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Category: Concepts
Environmentally sound and financially rewarding? Key findings from an exploratory study on the Science Based Targets Initiative (SBTi)
By Milena Bar, Ottilia Henningsson, & Dr. Kristjan Jespersen
The Science-Based Targets initiative aligns firms' emission reduction targets with a net-zero emissions pathway. Firm commitment yields significant abnormal returns which are larger for firms committed to larger emission reductions and for high-emitting firms.
The IPCC's sixth assessment established a code red for humanity and provided mounting evidence of widespread, rapid, and intensifying climate change. The Paris Agreement, ratified by over 190 states and non-state actors in 2015, formally stipulated the goals of limiting global warming to ideally 1.5°C and at a minimum well below 2°C with the aim of reducing the most catastrophic damages related to climate change onto the natural environment, human health and global financial market. The need for climate action is urgent and requires engagement from governments, individuals as well as corporate and investor participation.
Combatting climate change requires voluntary private sector engagement
Incentivizing corporations and investors to act voluntarily on climate change is critical to redirect private capital towards environmentally responsible business practices. The Science Based Targets initiative (SBTi) is becoming the global standard for firms seeking to set emission reduction targets aligned with the required global decarbonization targets established in the Paris Agreement. By encouraging voluntary corporate carbon emission reductions, the SBTi is a critical tool to reduce the private sector's reliance on fossil fuels.
2021 record year for new approved targets and committing firms for SBTi
Since its founding, just seven years ago, SBTi has experienced exponential growth in the number of committing firms and has mobilized firms representing more than a third of global market capitalization to reduce their carbon emissions. In 2021 the initiative took steps to increase the ambition level of firms' emission reduction targets. When first established, firms could commit to reduce their emissions either aligned with the reduction targets of 1.5°C or 2°C. However, from summer 2022, the initiative will only be accepting the more ambitious emission reduction target, as set out in their campaign Business Ambition for 1.5°C.
Since company engagement ultimately comes down to whether committing to SBTi will drive wealth for shareholders, understanding the stock market response to firm commitment to the SBTi is essential not only for businesses looking to commit, but also for investors. To justify the integration of a climate credential such as the SBTi in investment management, it needs to be able to provide excess returns. To understand the stock market reaction to firms' announcement of SBTi commitment, we conducted a short-horizon event study on a portfolio of 1.535 firms.
Firm commitment to the Science Based Targets initiative aligns environmentally sound practices with financial viability
Firm commitment to the SBTi indeed yields a positive announcement abnormal return and thus speaks to the credibility of SBTi in constituting a credible signal of firm commitment to sustainable business practices. Even more encouraging is the finding that firms committed to the 1.5°C target experienced substantially higher returns, indicating a stronger positive market reaction when exhibiting a higher cost of commitment and higher target ambition level. The market evidently differentiates between ambition levels by rewarding businesses that are pledging themselves to more demanding emission reductions and a more climate-friendly business strategy. These findings are particularly relevant in light of the SBTi making the more stringent emission reduction target the new standard for all firms via their campaign Business Ambition for 1.5°C and may encourage more firms to increase their efforts in reducing their greenhouse gas emissions.
Stock price reaction in response to commitment to the Science Based Target initiative
In turn, high carbon emitting firms, proxied here by firms identified by the CA100+ list, reaped the largest reward in their stock price following commitment. This finding further confirms the market's more sensitive reaction to costlier commitments, but also creates concern about whether the SBTi may have to rethink a recent strategic decision. The SBTi announced that they will not be accepting targets set by firms operating in the Oil and Gas industry, thus abandoning the industry specific methodology for fossil fuel firms which had been in development for several years. Fossil fuel firms have a key role to play in successfully achieving the goals of the Paris Agreement, thus begging the question of whether the SBTi is not missing out on covering an industry critical to combatting climate change and a sector of firms who are highly rewarded by the market for committing to reduce their emissions.
As climate disasters become more prevalent and more severe, firms who fail to transition to a low, or zero, carbon business model can be expected to become more vulnerable in the long run. To expand the analysis, we further tested the performance of a portfolio strategy screened for firms committed to the SBTi. Despite the underperformance of an SBTi screened portfolio against a portfolio consisting of only non-committed firms in the medium-term, there is reason to believe that a portfolio with SBTi committed firms may provide higher returns in the future. Given that SBTi commitment represents a commitment to aligning the firm's operations with the net-zero emissions pathway, it can be perceived as a safer bet in the long run. Moreover, portfolios consisting of SBTi firms were shown to be characterized by lower volatility. The objective of investors is shifting to increasingly sustainable and impact focused investment profiles, hence portfolio and asset managers may use SBTi commitment as a filter in security selection to achieve their client's demand.
Financial institutions have a key role to play in driving systematic economic transformation towards a global net-zero carbon emissions economy in their power to lend and invest. As evidenced, firm commitment, ambition level and cost of commitment are reflected in the stock's pricing mechanism, making the business case for the firm to set ambitious targets for decarbonization, and providing rationale for investors to in the short run utilize the market's reaction to firm commitment in investment processes and strategies.
Milena Bär is a recent graduate in MSc Applied Economics and Finance and is working as a student researcher in ESG and Sustainable Investments at Copenhagen Business School. Her research projects are mainly within the field of ESG metrics and regulation, with a focus on the investor's side.
Ottilia Henningsson recently graduated with a MSc in Applied Economics and Finance from Copenhagen Business School with a keen interest in the transition towards a more sustainable financial industry.
Photo by Matthias Heyde on Unsplash
Posted on June 30, 2022 January 5, 2023 Categories About, Accountability, Concepts, CSR, Environment, Featured, Initiative, Investment, News, Research, SustainabilityTags #alignment, #carbonfootprint, #climateaction, #climatechange, #climatecrisis, #commitment, #Corporations, #decarbonization, #economic, #emissions, #environment, #finance, #financialinstitutions, #financialviability, #IPCC, #netzero, #ParisAgreement, #reduction, #SBTi, #sciencebased, #ScienceBasedTargets, #sixthassessment, #targets, #transformation
Constructing Social Portfolios: A Quantitative versus Screening Approach
By Alina Hofer, Lea Katharina Kasper & Dr. Kristjan Jespersen
When we talk about ESG, one could argue that there is a strong bias focused on climate investing, reaching net zero targets as well as good corporate governance and diversity themes. But there is much more to ESG. The "Social" dimension of ESG is hugely under explored and developed and covers under studied issues such as how companies treat their employees and care for the responsibility of their products. Still further, assessments linked to human rights codes and social impacts is only now receiving the attention it truly deserves. Although the importance of these topics is undisputed, we see that attention to particularly address the social dimension has been lacking, whereas awareness of other ESG risks has been rising immensely during the past years.
Not only is the general knowledge and focus on the social dimension of ESG limited, its overall implementation in portfolio management has not been sufficiently experimented with and addressed.
The delay to properly implement the "S" in ESG is often explained because of the challenges to quantify, assess, and integrate social factors generally.
However, this argument should not be a sufficient justification for neglecting the "S" in ESG and for investigating a possible relationship between a good social rating and superior financial performance. To tackle this lack of awareness, we constructed two portfolios which integrate Refinitiv's Social ratings based on different integration strategies and test their performance towards the market between 2012-2021.
When integrating social – or other ESG – ratings into the investment process, we find there is often disagreement on how to best consider these factors in portfolio construction. Currently, it is most common to apply screening or best-in-class strategies. These approaches aim to remove assets that do not fulfill certain criteria from a defined investment universe. Negative screening would mean to remove those companies that perform worst from the pool of assets. Inversely, an investor could also only continue with those firms who at least have a certain minimum rating. For both approaches, the portfolio weights are then allocated to the assets that remain. This is done using conventional indicators such as value, size or expected risk-adjusted returns. In our study, we, however observe a clear shortcoming of this approach: After screening out the worst 10% "social performers" and allocating weights based on a risk-return trade-off, the portfolio does not necessarily promise a higher overall ESG score than a portfolio would reach which does not consider the ratings at all. Although the portfolio yields a solid financial performance, this raises the question whether any ESG-related impact has been made with this integration approach.
To make sure an investor can improve his exposure to assets that score well in the social dimension, we integrate the rating scores directly into the optimization problem of our second portfolio. This leads to a very different outcome on the social rating:
Looking closer at the mechanics of this approach, we extend the traditional Sharpe Ratio with the ESG factor, meaning to add by how much it a company "outscores" the market average. This results in the following "Social Sharpe Ratio":
We add a fifty percent weight split, which can be flexibly adjusted towards investor preferences. And we now balance a risk-return-social trade-off. This explains why the second approach over 9 years constantly beats the market average in respect to the integrated Social factor without sacrificing any performance on the financial side. In fact, we find that in 5 out of 9 years, the second strategy would have also led to higher risk-adjusted returns measured by the Sharpe ratio. Moreover, returns were consistently higher compared to the market benchmark. This result is quite remarkable, given that it is often questioned whether investors need to sacrifice returns in order to make their investments more socially responsible.
Lastly, our study resulted in one more unforeseen twist when it comes to integrating ESG ratings. That is, the question whether we can actually trust the rating scores. To answer this, we must first understand how scores are created. Rating providers look at an immense amount of publicly disclosed information, reports and policies. And based on what company's report, rating scores are aggregated. However, it is clear that a firm would only report on things they do well. In fact, we observe that with increased reporting, ESG scores also improve. But what about the real-life actions and impacts? Some rating providers offer a combined score, which also considers media reports on the involvement in controversial actions. As these scores are only available at an aggregate level, we calculate them on a single-pillar level using Refinitiv's methodology, which adjusts for firm size and industry. Looking at specific examples in our portfolios, we found that the impact of such controversy involvement on the overall score could still be larger. Nevertheless, we stress that in order to have a complete picture of a firm's ESG behavior, the impact of these controversies needs to be reflected in investment decisions.
To sum up, given the results of our research, there are three things we aim to highlight:
It is crucial to increase investors' awareness of "Social" matters and provide a better landscape for impact investments in this specific dimension.
Integrating ESG ratings does not always promise a better ESG performance for the whole portfolio. Therefore, it is necessary to focus on strategies that lead to actual impact.
Third, looking beyond the information that is disclosed by companies themselves, more attention should also be addressed to "real life actions" when making investment decisions.
Lea Kasper has recently graduated with a MSc. in Finance and Investments (cand.merc.) from Copenhagen Business School. Her interest and enthusiasms about sustainability and how to more efficiently integrate non-financial factors in investment decision-making contributed to her choice to further investigate this topic throughout the master thesis.
Alina Hofer has recently graduated with a MSc. in Finance and Investments (cand.merc.) from Copenhagen Business School. Being passionate about creating impact through ESG-aligned investments, she was excited to further focus on her interest in this field throughout the master thesis.
Image source: SustainIt
Posted on June 27, 2022 January 5, 2023 Categories About, Accountability, Concepts, Featured, Investment, News, Research, Social, SustainabilityTags #decisions, #disclosure, #ESG, #ESGscore, #ESGstrategy, #finance, #Impact, #Investing, #investment, #performance, #quantitative, #ratings, #research, #screening, #social, #socialinESG, #socialissues, #socialresponsibility, #SocialSharpeRatio, #SRI, #strategies, #sustainability, approach1 Comment on Constructing Social Portfolios: A Quantitative versus Screening Approach
Do nudges work in organisations?
By Leonie Decrinis
Introduced by Thaler and Sunstein in 2008, nudges have become popular policy tools to change the behaviour of consumers and citizens in desirable ways without compromising their freedom of choice. Their success in public policy domains has sparked the interest of management teams to apply nudges in organisations as means to guide the decisions of employees. However, in comparison to the ever-growing literature on the use of nudges in the public sphere, relatively little is known about their applicability at the workplace.
More and more organisations are pursuing corporate social responsibility and sustainability strategies, for which changes in workplace behaviour are key. Nudges can help organisations promote the needed behavioural change in relevant domains, such as employee health, energy conservation, green transportation, waste management, ethics and diversity, to name just a few. A number of studies report, for example, success in promoting healthier food choices of employees through alterations in the choice architecture of workplace canteens. Other nudging interventions have led to reductions in electricity use by providing feedback to employees on the desirable behaviour of peers. Regarding workplace diversity, evaluating job candidates jointly rather than separately has proved to promote gender-mixed teams. Further, in the ethical domain, honest employee behaviour appeared to rise by reminding people about their shared moral values at critical decision points.
The mentioned examples provide an idea of the potential of nudges as cost- and time-efficient alternatives to traditional organisational intervention tools that mostly involve trainings and sanctions with limited success. A key advantage of nudges is their behaviourally informed approach, acknowledging the role of unconscious decision processes that often contradict people's good intentions.
By altering the choice environment rather than trying to rewire the human brain, nudges can steer employees to desirable behaviours while preserving their freedom of choice.
Just recently, the United Nations Behavioural Science Week has convened experts from international agencies, governments, academia and the private sector to discuss about these possibilities. However, what has also been recognised, as much as workplace nudging involves opportunities, it comes with challenges that need to be addressed.
