Transforming Lives Is Good for Business
The most rewarding part of writing for the Forbes CSR Blog is when readers feel inspired enough to add their ideas and be part of the conversation. This happened in response to three pieces I wrote about CSR in the resource extraction sector. Partly, I think, it was in response to the imperative for mining companies to be responsible in order to secure and maintain their licenses to operate. I also think that readers are wrestling with the paradox I’ve been exploring over the last year, that it is both the best of times and the worst of times for CSR. On the one hand, businesses must operate more responsibly. On the other hand, after 10 years of ramping up, CSR has hit a wall, many people believe.
How can CSR evolve to have greater business and social impact?
“Responsible mining means using operations to transform lives,” says Juan Pablo Duque, CEO of Four Points Mining, a Colombian-British company devoted to the exploitation and exploration of gold and silver in Colombia. To build on what Mr. Duque told me last week, I believe the opportunity is to use business operations to transform lives and to do so at corporations in every sector.
Last week I presented four ideas for what mining corporations could do differently to transform lives. These ideas were complemented by input from Forbes readers and from comments made in response to my article in mining-related groups on LinkedIn. This thinking is relevant for business of all kinds, and I’ve revised my initial ideas accordingly. Here are seven interrelated points that I think can help take CSR to the next level:
1) Acknowledge that social change is good for business. Companies have a distinct social purpose and are responsible for the well being of employees, families, and communities. This starts with health and safety, because it’s the right thing to do and because there’s a clear business case. It also includes understanding and addressing other the social priorities that are relevant to the business, such as food manufactures investing in the shared value of helping local farmers improve crop yields.
2) Companies should do things that don’t always make business sense. Taking action that doesn’t appear to be in the best interests of the business creates a very high level of authenticity and good will, even among the most challenging stakeholders. For the mining industry, this can mean investing in unbudgeted local social priorities as needed to build long term support in the community. For a pharmaceutical company, this could involve giving away medicine that does not contribute to the bottom line because it is only effective for a small population of patients.
3) Business should be much more transparent. We’re in the age of transparency, and corporations have to be accountable to an unprecedented degree. Companies need to share what they’re doing in ways that give outsiders an unfiltered view of their operations. Volkswagen’s Transparent Factory in Dresden remains an inspiring model. That remarkable facility makes the “process of car production transparent to the world, establishing a link between technology, environment and people such as has never been seen before,” according to Volkswagen.
4) Companies should not operate where they are not wanted. This point has particular significance in the mining industry, where corporations must secure agreements with local communities in order to secure their licenses to operate. It also has implications for businesses in other sectors. Should a mass retailer such as Walmart operate in a community where it isn’t wanted? The answer to this question is related to point one, that doing what isn’t in the best interests of the business can create value in other important ways.
5) Work with the government. While that may seem anathema to business (especially in the U.S.), it’s essential for corporations that believe their operations can be used to transform lives. Leadership companies should collaborate with government stakeholders to establish practical, productive and progressive approaches to social policy development, implementation, monitoring, and evaluation.
6) Apply a systematic approach to solving social problems. Civil engineers, accountants, architects, and other professionals are trained to solve problems systematically. Corporations should harness the abilities of their people and their products in the same way that IBM does with its Smarter Planet initiative, a program that brings the company’s people’s knowledge together with the power of its technology to address complex, large-scale social problems.
7) Measure, monitor, and evaluate social outcomes. Existing voluntary guidelines related to corporate social responsibility, such as GRI and ISO 26000, are important, but they don’t capture the qualitative outcomes of corporate social investments in education, health, environment, and local culture. Companies with a social purpose should develop meaningful social objectives, understand the ways social outcomes intersect with and support their business goals, implement social continuous improvement processes, and communicate outcomes in a clear and transparent way. Unfortunately, I can’t think of a good best practice example, and that isn’t a good sign.
I’m particularly grateful to four people who provided valuable comments in response to the article I wrote last week: Stephen Woeller, my colleague from Impakt, Anne Johnson, a mining student who is enrolled in a Ph.D. program in Cultural Studies at Queen’s University, Alistair Kent, a Vancouver-based engineer, and Deirdre White, President and CEO of CDC Development Solutions.
I hope this post stimulates more ideas about the social purpose of business.
Follow me on twitter at paulatimpakt.