and Bacardi (yes, as moderator I did make a bad joke about their combination). The view of the room was that marketing/branding can be brought on board, but the key, unsurprisingly is taking a tailored approach in their own language, and making sure their teams are not biasing consumer research with the wrong kind of questions, which has been known to happen.
I could of course only attend the sessions I moderated, along with a couple of others. But there was a real buzz around the 450 attendees at the event, much more so than last year. In terms of content and real management tips, I think it was the best conference we've ever held in ten years of hosting them.
So while corporate CR budgets are still frozen or remain limited in 2011, there's room for great optimism in my view. Despite government weakness and focus on short term economic issues, companies, at least some of the 1000 largest and small innovators, are getting on with implementing policy and developing challenging targets. I believe two factors are key for helping more firms engage in 2011/12:
1) CEOs need to join forces and put more pressure on Governments. We need more public statements and even yes, campaigns by industry and business groups to push Governments onto more of a front foot on sustainability incentives and policy.
2) NGOs and campaigners need to turn their attention also to emerging market firms that are becoming increasingly global. No business is immune from bad publicity. I'm not suggesting Greenpeace stops pressuring Nestle, but I am saying WWF and others should focus just as much on newer global firms than on corporate donors or existing relationships. A whole new round of pressure is needed on emerging market companies, if nothing else to help them see the opportunities ahead in sustainable business.
Monday, May 09, 2011
1990's style Greenwash from Asia Pulp and Paper and Cohn & Wolfe
Asia Pulp & Paper are becoming increasingly desperate.
Isolated by almost all big corporates to whom they used to supply, abandoned by all NGOs who are not a badly-masked front group in their pay, they are now going back to tactics we don't often see these days.
This is a desperate company with a desperate, cash-strapped PR firm (Cohn & Wolfe) coming up with bad ideas that wouldn't convince a blind amoeba with exceptionally poor judgement who happens to be having a particularly bad day, even for a moment.
What's the plan? A new corporate website on rainforests and how APP is trying to protect them, whilst er, cutting them down.
The site is all about "open dialogue", in which case why haven't they invited a single credible NGO (how about the Forest Trust?) to contribute an unedited article or post?
Our contributing editor Brendan May offers some analysis of this latest round of outdated PR guff on his blog and it's well worth a click: "More PR nonsense from Asia Pulp & Paper".
APP is a company that will soon, if it hasn't already, become a case study in corporate recalcitrance in the face of proven science and good practice.
I teach them to my MSc Corporate Responsibility class as a prime example of a business stuck in the past, using old school tactics and getting nowhere.
As a teaching aid, they are invaluable. As a business, ever increasingly unsustainable.
Isolated by almost all big corporates to whom they used to supply, abandoned by all NGOs who are not a badly-masked front group in their pay, they are now going back to tactics we don't often see these days.
This is a desperate company with a desperate, cash-strapped PR firm (Cohn & Wolfe) coming up with bad ideas that wouldn't convince a blind amoeba with exceptionally poor judgement who happens to be having a particularly bad day, even for a moment.
What's the plan? A new corporate website on rainforests and how APP is trying to protect them, whilst er, cutting them down.
The site is all about "open dialogue", in which case why haven't they invited a single credible NGO (how about the Forest Trust?) to contribute an unedited article or post?
Our contributing editor Brendan May offers some analysis of this latest round of outdated PR guff on his blog and it's well worth a click: "More PR nonsense from Asia Pulp & Paper".
APP is a company that will soon, if it hasn't already, become a case study in corporate recalcitrance in the face of proven science and good practice.
I teach them to my MSc Corporate Responsibility class as a prime example of a business stuck in the past, using old school tactics and getting nowhere.
As a teaching aid, they are invaluable. As a business, ever increasingly unsustainable.
From a CEO's mouth: Emotional intelligence matters most
Over the weekend I had dinner with a friend of mine who is a CEO of a diversified foods and investment firm based in New Zealand.
He's a pretty successful chap. He has multiplied the turnover of the business he runs by a factor of six in under a decade. Now his job is to hire, motivate and sometimes fire the business unit managers who run the various parts of the company.