The first question that one might ask is how nudging individuals inside organisations for specific concerns leads to impactful organisational change in line with strategic corporate goals. Theory tells us that this is possible indeed by nudging a significant amount of employees. Organisations are made up of people. When enough people are nudged to alter their behaviour in a specific way, the new behaviour has the potential to become a norm, i.e. a rule for expected and accepted behaviour. Once embedded in the culture of an organisation, people are likely to conform to the new norm, so that organisational behaviour changes as a whole.
This idea comes with a caveat though. Organisations are complex social constructs with formal and informal components of organisational culture conveying a variety of messages to employees. A gentle nudge might thereby not be strong enough to induce the desired behavioural change. Signals elsewhere in the organisation could simply counterbalance the effect of a choice-preserving nudge. Typically, nudges are designed and tested for very specific instances of human behaviour. What works in one context might not work in another one, sometimes even resulting in unintended consequences. Clarifying the effectiveness of nudges is difficult in complex organisational settings, particularly regarding their impact in the longer term. This requires consequent piloting and testing over considerable periods of time, allowing for a flexible and adaptive approach to a particular setting.
Contrary to the idea of nudges being top-down policy tools, successful intervention implementation in complex organisational choice environments requires the active contribution of employees. The latter should be consulted about their needs, involved in the design of nudges and informed about the intervention implementation. A high degree of transparency is also necessary to ensure the acceptance of nudges by employees.
Another aspect to keep in mind is that widespread organisational change, such as switching from a solely profit-oriented corporate performance to a more encompassing economic, social and environmental one, cannot be addressed by nudges alone.
Complex organisational problems need to be broken down into micro pieces, suited to be managed by a variety of measures and instruments. Not all of the resulting aspects will have human behaviour at their core. Some might be fundamentally technological in nature, requiring innovative technical solutions. For those problems that remain to be behavioural, the ones that involve serious risks will always call for stringent enforcement tools. Others, however, might be better addressed through a voluntary, trust-based approach. This is where choice-preserving nudges come into play. Clearly, a single nudging intervention can only address a very specific concern. The wider organisational success depends on the aggregate of multiple nudges as well as their interplay with other policies. Measures ultimately need to send consistent messages about desirable behaviours, aligned with an organisation's broader strategic goals. By influencing organisational culture in an encompassing way, widespread organisational change will gradually take place.
Beshears, J., & Gino, F. (2015). Leaders as decision architects: Structure your organization's work to encourage wise choices. Harvard Business Review.
Foster, L. (2017). Applying behavioural insights to organisations: Theoretical underpinnings (EC OECD seminar series on designing better economic development policies for regions and cities). Paris: OECD and European Commission.
Ilieva, V., & Drakulevski, L. (2018). Applying behavioral economics insights at the workplace. Journal of Human Resource Management.
Venema, T., & van Gestel, L. (2021). Nudging in the Workplace. In R. Appel-Meulenbroek, & V. Danivska (Eds). A Handbook of Theories on Designing Alignment between People and the Office Environment.
Leonie Decrinis is PhD fellow at Copenhagen Business School with research interests in corporate social responsibility, sustainability governance and behavioral sciences. Her PhD project focuses on applying behavioral insights to corporate sustainability in order to align governance objectives with organizational behavior.
Photo credit: Rudzhan Nagiev on iStock
Posted on June 23, 2022 January 5, 2023 Categories About, Behaviour, Concepts, CSR, Featured, Initiative, News, Policy, Research, SustainabilityTags #behavioralchange, #behaviour, #change, #consumers, #CSR, #Employees, #freedomofchoice, #nudge, #nudges, #nudging, #organisationalchange, #Organizations, #tool, #workplace
ESG investing in a changing regulatory environment: investing in active or passive ESG financial products?
By Marco Morazzoni and Dr. Kristjan Jespersen
The impending climate crisis emphasizes the need to mobilize large-scale investments to finance the transition towards a more sustainable and inclusive economy. The financial sector plays a pivotal role in this context, as it allocates capital from investors who wish to pursue financial and non-financial objectives to corporations and stakeholders who need these resources to empower the sustainability transition.
Over the past decades, individual investors have become aware of the risks inherent in unsustainable business practices, being increasingly interested in financial products that combine a competitive risk-adjusted return with Environmental, Social and Governance (ESG) criteria. Despite the increase in funds, indices and benchmarks that include ESG dimensions, the universe of ESG financial products remains difficult to navigate for individual investors due to the range of investment strategies that can be used to pursue ESG goals, such as negative and positive screening, best-in-class, ESG integration, impact investing and ESG engagement. In addition to ESG strategic considerations, investors ought to consider the level of active management inherent in their ESG products, since it has considerable implications for financial returns and the ESG objectives pursued.
In fact, while some financial products have an active investment approach, trying to beat a reference benchmark, others merely aim to replicate the ESG impact and financial performance of an index.
'Active versus passive' debate
The literature on conventional active and passive investing is almost unanimously in favour of long-term passive investing, due to active managers' inability to consistently beat the market and to the lower fees charged by passive funds. However, the 'active versus passive' debate in the context of ESG investing is more nuanced. This is because ESG investing entails the pursuit of intangible and hardly quantifiable goals that go beyond the achievement of mere financial returns. Furthermore, due to the different definitions and methodologies used in the assessment of ESG performance and the resulting unrealiablity of ESG data, the trade-off between impact and financial returns can be difficult to reconcile.
A study conducted on 78 ESG active mutual funds and 15 ESG exchange-traded funds (ETFs) seeks to contribute to the debate by illuminating the financial and non-financial features that characterize these sustainable financial products. The funds were selected from Morningstar Direct according to specific criteria, such as: availability of an ESG rating, European domicile, invested in equity, active investment approach (for mutual funds) and passive investment approach (for ETFs).
By constructing an equally-weighted portfolio for the selected ESG active mutual funds and ESG ETFs, the study used the CAPM, three-factor, four-factor and five-factor model to compare the portfolios' risk-adjusted perfromance before and after fees. To increase the robustness of the study, the regression analysis was conducted on various market benchmarks, such as MSCI World, STOXX Europe 600, MSCI World ESG Leaders and MSCI Europe ESG Leaders.
The regression results indicated that the ESG active portfolio outperformed the ESG passive portfolio both before and after accounting for management fees. Controlling for the criteria used in the selection of the funds, the active outperformance could be attributed to the funds' instrinsic characteristics, such as investment orientation, ESG investment approach and ESG scores. Accordingly, 77% of the ESG active portoflio had a global investment orientation compared to 27% of the ESG ETF portfolio. This entails that the active portolio covered more geographies, exhibiting higher diversification and improved risk-mitigation.
Further, 83% of the active portfolio practiced ESG engagment, a strategy that previous literature associates to superior financial returns and improved ESG impact.
By engaging with companies on ESG issues, ESG active funds may have been able to help 'lagging' firms improve their ESG performance, while enabling 'leading' firms to address their ESG issues. With respect to ESG scores (Morningstar and MSCI), the active portfolio displayed a lower overall ESG score compared to the ESG ETF portfolio. This finding could suggest that the active portfolio invested in lower rated companies on average, with the objective of helping them transform their ESG strategy and thus pursue higher risk-adjusted returns.
Insights to individual investors in ESG financial products
Recognizing the limitation derived from the small sample size and the fact that the active outperformance might be due to the specific funds selected, the findings were used to provide a set of insights to individual investors who wish to invest in ESG financial products.
Firstly, individual investors were categorised into ESG-unaware, ESG-aware and ESG-motivated, according to the investor labels used by Pedersen et al. (2021) "Responsible investing: The ESG-efficient frontier". This categorization simplified reality to the extent that it became easier to derive actionable insights. Furthermore, it provided more granularity with respect to investors' prerogatives regarding the trade-off between the pursuit of an ESG impact versus a risk-adjusted return.
Based on this categorization, investors who disregard ESG information (ESG-unaware) should invest passively in broad conventional ETFs or in a diversified portfolio of more specific conventional ETFs.
Investors who consider ESG information for risk-mitigation purposes (ESG-aware) ought to focus on the level of selectivity displayed by active managers in their stock-picking activity, measured in terms of high/low R-squared. If active managers are highly selective (low R-squared), ESG-aware investors may consider foregoing part of their return, due to the higher active management fees, and thus benefit from managers' ability to pursue a greater ESG impact and potentially higher risk-adjusted returns.
Conversely, if active managers exhibit low selectivity with respect to a reference benchmark (high R-squared), investors would be better off investing passively in broad ESG ETFs or in a diversified portfolio of more specific ESG ETFs. Lastly, ESG-motivated investors may be better off investing in ESG active funds who practice ESG engagement, as the higher fees charged by these funds would worthwhile, given the superior ESG impact inherent in ESG engagment strategies.
Regulatory considerations
In addition to the empirical findings, the study also included regulatory considerations in the assessment of the suitability of active versus passive ESG financial products for individual investors. This was critical, since the new MiFID for sustainability preferences will come into force on the 2nd of August 2022.
According to this regulation (2021/1253), investment firms will be obliged to ask their clients about their sustainability preferences and find out whether they are interested in sustainable financial products. If the answer is affirmative, financial advisors will only be allowed to offer MiFID-aligned products to their clients. A MiFID-aligned product will have to include a minimum portion of 'environmentally sustainable Investments' (SFDR article 9), EU Taxonomy-aligned investments, or enhanced article 8 investments, consisting of article 8 investments (SFDR article 8) which also include Principal Adverse Impact (PAI) indicators.
Linking the new regulatory requirements to the findings of this empirical research, it is reasonable to expect that ESG-unaware investors will no longer exist, as investment firms will be legally required to inform these clients about the ESG implications inherent in their investments. This will give rise to an increase in supply of sustainable financial products (MiFID-aligned), as investment firms strive to keep up with the increased demand for these products. The rise in supply will most likely be larger than the increase in demand, since a portion of the new ESG-aware investors might continue disregarding ESG information, if ESG financial products are priced unreasonably (excessively high management fees). This will ultimately lead to higher competition among investment firms, with a consequent downward pressure on fees in the long-run. Lower investment costs could subvert individual investors' incentives, as they decide on whether to invest in ESG active or passive funds. Accordingly, it might become desirable for ESG-aware investors to invest in ESG active funds who practice ESG engagement, as opposed to it being a strategy exclusively suitable for ESG-motivated investors.
The information contained in this blog post is not to be taken as constituting the giving of investment advice or recommendation. The reader is acting for its own account, and they will make their own independent decisions as to whether any investment is appropriate based upon their own judgment.
Marco Morazzoni is a recent graduate in MSc Applied Economics and Finance from Copenhagen Business School. Having an interest in finance and ESG, he wrote his master's thesis on "ESG exchange-traded funds versus ESG active funds: how can individual investors pursue ESG objectives while achieving competitive risk-adjusted returns?"
Photo: Khanchit Khirisutchalual on iStock
Posted on June 17, 2022 January 5, 2023 Categories About, Accountability, Concepts, Featured, Investment, Models, News, Regulation, Research, SustainabilityTags #active, #climatecrisis, #ESG, #ETFs, #EU, #European, #finance, #financialmarket, #financialproducts, #Investing, #investment, #investors, #MiFID, #mutualfunds, #passive, #portfolios, #regulation, #regulatory, #sfdr, #sustainability, #transition, pressure
Corporate Social Responsibility (CSR) in Asia: Then and now
By Wendy Chapple & Jeremy Moon
This blog post is a repost and has first been published by Business and Society (BAS) blog on 27th of April 2022.
It is both a bit weird and a great honour to be invited to reflect on our paper, "Corporate Social Responsibility (CSR) in Asia: A Seven Country Study of CSR Web Site Reporting". The process has given us a chance to reflect on what we knew then, what we know now, and how much things have evolved. Our reflections cover memories of the context and origins of the paper; the data available – and unavailable – to us at the time; the approach we took – and what we see as its virtues – and the results; and the relevance of the paper to CSR in Asia today – nearly twenty years on.
As is often the case, the origins of a well-known paper are curious. Our paper grew from the internationalization strategy of the University of Nottingham (UoN) where we then worked in the International Centre for Corporate Social Responsibility (ICCSR). UoN had opened a campus in Malaysia and was opening another in China. So, the Vice-Chancellor encouraged us to engage with our colleagues there …which made us think that we should probably know a bit about Corporate Social Responsibility (CSR) in Asia … hence the paper. Little did we know what this would lead to!
Thanks to the ICCSR, we had the funds to employ researchers with whom we analyzed web site reporting of 50 companies' CSR in seven Asian countries: India, Indonesia, Malaysia, the Philippines, South Korea, Singapore, and Thailand (bringing a range of business systems in terms of size, religion and culture, political system, and economic development). Hang on, you say, what about China? Our answer is simply that at that time there were barely any Chinese MNCs with English language website reporting… which is certainly not the case now! Although our choice of sample skewed the population to the larger companies with a strong international business profile, this did not concern us as it strengthened the testing of the CSR-shaping role of national business systems.
