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When business and conservation groups fight against each other, both tend to lose out.

On the other hand, when they work together, mutually beneficial results are often achieved.

Today I would like to highlight the new Integrated Biodiversity Assessment Tool (IBAT), a wonderful example of a common sense project which can occur when large business and conservation groups work together in a spirit of mutual co-operation.

  
The problem
New business projects, such as construction of mines, pipelines, and many other forms of infrastructure, often have a significant impact on the area concerned from a viewpoint of biodiversity.

In order to prevent or mitigate this impact, or to avoid costly modifications to the project at later stages, it is crucial that such concerns are considered during the early stage of the planning process.

However there are at least two key barriers toward this end:

• Companies may be reluctant to share their plans with conservation groups until planning has reached a considerably advanced stage, lest they give away sensitive information.

• The process of conducting Environmental Impact Assessments (EIAs), which can involve compiling a substantial volume of information from a wide range of disparate sources, is arduous at best, and is often not complete prior to crucial decisions having to be made.

  
The solution
What business needs is a one stop shop – a singular, comprehensive, publicly accessible database which details, in consolidated form, complete information about each and every significant biologically sensitive area on a worldwide basis.

This is the objective of the IBAT, a consolidated web based analytical database which has been developed by Conservation International, in conjunction with a range of conservation groups and corporate partners.

  
How IBAT Works
Say, for example, that BP plans to build a new pipeline or road.

Regardless of where in the world the project is to take place, BP will be able to use the database to determine:

• whether or not any proposed construction routes intersected with legally protected areas;

• whether or not any such routes intersect with area which are not legally protected, but which are otherwise considered to be of significance from a conservation viewpoint; and

• which licenses or permits which, if any, the company will require.

Further, IBAT will also enable the company to explore each individual site in a considerable degree of detail and gain an in depth understanding of specific biological issues associated with the proposed construction routes, in turn providing guidance during the EAP process.

  
How IBAT benefits business
The benefits of IBAT to business will be twofold:

• Better information – earlier.

By helping companies indentify and accommodate specific conservation related concerns at an early stage of the planning process, the database will help to avoid: the need for significant adjustments to the project at a later stage; and/or any adverse reputational impact from allowing potentially destructive plans to reach advanced stages.

• Anonymity.

After an initial registration process, companies will be able to use IBAT on a completely anonymous basis, allowing them to search the database without fear of alerting external parties to any plans under consideration.

  
Environmental benefits
The benefits of IBAT from a conservation viewpoint are equally as clear.

The earlier that potential biodiversity related concerns are identified within the planning process, the greater the likelihood that firms will be willing to make adjustments to projects in order to accommodate such concerns.

  
Sleeping with the enemy produces results
Perhaps largely due to issues of mistrust, some on the side of both business and conservation have been reluctant to embrace any form of collaboration.

However, the IBAT initiative is a shinning example of the benefits to both which can accrue when they put aside any differences and work co-operatively toward mutually beneficial solutions and outcomes.

Dear readers,

Recently, I had the privilege of being interviewed by Saad Khan of Social Bridges, an organization dedicated to promoting responsible behavior amongst business in Pakistan.

The interview can be viewed here.

It was truly a pleasure to share my thoughts and opinions with readers of Social Bridges, particularly as I have a high level of respect for those involved with the organization and what they are trying to accomplish.

During the interview, Saad asked some thought provoking questions relating to Corporate Social Responsibility and Socially Responsible Investing, and I was challenged to think deeply about my responses.

This is the final article in a series of posts about Corporate Social Responsibility (CSR).

In this article, I would like to focus on the more practical aspects of designing and implementing effective CSR policies and programs.

I have provided some of my own ideas below. However, as I do not have specific personal experience in this area, I feel that the most interesting and valuable part of this discussion would be the professional experience of readers.

Accordingly, I cordially invite you to share any personal experience which you feel may be of particular interest or relevance to other readers.

 
Key principles in designing and implementing CSR policies

Listed below, in no particular order, are seven key principles relating to the effective management of Corporate Social Responsibility:

 
• Apply similar principles to managing CSR as with other aspects of the business.

In order to implement CSR in an effective manner, it must be managed like any other aspect of business. Amongst over things, this involves the setting of key objectives, priorities and performance indicators, the creation of action plans and subsequent performance evaluation.

The principles of effective management apply to all aspects of a company’s operations, including CSR.
 

• Keep it simple.

The entire approach of organizations towards CSR should be kept as straightforward as possible.

A more straightforward approach offers several benefits. First, under a simpler approach, it becomes easier for management and staff to maintain focus on the bigger picture of what the firm is trying to achieve. In addition, a simpler approach also increases the likelihood of staff understanding CSR policy and becoming engaged in CSR effort. Finally, under a simpler approach, CSR is likely to be managed more effectively – fewer complications, fewer opportunities for mistakes.

Simply put, simple is better.

 
• Focus on core principles, not policies and procedures.

Whilst specific policies may be necessary to provide clarity to employees in some circumstances, the focus should be upon core principles rather than detailed policies or procedures.

