How and When to Integrate Social Values into a Business

This blog was originally published on the Net Impact Blog as part of its Voices series, featuring Net Impact leaders around the world who are making a difference on their campuses and in their careers.

Expectations of business are shifting. Consumers increasingly choose brands that strive to embed positive social and environmental values and practices into their products, services and workplaces. In particular, millennials, who account for $1.3 trillion in spending power in the U.S., want to interact with and work for companies that not only focus on profit, but also deliver value to people – employees, communities, consumers – and the planet.

So if you are not yet thinking about social impact, when is the right time to start?

From day 1:

If you are a budding entrepreneur with a great idea, embed positive social and environmental values and practices into your company from the start. At the Net Impact Conference 2014 there were a number of highly successful mission-driven companies - Honest Tea, Greyston Bakery, Happy Family, and others - that have been that way from the start. It has not necessarily been an easy ride, however, these companies are demonstrating that is possible to be a successful business while also having a strong commitment to social good - there are many valuable lessons that can be learnt from them.

When you are big:

It is never too late to think about the social impact of your company but, if you leave it too long, it becomes harder and takes longer to change. At the Net Impact Conference, we heard from Paul Polman, CEO of Unilever, who talked about the multi-year journey that the company is on as part of its comprehensive Sustainable Living Plan. The process is highly complex and requires a huge amount of vision and leadership from the business, its partners and suppliers to get there. The same is true of other multinational companies such as Nestle, Pepsico, and P&G that are on similar journeys. While these efforts should be applauded and supported, if you have the choice, why wait?

So that leaves one option...

Act now as you grow:

While your company is smaller and more agile, make the shift today and embed a strong social mission and values into the business, culture and brand. It will not happen overnight but, if done in a strategic way, taking action may benefit the growth and success of the company.

Look at Chipotle. For over a decade, it has worked hard to embed its commitment to “food with integrity” into its business and brand. Earlier this year when it was forced to remove pork supplies from a third of its restaurants due to animal welfare concerns at an estimated cost of around $2 million in sales, there was no question about what action should be taken; the company knew that standing by its values was more important. CEO, Steve Ells told investors “customers are commending us for taking action against the inhumane treatment of animals, and congratulating us for standing by our business values.”

When is the right time to think about social impact? The answer is now. Whether your company or the company you work for is new, growing or more established, the sooner you take action to meet the changing expectations of today and tomorrow’s consumers, the better position the company will be in for long-term growth and success.

Send them to the Amazon

It’s the age-old question - is it possible for a business to transform itself for the benefit of society and the planet without a visionary, forward-thinking leadership team?

Patagonia's Founder Yvon Chouinard
gets it - how can we help other leaders
see the light?

I recently listened to a Shared Value Initiative webinar, which featured representatives from Kemira and Barclays Bank talking about how their companies are Innovating for Shared Value. Kemira spotted the risks and opportunities inherent in the global water crisis and changed its competitive positioning from chemicals to water quality management, a move that seems to have been beneficial to its bottom line. Barclays Bank is taking a slightly less dramatic and more experimental, though still innovative, approach to shared value, investing £25 million in its Social Innovation Facility, through which it is developing commercial products that deliver social impact.

What do both these examples have in common? New leadership taking the reins and moving the companies in the direction of Shared Value.

Of course, there were other factors that inspired the smarter approach to business – for example, consumer trust in Barclays Bank was at an all-time low following Libor Gate – however, the change of leadership seems to have been the engine behind the transformation. As Valerie Bockstette, Managing Director, FSG, noted at the end of the Shared Value Initiative webinar, “visionary leadership is a key ingredient for creating shared value.”

In some cases, it is not so much a change of leadership, as a mind-set change among the existing leadership. Take former Walmart CEO, Lee Scott, whose trip to see the aftermath of Katrina led to “Walmart mobilizing its tremendous logistics infrastructure to aid disaster victims.” It also inspired him to launch “one of the biggest corporate sustainability initiatives in history.” Coca Cola’s CEO Muhtar Kent was also inspired to take a more sustainable approach to doing business after visiting the Arctic and seeing Polar Bears struggling to find food.

So should all CEOs be sent to the Amazon? Or to the slums in Mumbai? Or anywhere in the world where they can see first-hand the material impacts of the company they lead?

The answer is yes, according to Harvard Psychology Professor, Daniel Gilbert, “when we only learn from the experience of others, this is often insufficient to drive action and behavior change.” 

To add another layer of complexity to the challenge, however visionary and forward-thinking a CEO is, if his shareholders and investors don’t play ball then he’s not going to be able to radically transform the business anyway. Particularly, as many shareholders and investors are still blinded by short term wins. A 2013 McKinsey and Canada Pension Plan Investment Board (CPPIB) study of more than 1,000 board members and C-suite executives around the world, found that “79% felt especially pressured to demonstrate strong financial performance over a period of just two years or less.”