We focused on broad CSR waves, i.e. community involvement, socially responsible production processes, and socially responsible employee relations. Whilst it enabled broad generalizability of the character of CSR nearly twenty years ago, it does raise some questions of compatibility with current CSR agendas in Asia. However, the more inductive identification of component CSR issues (e.g. community development; education & training; health and disability; environment) makes the findings amenable to temporal comparison, providing a more fine-grained analysis of activity within the waves. We also focused inductively on the dominant CSR modes (i.e. how the issues were addressed). This is when things got interesting. We started to see distinctive country patterns emerge in terms of issues within the waves (e.g. community issues were particularly prominent in India, Thailand, Malaysia and the Philippines, but less so in the other three countries), but this was not the case in the modes. The modes deployed within each of the waves were strikingly similar: philanthropy dominated community investment, and codes and standards dominated production processes. In other words, the "what" rather than the "how" was nationally distinctive.
Some conclusions now seem uncontentious, most obviously that 'community involvement' is the CSR priority in Asia. Similarly, there is no "Asian CSR" model, but a set of nationally distinctive patterns of CSR behaviour, resulting from the national business systems, rather than development. Reflective of the impact of globalization on CSR, we found that companies operating internationally were more likely to adopt CSR than those operating only in their home country. One might expect that international exposure might lead to an increase in similarity of approaches across countries; however, we instead found that the CSR of the multinational companies operating in Asian countries tended to reflect their host rather than their home countries, reinforcing the national distinctiveness. However, this finding may be a little simplistic in the light of emerging tensions between international CSR approaches and host country experiences.
It is great to see that CSR in Asia has attracted a volume of research and we are delighted that our paper has been a reference point for some of this research.
Blog Editor's note: The authors' paper, "Corporate Social Responsibility (CSR) in Asia: A Seven Country Study of CSR Web Site Reporting" , is open access until December 31st 2022 as part of the journal's 60th anniversary celebrations
Jeremy Moon is Professor at Copenhagen Business School, and Chair of Sustainability Governance Group. Jeremy has written widely about the rise, context, dynamics and impact of CSR. He is particularly interested in corporations' political roles and in the regulation of CSR and corporate sustainability. He is the Project Lead of the RISC research project.
Wendy Chapple is a full Professor of International Business and CSR at the Vienna University of Economics and Business (WU Vienna). She has played central roles in programme design and development, designing CSR related programmes and has been programme director for MSc and MBA programmes in CSR in the UK. Wendy gained recognition for the development of faculty, programmes and research, by winning the Aspen Institute faculty pioneer award in 2008. At WU, she will contribute CSR and Sustainability modules to the CEMs and undergraduate programmes.
Photo: Wikimedia Commons
Posted on June 16, 2022 January 5, 2023 Categories About, Concepts, CSR, Featured, News, Reporting, Research, SustainabilityTags #agenda, #asia, #community, #CSR, #CSRAsia, #Employees, #Globalization, #Impact, #involvement, #reflections, #relations, #reporting, #research, #socialresponsibility
Institutions matter: The importance of institutional quality when embedding sustainability within the capitalistic realm
By Lisa Bernt Elboth, Adrian Rudolf Doppler, & Dr. Kristjan Jespersen
Institutions not only structure any sort of social interaction [1], but are also essential in solving societal problems [2], such as climate change and the associated threat towards a fair and just future. It is not without reason that the United Nations particularly emphasized institutional progress within SDG 16 [3] to advance to a more effective, inclusive, and accountable society. In a recent study, it was found that institutions matter to a great extent when scrutinizing the relationship between corporate financial performance (CFP) and ESG performance. More specifically, the institutional environment a company finds itself in determines whether sustainable business practices get transformed into financial returns.
The claim that more sustainable companies are outperforming their not so sustainable peers is not new [4] and the consequent shift of investors' preferences towards more sustainable companies has been taking place with increasing speed over the last decade [5]. Associated wake-up calls and the urge to take ESG into consideration are not surprising either. Besides the alleged desire of investors for a just and sustainable future, this shift is more likely based on the theory that sustainable finance delivers abnormal returns [6]. But is the relationship between sustainable behavior and financial performance as straightforward as it is disseminated? Are more sustainable corporations indeed more likely to achieve better financial results regardless of where they are and what they do?
In fact, when utilizing ESG scores, rankings, and performance as a proxy for sustainable behavior, two meta-analyses [7] [8] concluded that in most empirical studies the resulting relationship was not as simplistic, universal or linear as it is often propagated. In a corresponding literature review, the researchers also identified a large number of discrepancies among scholars in how to statistically model the relationship, what control variables to use and how to even quantify the dependent and independent variables of focus. Following these insights, the researchers uncovered a determining factor in establishing and shaping the emphasized relationship – institutional quality.
The final sample consisted of datapoints from 6,976 corporations, situated in 75 different countries over a period of eleven years or, specifically, from 2009 to 2020. Subsequently, these were analyzed applying fixed effects panel regression models. Both an accounting- and a market-based measure were used to quantify corporate financial performance, respectively, Return on Assets (ROA) and Tobin's Q. Meanwhile, ESG performance was proxied by ESG scores from Refinitiv (former Thomson Reuters). The variables associated with institutional environment were split into
Institutional Quality, calculated through a factor analysis and based on the World Governance Indicators from the World Bank and
Industry Sensitivity, a dummy variable equal to 1 if the GICS industry of a firm was deemed sensitive towards ESG.
Institutions are among the determinantal factors for the link
Interestingly, the general statistical analysis of ESG and CFP did not yield any significant results, however, when moderating effects stemming from the institutional environment were introduced, this changed. Under high institutional quality, the researchers found a positive relationship between ESG scores and financial performance. Contrarily, the relationship was negative under low institutional quality. Exemplified below by the case of Finland 2012, Argentina 2018 and Zimbabwe 2012, institutions can be seen as the determining factor for direction of the focal link. Furthermore, the industrial environment a corporation finds itself in was found to affect the relationship ambiguously. Generally, sensitive firms seem to receive relatively less financial gain for improved ESG performance, and it may even be negative.
Possible explanations for such dynamics
Legal institutions, such as environmental regulations, labor laws or health and safety requirements, can serve as the means of reflecting sustainable behavior inside a company's balance sheet. Finland was for instance the first country to introduce a carbon tax capturing corporate pollution by giving it a price and hence affecting accounting profits.
In highly corruptive settings, where the trust of the general public is lacking, the likelihood of sustainable activities being perceived as greenwashing and thus not rewarded by investors, could be another reason for an inverse relationship in low institutionally developed regions.
In line with the previous, when accountability is low, and corporate entities can disclose information without third party verification, it could be relatively easy to stay focused on short-term profits through unsustainable practices but still receive a better ESG rating.
In environments with low institutional quality, banks tend to only give out short-term loans in order to reduce their own risks. This can lead to a vicious cycle of corporate lenders also only focusing on short-term profit maximization which then again decreases their access to capital, constraining their ability to engage in long-term sustainable practices.
Putting the SO WHAT into practice
When setting out for systemic change, it is important to ensure the necessary institutional environment in order to encourage individuals, as well as corporate entities to act in the best interest of the entire society and the planet. Thereby, a bottom-up approach focusing on incentivizing every individual and a top-down approach, fostering legal macro-level change can be synthesized, leading to the best possible outcome. These institutions should seek to maximize accountability, transparency, and mechanisms to internalize negative externalities. Corporations within such environments should fully leverage opportunities associated with sustainable practices, such as cheaper access to capital, in order to incrementally advance the progress towards a just space for humankind. Corporations, which are especially sensitive towards ESG related elements irrespective of their ESG scores, should aspire to enhance their own credibility, as this might award them with a competitive advantage. Lastly, societies with high institutional quality should strive for teaching about their institutions and the associated benefits to everyone else, as a global problem can only be solved on a global level.
Doppler, A.R., & Elboth, L.B. (2022). Institutional Quality, Industry Sensitivity and ESG: An Empirical Study of the Moderating Effects onto the Relationship between ESG Performance and Corporate Financial Performance (Unpublished master's thesis). 22098. Copenhagen Business School, Denmark.
Lisa Bernt Elboth recently graduated with an M.Sc. in Applied Economics and Finance as well as a CEMS Master's in International Management from Copenhagen Business School and Bocconi University. Her interest in global matters and sustainability has flourished during her studies impacting the choice of master thesis topic and this subsequent blog contribution.
Adrian Rudolf Doppler works as a research assistant for the Department of International Economics, Government and Business at Copenhagen Business School and had just graduated with a Master's in Applied Economics & Finance and the CEMS Master's in International Management after a two-year journey. He had always been passionate about ESG, Sustainability and the existing links with the capital markets, as well as the complex system dynamics arising form it.
Photo credit: Galeanu Mihai on iStock
Posted on June 15, 2022 January 5, 2023 Categories About, Accountability, Concepts, CSR, Development, Economic, Featured, Governance, Models, News, Research, SustainabilityTags #Capitalism, #CFP, #change, #corporate, #corruption, #environment, #ESG, #finance, #industry, #institutional, #InstitutionalQuality, #institutions, #performance, #rating, #sensitivity, #sustainability, #SustainableFinance1 Comment on Institutions matter: The importance of institutional quality when embedding sustainability within the capitalistic realm
Sustainability enabler or complexity blinder?
By Milena Karen Bär & Dr. Kristjan Jespersen
The first step of the EU Action Plan of Sustainable Finance
New regulations in the ESG sphere are on the upswing especially in the EU. To reach the commitments of the Paris agreement, the European commission has introduced new regulations as the first step of the EU action plan: the Sustainable Finance Disclosure Regulation (SFDR). The first level was already implemented on March 10th 2021. The implementation of the regulation is an extension of the EU Taxonomy, amending the issue of greenwashing among financial market participants (FMPs). The new reporting requirements are profound and will be fundamental to almost any participant on the European markets, whether you are in the financial, or for that matter, the manufacturing, retail, service, non-governmental and governmental sectors.
The European Union's experiment in defining what is sustainable and in directing markets to more sustainable investments, is putting pressure on market players to keep up with the quickly paced regulative developments.
Two main issues are subject to the debate of appropriate implementation of the SFDR, which entail firstly, the uncertainty of product classification and secondly, the complexity of data collection and usage. Not only all those affected must revise their whole reporting regime, but the EU must ultimately also ask itself the question whether the regulations have nurtured the intended behavior of the market.
SFDR and PAI in general
The SFDR is implemented to benefit clarity for investors and asset managers, by improving their ability to compare investment options from a sustainability point of view. Therefore, the SFDR provides a collective framework, which requires FMPs to disclose the way they are taking sustainability risks into consideration in its business practices (entity level) and in its financial products (product level) in a consistent and curated fashion.
Additionally, the FMP must report on the principal adverse impacts (PAIs). These contain a list of mandatory and voluntary adverse impact indicators, covering environmental issues and the field of social and employee matters, respect for human rights, anti-corruption, and anti-bribery matters. Based on the SFDR disclosures, the product offerings can then be classified within the three categories referred to as article 6, 8, or 9 products, which indicate the level of greenness ranging from article 6 which does not consider sustainability at all, and article 9 which must follow a sustainable objective.
Issues arising
The objective of the EU Action Plan and the SFDR is to reorient financial capital towards sustainable products and solutions. However, certain challenges raise the question whether the regulation can indeed serve this very purpose. To begin with, the mechanics of defining light and dark green products is lacking a foundation and boundaries, allowing for self-interpretation. The differentiation between light and dark green is ambiguous, and thus instead of serving as a guideline, is increasing uncertainty about what the articles constitute.
Issue 1: The color palette of light and dark green assets
One might say, just as colors are perceived differently by each human, light and dark green assets can be various shades of green and thus, on completely different sustainability levels. The regulatory product declaration is not yet methodologically sound, the lack of distinction of the two leaves room for interpretation of the classifying entity. So far, no specific classification mechanism or framework exists that FMPs can apply and are thus able to approach the classification in more prudent or more generous ways. One may put a product under article 8, while at the same time another FMP might classify the same product under article 9.
It seems the darkness of green is up for preference of the asset manager. Although there may be consensus that exclusion strategies are minimum requirements for both classifications, the scope of exclusion criteria varies greatly. This allows for instance some article 9 products to still be involved in controversial actions, such as fossil fuels, tobacco, and controversial weapons.
Secondly, collecting relevant data poses a challenge, and even if data is available, its variety used to report on the SFDR and the PAI, makes the curation inconsistent and biased. An investor might have a full PAI statement to assess its investment, but can one trust the accuracy and relevancy of the data?
Issue 2: Quality of data fades into the background
The PAI statements can be considered as a curation tool for asset managers (AM) to filter for the most sustainable products and steer capital towards green transition products. Even though the framework of the PAI indicators might be well structured, what is important is the quality of inputs. But the complexity of PAI indicators poses challenges for almost any market participant. PAI data is often not readily available, and this is aggravated by the fact that this data needs to be tracked on a continuous basis. Data collection and maintenance can thus become costly for the underlying portfolio companies. Large cap companies can overcome this issue, but small cap players are confronted with an expensive data collection for a wide range of PAIs or with the need to opt out due to lack of data availability.
Hence, large cap companies may gain competitive advantage without indicating greater performance. AMs incorporate the PAI data in a screening process to extract the most responsible products of the investment universe. However, some asset managers are simply selecting those assets with the highest coverage of PAI indicators. Again, leaving large cap companies in favor, although the high coverage of indicators not necessarily correlates with sustainable performance. The quality of the data fades into the background and investments with higher sustainable and financial potential can be missed out on. Ultimately, businesses leading the market today, may stay right where they are, without enabling opportunities for more innovative and greener solutions.