I asked him what the key factor is when he decides who to hire and fire. His response: It's all about the balance of IQ and EQ (by which he meant emotional intelligence, also known as EI).
In your twenties and early thirties, you can go a long way on your IQ alone, he reckons. But by your mid-thirties, if you haven't developed a real sense of EQ, and put it into practice for a while, you just can't succeed.
Personal relationships are everything in an entrepreneurial and fast-growing business such as his.
Any unit boss who cannot develop and manage these well is out by 35 in his firm.
We've all read or heard of Daniel Goleman's work in the area, more about him and others here.
Assessing people on how they relate to others is nothing new of course. Good managers and bosses have done it for centuries.
Ultimately you can make money and create little value (like many in finance) with IQ, but to build a real business, sustain successful relationships and motivate people, EQ/EI is what counts.
I suppose one of the main reasons we need a corporate responsibility movement/profession/occasionally dubious trade is because big companies have become so IQ focused (management by spreadsheet, MBA's with Game Theory ideas, financial relationships with suppliers rather than personal)that they don't take the time develop lasting relationships, internally and externally.
That's the price of progress in a way: If we want big, globally minded companies to sustain our pensions and dividends and push down costs, that's what happens. Fund managers demand it, lunch is for wimps, contracts become instead a limp handshake with a buyer in the foyer of Tesco's HQ, etc etc.
My CEO friend believes those days of spreadsheet management alone are very much numbered. The next generation of business managers and heads are going to have have those softer skills to manage successfully in the coming years, in his view.
The world is becoming an ever more complex place. Opportunities to source goods will open up world-wide: So why should your customer buy from you, and you from them? Because you know and trust them. That's worth more than a 0.5% discount in a volatile world, says my friend, who has done deals all over the world for decades.
I believe he is right. Time to look harder again at what we teach in business schools and universities.
He's a pretty successful chap. He has multiplied the turnover of the business he runs by a factor of six in under a decade. Now his job is to hire, motivate and sometimes fire the business unit managers who run the various parts of the company.
I asked him what the key factor is when he decides who to hire and fire. His response: It's all about the balance of IQ and EQ (by which he meant emotional intelligence, also known as EI).
In your twenties and early thirties, you can go a long way on your IQ alone, he reckons. But by your mid-thirties, if you haven't developed a real sense of EQ, and put it into practice for a while, you just can't succeed.
Personal relationships are everything in an entrepreneurial and fast-growing business such as his.
Any unit boss who cannot develop and manage these well is out by 35 in his firm.
We've all read or heard of Daniel Goleman's work in the area, more about him and others here.
Assessing people on how they relate to others is nothing new of course. Good managers and bosses have done it for centuries.
Ultimately you can make money and create little value (like many in finance) with IQ, but to build a real business, sustain successful relationships and motivate people, EQ/EI is what counts.
I suppose one of the main reasons we need a corporate responsibility movement/profession/occasionally dubious trade is because big companies have become so IQ focused (management by spreadsheet, MBA's with Game Theory ideas, financial relationships with suppliers rather than personal)that they don't take the time develop lasting relationships, internally and externally.
That's the price of progress in a way: If we want big, globally minded companies to sustain our pensions and dividends and push down costs, that's what happens. Fund managers demand it, lunch is for wimps, contracts become instead a limp handshake with a buyer in the foyer of Tesco's HQ, etc etc.
My CEO friend believes those days of spreadsheet management alone are very much numbered. The next generation of business managers and heads are going to have have those softer skills to manage successfully in the coming years, in his view.
The world is becoming an ever more complex place. Opportunities to source goods will open up world-wide: So why should your customer buy from you, and you from them? Because you know and trust them. That's worth more than a 0.5% discount in a volatile world, says my friend, who has done deals all over the world for decades.
I believe he is right. Time to look harder again at what we teach in business schools and universities.
Friday, May 06, 2011
Wall Street Journal jumps on WikiLeaks bandwagon
The WSJ and WikiLeaks are generally seen to be at opposite ends of the media spectrum.
But that hasn't stopped the Journal, embarrassed by missing the front end of many recent events (financial crisis, what looming crisis?) creating its own version, known as SafeHouse, in typically conservative WSJ style.
