The Economist & CSR: From Foes to Friends

What a difference two years can make. CSR has made it into mainstream:

Economist '2005 :
The respected conservative weekly was pretty much on the side of Milton Friedman's "The Social Responsibility of Business Is to Increase Its Profits". It dismissed CSR not only as a superficial PR exercise but even dismissed as counterproductive. "CSR cannot be a substitute for wise policies in these areas. In several little-noticed respects, it is already a hindrance to them...To improve capitalism, you first need to understand it. The thinking behind CSR does not meet that test."

Economist '2007:
It seems that the benefits that have been well documented (e.g. in Michael Porter's article) for some time, are becoming mainstream finally. In response to a CSR-critical book “Supercapitalism” the Economist writes:
"[D]one well, CSR can motivate employees and strengthen brands, while also providing benefits to society. Understanding and responding to the social context in which firms operate is increasingly a source of new products and services, observes Jane Nelson of the Prince of Wales International Business Leaders Forum. Telling firms they need not act responsibly might cause them to under-invest in these opportunities, and to focus excessively on short-term profits."

Simon Zadek, the boss of AccountAbility summarizes the state of CSR in a nice way: “The ‘whether in principle' conversation about CSR is over,” he says. “What remains is ‘What, specifically, and how?'”. Answers to these important questions is what the UN Global Compact with its local networks in over 70 countries tries to foster. And this blog highlights some of outstanding business4good cases.

Thanks to the Triple Bottom Line Blog

Business–NGO Partnerships Help the World’s Poorest

During the International Trade Forum leading businesses including Adidas, BP and Procter & Gamble committed to CSR:

“We believe that the leading global companies of 2020 will be those that provide goods and services and reach new customers in ways that address the world's major challenges — including poverty, climate change, resource depletion, globalization and demographic shifts.”

The full article on the World Business Council for Sustainable Development (WBCSD) website also features a few illustrative example of 'business4good' practices:

• Unilever is integrating social innovation strategies in its business operations. In India, it teamed up with NGOs to create Shakti, a rural network that sells products adapted to rural customers in more than 100,000 villages, employing 31,000 women. In Indonesia, it teamed up with Oxfam to research and assess the impact of production and distribution processes on poor communities. (Sources: Unilever, Oxfam)
• Procter & Gamble worked with research institutes and other organizations to create a low-cost ($0.01/litre) water purification product. PuR is mixed with water and filtered through a cloth to remove bacteria, viruses and parasites. One billion people lack access to safe drinking water. Relief agencies use PuR to provide clean drinking water during emergency relief operations. (Source: P&G Health Sciences Institute)
• Cemex, the world's third largest construction materials firm, has been working with Ashoka fellows to help more than 30,000 low-income families to build affordable, decent houses for themselves. Participants enter a savings and credit programme, get assistance to plan construction work, and benefit from services such as material storage, delivery and price guarantees for two years. This helps the company reach new customers it could not serve before, while helping poor families to improve their living conditions. (Source: Ashoka)

The WBCSD article also talks about tthe rise of social entrepreneurship and poverty as a business challenge. A pretty good read and nice update summary on how business can do good.

The Top 20 NGOs/UN Agencies according to Business

Dalberg, the Global Compact and the Financial Times came up with an unusual ranking... instead than companies are ranked it was NGO's and UN agencies that got assessed by corporate leaders against certain criteria (Accountability, Adaptability, Communication, Execution).

So who are the leading NGOs/UN agencies according to Corporate Leaders? See the Top 20:


For the full ranking tables and background information see FT or Dalberg.

Ranking are always disputed and setting criteria for such an homogeneous are such as NGOs and UN agencies this is far from an easy job. Having such diverse NGOs on the same piece of papers might appear a bit random to some but nonetheless I think it's a good start for increased transparency and stimulating improvement through sharing of best practices.

BTW not a big surprise than Rotary and Lions make it to the top considering that their members are mainly business people.

The only other ranking of NGOs - although focussed on US charities - is Charity Navigator. Do you know any else?

Ten Questions on Social Entrepreneurship with David Bornstein

Social entrepreneurship is a core topic of business4good and I have blogged about it many times (scroll). This includes David Bornstein who one of the most renowned figures in the field and author of How to Change the World - Social Entrepreneurs which just came out in an updated edition.

