Whether it is about achieving a higher purpose, increasing market opportunities, fulfilling socially responsible investment (SRI) index requirements or attracting new talent — especially generation Y — corporate social responsibility (CSR) is about change, at different organizational levels.
In the past two decades, most corporations have implemented CSR governance and management systems and reported progress on their CSR objectives. The number of CSR reports has increased, as have the scope and quality of the information published. There were fewer than 50 CSR reports following Global Reporting Initiative (GRI) guidelines in 2000 but, by 2011, there were 3,000.
Additionally, CSR awards and social indexes that identify best-in-class companies — such as the Dow Jones Sustainability Index (DJSI) — have flourished.
Nevertheless, applying traditional business analysis — by measuring what you manage and managing what you measure — is not enough to embrace the role and responsibility of corporations in addressing the complexity of sustainability challenges:
• In April 2010, when the Deepwater Horizon oil-drilling rig exploded in the Gulf of Mexico, BP was considered a best-in-class company in CSR and one of the DJSI “supersector” leaders. Forty days later, it was removed from the index.
• Chief sustainability officers (CSOs) are discouraged and frustrated when, during tough times, CSR is narrowed to a tedious reporting exercise and CSR projects suffer a loss of focus and shrinking budgets.
• Population will be an issue. The Earth’s population is expected to hit nine billion by 2040, three times what it was in 1960. In these conditions, achieving growth by selling more to more people will sooner or later hit the wall of Earth’s finitude.
The need for a deeper change
Academics and thought leaders — such as Michael Porter, a professor at the Harvard Business School in Cambridge, Mass., John Mackey, CEO and founder of Austin, Texas-based Whole Foods, and Yvon Chouinard, founder of Patagonia in Ventura, Calif. — are exploring and advocating for a deeper transformation of the way business is done. In this vein, the concept of conscious capitalism (CC), developed by Mackey, is based on four principles: commitment to a higher purpose; acknowledging stakeholder interdependence; conscious leadership; and conscious culture and management.
CC distinguishes itself from CSR in the sense that social responsibility is at the core of the business model, “rather than being added on later as a program to thwart criticism or help manage a business’ reputation,” says Mackey.
That’s something millennials, sensitive to meaning, contribution and integrity, adhere to.
“I’m very encouraged by millennials and their drive to make the world a better place. Businesses can do both by practising conscious capitalism,” says Mackey in a Jan. 15, 2013, article in Forbes. This concept is gaining more exposure with CC2013, a dedicated event in April in San Francisco.
Porter and Mark Kramer, a senior fellow of the CSR initiative at Harvard’s Kennedy School of Government, had a similar perspective in a 2011 article in the Harvard Business Review: “Most companies remain stuck in a ‘social responsibility’ mindset in which societal issues are at the periphery, not the core.”
Porter developed and presented his concept of “shared value” during the Greenbiz Forum held last February in New York. Beyond trade-offs, says Porter, “shared value involves creating economic value in a way that also creates value for society by addressing its needs and challenges.”
To truly embed this concept, leaders and managers will need “to develop new skills and knowledge — such as a far deeper appreciation of societal needs… and the ability to collaborate across profit/non-profit boundaries,” he says.
Developing leaders’ abilities
This means leaders will have to develop their ability to deal successfully with the complexity of sustainability challenges.
To better understand what it takes, David Rooke, a partner at an HR consulting firm in England, and William Torbert, a professor at Boston College’s Carroll School of Management, established a seven-level leadership development profile, in alignment with Lawrence Kohlberg’s stages of moral development. This reflects how leaders “interpret their surroundings and react when their power or safety is challenged” — from the pre-conventional opportunist, who is self-oriented, to the post-conventional alchemist, who generates social transformation.
Five per cent of leaders correspond to the pre-conventional (opportunist) stage while 15 per cent correspond to the post-conventional (including alchemists), and the vast majority (80 per cent) fall into three levels of the conventional stage, according to Rooke and Torbert’s 2005 article in the Harvard Business Review.
Based on this approach, researchers from the University of Laval in Quebec City examined the potential implications of action logics on environmental leadership. From their 2009 work The Action Logics of Environmental Leadership: A Developmental Perspective, it appears that, for an organization to strive beyond CSR as a management system, more of the post-conventional type of leaders will be needed.
The good news is “leaders can transform from one action logic to another,” according to Rooke and Torbert, in particular through skill development based on training and coaching, building networks and mentoring with peers.
HR leaders have a critical role to play as social responsibility becomes embedded in leadership and business practices. They are positioned to be real catalysts of this global business transformation at both individual and collective levels: by supporting leaders in their evolution through training and coaching programs; by inspiring and fostering changes in organizational culture; and by attracting a creative and talented new generation.
Sylvie-Nuria Noguer is a Montreal-based coach, accredited mediator and sustainability consultant. She can be reached at (514) 212-8176 or, for more information, visit www.sylvienuria-noguer.com.