While the intention of the SFDR is to further restrict greenwashing, current practice may raise the question whether there are still loopholes for FMPs to label their products as greener as they actually are. Although we have seen regulations to be great drivers of sustainable corporate and market action, guidelines must be established to provide more specific and narrow pathways. The weak structure of product classification and the complexity of data may prevent the SFDR to provide a framework for more coherent and uniform information of sustainability risks. The European commission must clarify actual implementation practices, to enable the entire effect of capital reorientation. No market participant is exempted from the need to be aligned with the SFDR today, as new waves of regulations will follow, and it is to start paddling.
Milena Karen Bär is a student researcher in ESG and Sustainable Investments, absolving a Master's degree in applied Economics and Finance at Copenhagen Business School. Her research projects are mainly within the field of ESG metrics and regulation, with a focus on the investor's side.
Photo by Freddie Collins on Unsplash
Posted on May 24, 2022 January 5, 2023 Categories About, Accountability, Concepts, CSR, Featured, Governance, Investment, Issues, Models, News, Regulation, Reporting, Standards, Sustainability
How do we think about sustainable investing? Suggestions from an exploratory study
By Margherita Massazza & Dr. Kristjan Jespersen
From the outset, this blog post takes the perspective that behavioral finance is required to assess the perceived tension in sustainable investing (SI). Our work investigates the extent to which sustainability considerations are included in investment decisions, and the drivers behind SI approaches.
Sustainability is increasingly integrated in financial markets, with the acronym "ESG" (Environment, Social, Governance) becoming an all-encompassing term widely used in all phases of the investment process. According to a recent global review, sustainable assets [1] reached USD 35.3 trillion at the end of 2019, representing 35% of total professionally managed assets, and they are set to grow further in the coming years. Yet, despite its growth and the positive sentiment associated with it, there is an inherent tension in sustainable investing.
This tension stems from the apparent disconnect between the theoretical assumptions of classical financial models, focused on risk and financial returns as the predominant determinants of investment decisions (e.g., Capital Asset Pricing Model, Modern Portfolio Theory, etc.), and the empirical evidence of SI, where portfolio allocations are affected by non-financial aspects like personal values and social pressures. How can we make sense of this tension?
Usually, the contradiction is formulated in terms of a tradeoff between financial returns and ESG impact: in order to achieve one, investors must forego the other. However, this view is still rooted in a traditional finance perspective, according to which including ESG considerations or seeking a non-monetary impact comes at the expenses of returns.
There needs to be more nuance in how sustainable investing decisions are investigated and assessed. Given the pervasive and engaging nature of ESG issues, sustainable investing is likely shaped by internal and external forces that go beyond the financial-vs-impact debate. By acknowledging the role that cognitive limitations, biases, and the external context play for investments, behavioral finance allows to capture the financial impact of factors that tend to be overlooked in mainstream financial theories.
Under this perspective, the authors carried out a study based on primary data from European retail and professional investors. It focused on two main questions:
To what extent are sustainability considerations included in investment decisions?
Firstly our analysis broke down the relative importance of four attributes for the investment choice, i.e. the relative weight (expressed in percentage) that each characteristic exert on the investment decision. Sustainability attributes carry a relative importance of about 38%, with ESG score displaying a 26% relevance, and the investment's end objective a 12% relevance. Taken together, these parameters display a larger role than standard financial attributes of risk level (relative importance of 33%) and expected returns (relative importance of 29%) (Figure 1). The results confirm the significance of ESG aspects for a well-rounded assessment of an investment, arguing against the traditional perspective of risk and returns as the sole determinants of investment choices.
Figure 1 – Relative importance of investment attributes for investment choice, by investor type
What drives investors to invest sustainably?
Secondly, we identified the main tendencies leading investors to engage in SI. Starting from a set of 16 heterogeneous motives, 4 main drivers emerged: a desire for self-expression, a financial-strategic rationale, the influence of the external context, and an opportunistic motive (Table 1). These drivers depict SI as a multifaceted phenomenon that unfolds along various dimensions, and not only on the financial and impact layers. They propose a novel perspective to think about SI, which takes into consideration how endogenous (e.g., alignment with values) and exogenous (e.g., role of regulation) forces may affect investments.
Table 1 – Drivers of Sustainable Investing
How can the findings help us better assess sustainable investing?
This analysis shows the extent to which ESG aspects are integrated in investments, confirming their importance for investment choices. It also shows the multidimensionality of SI drivers, which eschews the rigid perspective of traditional finance and accounts for the impact of relevant internal and external factors.
With this understanding, it is possible to formulate practical insights for industry participants to address the current challenges of SI. In fact, there are concerns related to the over-inclusion of sustainability in investment decisions at the expenses of fundamental financial analysis, which may lead to mispricing, inflated asset evaluation, and potentially an "ESG bubble".
Standardize definitions and improve sustainability communication. Social context emerged as one of the drivers of SI, and regulators have a strong role to play in harmonizing the meaning of sustainability in finance. Legislative and non-governmental bodies are working to overcome the lack of standard definition and frameworks in SI – e.g., via the European Union's Sustainable Finance strategy. Their effort to create a common vocabulary and shared understanding of what SI entails will help to align incentives, concepts, and strategies. In parallel, the financial-asset supply side (e.g., fund providers, financial advisors, etc.) should communicate clearly and extensively on the sustainability aspects of financial products. Given the importance of ESG characteristics for investment choices, this will ensure investors have reliable and trustworthy information to guide their investments. Together, the agreement in terminology and the availability of sustainability information will reduce the possibility for misinformation and opportunistic tendencies to sway investment decisions.
Recognize the existence of complex drivers behind sustainable investment decisions. Investors, both professional and retail, should evaluate how different motives affect their investment choices. Knowing that multiple drivers exist will ensure that investment are aligned with goals, limiting the influence of irrationality and misinformation. This will not only benefit investment strategies, but also curb counter-productive results such as the emergence of an ESG price bubble. To explore what drives investor's decisions, an ad-hoc survey could be submitted ahead of opening investment accounts, mirroring the logic of the MiFID directive. This may have positive effects, such as involving more retail investors in sustainable investing [2].
Finally, consider adopting a behavioral approach when studying sustainable investing. The flexibility of behavioral finance may allow to grasp further insights and help to think about this timely topic in a novel way.
[1] The Global Sustainable Investing Alliance (GSIA) considers defines "Sustainable" all assets that integrate ESG factors in the analysis and selection of securities. More detail in their latest global report.
[2] Retail investors still face barriers to fully engage in SI: the topic is investigated in the paper "Investment Barriers and Labeling Schemes for Socially Responsible Investments" by Gutsche and Zwergel (2020).
Margherita Massazza is a CBS and Bocconi graduate in Economics of Innovation, with a focus on Sustainability. Her research investigates the links between traditional investments and behavioral finance to understand how sustainability decisions unfold. She is currently working in the Foresight team of AXA, an insurance company, where she studies the role that corporations will play in the future and how the concept of sustainability will evolve.
Photo by PiggyBank on Unsplash
Posted on May 18, 2022 January 5, 2023 Categories About, Accountability, Behaviour, Concepts, CSR, Economic, Featured, Investment, Issues, News, Reporting, Research, Standards, SustainabilityTags #behavioral, #ESG, #exploratory, #finance, #financialmarket, #financing, #impactinvesting, #Investing, #investment, #investors, #research, #study, #sustainability, #SustainableFinance
How do we find the green elephant in the classroom?
By Lavinia Cristina Iosif-Lazar, Jens Riemer and Caroline A. Pontoppidan
"Environmental sustainability to be at the core of EU education and training systems" – So reads the latest recommendation from the European Commission to EU education ministers, which highlights that "learning for environmental sustainability is not yet a systemic feature of policy and practice in the EU." How then do we better inform practice and policy? Where does one even start to look at what has already been achieved and what more needs to be done on environmental sustainability, especially in Higher Education Institutions (HEIs)?
Coupled with the complexities of incorporating sustainability in HEIs and the diversity of methods used by HEIs in advancing these efforts or curriculum overhaul, the task of bringing about systemic change and reaching the targets set on climate mitigation and biodiversity can seem daunting. But this is where a good picture of where we are now and where we want to be, can make a difference.
Global pollution of, among other things, air, soil, and water, increasing exploitation of the resources of the Earth, and global climate change are challenging nature, environment, and public health. Also, Denmark and the world are in the midst of a biodiversity crisis caused by man-made pollution and exploitation of natural resources and habitats, global spreading of invasive species, and climate change. The intensive exploitation of the open land, forests, coastal zones, and marine areas has caused nature to be fragmented and continuously exposed to a number of stress factors, which means that biodiversity is on a constant decline
The EU Context: broadly speaking, all education needs to be green
At the EU level, we do not lack initiatives that have brought into focus the greening of the curriculum and the need to address climate and environmenal issues at all levels of education and training. The European Education Area (EEA) is an initiative aimed at strengthened collaboration between European Union Member States to build more resilient and inclusive education and training systems. One of the five focus topics of the initiative centers on Green Education. GreenComp – The European Sustainability Competence Framework developed by the European Commission was one of the cornerstones in the educational scope of the European Green Deal. Published in January 2022 and aimed at providing a shared competence framework on sustainability to guide educators and learners, the framework can be used by member states as a reference when rolling out educational initiatives on sustainability.
However, even with all the attention given to education initiatives, there is little direct appealing to HEIs at the EU policy levelMost of the time, communication is directed towards the whole sector leaving the specific directionality of the initiatives to the individual Member States and HEIs are most often mentioned together with schools and other training institutions. The GreenComp report mentions Higher Education a few times but only to illustrate that Higher Education has succeeded in creating a focus on competences for environmental sustainability in relation to preparing the students to address sustainability challenges and opportunities in their working life.
The Danish Context: The Danish Ministry of Education and the Green Transition
In September 2020, the Ministry of Higher Education and Science, Denmark, published 'Green solutions of the Future', a strategy for investments in green research, technology, and innovation. It also highlighted the important role of close collaborations between knowledge-institutions and the business community. To get things moving, the Danish government decided to allocate research funds to boost green research and also bringing more focus on green study programmes.
And the issue of what was happening in HEIs on green research quickly became a focal point. In December 2021, the Danish Ministry for Education and Science sent a request for data on the work HEIs were doing to integrate green themes in educational programmes. The Ministry asked institutions to submit an overview of seven green themes and the coverage of those themes in their programmes. Among these themes, two were focused on energy production and effectiveness, and the others addressed agriculture, transport, environment, biodiversity and sustainable behaviour.
The CBS Context: Green Themes in study programmes
There are multiple ways in which HEIs can find out what content in their educational offerings addresses the green themes described by the Danish Ministry. The way in which CBS did it, was to build on already initiated course content analysis and expand it to include the seven themes. In the academic year 2021-2022, CBS offered 18 Bachelor (undergraduate) programmes, 36 Master (graduate) programmes, as well as HD, Executive and special Master programmes. This amounts to a lot of data to go through and analyse. Other universities or schools might face the same issue of data being both diverse and difficult to gather, but once it is gathered, the managing the amount of data can become a challenge.
CBS used the qualitative research tool NVivo, to analyse and code data from courses in all CBS'study programmes. This was done by identifying specific key words related to the given seven green themes (see table below). The data collected was derived from study programme competency profiles, course descriptions and learning objectives. For every search result returned, the context was analysed and only relevant hits were then recorded in the respective codes.
Theme 1 Theme 2 Theme 3 Theme 4 Theme 5 Theme 6 Theme 7
Energy production Energy effectiveness Agriculture and Food production Transport Environment and Circular economy Nature and Biodiversity Sustainable behaviour and Societal consequences
How do Green Themes look like in a study programme at CBS?
Once the data was collected and the content analysed, a relatively comprehensive picture emerged of how and where the green themes are present in a study programme at a European business school like CBS.
Case 1 below, illustrates a visualization of an anonymised bachelor programme. It presents how the seven green themes can be visualized so to give an "as is" picture. With this information, study programmes can dive deeper into the green content that they already have embedded in their programmes and/or identify that they are interested in additional integration of the seven environment themes into education.
Figure 1: Case 1 – Bachelor Study Programme A (BSc. A)
Bachelor Study Programme A had extensive coverage of Green Themes 5 through 7. The numbers in each cell of the below table represent the number of hits (keywords) per theme. Within the Bachelor Study Programme A, the green themes were identified in both mandatory and elective courses, in their respective course descriptions (CD) and learning objectives (LO). Environment and Circular economy, Sustainable development and Social consequences, as well as Nature and Biodiversity were the themes found represented in the Bachelor Study Programme A courses.
The continuous loop: research, policy, strategy and the classroom
The analysis and reporting of course content on green and environmental themes can function as a basis on which discussions about environmental sustainability in an institution's educational activities can be taken. Getting this overview can inform further work to advance both content and scope that strengthens the advancement of environmental sustainability competences. These can later also find their way into regional strategies as well as inform policy makers at the International and European level. Having a well-informed stance on how, where and which environmental content and competencies HEI graduates obtain during their education can highlight where efforts need to be targeted. This also means that HEIs become a part of the action on "greening" the curriculum and, in turn, can better inform policy makers and education initiatives.