Therefore I was happy to read on Guy Kawasaki's blog 10 questions and answers with David. He makes some interesting links between social entrepreneurship, meaningful action and to happiness (reminding me of books I am reading from the Dalai Lama). Here three little excerpts from David's answers:


1. Bill Gates' Awakening:
"When Bill Gates announced that he would be stepping down from Microsoft to run his foundation, he made it clear that he was not retiring, but rather “reordering” his priorities. Why? It was through his research trips in the developing world that he came face to face with people suffering and dying—and he couldn’t shake it. He saw that he could be more valuable to the world helping to develop AIDS or malaria vaccines, or expanding access to health care systems, than helping to create more software tools, as valuable as those tools may be. Lots of people are coming to similar conclusions. It is like a global awakening."

2. The Bottleneck Fundraising:
"Most of our major businesses are able to raise hundreds of millions of dollars in capital markets—through debt or by issuing stock. But social entrepreneurs, who typically run nonprofit organizations, usually have to raise considerable grant funding from foundations, which usually comes in small, short term installments. Because the funding is so fragmented, social entrepreneurs end up spending 80% of their time fundraising, rather than spending 80% of their time focusing on running their organizations. This is a huge bottleneck."

3. Meaningful Action:
"The bottom line is that we focus on the “doing good” aspects, on the sacrifice, and ethical components, but we often forget to mention how wonderful it feels to take meaningful action in line with your core beliefs. Finally people often delay because they just don’t know where to go, what to do, or how to take the first step. So there is a big need for tools that help people find their place in the field of social entrepreneurship and social innovation. That is actually the subject of the current book I am working on."

Read the full interview.

The Other Africa: TED Conference on Ideas

What's the image of Africa in the west? If you are an optimist you might think about beautiful nature and animals but most likely many images might be negative such as poverty, famine and HIV/AIDS.

Africa has an image problem and therefore I was positively surprised to see these videos from the TED Conference on ideas which was held for the first time in Africa.

See inspiring videos which bring light to Africa showing for example how the investment climate and inflation rates have improved. It's very refreshing to see Africans themselves talking about their continent! See more at TED.



via iPienso.

Do you like Flying? If you also like the Environment then offset your Carbon Emissions

Are you a carbon balanced flyer? Probably not and I haven't known what this means until lately (not to mention how to become one ;) .

TerraPass is a prime example for a "Business4Good" and can help you to offset the carbon emissions we are responsible for through flying. This is a smart business approach to the problem that flying contributes to green house gases which I lamented on in an earlier post.

Becoming carbon neutral might be cheaper than you think. I just invested 36.95$ for an intercontinental flight from Europe to Australia. The money will go into into green energy such as from wind. You can calculate you emission here, check it out.

Just a disclaimer, no this alone won't be the solution for climate change but it's a part of it. What do you think?

Outcomes of UN Global Compact's Leaders Summit

This week the preliminary outcomes of the Global Compacts Leaders Summit from July in Geneva got released. I am thankful for it because way too much happened there for me to sum up myself :) Overall, it was very inspiring to have been there because you can see that business is taking global issues serious and the Global Compact is a facilitator in this change but as well as changing the UN itself by facilitating business-UN partnerships.

Highlights from my perspective were:

• Largest high-level event on of corporate responsibility ever: bringing together more than 1,100 leaders and representatives from business, government, civil society, labour, academia and the United Nations means this is important!
• Deepened commitment for universal principles: Through advancing responsible business practices a more sustainable and inclusive global economy can be realized. The Global Compact principles are the leading compass for this.
• Diversity of participants from 90 countries: Where else do you bring together CEOs (incl. many from China) that talk business with critical voices from nearly 200 representatives from civil society, labour and academia?
• Reports confirming that responsible business perform better: Goldman Sachs found that companies considered leaders in implementing ESG policies have outperformed the general stock market by 25 percent since August 2005. In addition, 72 percent of these companies have outperformed their peers over the same period.
• Responsible investments take off: More than 200 institutional investors representing over US $9 trillion in assets signed onto the Principles for Responsible Investment (PRI) in just over one year.
  
