CSR – living the commitment

In the small German town of Weil am Rhein, just across the border with Switzerland, is perhaps one of the finest examples anywhere in the world of corporate social responsibility which is not an add on but something intrinsic to a corporate culture.

It is the Vitra campus – the centre for the Vitra Design Museum and a collection of buildings ranging from factories and warehouses to a fire station. See https://www.vitra.com/en-au/campus. Vitra is a company famous for owning the rights to the more famous Eames chair as well as producing a range of products – from office equipment to domestic stuff – which epitomise everything which is best about functional, minimalist designs which also have a fun element.

The site architecture is a statement in itself. The Vitra Design Museum was Frank Gehry’s first European commission and a conference pavilion was Tadao Ando’s first project outside Japan. Warehouses, factories and a ‘shop’ most art galleries would die for have been designed by architects such as Alvarao Siza, Nicholas Grimshaw, Herzog and de Meuron and SANAA. The fire station was designed by Zaha Hadid before she became a starchitect, before most of her ideas got beyond the design stage, and long before the controversy about 2022 Qatari World Cup construction labour practices. To top it all off there is, at Vitra, a carefully designed prototype for a low cost portable house able to be erected quickly in developing countries.

Without even canvassing other CSR initiatives by Vitra it is clear that this is a company which lives its values – perhaps the best definition of effective CSR if the values are good ones. The old UK Quaker founder companies were exemplars of this and while some of them, such as Cadbury, have fallen to the barbarians it is significant to note that Unilever – inheritors of the founder William Lever’s commitment to housing and health care for his workers and their families – has developed a Sustainable Living Plan which will have a ‘positive impact on society’. A quick trip to Port Sunlight on Merseyside, by the way, is a good demonstration of the Lever approach. Similarly modern day Unilever is even trying to provide schooling, health care and good wages on Congo palm oil plantations (Economist 9 August 2014) while boosting the share price between November 2010 and late 2014 by 40 plus %. The environmental impact of palm oil plantations is, of course, another question.

In the wider, nastier, world outside Weil am Rhein and the Quakers the outlook is more complex. Two US academics , Kiyoteur Tsutsui and Alwym Lim, did a major analysis in 2012 of CSR practices in developing countries (their work is to be published in book form by Cambridge) using the UN Global Compact, the Global Reporting Initiative and Sustainability Reporting Guidelines as benchmarks. Looking at 99 countries over the first decade of the 21st century they found that organisational linkages with nongovernmental groups encouraged the adoption of CSR policies. In developing countries this resulted in substantial commitments but in developed countries (like us) commitment was more likely to be ceremonial and demonstrating a “pattern of organised hypocrisy.” This may be just because many developed country residents are themselves hypocrites who get upset about poor behaviour in the developing world while continuing on with their unsustainable living practices such as owning huge four wheel drive vehicles which they apparently need to negotiate speed humps in the inner suburbs.

However, the emphasis in CSR today is shifting from CSR to sustainability and innovation and, in that vein, RMIT is holding an academic seminar on May 7/8 this year about communicating sustainability: leadership, advocacy and creativity. It has been organised by Dr Marianne Sison at the School of Media and Communications, some other departments, and Professor Anne Gregory of Huddersfield University whose work on strategic communication management and evaluation the blog has often praised. Details are available at http://www.rmit.edu.au/events/all-events/public-lectures/2015/may/main-street-to-spring-street/ and http://www.rmit.edu.au/events/all-events/conferences/2015/may/communicating-sustainability/.  The blog has had a glimpse of ANZ’s Gerard Brown’s presentation on financial inclusion which, if the other papers are as good, suggests the seminar will be outstanding.

Consistent with the emphasis on sustainability it is also revealing that more and more companies are now using internal carbon pricing as a means of planning for a climate change influenced future. While Tony Abbott, whenever he is asked about his achievements mentions the carbon tax repeal, more and more companies and countries are moving towards internal pricing and trading systems to reduce carbon emissions. Shell, Exxon Mobil, Microsoft, Delta Airlines, Conoco Phillips, Google, Disney and Total (Economist 14 December 2013) are all using internal carbon pricing at prices higher than Australia’s former carbon price. This will no doubt come as a surprise to Maurice Newman, the PM’s business adviser, but not to Pope Francis who is about to issue an encyclical on climate change. Of course Newman is more likely to listen to the climate denialists in the US, such as the Heartland Institute and the Koch brothers, than the Pope.

Underlying CSR and sustainability problems, of course, are visions and theories about the company. Milton Friedman famously talked about the obligation of companies to maximise shareholder value. Two US law professors, Henry Hansmann and Reinier Kraakman, proclaimed in 2000 that the shareholder maximisation model was triumphant (Economist 21 March 2015) about the same time as Cheney, Rumsfeld and the neocons were intent on bringing democracy and the American way to the Middle East. But as GE’s Jack Welch said, pursuing shareholder value as a strategy was “the dumbest idea ever” just as Cheney, Rumsfeld, Bush, Howard and Blair have been shown to have had one of the dumbest Gulf policies of all time.

The Australian author, Jane Gleeson-White, in her book Six Capitals on emerging accountancy sustainability standards, talks about corporate theories of responsibility. From her talk at this year’s Adelaide Writers’ Festival she is under the impression that US law, and case law, demands that shareholders come first. Well yes, up to a point Lord Copper, but 28 US states already provide a legal framework for corporations to focus on their benefit to the community. The blog’s son works for one of such companies.

At a recent RMIT meeting on the forthcoming Masters of Communication course lectures there was discussion about a theoretical framework for the financial PR section of the course. The consensus was that stakeholder theory provides such a framework and that the old saw applies: the quickest way to destroy shareholder value is to ignore stakeholders.

As Marx observed, raw capitalism is a revolutionary force which destroys much – much to the chagrin of conservatives who belatedly discover some of their traditions have ended up on the revolutionary pyre. Smart capitalists recognise this and engage in CSR and sustainability policies. Dumb capitalists, such as Maurice Newman, and their dumb political allies such as Tony Abbott don’t. That’s why they’ll end up, as Leon Trotsky and other people have said, in the dustbin of history.