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Wednesday, March 29, 2017

Strategic CSR - Net positive

The article in the url below asks a particularly silly question and, in the process, demonstrates why The Guardian Sustainable Business unit ( misses as often as it hits:
"Can a company ever claim to be making a better world?"
My starting assumption in addressing what I think is the most important question society faces ('What is the purpose of the for-profit firm?') is that all firms with ongoing operations are making a better world for at least some of their stakeholders (as those stakeholders define 'better'). Now, there is certainly a debate that can be had as to whether the net effect of specific firms is positive or negative, but it is simply ignorant to question whether there are any firms out there improving our collective standard of living. In fact, the opposite question is far more interesting -- Are there any companies that are not making a better world? Once it gets past its provocative (read 'ridiculous') title, then the article in the url below comes round to this position by discussing what "net positive" means:
"So, what exactly is net positive? At its core, it involves measuring a company's impacts as a result of its operations and products. The positive impacts – anything from reduced greenhouse gas emissions due to fuel-efficient vehicles to the social benefits resulting from good supply chain practices – are the company's handprint, or what a company adds to the world. A footprint is what it takes away."
Putting aside the issue that this only discusses sustainability metrics (rather than all operations); conceptually, I think this is fine, although it is hard to know what it adds to the long-standing CSR debate (other than another label). Clearly, one of the central challenges to the progress of CSR is measurement – how do we measure something so complex that it encompasses everything done by all firms across all industries? And, as the article notes, it does not help when firms start issuing their own indices to suit their own purposes, as is often the case with sustainability:
"When you walk the aisles of your favourite shop you are bombarded with labels attempting to explain why this product is so much better than those others. It can be overwhelming, and it's neither a new problem nor one that's getting better; there are currently at least 465 different eco-labels in use around the globe according to the EcoLabel Index."
This is an extremely complex issue and deserves our full attention, but we need to be starting the debate from common points based on a fundamental understanding of economic theory and human psychology. It is therefore important that companies, such as Dell, are beginning to tackle this:
"In 2013, Dell announced its aim to make its overall positive impacts 10 times greater than its negative impacts by 2020. It has attempted to do this with a net positive assessment of the impacts of its programme that helps employees work from home. … Calculating this [impact], however, required a level of expertise and effort that would be daunting to most companies. And it could be just as hard, if not impossible, to communicate such complexity on product packaging."
Unfortunately, these efforts are not well-served by journalists seeking to provoke using shallow headlines because, clearly, although we have made great strides, we still have much further to go:
"In the meantime, all that's left to be worked out in calculating net positive, is well just about everything. … Its partners in the new project will need to develop methodologies for specific areas like water and greenhouse gases as well as guidance for companies that want to set net positive goals. And because every company will need to address different social and environmental impacts to reach net positive, members will be casting a wide net in their approaches."
Take care
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Can a company ever claim to be making a better world?
By Matthew Wheeland
August 24, 2016
The Guardian