An organizational focus based primarily around core principles allows employees the flexibility to apply a common sense approach when dealing with situations which may arise, whilst still ensuring actions and practices which are consistent with the key values of the organization as well as the principal objectives of CSR policy.

 
• Set measurable outcomes, goals and objectives.

As with any other area of business, the process of setting goals, objectives and measurable outcomes is essential for the effective management of Corporate Social Responsibility.

These provide focus and direction for CSR effort as well as a mechanism to measure and evaluate organizational performance.

 
• Focus upon specific industry concerns.

All firms should aspire to good corporate citizenship in common areas such as the environment, labor relations and corporate governance.

In addition, all firms should aspire to conduct their business in a manner of honesty and integrity.

Beyond this, however, organizational effort relating to CSR should focus predominately upon areas of specific concern to the industry in which the organization operates.

Manufacturers of alcoholic beverages for example, should focus CSR efforts upon programs to prevent under-age drinking, drink-driving or other forms of alcohol abuse. Timber firms could focus upon forest regeneration. Fast food companies could focus upon health related programs, as well as the minimization of harmful ingredients in their food. And finally, financial institutions could refrain from lending to certain clientele. (such as weapons manufacturers)

By focusing CSR efforts upon areas of specific relevance to their industry, organizations maximize the impact of their CSR effort both from a public relations viewpoint and from the viewpoint of the broader community benefit.

 
• Communicate, involve and engage.

No man is an island in himself, nor does any business operate in isolation.

Companies should seek input from key stakeholder groups throughout the CSR process, particularly during the process of setting goals, objectives and key priorities.

Not only will stakeholder input help the organization to identify and focus upon areas of greatest importance, the process of engagement will also help to strengthen key stakeholder relationships.

In addition, companies should also seek the engagement of employees. As the group which puts company policy into action, employees have considerable influence over the outcome of CSR effort. Where possible, staff should be given to opportunity to provide input into decisions relating to CSR policies and programs. In addition, companies should clearly communicate the reasons behind CSR effort, including the anticipated benefits from the perspective of the community, the organization and, where applicable, employees themselves.

In cases where staff have a clear understanding of the reasons behind CSR policies and programs, and are provided the opportunity to provide input into decision making, they are more likely to apply CSR policy in a diligent manner. They are also more likely to participate actively in specific CSR programs.

 
• Don’t leave it to the PR or legal department.

Many organizations view CSR as primarily a form of public relations, or risk mitigation. Accordingly, organizations may view CSR management primarily as a function for the public relations or legal departments.

Whilst these departments may be well positioned to provide valuable input into CSR management, there are drawbacks in viewing CSR in this manner.

Where CSR is left predominately to the public relations department, the resultant communication may come across as ‘spin doctoring,’ As a result key stakeholders, as well as the general public, may distrust the sincerity of the organization’s efforts, thereby limiting any positive impact upon corporate reputation.

Moreover, delegating CSR to one department misses the point. CSR is more than simply a public relations exercise. It is not simply a task to be delegated to one department and ignored by the rest of the organization.

CSR is fundamentally a way of doing business, and should be a factor in guiding organizational behavior across the entire spectrum of operations.

It should not be left to one department.

 
Over to you

I would like invite all readers to share any thoughts, opinions or specific experiences relating to the above topic which you feel may be of interest or value to other readers.

Please feel free to add your comments by clicking on the ‘comments’ section below.

I have a confession to make – my latest pair of running shoes were made by Nike.

I despise the company’s poor labor practices in emerging economies. Why then, did I purchase the shoes?

Simple – they were a comfortable fit. I live in a foreign country and face extreme difficulty in finding shoes in my size. So, when I find a suitable pair, I buy them. End of story.

Ethics – Not really a big factor in consumer purchases

My experience above highlights what may be an unfortunate reality – ethical considerations may not play a large part in many consumer purchasing decisions.

Consumer surveys suggest strong demand for ethical products, but does this translate into actual purchasing behavior?

The evidence suggests not. In England, The Co-operative bank estimates household expenditure on ‘ethical’ goods and services at just over five per cent of total household expenditure.

(Expenditure on ‘ethical products’ at 32.3 billion pounds, represents just under 5% of total annual expenditure of 600 billion pounds)

The statistics may possibly understate the effect of ethical consumerism. Nevertheless, at least two prominent researchers do not believe the relationship between ethical considerations and purchasing behavior is strong. 

Devinney points out that Fairtrade products rarely account for more than 2% of any market (download relevant article here), and Vogel believes that cases where companies have increased market share through responsible behavior represent “a very small percentage of consumer spending.”

 
Barriers to ethical consumerism

Why doesn’t purchasing behavior match consumers’ stated desire for ethical products?

There are several barriers to ethical consumerism:

 
• Other factors are more pertinent to spending decisions

A range of factors, such as price, product quality and safety, fashion, style and convenience affect purchasing decisions to a greater extent than ethical factors.

Ethical products will perform well in the market only if they are competitive in terms of price, convenience and quality – the key determinants of purchasing decisions.