So it seems true purpose-driven companies must have all its leaders, shareholders, investors, employees and stakeholders unified behind a shared mission to deliver long-lasting, sustainable value to the business, society and the world.

But, in the absence of visionary leaders, there’s still progress that can be made. Jim Collins, author of Good to Great, spent 5 years studying companies that made the leap from good to great and then stayed there. He found that “the real path to greatness…requires simplicity and diligence. It requires clarity, not instant illumination. It demands each of us to focus on what is vital—and to eliminate all of the extraneous distractions.”

So his response, in answer to the question “But how do I persuade my CEO to get it?” is “don't worry about that. Focus instead on results…within your own span of responsibility.”

And this is the message we need to remember. The circumstances won’t always be perfect but those of us who get it need to keep educating and raising awareness of the long-term, global, shared benefits that can be achieved.

The Way We Think About Charities and Companies is Dead Wrong

How out-of-date perceptions and expectations of NGOs and Companies are preventing progress

The title for this blog comes courtesy of Dan Pallotta and his thought-provoking Ted talk The way we think about charity is dead wrong from earlier this year. I finally got round to watching it the other week and it didn’t disappoint. Dan presents a very compelling argument, highlighting the fundamental contradiction between what we expect NGOs to achieve and what we allow them to achieve.  

In the same sitting, I watched Michael Porter’s recent Ted talk Why business can be good at solving social problems. This is a great introduction to the key principles and arguments of ‘Shared Valued’ and, again, it is a very compelling argument for changing our preconceptions of what companies are here to do.

The word that comes up again and again in these talks is scale, both in terms of the enormity of the social and environmental challenges we face, and the resources and capabilities required to solve them.

The problems we face in the world today, such as climate change, poverty, disease, are huge. Some of these challenges have been around for a number of years – in fact, as Michael Porter points out in his talk, it’s a bit embarrassing how little progress has been made considering how long we have been ‘tackling’ the problems.

And this is not going to change unless we rethink our approach.

Now you’ll have to forgive me, but to make my point, I’m going to turn to the wonders of PowerPoint shapes. In its simplest form (disclaimer), this is what is needed to get to transformative change:

When we think about solving social challenges, we commonly turn to NGOs but, in the way that they are set up today, they will struggle to move beyond incremental change:

As Dan Pallotta points out, whilst NGOs have specialist knowledge, expertise and a huge amount of passion, they lack resources – charitable giving has remained stuck at 2% of the GDP since the U.S. started measuring it in the 1970s (and, remember, this is the U.S. where philanthropy is big!). They also struggle to attract the best talent because they can’t compete with the remuneration packages offered by the corporate world, and the result is that they are unable to achieve the scale or reach that they really need to successfully tackle the social problems.

Think about the last time you gave money to charity? I imagine that you wanted every penny to go towards the beneficiaries, not to cover overheads. This is a real issue for NGOs – the expectation is that they are there to solve the world’s problems but without, God forbid, spending money on marketing, fundraising or salaries. Would you expect the same of a business?

The answer to that last question is no, however our expectation of companies is equally strange. A company has resources, talent, scale and reach but, in the majority of cases, these inputs are focused on generating profits rather than, and in some cases to the detriment of, solving social and environmental problems.

 What if…

·         Companies focused their energy on finding ways to sustain growth and profits through playing a role in helping solve some of the world’s big problems?

·         NGOs could invest in talent, fundraising and marketing and scale to the size where they could really make a different to the world’s big problems?

·         Companies and NGOs collaborated – bringing together different strengths and skills – to tackle the world’s big problems?

None of these ‘what ifs’ are impossible, in fact, some of them are starting to happen already. Look at the Gates Foundation, which is investing in talent, research and innovation. What is crucial is that we rethink our age-old perceptions and expectations of companies and NGOs. As a society, we need to allow these institutions the permission to evolve and change to meet the challenges of our world today. That is when we will see transformative change.

Challenging the Status Quo

A couple of weeks ago, I had the opportunity to attend the Conference Board’s Corporate Social Impact Conference. This annual conference brings together a varied audience comprising philanthropists, non-profits, foundations, companies, local government and consultants from around the U.S. It was a great chance for me to meet people and step outside my usual sphere of corporate work to understand and listen to the trends and challenges faced by different organizations across the social impact/sustainability community.

There were many interesting presentations and panel discussions but I’m going to single out a couple of speakers, who inspired me with what they said about the importance of focusing on solving problems – despite the discomfort and potential disruption - over maintaining the status quo.