The business school sector has much to build upon. Pioneering scholars have long focused on issues of the environment and sustainability. There has been a dramatic uptake in the last decade of attention to climate change by business scholars, encouraged by editorial statements and special issues in the leading journals in every one of our disciplines. In the classroom, these issues are increasingly being discussed in core and speciality courses, representing significant curricular shifts, and supported by our accrediting bodies
(Galdon et al., 2022)
To read the full report, please visit CBS PRME InFocus Report series: https://www.cbs.dk/viden-samfundet/indsatsomraader/principles-responsible-management-education/resources/prme-infocus-reports
Bianchi, G., Pisiotis, U. and Cabrera Giraldez, M., (2022). GreenComp: The European sustainability competence framework, Punie, Y. and Bacigalupo, M. editor(s), EUR 30955 EN, Publications Office of the European Union, Luxembourg, 2022.
Danish Ministry of Higher Education and Science (2020). Green solutions of the future – Strategy for investments in green research, technology, and innovation.
Galdón, C., Haanaes, K., Halbheer, D., Howard-Grenville, J., Le Goulven, K., Rosenberg, M., Tufano, P. and Whitelaw, A. (2022) Business Schools Must Do More to Address the Climate Crisis.
Lavinia Cristina Iosif-Lazar is a project lead on Principles of Responsible Management Education at the CBS Teaching & Learning Department. Lavinia's work centres on curriculum development, climate and carbon literacy and systemic thinking in management education, as well as assisting in the development of teaching materials.
Jens Riemer is a Green Transformation Officer at Copenhagen Business School, within Executive Support and Communcations. Jens works with the cross-cutting strategic initiative Green Transition, which focus on bringing together key players in establishing an organizational frame and initiate concrete problem-based research and educational activities.
Caroline A. Pontoppidan, Associate Professor department of Accounting & Academic director CBS PRME. Her research often engages with the institutionalization of global standards into local context – and challenges herein.
Photo by Alex Lvrs on Unsplash
Posted on April 19, 2022 January 5, 2023 Categories About, CBS, Concepts, Education, Environment, Featured, Hello world, Initiative, News, Partnerships, Policy, Research, SustainabilityTags #biodiversity, #climate, #denmark, #education, #environmentalsustainability, #EU, #goinggreen, #greeneducation, #greentransition, #HEI, #highereducation, #learning, #sustainability, #systematicchange
Posted on April 7, 2022 January 5, 2023 Categories Concepts, Economic, Featured, Innovation, Issues, Models, News, Research, TechnologyTags #algorithm, #challenges, #data, #economicgrowth, #EUproject, #fairness, #HECAT, #innovation, #job, #jobseekers, #jobseeking, #labourmarket, #market, #profiling, #SDG8, #unemployment, employment, model, technology
Do Tourists Like Nudges?
By Elizabeth Cooper
Nudges have been successfully implemented in various social settings, as a method of guiding people's decisions in certain directions whilst maintaining their freedom of choice. A number of studies have found high levels of support for nudges across different cultures. However, the context of tourism brings with it some complexities that might make nudging tourists in particular both more challenging and less acceptable.
The "context of tourism" is, of course, not a distinct or objective place or time. Tourism as a practice is in many cases intertwined with the everyday lives of others, so the same nudges that we are exposed to in our local supermarket may also be encountered by a tourist who is visiting our town for the weekend. What defines the tourism context in terms of nudging, therefore, is that the nudge is specifically targeted at people who are on holiday.
However, existing research suggests that it may be harder to nudge people when they are on holiday than when they are in their everyday contexts, for two main reasons:
We behave differently on holiday than we do at home. We tend to see holidays as an escape from everyday life, and a context in which we deserve to indulge our bad habits without feeling guilty. Complying with a nudge should, by definition, not reduce the consumer's pleasure – as a result, it is challenging to design acceptable nudges in a hedonistic context like tourism, in which pleasure takes priority.
We can be less inclined to do things for people we feel different to. While many nudges in our everyday lives are designed to guide us towards choices that are beneficial to ourselves (such as making healthier food choices, or encouraging us to save more of our paycheck), nudges targeted at tourists are often focused on the welfare of groups of people (often host communities) who can feel distant. Existing research in psychology has argued that we are more likely to connect with and feel empathy for others if we perceive similarities between us and them. This can make tourism settings unfavourable for nudging, since many people actively seek to experience difference when they plan a holiday.
Studies on nudging acceptance in general have consistently found that people tend to prefer 'System 2' nudges over 'System 1' nudges. System 2 nudges are more transparent and require more cognitive effort (for example, providing a hotel guest with information about the environmental impact of their stay). System 1 nudges tend to play on our intuitions and subconscious cognitive processes (for example, including carbon offsetting as a default in a flight purchase, so that customers have to opt out of it rather than in). There are not yet any studies on approval of nudges among tourists, but we can look at which kinds of nudges have been tested on tourists already, and how successful they are.
Some Examples of System 1 Nudges in Tourism
Commitment Signalling: In an experiment by Baca-Motes et al. (2012), hotel guests were asked upon check-in to make a commitment to reusing their towels, and then to wear a publicly visible pin indicating this commitment. This increased towel reuse in the hotel by 40%.
Providing Feedback: Pereira-Doel et al. (2019) found that inserting an AI display in hotel showers showing the duration of running water during each shower was effective in reducing guests' water usage.
Changing defaults: Kallbekken and Sælen (2013) reduced food waste at a hotel buffet by 20%, simply by making the plates smaller.
Increasing pleasure: Some scholars have argued that a hedonic context such as tourism requires more tangible benefits to achieve behaviour change. As a result, a few studies have experimented with nudges that are designed to increase pleasure for the tourist, while simultaneously promoting a desired behaviour. Dolnicar et al. (2019) found it much more effective to offer hotel guests a free drink if they opted out of room cleaning, than to appeal to their pro-environmental values by disclosing information about the environmental impact of room cleaning. Similarly, Dolnicar et al. (2020) managed to reduce plate waste by 34% at a seaside resort, by allowing families to collect stamps every time they did not generate plate waste at dinner. If they collected a stamp for every day of their stay, they could exchange the stamps for a small prize at check-out.
Although these kinds of nudges are ideal for a tourism context, given they increase the pleasure of the tourism experience and are also more likely to be approved of, they require more effort on the part of the tourism business. The tourism sector in many countries is dominated by SMEs, which often lack the resources required to implement nudges like this, even though they want to run a sustainable business. There is certainly a need for further research which works towards developing nudges which a) encourage behaviour that is beneficial for the planet and for host communities, b) are approved of by tourists, and c) are not burdensome for small tourism businesses to implement.
Dolnicar, S., 2020. Designing for more environmentally friendly tourism. Annals of Tourism Research.
Juvan, E. and Dolnicar, S., 2014. The attitude–behaviour gap in sustainable tourism. Annals of tourism research.
Reisch, L. A., & Sunstein, C. R. (2016). Do Europeans like nudges?. Judgment and Decision making.
Sunstein, C.R., 2016. Do people like nudges. Admin. L. Rev.
Sunstein, C. R., Reisch, L. A., & Kaiser, M. (2019). Trusting nudges? Lessons from an international survey. Journal of European Public Policy.
Viglia, G. and Dolnicar, S., 2020. A review of experiments in tourism and hospitality. Annals of Tourism Research.
Elizabeth Cooper is a PhD Fellow at Copenhagen Business School, within the Department of Management, Society and Communication. Her research aims to link the fields of behavioural science and tourism, by experimenting with strategies to 'nudge' cruise tourists into behaving in more sustainable ways, specifically in the ports of Greenland.
Photo by Elizeu Dias on Unsplash
Posted on February 18, 2022 January 5, 2023 Categories About, Behaviour, Concepts, Featured, News, Research, SocialTags #behaviour, #choices, #culture, #holiday, #nudge, #nudging, #people, #research, #tourism, #tourists
Are sustainable and healthy diets always compatible? Needs for an emic-oriented cultural research on sustainable consumption
It is widely acknowledged that a plant-based diet is healthier than an animal-based diet (Willett, et al. 2019). However, a group of Japanese researchers recently published a thought-provoking article demonstrating that a lower diet-related Greenhouse gas emission (GHGE) has generally resulted in an inadequate nutrient intake among Japanese adults (Sugimoto et al. 2020).
Their results seem to support the fact that the Japanese Government has excluded any dietary-related initiatives from its long-term national strategies concerning the targeted 80% reduction of greenhouse gas emissions by 2050. In other words, Japanese opinion leaders seem to challenge the generally accepted viewpoint of a direct positive correlation between a sustainable diet and a healthy diet, contradicting widely accepted European studies and initiatives (e.g. Sjörs et al. 2017). This apparent controversial observation motivated me to look into the historical development of meat consumption on a global scale. Most importantly, the recently published guiding principles by the Food and Agriculture Organization of the United Nations (FAO) and World Health Organization (WHO) in 2019 state that "Sustainable Healthy Diets" are a trade-off between the two dimensions: sustainability and healthiness of diets. Thus, countries should decide on such trade-offs in consideration with their situation and goals (FAO & WHO, 2019).
The following figure indicates such a trade-off situation for various geographical regions and it clearly shows that the meat consumption in Western countries is obviously higher than the rest of the world such as compared to e.g., Africa or Asia, although a substantial increase of meat consumption is observed in both China and Japan.
In particular, the main increases observed in China and Japan seem to be well-synchronized with the periods of their respective economic developments that simultaneously triggered their modernization (Westernization) process in their markets. However, the curves of Japanese and Chinese meat consumption also show a noticeable difference. Whereas the meat consumption in China has steeply increased since the 1980es, Japan seems to moderate its increase from the early 1990es and ahead, which is most likely explained by their respective economic developments. However, in this blog, I want to supplement these observations with some personal insights on what has happened in Japan during this period through my work experiences in the related industry.
Meat consumption in this blog refers to the average supply of meat across the population shown in this figure. Food supply is defined as food accessible for human consumption meaning the food remaining for human use after deduction of all non-food utilizations. Source: Our World in Data https://ourworldindata.org/grapher/meat-supply-per-person
During the Japanese bubble economy in the 1980es to the early 1990es, the Japanese middle class had increasingly wider opportunities to be exposed to the Western food culture due to their Westernization. This somewhat alarmed key Japanese health professionals, nutritionists, food experts and industries who considered a "Western lifestyle and food culture" as a source of lifestyle-related chronic diseases e.g., diabetes 2 and cardiovascular issues, which would gradually impact Japanese consumers.
This subsequently triggered a countless number of initiatives aimed to nudge a wide range of the population towards a healthier diet. The initiatives were eventually formalized as a Health Promotion Act in 2002 and the Basic Law on "Shokuiku (food and nutrition education)" in 2005 by the Japanese government (MAFF, 2019).
Source: Ministry of Agriculture Forestry and Fisheries. 2019. "A Guide to Shokuiku." https://www.maff.go.jp/j/syokuiku/guide/pdf/00_en_guide.pdf
The Shokuiku act has since become a comprehensive program targeting everyone from school children to the elderly, and its initiatives have involved a broad range of Japanese stakeholders, not only the central and local governments, health professionals and nutritionists but also food and restaurant businesses and their consumers.
The Shokuiku program has promoted the nutritional education from a holistic viewpoint and emphasized the importance of enjoying healthy meals from societal and cultural perspectives through various sensory food experiences. As a consumer researcher in the 1990es in one of Japan's largest high-tech companies producing various kitchen appliances, I also personally participated in a variety of initiatives involving consumer organizations, health professionals, nutritionists and food and restaurant businesses to nudge consumers towards a healthy diet at that time.
In a European context, nudging consumers towards a sustainable and healthy diet usually implies the replacement of an animal-based diet with a plant-based diet with emphasis on ingredients. One major difference to the Japanese nudging initiatives is that the Shokuiku promotion has encouraged consumers to learn how to select "nutritionally balanced meals" in their daily life while enjoying variations in sensory food experiences. Consumers have many ways to achieve this by following the "Japanese food guide spinning top" that can be easily followed by a wide range of population groups, i.e. from school children to the elderly (see the below picture). The maintenance of a moderate meat consumption level observed from the Japanese curve in the above figure might be partially attributed to such 'enjoyable' Shokuiku initiatives (see Yoneda, 2019).
Japan has been able to moderate its overall meat consumption without specific promotions of plant-based diets also thanks to the traditional Japanese food culture that is originally rooted in a plant-rich diet. Thus, in a Japanese context, it is perceived possible to achieve a well-balanced diet while simultaneously enjoying variations in sensory food experiences, in other words, nudging a healthy diet can be perceived as an enjoyable experience. Interestingly, Kanemoto et al. (2019) recently reported that meat consumption only weakly explains the difference between high- and low food carbon footprints (FCF) among 60,000 Japanese households. This study ponders that Japanese should (also) consider restricting their consumption in other areas than meat consumption with a higher estimated FCF such as restaurant foods, confectionary and alcohol.
