BSR Insight | The Big Responsibilities of Big Business

After spending nearly a dozen years working inside the world of sustainable business, BSR’s Managing Director, Information, Communications, and Technology Practice Dunstan Allison Hope, SABMiller’s Global Head of Sustainable Development Andy Wales, and BAA Ltd.’s Director of Corporate Responsibility and Environment Matthew Gorman are publishing the book Big Business, Big Responsibilities (Palgrave Macmillan 2010) to “put their career choices to the test” and evaluate whether big business has changed for the better—and whether the change has gone far enough. (Yes to the first question, not yet to the second.) After writing this book, the authors, who met while studying for their master’s degrees at the U.K.’s Forum for the Future, are optimistic about the progress of the private sector. After taking stock of their careers, the three authors have reached the conclusion that they should continue to work within business to create change.

To coincide with the launch of their book (June 10 in the U.K. and July 20 in the United States), the authors discussed their concerns about the potential setbacks sustainable business could suffer as a result of the BP oil spill, which developments give them the most cause for optimism, and the important role of the “everyday champion” in sustainability.

For more information about the book and launch events, and to read the authors’ blog, visit www.bigresponsibilities.org.

What surprised you the most in researching and writing this book?

AW: It’s interesting that in the 11 years since we took our master’s degrees together, although we’ve taken different paths in terms of the industries we’ve chosen, we’ve still been able to learn a lot from each other. I’ve learned from Dunstan about some of the work he’s been doing in China, and what it means to work in a big company in a big emerging market. Matt’s brought his knowledge of the climate change agenda for industry, and I’ve been able to share my experience dealing with water and natural resource issues working for a large beverage company.

Even though we are three authors coming with a similar view of business and a similar educational background, having worked in different industries, we brought new insights together on a variety of different issues.

That is a hallmark of the fact that to be a leader in responsible business today, companies need to develop deep expertise and be proactive and pioneering on the issues that are material to their industry. The fact that we brought three authors to the table who are experienced in different industries lends an expertise to the book.

DAH: One of the lessons for me was the realization that if you’re going to make change in business, you need to be absorbed in the products, services, and technology of your industry. Ten years ago, I looked at big business as one single, homogenous entity. Now I realize that to promote sustainability effectively, you really do need to be absorbed in the specific characteristics of that company or industry.

In the book, we use the example of the Global Network Initiative, which brought together human rights groups, which know a lot about human rights but less about technology, and internet companies, which know all about technology and less about human rights. Yet through the collaboration, they have learned a lot about each other’s fields. So one of the big takeaways for me is how important it is for campaign organizations and NGOs to become familiar with the products, services, and technologies of the companies they’re dealing with.

Many people have spent their entire careers working in one sector, and I’d like to see greater movement between those sectors, given how important collaboration is for progress.

In light of recent events—the global recession, the BP oil spill, the Toyota recall—what do you think is the biggest risk to business’ focus on sustainability?

DAH: Over the years, I’ve noticed the impact that NGOs have had on business. It is significant that you now see businesses addressing challenges in a proactive way that you wouldn’t have seen 10 or 15 years ago.

But my concern right now—after the BP spill, the Toyota recall, and the recession—is that NGOs will disengage from business—that given recent events, they may feel the need to focus more on campaigning and exposing bad practices. But I wouldn’t want NGOs to forget about the impact they can have by collaborating with business to address shared concerns. If NGOs disengage, it could derail the enthusiasm and momentum of business to address some of the shared challenges we face as a society.

MG: Separate from the reputational issues that BP and Toyota face, I think the recession actually could play out positively in terms of sustainability. The recession will drive a focus on efficiencies, and a major focus of the sustainability agenda is greater resource efficiency, so that provides a real opportunity. The financial crisis has also illustrated just how interdependent the global financial system is, and what impacts irresponsible behavior can have. I think that focus will also play through to broader issues of corporate responsibility and the role that companies play in an interdependent global society. So, if anything, the recession could increase the focus on some of the issues we face in our day jobs.

AW: The most important lesson we can gain from BP at the moment is that just as business adds value by running its core business responsibly, so, too, can it cause damage to society if something goes wrong with its core business. Business’ primary role in society is to provide necessary goods and services to society in a way that is safe and provides value to people. Corporate responsibility is about running the core part of the business in a responsible way.

About the recession: We’re in a period in which policy makers are keen to return to growth. What we mustn’t forget is that our understanding of what underpins growth has changed in the last 15 years. It must be sustainable growth that is cognizant of the resource constraints around water, land for food, and biofuel. We now need a much more inclusive model of growth.