The Heat and Warmth Fund (THAW Fund) helps Michigan residents who are struggling to pay their energy bills. Those who receive support include the elderly, the unemployed and the disabled and, according the organization’s website, "70% of the households assisted have a child or senior in the home". THAW Fund receives support from a multiple utility companies in the Michigan area – it’s a partnership that works insofar as both parties are able to achieve their existing aims; however, when you think about it, in many ways both organizations are merely circling the problem. THAW Fund CEO, Susan Sherer, wants to change this. Her team is now working with the regional utility companies to find ways to stop people getting behind in their energy payments in the first place. It’s early days and we’re talking about a complex problem that won’t be solved overnight, but at least both organizations are taking the first step towards tackling the root problem, rather than doggedly maintaining the status quo.

The other speaker I want to mention is Yasmina Zaidman, Director of Communications & Strategic Partnerships at Acumen Fund. Acumen invests in social enterprises, emerging leaders and breakthrough ideas to tackle poverty. Its model empowers local people to find ways to solve challenges facing themselves, their families and their communities, giving them the dignity to make decisions and take responsibility for their futures. Yasmina spoke about the opportunity for large corporations to learn from the innovative solutions developed by social entrepreneurs and their approach to finding solutions. Corporations will never have the agility of small enterprises; however, they can play an important role in supporting, mentoring and investing in social entrepreneurs and their ideas. Through doing this, they will have access to cutting edge innovation and, potentially, solutions to challenges that may threaten the long-term viability and sustainability of their business and the world in which it operates. Recently, the Acumen Fund convened a meeting between large corporations and social entrepreneurs in Nairobi to explore potential ways to bring social entrepreneurs and corporations closer together. There were a number of challenges raised by both sides – both real and perceived – but, the very act of being there shows a willingness to explore new paths and move away from simply maintaining the status quo.

What I admire is the courage of these different organizations – from THAW Fund to the corporations involved in the summit convened by Acumen – to look at things through a fresh lens. After all, as George Bernard Shaw put it, “progress is impossible without change, and those who cannot change their minds cannot change anything”.

It's been emotional!

Don't worry about the tennis; it's the tears that count!

When Andy Murray broke down in tears during his runner up speech at Wimbledon in 2012, it was a turning point in his career. Not only in his tennis career – he then went on to win an Olympic Gold Medal and the U.S. Open – but in his ‘public’ career. It was the moment that he was accepted and started to be cherished by the British media and the British Public. Andy Murray has always been a fantastic tennis player, but it wasn't until he showed his human and slightly more fallible side that people started to believe in him. Emotion is very powerful.

Recently I've been thinking quite a bit about emotion and the role it plays in inspiring change. My instinct when it comes to selling in sustainable business practices has always been to move away from emotion and stick to rational arguments; after all, the struggle has always been to get leaders to see sustainability as core to the business so how would bringing emotion into it help? Of course communications to engage employees and consumers could depict human stories in a conversational and approachable way, but not the communications to Senior Leaders or Management. My view on this is starting to change.

In his book, Start With Why, Simon Sinek makes the compelling argument that “people don’t buy what you do, they buy why you do it” – you might remember this from my blog on 21st April. Simon argues that inspiring people with why you do what you do, appeals to the Limbic part of the brain, which is separate to the area of the brain which processes rational, analytical thought and language. The Limbic brain is “responsible for all our feelings, such as trust and loyalty…It is also responsible for all human behavior and all our decision making” (Ch.4). Based on this, the easiest way to persuade or convince your audience to make a decision or take action, is to appeal first to the heart and then to the mind. As Simon points out in his book “I can’t help but wonder if the order of the expression ‘hearts and minds’ is a coincidence…Why does no one set out to win ‘minds and hearts’?” (Ch.4)

So, we need to bring more emotion to the table. The increasing focus on a company’s purpose – the why – enables us to do this whilst remaining within the comfort zone of most business leaders. Over the past few months, I have been working with a U.S.company to help it articulate its core purpose. Last week, the purpose was unveiled to the wider leadership of the organization and, considering that the audience was predominantly made up of middle class men, it was a surprisingly emotional event; there were tears! On reflection, it isn't that surprising – a purpose makes the connection to the broader ‘why’ of the business; it demonstrates the human/social impact of the business beyond generating profits and, inevitably, provokes people to question their own values and motivations. However, it was incredible to see the energy, enthusiasm and inspiration as every member of the company’s leadership team understood the positive, human impact of what they do every day.

Ultimately, in order to influence change within the corporate world, we need to tailor the message to suit whatever type of organization or people we are dealing with. However, emotion and business, particularly as we move towards business as a force for social, environmental and economic good, are not as far apart as they first seem.

