CORPORATE SOCIAL RESPONSIBILITY: WALKING THE TALK

By Hazel Henderson and - - Reprint | | Print |

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SAINT AUGUSTINE, Nov 30 2004 (IPS) - Corporations today face a challenge from the world\’s newest superpower: global public opinion, with its power to make or break companies\’ brands and reputations in today\’s round-the-clock, global electronic marketplace, writes Hazel Henderson, author of \’\’Beyond Globalisation\’\’ and a creator, with the Calvert Group, of the Calvert-Henderson Quality of Life Indicators. Many companies will fail the test, as they seek to \’\’green-wash\’\’ their operations with advertising and public relations. Others try \’\’blue-washing\’\’ by engaging the UN Global Compact\’s ten principles of global corporate citizenship. Such companies actual performance in walking their talk is now increasingly monitored by legions of civic organisations and auditing firms The growing global debate over socially-responsible investing funds is a very positive development, since higher ethical standards and performance on broader social and environmental criteria will determine the future of capitalism itself. Indeed this re-shaping of capitalism and corporations to conserve the environment while serving human needs and aspirations for equity justice, health, education, and the rights of all will also affect humanity\’s survival on this small planet.

Adapting to all these changes is the challenge facing all corporations. At the same time they also face the challenge of the world’s newest superpower: global public opinion. Its power to make or break companies’ brands and reputations in today’s round-the-clock, global electronic marketplace now requires adapting to a new Age of Truth.

Many companies will fail the test, as they seek to ”green-wash” their operations with advertising and public relations. Others try ”blue-washing” by engaging the United Nations Global Compact’s ten principles of global corporate citizenship.

Such companies’ actual performance in walking their talk is now increasingly monitored by legions of civic organisations and auditing firms including SAInternational, of New York and London, SustainAbility and AccountAbility, both based in Europe, and ASRIA of Hong Kong, as well as the global social, environmental, and corporate ethical governance research of socially-responsible investment firms and public pension funds. All are wary of finding new Enrons, WorldComs, Parmalats, or Halliburtons lurking in their portfolios.

This monitoring of corporate ethics, integrity, their very missions and financial goals, as well as their commitments to addressing the world’s mounting problems keeps companies under scrutiny. Also in the cross-hairs of public opinion are corporate commitments to alleviating poverty, disease, environmental destruction, and to helping achieve the UN Millennium Development Goals.

US businessman Paul Hawken and corporate critic has closely scrutinised socially-responsible investing (SRI) funds and their various standards for screening companies held in their portfolios. This rapidly-growing segment of US and global capital markets needs such pressure to constantly upgrade its standards and criteria for measuring social, environmental, and ethical performance of all companies. As the vanguard of the rising concerns of all investors about the corporate and accounting scandals (those Enrons, Halliburtons, etc.), the socially-responsible investing industry must continue to lead in setting ever higher standards for 21st century capital markets.

The growing global debate over SRIs is a very positive development, since higher ethical standards and performance on broader social and environmental criteria will determine the future of capitalism itself. Indeed this re-shaping of capitalism and corporations to conserve the environment while serving human needs and aspirations for equity, justice, health, education, and the rights of all will also affect humanity’s survival on this small planet. This is why I called for the UN Global Compact to spin off from the UN to protect the UN’s reputation from corporate backsliders.

Paul Hawken’s critique is only one aspect of a much larger question: can capitalism’s current model and its globalisation of finance, markets, trade, privatisation, and currency regimes under its traditional assumptions continue without radical reform?

Attacking only the emerging SRI segment of the still-dominant model of socially and environmentally destructive capitalism will obviously reinforce this entrenched model with its enormous power, lobbying clout, and control of mass media. These forces of reactionary capitalism –whether on Wall Street, Frankfurt , London or Hong Kong– and companies in the old unsustainable fossil-fuelled industrial system, will welcome Paul Hawken with glee as their newest spokesperson.

This is unfortunate, since we know from past experience how often perfectionism, utopianism and visionary zeal can drive out the good, just as the theoretical best can drive out the better. Incremental reforms such as SRI need the time and space to experiment. New norms and ethical criteria need to gain a foothold in these markets, as well as society and most important, in mass media.

Today, we live in ”mediocracies” whatever our political systems. Media trumps politics, shapes culture, educates our children — for better or worse. Corporate advertising drives unsustainable consumerism and financial markets hooked on ever-rising GDP-growth and quarterly corporate profits.

For these very reasons, I founded Ethical Marketplace media as a global multimedia platform for raising the standards, benchmarks, and ethical performance of all marketplace actors through the power of information and mass media. (END/COPYRIGHT IPS)