BSkyB’s Bigger Picture Review 2009 PDF

While more and more companies see assurance as something
of a magic bullet that lends credibility to disclosures of environmental, social and governance (ESG) performance, the assurance business is ill-equipped
to meet the growing demand for its services. Is assurance
really worth the effort?

Read the article (PDF), published in the December issue of Ethical Corporation magazine.

I went to my bank on Christmas Eve to make a deposit and attempted to make some typical holiday small talk with Max, my favorite teller. “Are you ready for the holiday?” I asked (careful not to say “Christmas” lest I offend). She shrugged and said that it would be quiet, then she told me how a friend who has stage-four breast cancer, and who seemed near death in the spring, was up and about and feeling much better. “I’m just going to celebrate the fact that she’s alive right now,” she said, “and I don’t feel at all bad about not getting out there and shopping.”

Amen to that. There seems to have been an intense focus on how much “consumers” (a consumer somehow being a different species of human being; more on that later) are spending this holiday season. As though what comes out of our thinner-these-days wallets will save our economy and, thus, our world. Meanwhile, there is much moaning about how the healthcare bill that the Senate passed on Christmas Eve simply doesn’t cut it, that’s it’s so watered down as to be a certain failure. And there is much griping about how Copenhagen failed to meet expectations—as though it were even remotely possible to get 190 or so countries to sit down and, in the space of two weeks, agree to global, binding, verifiable targets to reduce GHG emissions.

Can we just celebrate that the United States, whose government only a year ago refused to even sit at the climate-change table, is now pushing itself and governments around the world to address the issue? Can we celebrate that we now have at least a foundation for moving toward meaningful action? And can we celebrate that a sizeable chunk of the US population is one step closer to having meaningful access to health care?

Yes, we have a tremendous amount of work to do. That includes creating jobs and pushing the global economy into meaningful (seems to be my favorite word today) recovery whilst reducing our environmental impacts. It certainly won’t happen by shopping alone. Nor will it happen if we just sit at home and moan. If we celebrate small steps, maybe we can summon the will and the wherewithal to take bigger steps.

Maybe 2010 will be a year of meaningful, positive change. But then, I’ve always been a bit of an optimist.

Happy New Year.

Following the news from the Copenhagen climate summit has nearly become a full time job. Observing the chaotic deliberations, I am reminded of Adam Kahane’s comments on solving complex sustainability problems via a stakeholder inclusive approach, delivered during this fall’s BSR conference.

What sticks in my head the most is how relevant each of the three “complexity parameters” are to the climate debates :

1) Systemic complexity, whereby cause and effect are far apart in space and time (the generational issue in climate change)

2) Social complexity, whereby each actor has a fundamentally different worldview and perspective (developed vs developing nations, anyone?) 

3) Generative complexity, whereby we are dealing with situations that have never occurred before (when was the last time we had to put together a truly global, multilateral, mutually acceptable, binding agreement on anything?)

Adam’s approach to his work as a facilitator rests on the thesis that to attain a successful outcome, you basically need two things: power and love. Love, defined as “regard for others”, and power, as defined by the “drive of all things living to realize themselves”.  To some degree, we are seeing both love and power demonstrated at the summit, which is good news.

What is not so good is that the premise of stakeholder directed problem solving requires sufficient time to address both the complexity of the problem and do it in a way that takes the power/love approach.

And time is indeed in short supply.

I typically count myself among the last-minute shoppers—rushing frantically from store to store; arranging next-day shipping to expedite my online orders; and, finally, wrapping gifts in newspaper late into the night on Christmas Eve.

But, not this year.

No, I’m stopping the madness and buying all of my gifts from the Zingerman’s website. FYI, Zingerman’s is a family of small food-related companies based in Ann Arbor, Michigan.

Sorry, Mom, if I ruined the surprise, but if it’s any consolation, here are a few things you can feel good about:

• Michigan needs us: The unemployment rate—15.1 percent as of October 2009—is higher in Michigan than in any other state. The auto industry is still struggling, despite a massive bailout and recent some signs of life. And Detroit’s Pistons (currently four games behind .500) and Red Wings (also running with the middle of the pack) aren’t lifting many spirits either. Supporting Michigan’s business community seems like the least we can do to help.
• Small business is the backbone of America: while Zingerman’s is hardly a small business anymore, it still feels like and operates like one, serving as a reminder that small, independent businesses need help too to survive in this economic climate.
• Enough with the “green” gifts: there are a number of gift guides on the web touting “green” products this holiday season (see examples here, here, and here). While I appreciate the focus and enthusiasm, I can’t help but think that my family and friends have their essential needs met already. Will more clothing or toys or gadgets make them any happier? Not nearly as much as good chocolate or cheese will!
• Last but not least, an eye toward sustainability: Zingerman’s strategic vision for 2020 focuses on sustainability as it pertains to customers, employees, and the planet at large. What’s not to like? 

That said, the holidays will have come and gone before we all know it, so let me take this fleeting opportunity to wish you a happy and festive holiday season! Oh… and happy shopping!

• UN Climate Change Summit in Copenhagen: is it dead on arrival or too early to tell?
• If we can’t get effective climate policy, is it too soon to start thinking about water policy as well?
• When one moves, what does one do with that stash of outdated business cards? [Seriously, I want someone to answer this question for me.]
• How will Americans wean themselves off plastic?
• Has no one thought of a “green” pizza box before?