Because there’s no... urm plan B

So Branson is back! Last week Richard Branson launched his B Team, a group of global business leaders
who have joined forces “to create a future where the purpose of business is to be a driving force for social, environmental and economic benefit”. In typical Branson style, the project was launched with a big media splash and, rather infuriatingly for people who work in this sector, he talks as though he invented sustainability. However, I digress…

Superhero?

For those of you in the UK, the irony of the name, considering M&S’s Plan A (“…because there is no plan B”), won’t be lost on you. The name has caused a stir in the US for different reasons given the recent moves by the Government, and associated media attention, to prevent teens from obtaining the morning after pill, Plan B, without a prescription.

What the B Team is actually going to do is still somewhat vague. The group is committed to tackling three initial challenges “to help focus business away from short-term gain and to balance the long-term benefits for people and planet”:

• The future bottom line: to include people and planet in business’ bottom line.
• The future of incentives: to catalyze incentives that benefit people and planet alongside profit.
• The future of leadership: to ignite a movement of leaders committed equally to people, planet and profit.

The details of how these challenges are tackled is still to be fully disclosed – and perhaps worked out – but,  crucially, the B Team will play a convening role, bringing together influential figures and decision makers from Governments, non-profits and the corporate sector.

Although Branson’s style is a little difficult to swallow, it’s early days for the B Team so we should give it the benefit of the doubt. However, for me, there are two key questions:

• Are we just preaching to the converted? As Toby Webb pointed out in his recent blog, our sector is becoming more like a ‘cocktail party’; people circulating and telling each other what they want to hear. Richard Branson has bought together ‘believers’; it’s a great line-up of sustainability greats, such as former Chairman and CEO of PUMA, Jochen Zeitz and Unilever’s CEO, Paul Polman. The question is, are these people going to be able to influence the non-believers? Or will they just be the same voices, preaching the same messages? They've been ignored in the past so what are they going to do differently to engage the skeptics going forward?
• What is Team B’s special sauce; what is it that will enable them to succeed where others have struggled? It’s not so long since everyone was talking about the revolution of Shared Value, and now it’s gone rather quiet. That’s not to say that Porter and Co. are not making progress but it’s not changing the world over night. Is the same thing going to be true of the B Team?

Just in case, is there a Plan C?

We need a Captain Planet to get rid of our Eco-Villans once and for all!

I went to my first Green Drinks Happy Hour the other week… no, not an event for people that like green cocktails, although that could be fun! It’s a monthly event that brings together sustainability professionals in the Boston area. It was fun evening and great to meet some fellow sustainability enthusiasts; however I had two conversations that really stood out and, if I'm honest, despair of humanity.

Number 1: it didn't take me long to track down the fellow Brit in the room, who was an academic from the UK, currently doing research at Harvard University. He is looking at the public policy implications and barriers linked to the climate change mitigation strategy of blocking the sun. My initial reaction was a mixture of incredulity and horror; for starters, ‘blocking the sun’ sounds like a plan from Captain Planet and, secondly, why would anyone want to make the world colder and darker? But immediate reactions aside, it is actually a very interesting idea. Some advocate the use of a giant mirror positioned hundred of km above the Earth’s surface to deflect some of the sun’s rays away from the Earth. However, the same effect could be achieved by shooting sun-reflecting sulfates into the lower stratosphere to create a barrier, which is, apparently, not very costly or difficult to do. Temperatures would be reduced by 1-2 degrees so we wouldn't be walking around in the cold and dark (or so I am led to believe) and, in only a couple of years, it could significantly slow down the rate of climate change.

The real barrier is not the science or individuals, like me, who like the sunshine; it is getting global consensus. In order to go ahead, the plan would need to be agreed by leaders all around the world, which is the final nail in the coffin as that is unlikely to happen. This is nothing new – Climate Change would have been addressed long ago if we weren't all so busy protecting our own interests. Maybe blocking the sun is not the answer but it still makes me sad that, in an ever more global world, we are still so far from being able to make rational, considered decisions for the greater good.

Number 2: I got talking to a lawyer, who had come to the event to find out more about ‘this sustainability stuff’ and, particularly, the business case as it relates to shareholders. I began my usual spiel about how, if done strategically, corporate responsibility is good for business and benefits all stakeholders. However, he stopped me and pointed out that many shareholders still think in the short term. If, as a result of running the business in a more sustainable way, there was any affect on the dividends they would receive for that year, even if the longer-term profit forecasts were bright, they would never agree and may even sue the company. Again, this is not news. I am aware of huge mindset shift that needs to happen worldwide to get more companies to adopt a more sustainable approach to business. Nevertheless, it still astounds me at the ability of people in the world to blindly act according to their own interests rather the interests of their communities, countries, or even the planet.

