Are we too dazzled by the sustainability leaders?
Date: 30 Apr 2014
When people think about business and corporate responsibility, they tend to see it in terms of a one-way progression.
Companies may start as sceptics and laggards, but sooner or later something will act as a catalyst to get them moving on the journey. And then there are various scales of engagement.
Until you get to the end of the spectrum, which is where strategic and fully embedded leadership lives. At the moment, we tend to imagine that a very few companies have reached that stage. In the UK, for instance, it would be Marks & Spencer, Kingfisher and Unilever. These are companies that have launched big, hugely ambitious sustainability plans, who have the top leadership at the front of the charge, and a trunkload of impressive stats to show how the actions they've taken have made them simply better businesses.
There are a number of things wrong with that view.
First is the belief that there are stages of development that companies go through. In truth, different companies are good at different things. You can be in one state of development in one area, and a different state in another. Our tendency might be to see that as a problem, but it isn't necessarily. Different states may be appropriate depending on what the business is, and what it's trying to achieve.
Let's use an analogy. When it comes to the general fitness and healthiness of the population, all things are broadly equal. You want to be well nourished, have all parts of your body moderately well exercised, and to live in a healthy environment that doesn't harm you. That is where businesses are at the lower end of the spectrum.
But when you become an elite athlete you only achieve that by specialisation. A tennis player will train for multiple short bursts of speed, for agility around a court, for power through a certain range of actions. A marathon runner will train for endurance leading to a high level of consistent performance. And so on. The training of each would be pretty much useless to the other.
Companies that become famous for their corporate responsibility specialise. They may have that general underpinning level of fitness across all areas, but they don't get to be special by expecting the same high level of performance across everything they do. Whatever they say.
So there is no one stage of development. Just differences in what is the peak performance a company is aiming for, whether it is prepared to become famous for this aspect of what it does, and how successful it is in achieving its goals.
The second thing that is wrong with the spectrum view is the idea that it's all one-way traffic. All companies are on the journey to match the sustainability leaders. Eventually, Kingfisher's 'Net Positive' will become the new standard by which all companies will be judged. Indeed, Forum for the Future, WWF and the Climate Group have just produced a report on 'net positive' principles to encourage just this viewpoint.
Although this is a comforting myth for those of us who see ourselves as change agents to believe, it is not an attractive vision for companies, and there's a reason why the roll call of businesses at the advanced end of the spectrum has changed so little, and grown so little, in the last five years.
The principle of effective marketing is differentiation. If company X becomes famous for quality, then you aim for price. Or great service. Or a particular identity embracing a very specific demographic. Or, indeed, for ethics.
In years gone past, when rival banks phoned me up to lure me away from the Co-operative Bank, they pitched their superior terms and deals. I responded by mentioning the ethical policy. They made their excuses and ended the call - because they knew that not only could they not compete for my business on that scale, but that they didn't even aspire to. That wasn't their strength (what conversation would happen now that the Co-op has so comprehensively fumbled the ball is anyones guess).
So if Unilever is going to become the unequalled leader in its markets, it may prompt its rivals to do a bit more to make sure they don't look to far behind the curve, but they won't aim to compete in that area unless they believe Unilever is vulnerable to challenge. Ultimately, only a small number of companies can be famous at any one time for doing this stuff. So the rest will aim to find one specific part of the agenda they can make their own - or they will just content themselves with doing the stuff they need to for the hygiene factor.
And companies can shift their position forward or backwards, depending on the identity of the leadership, and the potential advantage they see in their position versus the cost of higher expectations when they put themselves in a leadership role. And the fact that a company may manage a mix, not aiming to reach a leadership level in all areas is not the sign of a bad or irresponsible company.
That is only good enough if the widely shared status quo of achievement is enough to take us towards a sustainable future. And that isn't the case today based on the best information we have.
So the question isn't "how soon can we get all businesses to match the standards of the leaders" - it is instead "what are the aspects of best practice of the leaders that are so important they should be mandated to become the standard practice of tomorrow.
And the answer "all of them" is the wrong and lazy answer.
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In a recent article, the BBC's economics editor Robert Peston highlighted the fact that in 2012 the chances are that the economy - punch drunk as it is from the various flavours of debt crisis it has been pummelled with over the course of the year - will be hit by the collapse of a major bank and / or government.
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