To sum up the most recent meeting of the United Nations Global Compact US Network, held October 19 at PricewaterhouseCoopers offices in San Francisco (I know, this post is terribly late):

Boards need to step up and listen up.

In his opening remarks, Allen White sounded the call that became the theme, reinforced and restated during each panel and discussion that followed. Companies need activist boards, he said, and he presented the following ideas for how companies can begin to cultivate boards that to meet the calls for better governance and attention to some of our most pressing issues:
1. Create a process by which boards reflect on stakeholder management, engagement, and governance.
2. Require all board members to build competency in sustainable governance.
3. Consider sustainability competency as a criterion for selecting new board members.
4. Require directors to hold management accountable for integration of sustainability.
5. Boards should set sustainability goals.

Carolyn Y. Woo, Dean of the Cardozo College of Business at the University of Notre Dame, acknowledged many of the challenges to effective board governance and noted that external pressure is one key to better governance. She also noted that board members need to demonstrate personal ethics and a “moral backbone”.
Several directors who attended and participated in panel discussions, including Dianne Dillon-Ridgely, Rinaldo Brutoco, and Bill Conway, echoed the sentiments of both Mr. White and Dean Woo.

I moderated a panel discussion entitled “Retooling the Board for the 21st Century. Panelists Helle Bank Jorgensen of PWC; Rinaldo Brutoco, director of Men’s Wearhouse; Brian Lowry, Deputy General Counsel at Monsanto; and Dean Woo addressed, in candid and lively fashion, how boards can be better educated, increase the ranks of women and minorities, and should oversee their companies’ sustainability performance. Key takeaways:

Everyone, from management to board members themselves, is responsible for making sure boards are educated on key issues of the day.

Boards need to make sure they understand stakeholder concerns; that may require greater accessibility to stakeholders.

Boards need to be more diverse. Much of the shift and change in the boardroom is due to diversity in terms of gender, ethnicity, background. Board composition should reflect the world we live in and the reality around us. Boards need to be presented, however, with the “good” reasons and data supporting increased board diversity.

The stakeholder panel, whose participants were Stu Dalheim (Calvert), Anne Simpson (CalPERS), Susan Mac Cormac (Morrison & Foerster LLP), and Jonathan Jacoby (Oxfam) addressed the trends in stakeholder engagement with boards, including the increased focus on shareholder rights and scrutiny on issues such as executive pay. A key takeaway was that boards need to be more open and engage more with stakeholder groups in order to better represent their interests.

Cecily Joseph, Director of Corporate Responsibility at Symantec and the UNGC US Network representative, closed with this succinct summary: Boards need to step up, be trained, have expertise in sustainability, hear from stakeholders, and be reflective of society. Hear, hear.

2008 Corporate Responsibility and Sustainability Report PDF

The sustainability community is obsessed with the concept of “best practices.” Conferences promise to teach them; social media platforms encourage us to share them; and consultants are hired to impart knowledge of them.

Our tendency to focus on best practices is useful and necessary, in part. It saves considerable time and energy by narrowing the ever-evolving world of sustainability into bite-sized lessons from which practitioners can pick and choose.

At the same time, I can’t help but think that our fixation on best practices is short-sighted. Best-practice examples too often identify and celebrate outcomes while ignoring the processes that deliver said results.

This is troublesome because results are difficult to replicate when the circumstances change. Processes, on the other hand, can be transferred and adapted across industries, corporate cultures, and so on and so forth.

I am reminded of the well-known Chinese proverb: give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.  The premise of sustainability—in my opinion, to take a long-term view of key challenges and raise the awareness of others— is aligned more with the latter than the former.

So shouldn’t we also practice what we preach?

As alluded to in the BSR conference theme: “Reset Economy. Reset World.”, we’ve entered a brief period where business and society is re-examining core assumptions about how we live and work. There’s a realization that the concept of sustainability is vital and relevant, and that sustainability integration is a business imperative fundamental to innovation, profitability, and ultimate long-term survival.

But it’s not as easy as pressing a reset button (there is no sustainability CTRL-ALT-DELETE key sequence!) In a sense, what we’re talking about is systems redesign. Embedding sustainability is very difficult, not least because of the fundamental culture change that accompanies efforts to integrate and operationalize sustainable business practices. Join that with barriers to implementation ranging from existing political frameworks, lack of scale, and an entrenched system of investor valuation that excludes most social and environmental factors, and the true nature of the challenge becomes apparent.

The BSR conference reflected these hard truths, mirroring in the choice of conference topics what we as sustainability practitioners need to do to move forward. Namely, to

• engage in transparent and collaborative learning and problem-solving,
• create openness for new models and approaches, and
• incorporate a multitude of views, voices, and experiences along the way.

We’ve moved past the early stages where the “low-hanging fruit” in terms of sustainability theory and practice has been harvested. In large part, we know what has to be done—and we know that it will take sustained and considerable effort to achieve systems redesign. Perhaps Ben Verwaayen, CEO of Alcatel-Lucent said it best in his closing plenary (@ 4:09) : “CEO involvement is YOUR measure of success”.  Let’s make it happen.