Maybe we need Captain Planet after all!

People don’t buy what you do; they buy why you do it

Back in the days when I was fundraising for a nonprofit, my communications always focused in on the 'why' – what is the need or problem and why is it important that we address it now. Of course, the funders that I was talking or writing to were interested in what we were doing to address the problem, but, ultimately, the reason that they decided to make a donation was based on the difference that they thought it would make, the positive impact that they would have on the cause in question. Learning to present the 'why' in a compelling way was fundamental.

The importance of the 'why' reaches far beyond the realms of the fundraising world. Simon Sinek, author of Start With Why, gave a great TED talk back in September 2009 that explains the importance of the 'why'. It’s a great talk and I would thoroughly recommend watching it but, in short, the key point is that what inspired leaders and inspired organizations have in common is that they focus on why they do what they do, rather than simply what they do. He uses the example of Apple which sells its products by sharing the core belief that is driving the business – as Simon Sinek puts it, they say to us, “Everything we do, we believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use and user friendly. We just happen to make computers. Want to buy one?" It seems so obvious but it’s amazing how few companies actually do this.

However, where understanding the ‘why’ can be really powerful is in terms of understanding the broader purpose of a company – the reason it exists and what it brings to society/the world. Apple is actually an interesting example because it hasn’t done this. Whilst Apple clearly understands the ‘why’ in terms of product strategy and marketing, it has been slow to recognize, articulate or act on the social or environmental opportunities of the business. You could say that it's only identified half its purpose. In today’s world, consumers want more than that – they want to understand the ‘why’ of a company from a product/business perspective as well as a social perspective. By understanding and articulating their ‘why’ or ‘purpose’, companies are in a much stronger position to drive authentic, sustainability activity, derived from the core of the business.

Ruggie's Rules - The End of the Beginning

Ask the CEO of a multinational corporation “does your company respect and protect human rights?” and the answer is unlikely to be negative. But go on to ask another question “how do you know?” and you’ll probably get a much less confident response. The truth is that, until very recently, they didn't have to know. What’s more, if a problem or an accusation was filed against them, there was no international legal framework against which they could be brought to justice - existing national frameworks were inadequate or simply not relevant.

This was the challenge given to John Ruggie, Berthold Beitz Professor of International Affairs at the Kennedy School of Government and an Affiliated Professor in International Legal Studies at Harvard Law School, by the United Nations Human Rights Council – to bridge the gap between national public governance frameworks and the governance of global businesses.

Last night, I went to a talk by John Ruggie at the Harvard Bookstore, to mark the launch of his book Just Business. He talked about his approach to the challenge and his experiences of working with governments and corporations all over the world to agree a set of guiding principles, perhaps better known as Ruggie’s Rules. It became clear to him very early on that there was no silver bullet - it wasn't about creating a legal instrument and expecting everyone to adhere to it because, as we saw with the Kyoto Protocol, this would be far too easy to ignore. What was required was a ‘building block approach’, establishing a common platform (i.e. the guiding principles) and then gradually bringing organisations on-board. For example, having agreed the guiding principles, John Ruggie and his team approached national export agencies and persuaded them that, when promoting companies overseas, there should be some due diligence built into the process to ensure that they are not promoting companies who do not respect or protect human rights. This has proved to be a clever and successful means of pushing the guiding principles out into the global corporate network and a start towards changing the status quo.

As you’d expect, the guidelines have received mixed reactions. Activist organisations don’t think they go far enough with the organization Human Rights Watch saying that the UN Human Rights Council “squandered an opportunity to take meaningful action to curtail business-related human rights abuses.” Other commentators, such as John Braithwaite, Corporate Criminologist at the Australian National University, are more encouraged by the steps taken: “I’m a strong supporter of progressive UN framework agreements that seem pretty wishy-washy at first…“ in the long run they can make a huge contribution from limited beginnings.”

Whilst, I don’t believe that extensive regulation is the answer to making companies more sustainable, it is helpful to have some frameworks in place to ensure a minimum standard of practice. As John Ruggie put it last night “it’s the end of the beginning”; in other words, Ruggie’s Rules are not going to eliminate abuses of human rights by global companies over-night but they create a baseline to support companies to start answering the question “how do you know?” with confidence.

Embrace change - it leads to success

Nike has made huge leaps forward in addressing the social and environmental impacts of its business. Not so long ago, the company was mired in controversy over allegations of human rights abuses in the factories making its shoes and clothing around the world – there were large protests, boycotts and widespread criticism from the media. Today, it's considered a sustainability leader.