These observed trends indicate the importance of fully understanding social, cultural and dietary contexts in various countries and regions when researching on sustainable food consumption because food is inherently deeply rooted in the specific cultures. In other words, sustainable consumption studies should ideally shed more light on an emic approach addressing a specific sample of that region and discuss adaptability of such studies to countries outside of the specific region with due respect of the embedded cultural contexts.
Fumiko Kano Glückstad is Associate Professor of Cross-Cultural Cognition at the Copenhagen Business School. She works in the area of cross-cultural psychology and her recent project "iBeauty" funded by the third largest Japanese cosmetic company investigates associations between personal values, beauty and well-being in cross-cultural contexts. She previously worked as a consumer researcher and product concept designer of kitchen appliances at Panasonic Corporation, one of the largest Japanese electronics industry enterprises.
Posted on January 19, 2022 January 5, 2023 Categories About, Behaviour, Cities, Concepts, Development, Featured, Food, Initiative, Issues, News, Philanthropy, Research, SustainabilityTags #asia, #carbonfootprint, #consumers, #culturalcontext, #culture, #diet, #europe, #FoodSystem, #health, #healthy, #Japan, #lifestyle, #meatconsumption, #meatsupply, #nutrients, #plantbaseddiet, #research, #shokuiku, #study, #sustainability, #SustainableConsumption, food
Negative Capability: Sustaining our discomfort towards a collectively responsible society
By Tali Padan
In my PhD studies, I work with a different type of sustainability. Not the sustainability of carbon footprints or systemic transformations but a sustainability of reflection. How we do keep ourselves in continuous reflexive dialogue (with ourselves and others) so that we don't prematurely reach conceptual closure, stagnating in our own comfort?
Maybe comfort is sustainability's biggest threat.
I say this considering the many years I've lived in the US, after a few formative years in Israel. Comfort is the reason my mom uses paper towels in lieu of regular towels in the kitchen, and the reason my dad cannot stand critics of Israel. Comfort is identity. It is plastic. It is the reason I throw away the whole moldy cream cheese instead of washing and separating. It is why it is easier not to participate in big group meetings. This blog post itself is a distraction from the discomfort that Chapter 5 of my PhD dissertation brings.
When this comfort is shaken up, there are many ways of trying to get there again – avoiding, rejecting, resisting – and in the case of global shakeups like the Covid pandemic, the talk about 'getting back to normal'. But what if we were able to maintain a state of uncertainty, of not knowing what the solution is or how to get there. And rather than spending energy trying, we settle into the unsettlement, letting it stir up the hurricane of trapped emotions and meeting visitors we thought we buried years ago? This is what the poet John Keats called 'negative capability', the ability to be in uncertainties, mysteries and doubts 'without any irritable reaching after fact & reason'.
What if that 'irritable reaching' was in reality counterproductive towards our individual and therefore collective growth?
Here comes the 'don't get me wrong' section. I am not suggesting we linger in the dissonance until the glaciers drown us. Nor that we use this approach as an excuse not to try, or ironically – get so comfortable with the discomfort that we disengage from any responsibility. But that we let each shake-up sufficiently run its course so that our demons can be faced, both individually and collectively.
In the elective course that I teach for third year Bachelor's students, this is what we practice. First, and maybe most importantly, we sit in a circle. The circle grounds us in our fundamental equality and triggers us to explore our many inequalities. The class engages in a series of activities dealing with democracy, using an Israeli democracy education method called 'Betzavta' (Hebrew for 'togetherness'). Betzavta, developed in the Adam Institute in Israel, integrates and emphasizes dilemmas and conflicts in order to experientially learn how to live with others in a democratic society. Each activity in the method includes reflecting on the result of the activity but also on the process. By shifting the reflection towards process, students are provoked to examine their own dynamics. Subconscious assumptions and habits can then be revealed and questioned.
It is by no means an easy process. As one student succinctly put it in the final evaluation:
"I thought that the whole thing was very good, good questions, good topics, good dialogue. But man, did it suck. It was horrible actually. But very cool."
The 'horrible' part that this student is referring to could range from the discomfort of conflicting opinions to the tension of judgement, and the palpable, heavy silence that can be felt when students hold back from sharing these tensions. The good part, as I perceive it from the facilitator's chair, is that these tensions are exposed, felt and explored, and subsequently used towards a reflexive type of learning. Lingering in these tensions cultivates our negative capability and is the doorway towards this learning.
The class represents a miniature society. When going through such an experience, students start to naturally move away from an exaggerated individuality and become more considerate towards the collective. By exposing and sharing the more difficult emotions we usually avoid – anger, irritation, overwhelm, anxiety, boredom – students get the opportunity to practice living together more genuinely, modeling the society most of us wish to see in the world. Lingering in these emotions requires being negatively capable because the habit is to seek comfort, stability, a pleasant state of mind. In this way, the 'negative' in negative capability does not refer to what is undesirable but rather an absence, the absence of habit, identity, or ideology. It means having the ability to stay in uncertainty without resorting to previous knowledge structures or beliefs. It's in the letting go, entering the vulnerable home of the unknown, where thought is not there to fragment and give birth to anxiety, that we may connect with each other more genuinely. This, in my view, is a sustainable practice that could benefit us individually and therefore collectively.
Tali Padan is currently in the final year of her PhD at CBS, writing about experiential learning techniques in the business classroom. As a facilitator and researcher, Tali is interested in how purposeful experiences of dissonance can contribute to learning. She is from Israel/USA and has lived in Denmark for ten years.
Posted on December 13, 2021 January 5, 2023 Categories About, Behaviour, Concepts, Education, Featured, Issues, News, Philanthropy, Research, Social, SustainabilityTags #CollectiveImpact, #comfort, #discomfort, #learning, #negativecapability, #reflection, #research, #responsiblesociety, #sustainability, #uncertainty, society
"A Little Less Unsustainable Is Not the Same as Sustainable" – Why Including Fossil Gas and Nuclear Power Will Harm the EU Taxonomy
By Andreas Rasche
The EU Taxonomy reflects a classification system that assesses whether certain economic activities are environmentally sustainable. Without doubt, the idea is a good one and the Taxonomy acts as a prerequisite for the EU's Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR) to unfold their full potential. But: should fossil gas and nuclear power be included into the Taxonomy and hence count as environmentally sustainable? A leaked EU "non-paper" seems to suggest exactly that…
Including fossil gas and nuclear power will significantly harm the Taxonomy, both in terms of its perceived legitimacy but also in terms of its consistency with existing policy frameworks and regulations. I believe that there are three key points to consider:
Legal Inconsistency: Including fossil gas and nuclear power into the Taxonomy is likely to undercut the very regulation that the Taxonomy is based on. Article 10 of the Taxonomy Regulation (EU 2020/852) makes clear that an economic activity is considered sustainable if "that activity contributes substantially to the stabilisation of greenhouse gas concentrations in the atmosphere" (my emphasis); at least for fossil gas this is highly questionable. Although nuclear power is a low-carbon energy source, it is by no standards a safe alternative to renewables. In fact, it is a risky energy source, especially if we consider its entire life cycle. This is exactly why many investors see nuclear power as an exclusion criterion for sustainable finance products. When considering the entire life cycle of nuclear power, this energy source creates non-calculable risks vis-à-vis the Taxonomy's environmental objectives (e.g., the protection of healthy ecosystems). For instance, the mining and processing of uranium has a questionable sustainability track record.
Policy Inconsistency: The EU itself suggested that to reach its goal to reduce emissions by 55% until 2030, there is need to cut 30% of the total consumption of fossil gas by 2030. However, including fossil gas into the Taxonomy will re-orient capital flows in a way that money is flowing into this sector (and not away from it). At the end, it is likely that this will lead to higher usage of fossil gas, much beyond the "transitional use" that the EU intends to establish. Further, a number of EU member states have pledged during COP26 to show "public support towards the clean energy transition and out of unabated fossil fuels." This pledge does not seem well aligned with an inclusion of fossil gas into the Taxonomy.
Reduced Perceived Legitimacy: A factor that is less debated in the public, but still very relevant, is the reduced legitimacy of the Taxonomy. Although the Taxonomy, and linked regulations like SFDR, imply more work and a certain "bureaucratic burden" for financial market participants, many market actors have welcomed the new regulations. They increase transparency, make greenwashing harder, and hence have the power to re-orient capital flows into sustainable economic activities. Including fossil gas and nuclear power into the Taxonomy, endangers this legitimacy. In fact, the Taxonomy may move "from hall of fame to wall of shame", as the WWF recently suggested.
At the heart of the problem, lies a misunderstanding, I think. The EU Taxonomy is supposed to single out those economic activities that have the potential to make a substantial contribution to reaching six environmental objectives. Just because an economic activity is a little less unsustainable than comparable activities, it is not ipso facto sustainable. Being less unsustainable is different from being sustainable. Put differently, just because nuclear may be "cleaner" than coal does not imply that the former contributes to sustainability.
It is often argued that fossil gas and nuclear power need to be included into the Taxonomy as they are necessary "transitional activities". I believe this claim is misleading:
Focusing on "transitional activities" sets the bar very low for Europe's ambitions Green Deal. Ursula von der Leyen called the Green Deal Europe's "Man on the Moon" moment, pointing to its ambitious character. If contested energy sources like fossil gas and nuclear power become part of the Taxonomy, we have not put a man on the moon. Maybe, then, we have not even managed to let the rocket start…
Excluding fossil gas and nuclear from the Taxonomy does not imply that these energy sources will vanish overnight. It simply means that they will not be considered a sustainable economic activity (like a number of other economic activities).
It is time to take the Taxonomy seriously, otherwise we may slow down or even hinder the necessary green transition of Europe's economy…
Andreas Rasche is Professor of Business in Society and Associate Dean for the Full-Time MBA Program at Copenhagen Business School. More at: www.arasche.com.
Photo by Frédéric Paulussen on Unsplash
Posted on December 2, 2021 January 5, 2023 Categories About, Accountability, Concepts, CSR, Development, Economic, Featured, Governance, Issues, News, Policy, Regulation, Standards, TechnologyTags #energy, #EU, #europe, #fossilfuels, #greentransition, #nuclear, #nuclearpower, #policy, #power, #sustainability, #sustainableDevelopment, #taxonomy, Economy
Climate Change and Magical Thinking
By Steen Vallentin
COP26, the 26th UN Climate Change Conference, has just ended. It was supposed to be 'the next big and significant one': the great follow-up to COP21 five years ago, the outcome of which was the Paris Climate Agreement, the first binding international treaty on climate change. The global urgency regarding climate issues has certainly never been greater.
Although COP26 has yielded some results and some progress has been made, it has been a disappointment to many, including the iconic and omnipresent Greta Thunberg, who was filmed chanting "you can shove your climate crisis up your a…" along with other demonstrators at a rally in Glasgow – and who summarized the accomplishments of COP26 in three words:
Looking at the Glasgow Climate Pact and its immediate reception, we are certainly, once again, witnessing a political willingness to attribute considerable significance to (non-binding) declarations of intent regarding (possible) future actions and to the mere mentioning of the 1,5°C temperature increase target and efforts to phase-down (not phase-out) the use of coal power and fossil fuel subsidies.
In the absence of truly transformational commitments and progress, the espoused political belief in the power of words to move action can seem quite magical at times, indeed reflective of magical thinking. Certainly, there was nothing magical about the moderate public and civil society expectations of progress preceding COP26. We have to look elsewhere for the magic. We have to look inside the established political system, where magical thinking is at play in definitions of climate problems and solutions, and where it, in itself, constitutes a problem worth addressing.
What is Magical Thinking?
To begin with a definition, magical thinking refers to "the idea that you can influence the outcome of specific events by doing something that has no bearing on the circumstances". It is a well-known phenomenon in the area of human health and disease. Children are known to practice it.
However, in the area of climate change and sustainability it is the grownups, in particular politicians, that tend to have a proclivity for magic – with the younger generation seeking to expose the deficiency and unrealness of subsequent courses of action.
In relation to sustainability, magical thinking is a matter of believing that certain outcomes – decoupling of economic growth and GHG emissions, a zero carbon economy – can be achieved by means that, although they may have some bearing on circumstances, are insufficient and ultimately unfit for purpose (according to the best available scientific knowledge).
Ends and Means: Strong and Weak Sustainability
One way to frame this problem, at the most general level, is to distinguish between strong and weak sustainability, as illustrated in the table below.
– source: developed from Sjåfjell (2018)
While strong sustainability calls for radical and systemic change guided by a biocentric preoccupation with planetary boundaries, non-negotiable ecological limits and safe operating spaces, weak sustainability signifies a more pragmatic and incremental approach to change, maintaining an anthropocentric focus on development as (economic) growth, human needs and intergenerational equity. An important point being that urgent calls for action tend to draw on the repertoire of arguments provided by strong sustainability, whereas most solutions ultimately fall under the heading of weak sustainability. They are not radical, only incremental, and certainly pragmatic.
The question is whether it is indeed an act of magical thinking to believe that we can accomplish strong sustainability ends by weak sustainability means. In other words, that we can reach the climate targets we need to reach, according to science, by way of incremental, small steps change – holding onto the growth paradigm, the business case and win-win.
