Sep 23, 2021
Is the business case for CSR slowing down progress towards climate action?
Can we really stay within planetary boundaries while chasing profits, and keep everyone happy? Is there such as thing as a win-win given the current scenario?
I’m a self-taught sustainability communicator and practitioner, and I’ve learned much of what I know from reading articles, watching webinars, and following the right industry people. I’ve also been fortunate enough to speak with sustainability experts from academia, established non-profits, and Fortune 500 companies. And after five years, I’ve come to conclude this: a lot of what gets reported in media- especially the cool-sounding stuff like “carbon offsetting”, “net-zero”, or “recycled plastic”- is a very small solution in comparison to what actually needs to happen to keep global temperatures below 2 degrees Celsius within a decade.
Since my interest in corporate sustainability is growing, to get more clarity, I took the 360-degree Corporation: Tools for Achieving Corporate Purpose course by Sarah Kaplan on Coursera, and found answers to some of these pressing questions.
My key takeaways:
- When an organization pursues CSR or ESG simply for reputational purposes or to increase their bottom line, the lesser they value such goals and demonstrate less commitment to them subsequently.
- As corporations do more “good,” they are also arguing that this should be matched with reduced government intervention, reduced regulation, reduced taxes, and so on. CSR shouldn’t be a substitute for regulation and other government guidance but rather a complement where corporations work together with the government to progress on important social issues.
- If social responsibility is treated as a “side of the desk” issue that isn’t essential to running the business, then it will also risk being just “greenwashing,” “pinkwashing” or “purpose-washing.”
There is no doubt that the larger the corporation, the more responsibilities it has towards all its stakeholders (not just shareholders). Gone are the days of Milton Friedman’s philosophy where you could solely focus on increasing shareholder value. Today’s consumers and employees alike want to work with Benefit Corporations that not only make bold ESG commitments but also follow through with action.
Making sustainability central, and not an add-on to business strategy is imperative if a business wants to grow sustainably over the next 100 years.
But there is a catch here: while most businesses are talking about a win-win scenario and making 2050 projections to halve their emissions, the reality is that there can’t be a win-win unless businesses make serious sacrifices now. We cannot continue growing at the pace we are and expect to reduce our impact. If it were that simple, why would we be in this situation in the first place? And how can we be sure that we’ll hit those targets twenty or thirty years out? It’s like saying that you can continue being lazy, eat desserts and junk food, and lose weight. It just doesn’t work like that. If you want to trim the fat, you need to change your lifestyle. Period.
In fact, while most businesses are talking about adopting new technologies or investing in innovative startups, the most crucial thing businesses aren’t talking about is changing their business model.
Imagine a corporate executive saying, “The situation is grim. We’ve messed up big time, so unless we slash our product line by half, back away from using fossil fuels, and discourage overconsumption, there is no way we can reduce our emissions by 2030 or 50 or the next 100 years.” Wow, wouldn’t that be something?
While it’s great to maintain a positive attitude in the face of dire circumstances, admitting and accepting the truth is half the battle won. If more corporates say it like it is, rather than using band-aid solutions, it’ll actually work in their favor. Sure, their share prices will fall temporarily — since that’s how the market works, but imagine how the company will fare in the long run. Businesses take big risks and make big bets in the face of uncertainty all the time- why not do the same for climate action?
There’s an amazing article by Auden Schendler, The Complicity of Corporate Sustainability, which is by far, one of the most honest articles I’ve read from an industry veteran. Auden has been named a “climate innovator” by TIME magazine and given talks at Google, Harvard, MIT, Yale, so he knows a thing or two about the situation we’re in. When I was doing my research on the sustainability efforts of Fortune 500 companies, Auden’s article really hit home because of its wisdom, straightforwardness, and radical candor.
I took out some key paragraphs from his article that hold a lot of value, so read carefully:
a)“As a result, I’ve concluded that the business case for environmental action, which remains the fundamental corporate climate strategy, has little to do with sustainability, however admirable the intent and vision of its practitioners. Even worse, the focus on sustainable practices instead of power-wielding has unwittingly empowered the fossil fuel industry’s capture of government policy and action, providing cover to allow ExxonMobil and others to maximize profit and global emissions of greenhouse gases, unmolested.”
b)“The actions businesses take under the banner of win-win, profitable, and good-for-the-planet corporate sustainability were exactly and precisely what the fossil fuel industry would want them to do. These moves ensure that businesses take responsibility for the climate problem only as their own individual emissions challenge, instead of seeing it as a systemic issue. It creates a focus on sustainability actions so lame and small ball that they could never and would never disrupt the fossil fuel industry’s hammerlock on governance.”
c)“Sustainable business practices haven’t just been a distraction (bad), nor a dodge of hard, controversial work (sinister), nor even intentionally duplicitous (corrupt). The approach has been evil because it represents complicity. Complicity with the fossil fuel industry and the structure it created — its capture of government; its ownership of the economy; its buried but enduring subsidies; its support, by political proxy, for anti-democratic practices that would restrict regulation; its construction of a world in which citizens exist in a fossil economy, not of their creation but nonetheless blame themselves for it.”
Phew! For someone who’s extremely passionate about sustainability, this was a lot to absorb.
What Auden’s suggesting is that if corporates truly want to make a difference, they need to start using their power to influence policy changes, bringing about a systemic change rather than focusing on individual emissions, and strictly cutting back on fossil fuels.
That will be a real game-changer.