  
• Lack of awareness

Despite an increase in media attention toward Corporate Social Responsibility, lack of consumer awareness continues to be a barrier to ethical consumerism. Given the volume of purchases made by consumers, it is unrealistic to expect them to possess an in-depth understanding of a broad range of ethical factors associated with the majority of purchases they make.

Accordingly, only those factors which receive significant media attention are likely to affect purchasing decisions.

Moreover, the media can potentially distort consumer perceptions, particularly in cases where reporting fails to adopt a fair and balanced viewpoint.

  
• Feeling of disempowerment

According to a Marks & Spence survey, (refer article here) thirty-eight per cent of respondents did not believe that their own individual purchasing decisions made any significant impact on business and corporate behavior.

The resulting feeling of disempowerment provides a significant barrier to ethical consumerism. Why bother with ethical products if you think your own purchases make no difference? 

 
• Complicated trade-offs

Which is more environmentally friendly from a British standpoint – buying roses from the Netherlands or ones air-freighted from Kenya?

Many Brits would choose the former. However, the carbon footprint of Dutch roses is actually six times as large because they have to be stored in greenhouses. (refer article here)

This highlights another barrier to ethical consumerism – choosing the best products is not always a clear cut issue.

In addition, choosing the most ethical manufacturer or supplier can also be complicated, particularly where companies perform well in some areas but less well in other areas.

 
In fairness to business

Large business is often criticized for not paying sufficient attention to social responsibility. But is this fair?

Surely, companies do have a responsibility to adopt only positive ethical practices. But consumers must stick to their end of the bargain as well. Good corporate citizenship must be rewarded at the checkout, particularly where price and quality are similar.

Only then, can consumers fairly criticize large business.

 
Conclusion

Although many consumers genuinely care about social, environmental and other ethical issues, the effect of these considerations on consumer purchasing behavior is limited due to a range of barriers to socially responsible purchasing.

As a result, ethical consumerism has some impact on corporate behavior, but the effect is limited.

 
Over to you

Do ethical considerations play a large part in your personal buying habits? Should consumers place more emphasis on ethical considerations at the checkout?

Please feel free to add your opinion by clicking on the ‘comments’ section at the head of this post.

This is the seventh post in a series on Corporate Social Responsibility (CSR)

Today I would like to discuss the role of governments in promoting CSR.

One view is that CSR, by definition, is the function of business, not government. Under this view, business, not government, is in the best position to manage CSR in an effective manner. If governments intervene, they will simply mess things up.

I disagree. Governments should, and do, play an active role – particularly in terms of defining expectations, setting positive examples and rewarding ethical conduct. 

 
What should governments do?

In my opinion, the role of governments in promoting responsible business practices can be summarized in seven steps as outlined below:

• Set laws to define minimum standards of behavior.

This is the most basic function of governments in relation to CSR.

Companies have no mandate to decide upon minimum acceptable standards of behavior – governments do. Governments, therefore, not companies, need to define minimum requirements through legislation.

• Develop frameworks for ethical business practice.

This can be done at a national level, at an international level, or both.

At a national level, India’s Ten Point Social Charter provides an excellent example. The UN Global Compact, which stipulates ten core principles relating to human rights, the environment and corruption, provides an international example.

In both of the cases above, compliance with the content of the document is not mandatory. However, both documents clearly outline core principles which companies are expected to follow.

Governments must clearly define the standards required for ethical corporations. Businesses that seek to be responsible must follow these standards.

• Favor ethical companies in procurement.

Government departments, entrusted with the use of taxpayers’ money, should consider the ethical practices of potential suppliers in their procurement decisions.

Only companies with positive ethical practices should be rewarded with taxpayers’ money.

• Set an example.

Governments should aim to conduct the affairs of their own departments in a manner which is beyond reproach.

Leadership is done by example. Governments must therefore demonstrate ethical and responsible conduct by practising it within their own operations.

• Use fiscal policy to encourage and reward ethical behavior.

Tax credits or subsidies can be provided to encourage certain types of ethical behavior. One example may be hiring staff from particularly disadvantaged groups, like those who suffer from physical or mental disability.

Tax credits and subsidies can also be used to promote investment in certain types of technology. Renewable energy is a prime example.

• Work with industry and other stakeholders in the development of voluntary codes of conduct.

Industry and other key stakeholders are usually in the best position understand the particular requirements of their industry. Accordingly, governments should not play an overbearing role in this area.

However, governments have a role to play in ensuring that such codes address the needs of all relevant stakeholders, as well as meeting expectations of the general public.

• Sponsor co-ordination and training.

Many CSR projects operate at an individual company level. Governments can play an active role in fostering and promoting co-operation and coordination of individual projects which operate within the same area.

Governments can also foster learning and development by organizing workshops or other forums to provide opportunities for companies to share their knowledge and experience.

 
Conclusion

Governments should seek a proactive role in promoting sound ethical practices in business.

This should include defining expectations, setting a positive example and rewarding business for sound ethical practices.

 
Over to You:

Your thoughts, opinions, and perspectives in relation to the role of governments in promoting responsible business behavior are most welcome.

Please feel free to express your opinion by clicking on the ‘comments’ section at the head of this post.