The company’s vision is to deliver innovation and inspiration to every athlete and sustainability is central to how they do that. Hannah Jones, VP of Sustainable Business and Innovation at Nike Inc., summed up the approach in a recent tweet:

The key word is ‘innovation’ and ‘opportunity’. In order to become more sustainable, businesses need to see it as an opportunity and it means change, not a few tweaks here and there, but real change. The good news, to steal Hannah Jones’s tweet style, is that change = profit.

A recent report by MIT Sloane Management Review and the Boston Consulting Group, The Innovation Bottom Line, demonstrates the link between business model change and profiting from sustainability. 50% of survey respondents (executives and managers from commercial enterprises) who had changed 3 or 4 elements of their business strategy said that they had profited from sustainability activities:

And more change = more likely profit because, as you can see, only 37% of the respondents who had changed one element of the business model said that sustainability adds profits.

The change doesn't end with the business model, as report outlines, to “hit the sustainability bull’s-eye”, there needs to be:

• Support from the top and full integration across the business
• Clear goals and effective measurement - get the numbers that people can’t ignore
• Understand what your customers think and want in terms of sustainability
• Collaborate with individuals, customers, businesses and groups outside the business

Check out the report for more details - there are some interesting statistics. 

In the words of Charles Darwin “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” 

Is there Social Intrapreneur in all of us?

"Social innovation is the unwritten bullet-point in everyone’s job description" is the opening line from Marzena Zukowska, media manager and strategist with Ashoka Changemakers, in her Forbes article 3 Necessary Ingredients for Corporate Changemaking. The article is about Social Intrapreneurs; employees, who are working to change the culture of their workplace from the inside. There are some remarkable examples of how this is being done. Check out this video of the Food for Good initiative, thought  up and bought to life by PepsiCo employees in Dallas, Texas:

Click here to read about other inspiring examples from around the world.

At the end of last year, Ashoka and Accenture, launched The League of Intrapreneurs, a competition to raise awareness about what they're calling a 'lost tribe' of social innovators from all over the globe; the millions of employees, who have come up with projects to help their employers fulfill their commercial and social objectives. Winners will be featured in the globally distributed 'Intrapreneur Toolkit', they will be publicized on the Fast Company's Co-Exist blog and they will receive consultancy support from Accenture Development Partnerships.

This celebration of Social Intrapreneurs is a an important step - it's recognition of that the fact that it's not only entrepreneurs that have great ideas; that employees in companies, whatever their day job, have the potential passion, creativity and skills to bring groundbreaking new social projects to life. In my opinion, if this competition can encourage companies to provide the means and mechanisms to enable employees to communicate and develop their ideas and, most importantly, inspire employees to fight for what they're passionate about, it will have been a success.

We can all find our inner hero!

Having said that, we're not all Social Intrapreneurs, and, let's be honest, it would be a nightmare for companies if we were! Nevertheless, the phrase 'social innovation is the unwritten bullet point in everyone's job description' is still true. Everyone in a company can help make the business they work for a 'better business' - from finding ways for their team or department to use less paper, to changing to a supplier more in line with the values of the business, to working alongside a 'Social Intrapreneur' to make their idea a reality. What is important is that their company has a clearly defined purpose and strategy that inspires employees to work towards a clear, shared goal and empowers them to make a difference as part of their job, without waiting to be told to do it.

So whilst we unlock the potential of Social Intrapreneurs, let's not forget the potential of everyone in a business to change it for the better.

Management consultants - it's time to be proactive!

I participated in a webinar given by Verdantix this morning. It was entitled Secrets of Success for Sustainability Consulting and was focused around the current and future challenges facing sustainability consultancies and what is required for them to continue providing successful services to existing and future clients. Included in the presentation was data from their Global Sustainability Leaders Survey, which has been well publicized in recent weeks, showing that the Big Four accountancy firms - KPMG, Ernst & Young, Deloitte and PwC - "have the strongest brand preference in both the sustainability consulting and sustainability assurance markets, according to...heads of sustainability".

It's not hugely surprising that the Big Four scored so highly; they're well-known brands and have been advising businesses for a number of years - when faced with a choice, it's easy to understand why companies would opt for names that are familiar and/or that they've worked with before. There are of course other reasons but that's for another blog; what I want to explore is the potential for large management consultancy firms to use their experience, influence and brand recognition to accelerate the move towards a more sustainable way of doing business.

None of the big management consultancies are ignoring the importance of sustainability - both social and environmental - on the business world. McKinsey & Company advises clients on 'Sustainability and Resource Productivity', The Boston Consulting Group produces research and commentary around issues and challenges related to sustainable business, PwC lists sustainability as one of the key issues affecting the business community; this is all positive, except could it be more pro-active?