This is a potentially significant development, according to the corporate-owned freedom campaigner Huffington Post.
But I wonder, is it really? I mean, it's just a simple document upload system in the end. If you are a determined leaker, you would just upload your docs to SendSpace or one of the others, then email various media outlets with the leak from an anonymous Yahoo or other account. So this save you two minutes on Yahoo!.com and means you will only leak to one outlet.
The other way of looking at it, of course, is that it means leaking has gone 'mainstream'.
Al-Jazeera already has their own version.
If the WSJ want your company/government's confidential documents for stories and are being pro-active about it, that's going to encourage all the other media outlets to do the same.
Which means the public knowledge about the increased security of leaking may well encourage others to do a bit of a Bradley Manning on various companies.
It hasn't happened yet, despite folks like us hyping up the risks a bit. But that doesn't mean it won't at some point soon.
For a previous post on leaks and the dark side of the internet, go here.
But that hasn't stopped the Journal, embarrassed by missing the front end of many recent events (financial crisis, what looming crisis?) creating its own version, known as SafeHouse, in typically conservative WSJ style.
This is a potentially significant development, according to the corporate-owned freedom campaigner Huffington Post.
But I wonder, is it really? I mean, it's just a simple document upload system in the end. If you are a determined leaker, you would just upload your docs to SendSpace or one of the others, then email various media outlets with the leak from an anonymous Yahoo or other account. So this save you two minutes on Yahoo!.com and means you will only leak to one outlet.
The other way of looking at it, of course, is that it means leaking has gone 'mainstream'.
Al-Jazeera already has their own version.
If the WSJ want your company/government's confidential documents for stories and are being pro-active about it, that's going to encourage all the other media outlets to do the same.
Which means the public knowledge about the increased security of leaking may well encourage others to do a bit of a Bradley Manning on various companies.
It hasn't happened yet, despite folks like us hyping up the risks a bit. But that doesn't mean it won't at some point soon.
For a previous post on leaks and the dark side of the internet, go here.
Seven hundred and one CSR posts later: Still all about communication
This is my 701st post on this blog.
I find it hard to believe there have been that many. The blog began in 2005 as a collaborative attempt by our writers around the world to contribute to the debate.
Ethical Corporation has published now about 7000 articles on CR.
So somehow this blog seems to fairly evenly represent around 10% of EC's output in terms of post numbers.
There's a pointless stat for you, but I found it interesting.
As with many multi-party collaborations the 'combined writers blog' idea soon fell away, particularly given we all did it for free.
After a brief hiatus for a year when I posted blogs on the Ethical Corp site instead, I've really ramped up blogging over the last two years in particular.
About half the content, perhaps more, has been added in that time.
Now onto something more useful.
Having reviewed some of the posts going back six years, its clear to me, that at least in my own tiny mind, corporate responsibility is about pretty much one thing: Communication.
Indigenous communities don't automatically dislike big companies. Journalists are sceptical, but not cynical, about business. NGOs similarly, as Christian Aid said this week at our Responsible Business conference. And the average man in the street? Sceptical yes, cynical, I don't generally think so.
What does this mean? It means that CR is really all about communicating your intentions, your dilemmas, your aims, objectives and potentially unknown outcomes.
Get that right, and show that you listen, and will act when you have done so, at least towards some kind of compromise, and most people will buy in.
Not always of course, but better communication between companies and stakeholders can solve most challenges before they become major disasters or significant problems.
My 701st post was going to highlight our CR management blog post about how the media view corporate responsibility plans and initiatives. Most importantly, it's about how companies can talk to the media in a more compelling way. Here's the link.
I find it hard to believe there have been that many. The blog began in 2005 as a collaborative attempt by our writers around the world to contribute to the debate.
Ethical Corporation has published now about 7000 articles on CR.
So somehow this blog seems to fairly evenly represent around 10% of EC's output in terms of post numbers.
There's a pointless stat for you, but I found it interesting.
As with many multi-party collaborations the 'combined writers blog' idea soon fell away, particularly given we all did it for free.
After a brief hiatus for a year when I posted blogs on the Ethical Corp site instead, I've really ramped up blogging over the last two years in particular.
