For all its benefits, the Industrial Revolution has also created massive social, economic and ecological problems that have usually been deposited on the back burner while the profits rolled in. But under outside pressure, the business world has been trying to police itself. Is the wolf the best shepherd? Swiss Style’s Lauriane Zonco spoke to one.
Once upon a time, the very sentence “corporate social responsibility” (CSR) was met with contempt from both the business world and alternative thinkers. The business folk deemed it an unacceptable expenditure of financial and time resources by the private sector to fix what they saw as an essentially public matter – we make the mess, the taxpayer cleans it up. Alternative thinkers, for their part, felt that anything with the word “corporate” in it really could not bode anything good, least something worth fighting for. For a long while then, both camps seemed to agree on something, albeit through complete different reasoning: social responsibility, yes, but please forget the corporate part and everyone will be better off.
Then something changed. Or rather, a lot of people changed thanks to the greater spread of information on good, and more often than not bad, business practices. What had been a slightly fringe anti-consumer, anti-corporate movement in the 1960s and 1970s, moved closer to the mainstream in the 1990s. The general public started to point fingers at corporations whose behaviour was far from spotless when it came to, say, the environment or labour relations. Soon, the neoliberal Milton Friedman crowd, which continued to insist that CSR was irrelevant at best, and dangerous at worst for private businesses and thus for the economy as a whole, started to sound as if they were living in another century. Today in fact, as Russel Sparkes, one of UK’s leading authorities on socially responsible investment, puts it, CSR “describes the practical reality that companies are increasingly being judged not just by the products and profits they make, but also by how these profits are made.” In other words, CSR has become another critical component in the attempt to conduct a successful, and above all, sustainable, business.
Few are more aware of this than Peter Bakker, the newly-appointed president of the World Business Council for Sustainable Development (WBCSD), a Geneva- based CEO-led organisation of forward- thinking companies that pushes the global business community to create a sustainable future for business, society and the environment. From its launch in 1992 in the wake of the Rio Summit to the present day, the Council has provided a forum for its 200 member companies. These represent all business sectors, all continents and a combined revenue of over USD 7 trillion to share best practices on sustainable development issues and to develop innovative tools that change the status quo and lead businesses to truly integrate CSR at their core. It is hard to see how the WBCSD could have found a better fit to spearhead this herculean task than Bakker. His business and corporate social responsibility credentials (see box) effectively meant that he had walked the talk – and could entice others to do the same. And so here he is, only six weeks into his new job, in his office at the Council headquarters in the Geneva countryside. The quiet and peaceful surroundings rather contrast with the enormous task the WBCSD has set for itself – and, as a matter of fact, for all businesses worldwide.
Earth versus humans
When pressed to give a sense of what the Council is trying to achieve, Bakker announces that its target is the word’s sustainability by 2050, or in other words, that by that date, “there will be a little bit more than nine billion people on Earth. They will all have to live well within the boundaries of the planet.” What could be seen by pessimists as a noble but doomed enterprise at best and a bad joke at worst is actually for Bakker, and a growing number of people, simply the only viable option. He does, of course, realise how daunting his statement sounds: “I know it seems like a very simple sentence to cover an enormous amount of topics, from water, health, energy, food, and so much more,” he agrees, “but if we do not consider all of these areas, if we do not pay attention to all of these threats, then one of them will get to mankind”. Hearing about the end of mankind in a catastrophe Hollywood movie is one thing – listening to a respected business and corporate social responsibility leader calmly talking about it is quite another, and frankly, much more frightening.
For Peter Bakker has no doubt about it, things will have to change, or something will have to give in, and it does not take a genius to quickly realise that the rules of probability are more likely to favour nature than mankind.
As Bakker reminds us, “for a long time the issue in sustainable development was about migrating from old to new energies, but we will have to increasingly look at adaptation from now on, adaptation to a new kind of environment: higher seas, heavier storms and so on”. It’s a pragmatic approach on the surface, not unsurprising for a lifelong businessman, at its heart, of course, it means accepting the fact that our economic system has in some ways failed for lack of long-sightedness. In his view, the private sector will adapt to the new environmental conditions because it will be the primary bearer of the costs incurred by these new environmental threats, in terms of insurance and lost business opportunities – society as a whole more so, of course, but the business of business is business, not people.