The Magic of Win-Win
Andrew A. King and Kenneth P. Pucker, in a recent piece in Stanford Social Innovation Review, speak of "the costs of magical thinking" in relation to the prevalence of the win-win (or triple-win) mindset and associated terms such as CSV (creating shared value). They talk about "strategies [that] rely on improbable mechanisms, promise implausible outcomes, and boast effectiveness that outstrips available evidence." Strategies that "inflict harm because they distract the business world and society from making the difficult choices needed to address pressing social and environmental issues".
This begs the question: What is located on the other side of win-win? How can we escape its magical allure and the often exaggerated claims made in its name? Unfortunately, King & Pucker do not have much to say about this. They speak only of how: "It is time to turn away from alluring unproven strategies and refocus our efforts on those interventions that have proven effective – such as government regulation".
It is not a terribly convincing argument. Government regulation in the age of man-made climate change is not so much an escape from win-win as it is an embodiment of win-win – and arguably needs to be. Sustainable development is not only about climate change and climate solutions – the social and economic pillar of sustainability need to be considered alongside the environmental pillar at all times. That is, questions of social justice and of what is economically feasible also need to be addressed.
The European Green Deal as a Win-Win Scenario
The European Green Deal is, for better or worse, an illustrative example of this. The President of the European Commission, Ursula von der Leyen, has referred to the green transition as 'Europe's Man on the Moon Moment'. Nevertheless, the framing of the European Green Deal reads like a textbook case of win-win, and not a very advanced one at that. As you can read on the Green Deal webpage: "Making Europe climate-neutral and protecting our natural habitat will be good for people, planet and economy. No one will be left behind." The Green Deal is Europe's new growth strategy, it will help cut emissions while creating new jobs and, again, it will leave no one behind.
Speaking of private businesses, the arguments for going beyond win-win are quite straightforward. There are ethical issues and matters of responsibility that need to be addressed regardless of whether the company can derive any commercial benefit from it. However, in the political realm of multiple and competing interests and policy concerns it is more difficult to escape the clutches of win-win.
Imagine if von der Leyen would have said: "We need to make sacrifices in order for the green transition to happen. We need to slow down growth, it will cost jobs and we cannot guarantee that some people will not be worse off as a result'. It is a virtually unthinkable scenario. Not least because we know that it is the poorest and most vulnerable population groups that are bound to be worse off.
The Magic of Danish Government Policy
That is to say, government as we know it does not represent a solution to the problem of widespread magical thinking about climate change and sustainability. It is very much part of the problem and there is no apparent escape. Not even for the most advanced nations in Europe. Let us take Denmark as an example. Denmark was just ranked 4th in the 2022 Climate Change Performance Index (CCPI). As the three top spots were left empty to signal that not a single country currently deserves a 'Very high' rating, Denmark is supposedly the leading country in the world measured on criteria regarding climate policy, renewable energy, energy use and GHG emissions.
This is not to say, however, that Danish climate policy is bereft of magic. Quite the contrary. Dan Jørgensen, the Danish Minister for Climate, Energy and Utilities, has become famous for waving his own kind of somewhat oversized magic wand: 'the hockey stick'. The hockey stick was originally used (by American climatologist and geophysicist Michael E. Mann) to illustrate temperature changes over time and the transition from the Holocene era (the long shaft) to the Anthropocene era (the short blade). There is nothing magical about this science-based graph.
However, the image of the hockey stick has in recent years been appropriated by management consultants and policy makers who are using it to serve instrumental and sometimes magical purposes. In the instrumentalized imagery, the bend between shaft and blade represents the (magical) moment of innovative/technological discovery, an inflection point allowing, ideally, for a transition from a period of inferior – ineffective, unsustainable – solutions (the shaft) to a period of superior solutions (the blade).
Dan Jørgensen has been widely criticized for his espoused belief in a long shaft (gestation) period, that tends to become longer and longer and is so far marked by a lack of truly groundbreaking results and postponement of difficult decisions (particulary regarding implementation of a CO2 tax). On the one hand, the inflection point is continually moved further and further away. On the other, it is assumed that the magical moment of discovery and transformative change will happen in time for Denmark to be able to deliver on the Paris Climate Agreement and the even more ambitious Danish climate law.
A concrete example of magic at work in Danish climate policy is the below image from the recent government action plan on green transition. Notice in particular the small miracle that is supposed to happen from 2029-2030, where all the technical reduction potentials on display somehow reach their target of zero. It seems magical. It is certainly not well explained in the action plan how this can come about – or why the reader should find this sort of technical forecast even remotely believable.
The Great Balancing Act: Magic and Reality
There is an upside and a downside to magical thinking and political talk and action that can be said to reflect magical thinking. Today's magical ideas may turn out to be next year's (or the next decade's etc.) realistic solutions or courses of action. Magical thinking blends into notions of aspirational talk and aspirational policymaking, suggesting that lofty goals can help inspire, motivate and accelerate change processes.
However, the downside is if magical belief in win-win solutions becomes a sort of self-imposed constraint or censorship standing in the way of open and honest discussions about the changes and sacrifices needed to make the green transition happen.
This can exacerbate accusations of greenwashing and create more public cynicism regarding climate policy and the willingness and ability of the political system to act proportionately. Magical ambitions needs to connect with harsh realities.
King, A.A. & Pucker, K.P. (2021). The Dangerous Allure of Win-Win Strategies. Stanford Social Innovation Review, Winter. Online first.
Sjåfjell, B. (2018). Redefining the Corporation for a Sustainable New Economy. Journal of Law and Society, 45(1), 29-45.
Steen Vallentin is Academic Director of the CBS Sustainability Centre and Associate Professor in the Department of Management, Society and Communication at Copenhagen Business School. His research is centered on CSR as a social and political phenomenon in the broadest sense, increasingly with a focus on corporate sustainability, circular economy and business model transformation – along with the politics and aspirational aspects of sustainable development more broadly.
Heading photo by Kristopher Roller on Unsplash.
Posted on November 17, 2021 January 5, 2023 Categories About, Accountability, Communication, Concepts, CSR, Development, Economic, Environment, Event, Featured, Governance, Issues, News, Policy, Regulation, Social, SustainabilityTags #action, #ambitions, #AspirationalTalk, #change, #cliamteaction, #climatechange, #climatecrisis, #climategoals, #COP26, #denmark, #development, #europe, #EuropeanGreenDeal, #Glasgow, #goals, #GreenDeal, #greentransition, #growth, #magic, #magicalthinking, #policy, #politics, #sustainability, #targets, #transformation, #UNCCC, #winwin
White People and the Animals they Love
Book Review of Saving Endangered Species: Lessons in Wildlife Conservation from Indianapolis Prize Winners
By Lisa Ann Richey
This book review has first been published by Conservation and Society and can be also found at CBDS blog.
According to the press website, Saving Endangered Species has wide and diverse aims: 'to win new recruits, inspire biologists and conservationists already in the field, and illustrate the profession's fundamental scientific tenets through wildlife champions' own exciting narratives.' Overall the purpose of the book is to present a moral imperative for a conservationist approach to saving nature and to do this through a collection of personal experiences from great conservationists about their love of nature and experiences from the day-to-day workings of conservation. Seven of the book's contributors are winners of the Indianapolis Prize 'the world's leading award for animal conservation' (p. 12) and one that prioritizes the inclusion of people as a 'primary factor in the equation' of conservation, and high levels of exposure in celebration of these 'heroes and role models' (p. 13).
The book is stunning. It is an aesthetically beautiful edited volume from its entrancing animal photographs, skilled illustrations and colloquial snapshots of its famous contributors. And yet, for all its beauty, this book could have been titled, 'White People and the Animals they Love.'
I start with my fundamental critique because for some readers, this will be all they need to hear to check this book off their 'must read' list. These readers, however, will be hard pressed to find other works of conservation biography that aren't also easily critiqued for their class, racial, gender, and geographical elitism.
Also, a disclaimer, I am a social scientist who works in some of the policy spaces, 'partnership' imaginaries of business and helping, and geographical areas covered in this book. Thus, I am among the 'to be inspired' of the intended audience for this book. Additionally, the introduction, written by Dr. Robert W. Shumaker (evolutionary biologist, president and CEO of the Indianapolis Zoo) calls for 'a more integrative approach in which the centrality of humans is recognized in the conservation agenda' (p. 6). Thus, a review by a scholar of humans might be reasonably appropriate.
In spite of the fact that the index does not include the term 'celebrity,' the book epitomizes what has come to be called 'celebrity environmentalism' (see Abidin, et. al 2020). The practice of scientists, film stars and social media influencers among others, who 'enjoy public recognition, publicly support environmental causes, and benefits from their sustained public appearances' as celebrity environmentalism may be a way of bringing new resources to conservation.
The celebritized approach to conservation is clear from the Introduction's start. While the reader might expect the star of this chapter to be the American Bison, named the official mammal of the United States in 2016, and depicted as a steadfast and grandiose being in the illustration that precedes the text, it is not. The star is the celebrity conservationist William T. Hornaday who initiated the first-ever zoo-based conservation effort as a result of his initial desire to provide a live bison model for better taxidermy (p.2). Thus, the scientific model for which the book collects a series of testimonies, is linked to the efforts of Hornaday. He was the director of the Bronx Zoo in 1906 when Ota Benga, a Mbuti man from Congo, was displayed in a cage in the monkey house. Hornaday wrote to the New York city mayor that 'When the history of the Zoological Park is written, this incident will form its most amusing passage.'
Many people at that time, such as the Black clergyman Rev. James H. Gordon, were not amused. Many readers today will question the unambiguous celebration of these violent and dehumanizing roots of a movement intended to provide a moral approach to saving nature.
Distinctions are signaled between the scientific authors and the celebrity environmentalists through engraving the masthead of every other page with a 'Dr.' before the scientists, with other names presented title-less. Yet, these contributors are all performing the limited scripts of celebrity environmentalism: notably contributions enact specific tropes outlined by Abidin and her colleagues. We see contributions from the 'Ambassador' trope of high-profile performers who are patrons of NGOs and foundations, but whose personal commitment varies between superficial co-branding and long-term engagement. Quite prevalent is the 'White Savior' trope in which 'wild places' need to be saved from 'locals' through the actions of white people. The book also highlights the 'Activist Intellectual' trope promoting cerebral and scientific reasons to support conservation, that then become celebritized through a focus on funding, media and elite networking. Finally, the book's promotional writing enacts the trope of the environmental 'Entrepreneur' where conservation is meant to provide a good investment for business-minded people.
The book opens with a long vignette from Harrison Ford at the 2018 Gala celebration referring to his co-contributors and others like them: 'You can call them researchers or scientists or conservationists. But let's call them what they really are: These are heroes. Real heroes.' (p. 17). However, as this book shows, the heroic narrative structure makes forging alliances and political solidarity across lines of class, race, cultures and politics quite challenging. Heroes stand above others, they are exceptional. And, as such, conservation through heroism is unsatisfactory, if not oxymoronic.
Conservation and the environmental politics that can sustain life on our planet call for less singularity, fewer stories of individuals excelling over other people and nature, and more connectedness, cooperation and coexistence.
The introduction tells us that 'these are the voices of the greatest conservationists of our time' (p. 17). I have no reason to doubt that these are their voices and that they are great conservationists, whatever criteria make up 'greatness'. The stories are full of passion and genuine concern for conservation, so there is no doubt that these heroes are acting from noble intentions. However, the heroic hubris prevents the reflection over either why chickens when pushed off a roof don't 'progress well in flight' (p. 21) or why 'with no prior thought' wildlife conservation should be best achieved through 'a big cash award' and an 'exciting and glamourous event' (p. 305).
With some notable exceptions, this book presents the same old stories of great men who just happen to have no reproductive obligations (with the predictable exception of the female scientist), so they can go singularly or with the support of a doting wife into long-term relationships with animals.
These men also have friends with lots of money and political clout, and the documentation of elite networking practices that comes through in the chapters actually works counter to a singular hero at the helm of conservation. Finally, these conservation heroes rely heavily on a competent staff of Black and Brown people who can put lofty ideals into practice, while not usurping the limelight from celebrity environmentalists.
Some of the more 'Activist Intellectual' celebrity environmentalists present compelling arguments in lively texts around global warming and the contentious politics of saving the polar bears. Many of them take the reader through a combination of wildlife daily habits, international fundraising, and management of research and training projects. These are narrated as a partial life-history of a single 'hero,' and while there are nods to 'local supporters,' 'scouts' and collaborations between 'enthusiastic' local staff and international volunteers, this book tells a dangerous single story.
It's time to remind ourselves and our peers that the heroic narrative of celebrity conservation may be useful for raising funds from businesses and for garnering the attention of bored bureaucrats, but it has dangerous political consequences.
A close reading of the text finds examples such as four 'community game scouts,' the 'local African supporters' in Kabara, and the 'young Samburu warrior' who was 'walking in the bush' with David Quammen, a writer from National Geographic (p.80). Samburu people have proper names, no less notable than people from Cincinnati, and the young man was not working as a warrior when assisting on a conservation project. These people are being rendered mundane through the repetitive text of the white savior narrative. They are being de-humanized as they remain in the background of the African or Asian 'habitat' for animals. The heroic narrative is based on an ongoing history of inequality between races, classes, genders and cultures.