About half the content, perhaps more, has been added in that time.
Now onto something more useful.
Having reviewed some of the posts going back six years, its clear to me, that at least in my own tiny mind, corporate responsibility is about pretty much one thing: Communication.
Indigenous communities don't automatically dislike big companies. Journalists are sceptical, but not cynical, about business. NGOs similarly, as Christian Aid said this week at our Responsible Business conference. And the average man in the street? Sceptical yes, cynical, I don't generally think so.
What does this mean? It means that CR is really all about communicating your intentions, your dilemmas, your aims, objectives and potentially unknown outcomes.
Get that right, and show that you listen, and will act when you have done so, at least towards some kind of compromise, and most people will buy in.
Not always of course, but better communication between companies and stakeholders can solve most challenges before they become major disasters or significant problems.
My 701st post was going to highlight our CR management blog post about how the media view corporate responsibility plans and initiatives. Most importantly, it's about how companies can talk to the media in a more compelling way. Here's the link.
Thursday, May 05, 2011
Ethical Corporation award winners announced
Having knocked listings of 'best' and 'worst' companies in my previous post today, here's a list that we created!
Kidding. Actually these are highly subjective awards we've handed out after some considerable study and research, not a list generated by quantitative research etc.
On Tuesday evening here in London we handed out awards to companies our judges felt represented the strongest entries to our 2011 awards for responsible business.
This is not to say that all of them are the best in the world. We could only judge from the entries we had. Nevertheless, I think what we ended up with is a pretty strong set of winners.
Here's who won what:
Individual Leader category
Winner: Fabio Barbosa, Banco Santander
High Performance category (sponsored by Accenture)
Winner: Unilever
Highly commended: US Postal Service
Innovative Reporting category
Winner: L’Oreal
Highly commended: Petrobras
Authentic Communications category
Winner: Coop
Highly commended: InBev
Effective Campaigner category
Winner: 38 Degrees
Highly commended: Rainforest Action Network
Best Private Company category
Winner: Firmenich
Highly commended: National Commercial Bank of Saudi Arabia
Sustainability Commercialised category
Winner: Kingfisher
Highly commended: Timberland
Best Collaboration category
Winner: Marshall’s & Hadoti
Highly commended: Marks & Spencer & Oxfam
Lifetime Achievement category
Winner: Chris Wille, Head of Sustainable Agriculture, the Rainforest Alliance
Here's who was on our judging panel.
Here's the press release on it, and the awards website too.
Hope you can come along next year to the dinner and awards.
Kidding. Actually these are highly subjective awards we've handed out after some considerable study and research, not a list generated by quantitative research etc.
On Tuesday evening here in London we handed out awards to companies our judges felt represented the strongest entries to our 2011 awards for responsible business.
This is not to say that all of them are the best in the world. We could only judge from the entries we had. Nevertheless, I think what we ended up with is a pretty strong set of winners.
Here's who won what:
Individual Leader category
Winner: Fabio Barbosa, Banco Santander
High Performance category (sponsored by Accenture)
Winner: Unilever
Highly commended: US Postal Service
Innovative Reporting category
Winner: L’Oreal
Highly commended: Petrobras
Authentic Communications category
Winner: Coop
Highly commended: InBev
Effective Campaigner category
Winner: 38 Degrees
Highly commended: Rainforest Action Network
Best Private Company category
Winner: Firmenich
Highly commended: National Commercial Bank of Saudi Arabia
Sustainability Commercialised category
Winner: Kingfisher
Highly commended: Timberland
Best Collaboration category
Winner: Marshall’s & Hadoti
Highly commended: Marks & Spencer & Oxfam
Lifetime Achievement category
Winner: Chris Wille, Head of Sustainable Agriculture, the Rainforest Alliance
Here's who was on our judging panel.
Here's the press release on it, and the awards website too.
Hope you can come along next year to the dinner and awards.
What's the point of a "most hated/admired" list?
The Huffington Post (now owned by ever-stumbling corporate giant AOL) has published an article (of sorts) entitled:
11 Companies With The Worst Reputations In America
The list constitutents are sadly predictable: Banks, banks, car firms, oil companies and telecom/Internet firms.