On the flip side, looking at recent events, what gives you the most cause for optimism?

MG: Two things jump out for me: The first is how companies are increasingly engaging with the policy agenda. In the book, we make the point that there’s a lot that business will do on its own. But equally, there are some areas where public policy has a clear role—a big example is climate change. It was really interesting in the run-up to Copenhagen to see 1,000 global companies signing up to the Copenhagen Communiqué to call on government to deliver a robust global climate deal. That was a really positive shift toward a level of engagement by big global companies that wasn’t there for Kyoto. And it’s a trend I see continuing.

The other one is the increasing consumer engagement in this agenda. Especially in the U.K, consumer interest in sustainability in the last five to 10 years has been steadily increasing, and companies are responding to that.

DAH: For me, a cause for optimism is the increasing fluency that CEOs have on this topic. CEOs from companies like Alcatel-Lucent and GE, who both recently spoke at BSR Conferences, are much more comfortable talking about this and are expressing their personal opinions on what it’s going to take to be sustainable.

AW: Years ago, there were a small number of first movers working on the bottom-of-the-pyramid concept, and we’re now beginning to see BOP opportunities, not just in small innovations, but in very serious parts of business. At SABMiller, we source grains from 28,000 small farmers for local beers for local consumption, and we aim to increase this in coming years. This creates a lot of local employment; one study conducted by Professor Ethan Kapstein at INSEAD concluded that every job created in our business in Uganda creates 100 jobs in the country as a whole.

The title of your book could imply that big business carries the burden of solving the world’s challenges. But in the book, you also talk about collaboration. How would you describe the “responsibilities” for each group—business, government, civil society, and consumers?

MG: It is interesting, that reaction to the title, because we were looking to highlight what business is doing that doesn’t always make it out there to mainstream awareness. But collaboration is a strong theme in the book.

In particular, how civil society groups engage with business in the future will be significant. The campaigning role of NGOs historically has been very important in holding the feet of business to the fire, and that will and should continue. Equally, though, the role of NGOs in collaborating with business to solve specific issues is growing in importance, and that’s a collaborative role that we see growing in importance.

Another key area is how business engages with government and policy makers. The Copenhagen Communiqué began in 2005 by leading U.K. companies and NGOs because these businesses recognized that climate was an issue, and they needed a policy framework to allow them to make the right investment decisions. But government felt that there would be business resistance to doing that. The group was trying to break that catch-22 and create the political space for government to develop the policy framework that was needed.

AW: I think it’s a mistake if we disaggregate the responsibilities of different sectors—companies have to do this, government has to do this, and NGOs have to do this, but together. At SABMiller, our work on water scarcity is about understanding the shared risks that we face together and coming up with shared solutions. Some of the resource challenges the world faces are so significant that no one sector can address them alone. This means that we need to work in innovative ways, and one enabler of this will be if people migrate more between the sectors during their careers—from government to NGOs to business—so that we have the rounded skill sets needed to work on some of these challenges. This was one of the motivations that lay behind Sara Parkin’s original vision for the Forum for the Future master’s degree we all studied.

Speaking to our audience of practitioners and leaders in sustainable business, do you have advice about becoming what you describe in Chapter Nine as an “everyday champion” for sustainability?

DAH: Businesses often have a culture that encourages change, innovation, and rapid decision-making, and those are the exact same characteristics that are needed to tackle sustainability challenges. Look for those opportunities to drive change and innovation to do things differently. Business can actually be quite a fertile place for new ideas.

MG: Your most important role is about raising awareness of these issues more broadly in your business. I can use my company, BAA, as an example: We run big airports, and since big airports are big energy users, we’ve set some challenging CO2-reduction goals. But delivering those goals on the ground relies on tapping into the ideas, knowledge, and enthusiasm from throughout the business. How do you give people the license and channels to come up with the ideas? We run big green events in each of our business units, and by engaging people, the results have been very successful. It’s really important for people in sustainability roles in companies to provide the opportunities for people throughout the organization to become “everyday champions.”

For company leaders—CEOs and executives in particular—it’s also important to set the right kind of tone that this is a significant agenda item for the company.

AW: Over the next 15 to 20 years, business will change dramatically, and the challenge and opportunity for the everyday champion is to think of how your business will change in the long term and what’s needed in the short term to enable the company to prosper in the long term. Sustainability is starting to be one of those big trends, and the effect of that will be dramatic over the next 15 years. Imagine what the world will look like in 15 or 20 years, and think about how you can help your business prepare for that now.