The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Wednesday, October 28, 2015

Strategic CSR - Unilever

The headline and opening sentence in the article in the url below suggests that we have discovered how to measure CSR, comprehensively:
"Unilever and Patagonia have cemented their position as the world's most sustainable brands, topping the list of sustainability leaders in a new report released Thursday."
In fact, the text should read that these companies are "perceived to be the world's most sustainable brands." The reason comes down to the question asked in the survey that generated the data on which the headline was based:
"The 2015 Sustainability Leaders Report, produced by think tank SustainAbility and research consultancy GlobeScan, asked 816 sustainability experts in 82 countries which company they thought best integrated sustainability into its business strategy."
When you are asking people "which company they thought best integrated sustainability into its business strategy," you are going to generate opinions rather than facts. This would be OK if the opinions were based on knowledge of what is actually going on inside these companies; instead, they are based on what people think is going on. The dangers of relying on perception-based understandings of reality are that, once a perception is formed, it (a) becomes susceptible to group think (i.e., I need to say what others are saying) and (b) becomes particularly difficult to dislodge (i.e., these companies are the best because they were the best last year). As a result, there is a great deal of inertia in lists like this:
"Unilever drew top honors for the fifth year in a row, while Patagonia ranked second, the same position it occupied last year. The two companies were followed, in order, by Interface, Marks and Spencer, Natura, Ikea and Nestle. … BASF is the only new company to make the top 11, while two companies – Walmart and Puma – fell off from last year's top 10 list."
The sorts of biases that infuse these kind of survey data become particularly apparent when you look at the regional breakdown of perceptions described in the article:
"In Asia, for example, India's Tata group is the fourth-highest regarded company, and Shell and Proctor and Gamble both make the top 10. In Africa and the Middle East, 5% of experts identified SABMiller as a top leader. Meanwhile, in Oceania, Westpac came in third, Tesla came in fourth, and HP, Siemens and Novo Nordisk all made the top 10. Unilever and Patagonia, in fact, were the only two companies to make the leader list in every region."
Until we are able to create a meaningful measure of CSR that allows us to capture all aspects of operations and compare across industries and cultures, this (no doubt profitable) industry of creating CSR/sustainability lists is going to be driven by anecdotes and perceptions (which is why companies like Enron and BP won so many CSR/ethics awards for so many years).
Take care
David Chandler & Bill Werther
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Unilever, Patagonia cement their positions as the world's most sustainable brands, says new report
By Bruce Watson
May 28, 2015
The Guardian Sustainable Business