At the moment, it still feels as though 'sustainability' is somewhat sidelined by these firms - if a company asks for advice about sustainability, it's provided; if a company is looking for the latest research on sustainable business, they'll probably be able to find it; but how often are principles of sustainable business present in cases where the client doesn't ask for it?

Don't get me wrong, we're talking about consultants here and not activists, and, ultimately, management consultancies are there to help their clients with specific problems. But, having said that, wouldn't it be more 'helpful' for them to encourage their clients to think about the long term implications of their activities; to help them adapt their business models to withstand future challenges; and to persuade them to think beyond the next quick win? By adapting their approach in this way, the high profile management consultancy firms could play a very positive role in creating a more sustainable commercial sector.

And don't worry (just to preempt the inevitable backlash from management consultants that I know), you don't have to hug any trees! If it helps, don't even think about it as 'sustainability'; just think of it as good business. 

Completing the circle: a new vision for the economy

It's a hard life!

I recently spent 3 months travelling round South America and, whilst on a pretty tight budget, there was always just enough in the kitty for a beer at the end of the day. However, when we got to Argentina, it wasn't a lack of funds that was the problem – it was their bottle collection schemes that put a spanner in the works. We first encountered this in Cafayate, a small town just south of Salta – having found a hostel we went off in search of groceries and, of course, some beer. However, for every beer you buy, you have to bring back an empty beer bottle – slightly tricky if you've just arrived and don’t have any empties. Frustrating on the one hand but very advanced on the other…

Last Friday, the Ellen MacArthur Foundation launched its second report Towards the Circular Economy Vol.2: opportunities for the consumer goods sector, at the World Economic Forum in Davos. According to the report, “a cost reduction of 20 per cent from USD 29 to USD 24 per hectolitre of beer consumed would be possible in the U.K. by shifting from disposable to reusable glass beer bottles”. The report points out that there would be an additional cost due to the additional material required to create more durable bottles (“34% increase in the amount of glass used per bottle); however, the cost savings from reusing bottles would far outweigh this.

Reusing beer bottles is just one of a number of examples in the report of how the consumer goods sector can benefit from making the shift to a more circular business model. Through its research, the Ellen MacArthur Foundation estimates “the full potential of the circular economy to be as much as USD 700 billion in global consumer goods materials savings alone”.

Theoretically it makes perfect sense; however, the tricky bit is getting businesses to make the shift and providing the right support and incentives to help them through the transition. To support this, the Ellen MacArthur Foundation is launching the Circular Economy 100, a alliance of 100 pioneering businesses to accelerate the transition to a circular economy. But it’s going to take a lot more innovation and collaboration to make this fly.

The encouraging news is that we’re not starting from scratch. Companies have already started to embrace the principles of the circular economy. Just yesterday, CSR Wire, as part of its Noble Profit series, posted an interview with Ford’s Global Director of Sustainability, John Viera, in which he talks about how Ford is re-using waste materials – from old carpet to unwanted jeans – in the production of its cars. 

Now the challenge is to take these ideas to scale. Watch this space...

Purpose - A Unifying Force

Purpose is what everyone's talking about on both sides of the pond - and, what's great is that it's not just sustainability or corporate responsibility professionals doing the talking, it's people from all across the business world. Just today, Jock Mendoza-Wilson, Director of International and Investor Relations at System Capital Management, posted a blog called Business with a Purpose from Davos.

So what exactly is meant by the term purpose? The way I would describe it is that a company's purpose says what an organisation does beyond generating profits; it expresses the value that the company brings to the world, what the company stands for, and, essentially, why the company should continue doing what it does. A good example is Coca Cola's purpose: "to refresh the world, to inspire moments of optimism and happiness, to create value and to make a difference". This statement demonstrates Coca Cola's commitment to doing more than selling a product to make a profit - in fact, the purpose immediately establishes 'creating value' and 'making a difference' as central to the business and therefore central to generating profits.

Establishing a purpose is beneficial for motivating and inspiring employees because it makes them feel good about what they do; it encourages suppliers to build sustainable business practices into the way they do business; it builds trust and loyalty among consumers because they can see the positive impact on their lives and the world around them; and, ultimately, it helps the business chart and stick to a course that is sustainable and generates both stakeholder and shareholder value. There's some interesting discussion of this in Salterbaxter's Directions Report 2012: Profits from Purpose.

Most of all, I believe that the real power of a purpose lies in its ability to unite people at all levels of an organisation and therefore help drive change. Whilst sustainability or corporate responsibility goals have - more often than not - divided individuals or departments within a company, a purpose helps unite them behind a common cause. Everyone understands what the purpose means and how it relates to the day-to-day business operations. What's more, it can add more depth to what a company does - opening up opportunities for employees to innovate and think about how they can adapt what they do to align with the purpose - from senior management to graduate trainees.

