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Tuesday, October 11, 2011

Has the time for CSR passed?

Understanding the constraints of CSR

"CSR won't lead us to sustainability."

Kelly Baxter, Executive Director of The Natural Step Canada, spoke these words at an excellent event I attended last Monday through the Toronto Sustainability Speaker Series

I was pretty taken aback. I shuffled in my seat nervously, felt blood rushing to my cheeks.  I had come so far to believe in the power of CSR and its potential for solving societal problems.  Jotting down her words anxiously I wondered, "Am I completely of the mark? Is the work I'm doing taking us in the wrong direction?"

It didn't take long for me to realize that Kelly was making a really logical and interesting point (My anxious reaction to her comment made me realize how much of a social-business nerd I really am).

Kelly defines Corporate Social Responsibility as a triple bottom line approach, that is, embedding social, environmental, and economic values into a business model.

(These diagrams are a copy from the presentation given by Kelly Baxter on Oct. 3, 2011)

As we know, there has been a big push for CSR amongst most large companies within the last ten years, and according to Kelly many have done a solid job of reaching this point (though I'm not fully convinced of this). But "the time for CSR (has) passed", she said, "we've been congratulating ourselves on being less bad".  Companies have done a good job of fitting social and environmental practices into their current business models.  But what we need to be doing is the opposite.

Kelly presented the analogy of a car heading dangerously toward the edge of a cliff. The driver slams on the breaks to stop the car before it reaches the edge instead of turning the car around and driving in the other direction.

We're approaching the edge of a cliff right now. We've got frighteningly high levels of carbon emissions, unsustainable deforestation, over 1 billion people living in extreme poverty (to name just a few of our problems) - and the response has been to infuse practices into business models that make the problem less imminent or less catastrophic.  Our current approach is all about reducing as opposed to zeroing-in on the causes of the social and environmental problems we're facing.  

We've been striving for less bad, when we really need to be turning our car around and going for the good.

So how do we do that?

We need to build our business strategies to work within social and environmental constraints. Not the constraints of today, but of those 5, 10, 50 years down the road.  

Check out the two diagrams above.  Kelly said that most companies are asking the following question: "Based on our business plan, what should our sustainability practices be?"  

But what we need to be asking is: "Based on the impending environmental constraints and societal requirements, what should our business plan be?"

Ray Anderson, the late CEO of Interface Inc., is known for leading the corporate world in shifting his company to a completely sustainable business model. He said, "For this (sustainability) to take hold throughout the business world, a change in the business paradigm is needed."

Companies that do not plan within these constraints going forward are not sustainable.  There won't be the same level of resources for them to continue status quo, and it's as simple as that.  

So do I need to be worried about the work I do with CSR?  Nope.  There are companies that still haven't reached that triple bottom line, which means there is still a place for it in our corporate practices.   We needed to start with CSR to get to this point, and many companies are still catching up. 

But Kelly's right. It's time to turn the car around. Designing business plans within the natural social and environmental constraints we're going to face makes logical sense. 

While I felt at peace with the conclusions I came to, I can't help but remain bothered by the big harry monster of a barrier to our progress in sustainability: Convincing the non-believer corporate leaders that sustainability is lucrative. 

How are we possibly going to do that? 
Honestly, I don't know.

But I do know something that can get us closer: We need to start bringing our CEO's, CFO's, and other executives to these events. It's not enough to talk amongst one another about these critical issues - at this point it's not going to get us much further than we are right now. 

I've made a personal commitment to bring a "non-believer" to an event before the end of the year. What about you?

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