This is where the corporate social responsibility stance is supposed to actually join forces with straightforward economics theory: companies will subscribe to CSR because it is in their interest to do so, because it makes business sense. Squeezed between the general public’s demand for good business behaviour on one side and by the more and more obvious limits of nature on the other, the private economy will do what it does best: choose the profitable option. And as Peter Bakker likes to stress, the very meaning of “profitable” will change in time – or at least that is what he militates for: “Corporate social responsibility has evolved enormously and will continue to do so. Even companies, such as Unilever have already understood that CSR is much more than simply adding a department in a corporation, it means letting it sink at every stage and every level of the company. This is truly the way forward, the CSR of tomorrow.”
New leaf or fig leaf?
The idea the WBCSD, along with its partners, wants to help diffuse and implement is that business strategy needs to incorporate CSR, in a bold bet to move away from pure business financial value to sustainable social value. It is, acknowledges Bakker, a new way to look at performance and at conducting business, one that entails “reconfiguring one’s business DNA” as the Time magazine coined it in its 2009 article on CSR. This scenario, which has the Council playing the roles of facilitator and coordinator on CSR endeavours, essentially translates in a virtuous circle in which educated, responsible consumers favour socially conscious businesses, thus creating a world where everyone is better off. This win-win storyline has often been much criticised – especially in the first years of the WBCSD – as being illusory at best, and even worse, for providing corporations with a good conscience that could enable them to keep going on with harmful business practices while using cosmetic CSR actions as a smoke screen. In truth, the Council’s beginnings were marked by an outright defiance from some activist organisations – with Greenpeace at the forefront – which profoundly dislike the WBCSD’s ties with the business world and saw it as the Trojan horse of big corporations.
The WBCSD’s impact and influence has grown over the years to the point of transforming the institution into a global reference in the field of sustainable development. This evolution is both testimony to the work of Bakker’s predecessor, Björn Stigson, who really transformed the Council’s image, and proof of how much the perception of CSR has changed over the past decade. After much criticism in the 1990s, 2002 saw the Council team up with Greenpeace, one of the most influential corporate critics, at the Earth Summit in Johannesburg. Together, they delivered a message demanding greater action by governments on climate change.
The change of tone did not stop there. A 2003 World Bank/IFC-commissioned study identified the WBCSD as one of the “most influential forums” for companies on corporate social responsibility issues, and a 2006 Globescan survey reported that 54 percent of all surveyed experts believe the WBCSD would play a “major role” in advancing sustainable development. In the 2007 Ethisphere list of the 100 Most Influential People in Business Ethics, former WBCSD President Björn Stigson was ranked 9th, and British newspaper The Guardian has just chosen Peter Bakker as one of the judges in its 2012 Sustainable Business Awards.
The days when the Council and CSR alike were deemed to be irrelevant or counterproductive now seem just a distant memory, and, much to the chagrin of some hardcore activists, the days of radicalised CSR might be over too, now that everybody agrees – if not yet believes – on its utmost importance. Peter Bakker, for one, is a firm believer that change will come from within the system, simply because “business is the most powerful change agent in the world; look at the power of capital and the power of innovation,” he enthuses. “Really, I think business will save the world,” he concludes, almost provocatively. Everyone would like to agree, it would be great. But the question remains: how?
Bakker , CSR and TNT
A distinguished former business leader who headed the Dutch global logistics company TNT for ten years, Peter Bakker worked his way up the company’s corporate ladder from the early 1990s onward. As the TNT CEO, Bakker experienced CSR first hand. The 9/11 attacks, coupled with the demise of Enron, led to some soul-searching in the company. The considerable environmental impact of its logistics activities naturally pushed TNT towards environmental issues and the company set some very bold targets such as a 45-percent reduction in carbon footprint by 2020. The move that truly made TNT enter the club of the few progressive companies that took CSR seriously was Bakker’s groundbreaking alliance with the World Food Programme, the United Nations’ largest subsidiary, an alliance that effectively put TNT skills and resources at the disposal of the Programme’s projects – eminently dependent on efficient transportations and logistics in cases of emergency reliefs. As CSR made its way inside TNT, effectively transforming the group into a CSR leader, Bakker started to reflect on his own life and career. In need of a change, he seized the opportunity of the de-merger of TNT, which in 2011 was split in two separate entities, to step down and give his career a new direction after June 2011. Initially Bakker became a UN Ambassador against hunger and took on an active role in addressing the outbreak of one of the worst famines in East Africa. During that period Peter Bakker became the natural candidate for the President position at the WBCSD.
Article by by Lauriane Zonco