Over the years, one of the biggest challenges has been getting sustainable or responsible business to the top of the agenda, mostly because, unless there was a key sponsor among the top decision-makers, it's often been seen as something separate from the core activities of the business. I believe that the development of corporate purposes will help to change this  - the right purpose will help drive understanding, inspire action and innovation and, ultimately, accelerate positive change. 

Don't forget about business

As we're new to Boston, we're being keen beans and doing all the tourist 'must sees'. At the end of last week we went to the Harvard Museum of Natural History, which has some amazing exhibitions and a huge collection of skeletons and fossils that will excite even the most sceptical visitor. One of the exhibits, put together in collaboration with the Harvard University Center for the Environment, is about climate change: how this has affected our planet in the past and what challenges we face in the future. The best bit of this exhibition was a video outlining the actions required to slow climate change and what this means financially for each family in the USA. At points, those watching the video are asked to vote as to whether or not they're willing to take these actions. Perhaps the most testing question is whether or not individuals in the USA are prepared for the government to invest in climate change initiatives in other less-developed areas of the world i.e. individuals in the USA pay for changes in their own country as well as funding initiatives in developing countries. Not an easy question to answer by any means, especially when the financial costs are made clear...

However, it's not just individuals and the government that need to take action. What is missing from this video is the role that business plays in tackling climate change. Whilst there are actions that individuals and governments can take, there are also ways that the business community can make a huge difference through their own initiatives and through collaboration with others. Real and lasting change will happen when all these efforts combine.

In a post on the BSR blog the other week, Solitaire Townsend, Cofounder of Futerra Sustainability Communications, talks about the critical role of brands in influencing and changing consumer behavior. As she puts it: "Brands carry promises and guide our behaviors—from doing laundry to buying a new car... As consumers struggle to balance their aspirations with reality, they will look to brands for answers. Right now they are asking, but soon they will be demanding.” Of course, the way that businesses respond to these demands will be very different - it might be through a transition to a new business model and, as Fiona Bennie describes it in her blog Same Brand, Different Business Model on the Sustainable Brands Blog, "[holding] customers' hands as they transition to and adopt new ways of consuming, of lending and borrowing, and ultimately of meeting their needs". Or through the adoption of more 'durable design' so that products change over time and continue to interest and inspire their owners. These are just some of the ways that businesses can work to make their own operations and the lives of consumers more sustainable.

What's important for consumers to understand is that they're not alone. Whilst this doesn't mean we should all sit back and do nothing; we shouldn't be daunted by the action that needs to be taken because businesses, governments and individuals are all in this together!

Making it legal but not too legal

As of January 2013, Massachusetts will enable companies to incorporate as Benefit Corporations. The Benefit Corporation movement in the USA aims to remove any legal boundaries that prevent companies pursuing their social and environmental goals. In brief, as set out in the Benefit Corporation White Paper, the characteristics of a benefit corporation are:

1. a requirement that a benefit corporation must have a corporate purpose to create a material positive impact on society and the environment
2. an expansion of the duties of directors to require consideration of non-financial stakeholders as well as the financial interests of shareholders
3. an obligation to report on its overall social and environmental performance using a comprehensive, credible, independent and transparent third-party standard

The idea for Benefit Corporations came from B Lab, a not-for-profit organisation that has developed a set of standards against which companies (rather confusingly referred to as B Corporations) could benchmark their corporate responsibility efforts, thereby demonstrating that they're not all talk. Through the development of its standards, B Lab found that companies were coming against a number of legal issues when they tried to move towards giving equal consideration to stakeholders as they do shareholders when making company decisions - 'historically, the U.S. legal system governing corporate entities and their activities has not 

been structured or tailored to address the situation of for-profit companies who seek to use the 

power of business to solve social problems'. The result was that some companies were scared of pursuing their social mission for fear of litigation for failure to maximize shareholder value. So the Benefit Corporation movement is calling on state authorities to provide a more flexible legal framework that enables companies to pursue social and commercial goals in equal measure. 

I'm interested that legal concerns have been such a barrier for American companies as this is not something that I've come across in Europe. Of course, aligning all stakeholders behind the social purpose and objectives of the business are always crucial in order to move forward but fear of the legal backlash if shareholders changed their minds or disagreed was not something we came up against - perhaps this is simply a reflection of the differences between European and US legislation. Anything that removes boundaries and gives the companies the freedom to innovate and compete to be 'better' is a good thing and the fact that it has got lots more people talking about the importance of shared value in the corporate world is positive. Just as long as it doesn't become too legal and by that I mean, stifling creativity and slowing momentum through the development of endless hoops for companies to jump through in order to meet a minimum - and ultimately rather uninspiring - standard of best practice.