You could write it yourself based on media coverage awareness.
The 'worst' list made the headline of course. The press release announcing the list emphasises the best performers.
Again this list is predictable: Google, Apple, Berkshire Hathaway, Johnson & Johnson, 3M etc.
What use is this type of exercise I wonder? For Harris Interactive, who put it together, it's simple an exercise in marketing: "Look at us, we can help you".
But there are so many variables in corporate reputation, particularly between and even within sectors, that these lists are not really much use to anyone, except Harris and their sales people.
Is such a list going to keep boards at these companies awake and drive changes in strategy, products and outlook? I seriously doubt it.
I guess corporate PR and marketers might use it for advertising.
Given the variables in the sectors though, intellectually this sort of thing is really of no real value whatsoever.
Perhaps I was asleep and missed a meeting where the value of catch-all lists was explained in detail. Do let me know if so.
The surveyers and 'analysts' decided to separate social responsibility from workplace environment, which makes no sense at all:
Social Responsibility – 1) Whole Foods Market; 2) Johnson & Johnson; 3) Google; 4) The Walt Disney Company; 5) Procter & Gamble Co.
Workplace Environment – 1) Google; 2) Johnson & Johnson; 3) Apple; 4) Berkshire Hathaway; 5) 3M Company
Berkshire Hathaway is a holding firm for other businesses, just take a look at their homepage. So ranking them 4th on 'workplace environment' is clearly a nonsense.
Are we to believe that all their portfolio companies have been assessed? Clearly not. Which immediately makes the entire list and process appear highly dubious.
Giving the Huffington Post a headline to glibly demonise companies with (whether they deserve it or not) is not really helpful.
It all comes across as rather cynical exercise in marketing by a research firm that should know better.
My suggestion to Harris Interactive is to make such research much more nuanced and targeted, and pull out something genuinely useful for a sector where companies can be compared on a specific issue, that can help make the case for positive change.
(Now my soapbox has collapsed under the weight of my own pomposity, I'd better get back to work)
11 Companies With The Worst Reputations In America
The list constitutents are sadly predictable: Banks, banks, car firms, oil companies and telecom/Internet firms.
You could write it yourself based on media coverage awareness.
The 'worst' list made the headline of course. The press release announcing the list emphasises the best performers.
Again this list is predictable: Google, Apple, Berkshire Hathaway, Johnson & Johnson, 3M etc.
What use is this type of exercise I wonder? For Harris Interactive, who put it together, it's simple an exercise in marketing: "Look at us, we can help you".
But there are so many variables in corporate reputation, particularly between and even within sectors, that these lists are not really much use to anyone, except Harris and their sales people.
Is such a list going to keep boards at these companies awake and drive changes in strategy, products and outlook? I seriously doubt it.
I guess corporate PR and marketers might use it for advertising.
Given the variables in the sectors though, intellectually this sort of thing is really of no real value whatsoever.
Perhaps I was asleep and missed a meeting where the value of catch-all lists was explained in detail. Do let me know if so.
The surveyers and 'analysts' decided to separate social responsibility from workplace environment, which makes no sense at all:
Social Responsibility – 1) Whole Foods Market; 2) Johnson & Johnson; 3) Google; 4) The Walt Disney Company; 5) Procter & Gamble Co.
Workplace Environment – 1) Google; 2) Johnson & Johnson; 3) Apple; 4) Berkshire Hathaway; 5) 3M Company
Berkshire Hathaway is a holding firm for other businesses, just take a look at their homepage. So ranking them 4th on 'workplace environment' is clearly a nonsense.
Are we to believe that all their portfolio companies have been assessed? Clearly not. Which immediately makes the entire list and process appear highly dubious.
Giving the Huffington Post a headline to glibly demonise companies with (whether they deserve it or not) is not really helpful.
It all comes across as rather cynical exercise in marketing by a research firm that should know better.
My suggestion to Harris Interactive is to make such research much more nuanced and targeted, and pull out something genuinely useful for a sector where companies can be compared on a specific issue, that can help make the case for positive change.