• Action platforms, i.e. walking the talk: Of course such an event is a lot about dialogue but I am glad to see that there is follow through. For example through action platforms on: Climate, Water and Responsible Management Education.

As you see, a lot has happened there and is underway. You can read the complete preliminary results.

Support Make Poverty History

Make Poverty History is a great campaign I have been supporting since a couple of years. With white bands as its major symbol millions of people around the world are campaigning for the Millennium Development Goals. These where signed in 2000 to eradicate extreme poverty by 2015.

"Like slavery and apartheid, poverty is not natural. It is man-made, and can be overcome and eradicated by the actions of human beings."
- Nelson Mandela

070707 was 'half time' on the way to landmark 2015 and reports show that in some countries great has been achieved and in many others a lot more is necessary. Around the world this has been reason for another push to campaign for the universal goals against poverty. In Australia the campaign even lit up the Opera House!

Support the campaign to Make Poverty History in your country: www.makepovertyhistory.org

The Mali Project: How it all began - the first school

Two weeks ago I was writing on the development situation and some background of Mali. Now I'd like to dive deeper into the Mali Project. Before we come to the concept and current projects, read how the whole project began:

Paul Currie (Co-founder of Reach and film director) met Youchaou Traore whilst in Mali filming a documentary on child trafficking. Paul was inspired by the strength, vision and dedication of Youchaou - at this time translator next to being a teacher - in wanting to help his community. Youchaou had grown up an orphan, on the streets, so he understood the hardships his community faced and how precious it was to get an education. Paul could see that a little bit would go a long way and he committed to making Youchaou’s dream of a school a reality. He returned to Australia and inspired the Reach Crew to help.

The Australian young people lead by Elise Klein emailed this man, Youchaou Traore and told him they wanted to help. This was the start of a three year long relationship built only through emails where the young people set out to raise the money needed for the primary school. AUD$50 000 later, the school was completed. 130 students were enrolled in the first year. It has been labelled one the best schools in Mali and is available to the poorest of the poor.

On a self-funded trip, a small team of Reach Crew with the support of a Reach staff member and corporate supporter, visited the Kalabankoro community in late 2005 to gain first hand experience of the situation and to meet the community they had raised money to help.

In 2006, the Australian young people raised over AUD$70 000 to get the school to its final phase of a secondary school to accommodate students completing their secondary studies. 2006 also saw the creation of a micro finance organisation for Kalabankoro women to help generate economic development in the area. Again in late 2006 a self funded trip was organised to visit Kalabankoro community. In 2007 a community health centre was started in temporary rented premises.

See this inpiring video from a visit at the Mali Project from an earlier post. More about our plans on scaling up this great project soon...

Flying for half the price than train - kerosene's subsidy is a loose hot air balloon fueled by tax money

How to waste tax money, distort market competition and kill the climate at the same time? What sounds like an absurd question is reality every day: tax subsidy (or more correctly put exemption) of flights' fuel does the trick!

Take for example: Recently, I wanted to get from Munich, Germany to Geneva, Switzerland. Distance around 600km which you could perfectly do by car, train or flying. Train ticket is around 200€ return. Guess how much flying is? 90€!

I couldn't believe that environmental dubious - but undoubtedly more comfortable - flying is less than half the price if trains, not to mention the cost of a car. So why do we need kerosene's subsidy when it obviously distorts the competition and sets the completely wrong signal in environmental protection and sustainability. Shouldn't have taxes the function of setting the right incentives? Also the money on taxing flights could will be used for development assistance as unitaid does.

Where are the EU, Germany and the US here? Don't you need some $$$ to save the climate or to decrease your debt mountains? That would be real sustainability. And don't tell me that a moderate percentage on these super cheap flights would stop business people flying business class when there companies pay or would harm the economy on a big scale. Maybe it's the power of lobbies? But I can't imagine that the airways industry (kerosene untaxed) is more powerful than the car industry (car fuel heavily taxed). So why is the right thing not happening?

Don't get e wrong here, I am certainly not against flying per se and am a frequent flyer myself. But we just need to show responsibility for our consumption and behavior. Until we get this dangerous tax hole fixed setting off our carbon emission ourselves by initiatives such as Terrapass is a start!