(Now my soapbox has collapsed under the weight of my own pomposity, I'd better get back to work)
Sunday, May 01, 2011
A new solution to tackle bribery?
Kaushik Basu, the Chief Economic Adviser to the Ministry of Finance of the Government of India has come up with an idea to tackle India's rampant bribery problem.
Basu argues that:
"...we should declare the act of giving a bribe...as legitimate activity. In other words the giver of a harassment bribe should have full immunity from any punitive action by the state.
It is argued that this will cause a sharp decline in the incidence of bribery. The reasoning is that once the law is altered in this manner, after the act of bribery is committed, the interests of the bribe giver and the bribe taker will be at divergence.
The bribe giver will be willing to cooperate in getting the bribe taker caught. Knowing that this will happen, the bribe taker will be deterred from taking a bribe".
Basu is careful to distinguish the kinds of bribes where this policy might be effective, saying that:
"...this paper is concerned with are bribes that people often have to give to get what they are legally entitled to. I shall call these ―harassment bribes."
He offers an example of the kind of lower-level bribe this approach might apply to:
"Suppose an income tax refund is held back from a taxpayer till he pays some cash to the officer. Suppose government allots subsidized land to a person but when the person goes to get her paperwork done and receive documents for this land, she is asked to pay a hefty bribe..."
He acknowledges his idea is not a perfect one:
"...one problem that will open up is that public servants may be vulnerable to blackmail and false charges of bribe-taking.
We could try to plug this loophole by increasing the punishment for blackmail and false accusation."
This acknowledged risk is potentially significant. But clearly India, as many other countries has a very serious bribery problem.
Another problem (and solution) Basu highlights with this approach is this:
"Once it is completely clear that a bribe giver has immunity from our bribery law, it is true that many more people will be willing to give bribes.
However, since, every time a person gives a bribe, after that it will be in the interest of the bribe giver to expose this act of corruption (since by that not only will she not be punished but she will be getting back the money that she gave as a bribe) the bribe taker will not want to take the bribe..."
The full paper is here.
We published an easy-to-read, ten page briefing on how corporate responsibility is evolving in India last summer.
Here's a link to it.
And here's a good blog post, where I first saw the link, by Seth Godin, entitled: "Why you might choose to be in favor of transparency"
Basu argues that:
"...we should declare the act of giving a bribe...as legitimate activity. In other words the giver of a harassment bribe should have full immunity from any punitive action by the state.
It is argued that this will cause a sharp decline in the incidence of bribery. The reasoning is that once the law is altered in this manner, after the act of bribery is committed, the interests of the bribe giver and the bribe taker will be at divergence.
The bribe giver will be willing to cooperate in getting the bribe taker caught. Knowing that this will happen, the bribe taker will be deterred from taking a bribe".
Basu is careful to distinguish the kinds of bribes where this policy might be effective, saying that:
"...this paper is concerned with are bribes that people often have to give to get what they are legally entitled to. I shall call these ―harassment bribes."
He offers an example of the kind of lower-level bribe this approach might apply to:
"Suppose an income tax refund is held back from a taxpayer till he pays some cash to the officer. Suppose government allots subsidized land to a person but when the person goes to get her paperwork done and receive documents for this land, she is asked to pay a hefty bribe..."
He acknowledges his idea is not a perfect one:
"...one problem that will open up is that public servants may be vulnerable to blackmail and false charges of bribe-taking.
We could try to plug this loophole by increasing the punishment for blackmail and false accusation."
This acknowledged risk is potentially significant. But clearly India, as many other countries has a very serious bribery problem.
Another problem (and solution) Basu highlights with this approach is this:
"Once it is completely clear that a bribe giver has immunity from our bribery law, it is true that many more people will be willing to give bribes.
However, since, every time a person gives a bribe, after that it will be in the interest of the bribe giver to expose this act of corruption (since by that not only will she not be punished but she will be getting back the money that she gave as a bribe) the bribe taker will not want to take the bribe..."
The full paper is here.
We published an easy-to-read, ten page briefing on how corporate responsibility is evolving in India last summer.
Here's a link to it.
And here's a good blog post, where I first saw the link, by Seth Godin, entitled: "Why you might choose to be in favor of transparency"
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