The afterword, written by the CEO of the Indianapolis Zoological Society (2002-2019) reads like advertising copy for 'Western Civilization' complete with God, Guns and Gold. It is a colonial vision of men like Paul Erlich in which the 'dangers of unchecked human population' are called out as problems while fossil fuel addiction, or all those flights to the Galas celebrating conservation heroes, are left unmentioned. The 'Danger of a Single Story' by Chimamanda Adichie taught an important lesson in 2009: 'The single story creates stereotypes, and the problem with stereotypes is not that they are untrue, but that they are incomplete.' This is a beautiful book in its intentions and its aesthetics; the stories are often compelling and transport us into the lives of cranes and elephants and into some of the world's most notable conservation initiatives. Yet, despite its intentions, the people are missing from this heroic script of celebrity environmentalism.
Perhaps these people are left-out by design. Dr. George B. Schaller writes clearly: 'My account here demonstrates that conservation is not part of development' (p. 78). But, conservation is part of development. It is impossible to define conservation otherwise (Adams 2004). Both conservation and development are part of the holistic process of living sustainably on our planet. This book is intended to celebrate 'people as a primary factor in conservation.' We do learn a lot about a particular sub-group of privileged people, their psychology and insecurities, their dreams and aspirations, about networks of elites across the globe who happen to have farms, foundations or PhD scholarships to spare. But we learn far less about the non-celebrity people in the lives of animals. Surely a global conservation movement that manifests the holistic visions and 'the connectedness of all living things' (p. 119) that many of these contributions also embrace, needs less heroism and single stories and more solidarity, comradery and complexity.
Abidin, C., Brockington, D., Goodman, M. K., Mostafanezhad, M. and Richey, L. A. (2020) "The tropes of celebrity environmentalism." Annual Review of Environment and Resources.
Adichie, C. (2009) "The Danger of a Single Story" TED Talk.
Adams, W.M. (2004) Against Extinction. The Story of Conservation. Earthscan, London.
Lisa Ann Richey is Professor of Globalization at the Copenhagen Business School. She works in the areas of international aid and humanitarian politics, the aid business and commodification of causes. She is the principal investigator on the Commodifying Compassion research project. https://www.lisaannrichey.com
Photo by Katie Treadway on Unsplash
Posted on October 14, 2021 January 5, 2023 Categories About, Concepts, CSR, Equality, Ethics, Featured, Issues, News, Research, SustainabilityTags #activistintellectual, #animals, #book, #bookreview, #celebrity, #conservation, #environmentalism, #hero, #inequality, #politics, #voice, #whitesavior, #wildlife
Are we asking the wrong questions in corporate social responsibility (CSR) research?
By Rikke Rønholt Albertsen
The sustainability contributions of business are under increased scrutiny in society. Observations of greenwashing, blue-washing, corporate hypocrisy, and decoupling suggest the existence of an intentional or unintentional gap between espoused CSR strategies and actual sustainability outcomes at the societal level. In other words, there seems to be more "talking" than "walking".
This has inspired a growing concern in parts of the CSR research community that maybe we have been asking the wrong questions. Is it possible that in some ways we are contributing to this gap between strategy and impact?
Next year, an entire subtheme of the annual European Group for Organisational Studies (EGOS) conference will be dedicated to "Rethinking the Impact and Performance Implications of CSR". This subtheme will address the tendency in CSR research to focus on outcomes at the organisational level without analysing impacts at the societal level.
There are valid reasons for limiting the scope of CSR research in this way: from an organisational performance perspective, many of the traditional success criteria for CSR policies—such as strengthening legitimacy, market position, and employee satisfaction—do not require data to be gathered on sustainability impact from a societal perspective.
However, the urgency and magnitude of the current global crisis related to climate, biodiversity, and social inequality fuels the expectation that corporations should acknowledge their role in creating these crises and take decisive action to be part of the solution. From this perspective, one would expect CSR research to provide knowledge of how, when, and why CSR policies and practices truly contribute to solving sustainability challenges. Yet, as a review of current CSR literature shows, this is rarely the case [1].
So what constrains CSR researchers from addressing this impact gap? In the following, I will highlight two interrelated mechanisms that have emerged from my research.
1) Sustainability impact is non-linear, systemic, and complex.
The problem with measuring sustainability impact is that it does not conform to conventional systems of measurement and reporting. Company CSR reports primarily provide key performance indicators linked to resource use per unit of production or list company policies and protocols to ensure compliance with various sustainability standards. In general, companies tend to (self) report on the successful implementation of their (self-imposed) CSR strategy, which happens to align with existing business objectives. However, as dryly noted by former environmental minister and EU commissioner Connie Hedegaard: the need for CO2 reductions is not relative; it is absolute! The melting Arctic poles do not really care that a company has made an effort to reduce its relative emissions if the net result is still more CO2 [2].
The negative impact on ecosystems is subject to irreversible tipping points where effects compound and accelerate. Thus, the societal impact of a sustainability policy or protocol cannot merely be assessed at the organizational level. It must be traced up and down the value chain and checked for unintended systemic consequences and hidden noncompliance [3]. Think of ineffective emission off-set schemes or families impoverished by bans on child labour. Ultimately, being "less bad" does not necessarily amount to being good.
2) Researchers do not have the necessary information.
Analysing the societal impact of corporate CSR policies and practices is a highly resource intensive task, which requires an entirely different set of research skills and data access than traditional organisational research. Instead, researchers most often opt to evaluate sustainability performance through estimations, perceptions, and narratives offered by company staff in surveys and interviews [1]. This data is context specific and prone to subjective biases, making it difficult to draw objective conclusions about societal impact.
Consequently, because there is so little existing knowledge of the link between CSR initiatives and societal impact, the CSR contribution of corporations is primarily assessed based on compliance with reporting standards and commercial rating initiatives such as the Dow Jones Sustainability Index [4]. This, for lack of better options, becomes the go-to objective indicator of CSR performance used by CSR researchers. Through this self-fulfilling circular logic, these indicators are used to identify CSR high performers for research on best practice. CSR research thus potentially perpetuates the perception of what successful CSR policies and practices look like—all without examining the societal impact of these practices.
Is this a problem?
Just as corporations increasingly realise that addressing CSR issues is no longer optional, we as CSR researchers may need to move beyond asking how, when, and why corporations engage with sustainability and begin asking how, when, and why corporations contribute to sustainability. If we do not, we risk losing our relevance when corporations look to academia for guidance on how to design and implement CSR strategies based on maximum impact rather than just maximum compliance and minimal risk.
We are challenged to expand our field of enquiry and be innovative when assessing how the observed means ultimately align with desired ends. This will require forging research alliances with new knowledge fields and establishing relationships with new groups of informants beyond company employees. The first step, however, is to rethink the questions we ask.
[1] J.-P. Imbrogiano, "Contingency in Business Sustainability Research and in the Sustainability Service Industry: A Problematization and Research Agenda," Organization & Environment.
[2] C. Hedegaard, "Farvel til 'logofasen' -nu har vi set nok grønne slides," Berlingske, 2020. [Online].
[3] F. Wijen, "Means Versus Ends In Opaque Institutional Fields: Trading Off Compliance And Achievement In Sustainability Standard Adoption," The Academy of Management review.
[4] M. Zimek and R. J. Baumgartner, "Corporate sustainability activities and sustainability performance of first and second order," 18th European Roundtable on Sustainable Consumption and Production Conference (ERSCP 2017).
Rikke Rønholt Albertsen is a PhD Fellow at the Department of Management, Society and Communication at Copenhagen Business School and a member of the multidisciplinary CBS Sustainability Centre. Her research focus is on exploring and understanding gaps between the espoused sustainability objectives of corporations, and their actual contribution to sustainability. She has a background in consulting at Implement Consulting Group and in sustainability advocacy as co-founder of Global goals World Cup.
LinkedIn Profile.
Photo by Emily Morter on Unsplash
Posted on October 7, 2021 January 5, 2023 Categories About, Communication, Concepts, CSR, Featured, Issues, Knowledge, News, Partnerships, Research, SustainabilityTags #assessment, #Compliance, #corporatesocialresponsibility, #CorporateSustainability, #CSR, #Impact, #impactgap, #question, #reporting, #research, #researcher, #sustainability, information
Connecting, Cohering, and Amplifying: The Work of Transformation Catalysts
By Sandra Waddock and Steve Waddell
The shocking 2021 IPCC report on the climate emergency makes clearer than ever that many human systems are in dire need of significant change. Today's harsh growth-oriented economic systems are particularly implicated in the growing chorus of demands for purposeful system transformation towards a flourishing world for all. Significant systemic transformation is needed to bring human activities in line with both social and planetary boundaries now being breached. That means that the way we think about economics, how our businesses operate, and even how communities and whole societies operate likely need to change – and radically.
But transforming such whole systems – economies, societies, communities, even organizations – is incredibly hard. Transformation inherently involves fundamental changes to core aspects of a given system. Things like purposes, values, goals, important assessment metrics, and even the mindsets or paradigms of people in the system must change, whether the system to be transformed is an organization, economy, or society. Our research suggests that a new type of entity – transformation catalysts – may be able to help.
What is a Transformation Catalyst?
A chemical catalyst brings about a chemical reaction without necessarily changing itself. Used in a social sense, a catalyst is a person or thing that makes something new happen or precipitates change. In the spirit of any catalyst, a transformation catalyst works with the mix of different efforts and activities that already exist and that are geared towards significantly changing a system – transformation. When this mix of change efforts, which is usually fragmented with different activities operating in separate silos, is organized, it can become a transformation system. Organized as a transformation system, these activities can be much more effective at producing desired change.
The transformation catalyst's role is to bring together an array of efforts so that together they can emerge or develop new ways to do their work more effectively – that is, operationalize the transformation system.
We like to say that transformation catalysts connect, cohere, and amplify transformation efforts that are already underway. Four catalytic actions make this coherence and amplification of efforts possible: seeing, sensemaking, connecting, and radical action and learning.
The Four Catalytic Actions
Seeing means helping change agents figure out what their emerging transformation system is all about and who is doing what, where, and how. Seeing involves various forms of stakeholder analysis – figuring out who is in the system, which can use a variety of approaches, including interviews and mapping tools to identify key participants, resources, and system dynamics. Doing so helps participants identify where gaps and possibilities exist to create more effective action.
Sensemaking means creating a shared and coherent vision among various participants to, quite literally, make new sense of their actions and system, and tell new stories about it. These new, more powerful framings can have broad appeal to draw in other participants, raise funds, and create energy moving forward. Sensemaking also means helping participants understand how to pull together into a coherent transformation system so they can act in new ways to take more effective action.
Connecting is the process by which actors learn about each other and begin to devise new ways of acting more coherently together. Connecting involves aggregating, cohering, and, ultimately, amplifying efforts that may already be underway, but have not been as effective as desired to date. Connecting can mean creating a shared set of aspirations and identity and awareness of their own efforts as part of a broader transformation system. Then they can learn from those actions – the radical action and learning process.
Radical action and learning needs a safe space, so that participants in a transformation system can question, explore, analyze assumptions, and experiment with new ways of doing things that are transformative. Experimentation is crucial, since transformation is unpredictable by its very nature. Mistakes will be made, and things will not always work out as planned. Sometimes creating prototypes can be helpful, too, as a kind of testing ground for further action.
Catalyzing Change through 1000 Landscapes for 1 Billion People
One example that we describe in our paper is that of 1000 Landscapes for 1 Billion People. 1000 Landscapes is an initiative creating sustainable solutions by recognizing that long-term sustainability means emerging a shared foundation of land and water resources for all.
In its early stages, 1000 Landscapes consulted with more than two dozen landscape partnerships globally to figure out who was doing what (seeing). They identified what the barriers were to managing landscapes in new ways were (sensemaking).
1000 Landscapes is now building collaborative capacity for holistic landscape management in many different places, starting with an initial group of 20 and growing the number over time (connecting). Holistic land management means, as the initiative states on its website, "integrating action for food, water and health security, sustainable livelihoods, biodiversity conservation, climate action, and the transition to inclusive green economies" (sensemaking).
1000 Landscapes plans to expand to 50 areas in its second phase (amplifying). Its goal is reaching at least 1000 landscapes "meeting locally defined development and environmental goals, with benefits for over one billion people" by 2030 (amplifying and radical action). 1000 Landscapes even uses the language of catalysis to describe its work: "working in radical collaborations with dozens of organizations to catalyze system change". It thereby "unlock[s] the transformative potential of inclusive landscape partnerships and to scale their impact".
The Mantra for Transformation Catalysts
The key to understanding transformation catalysts is knowing that they themselves are not doing the actual transformation work. Instead, they are helping to organize other change agents who are already doing that work in new ways so that they can become more effective. Indeed, they are helping them to become effective transformation systems with the potential to overcome the many inertial forces that hold systems in place.
Small, fragmented, individual efforts cannot achieve that type of scale impact. But the potential that transformation catalysts bring is the ability to bring those actors together in new ways. They can help change agents see and understand new, radical possibilities for transformative change if they can act coherently together. Then they can amplify their own efforts by figuring out where the gaps in their transformation efforts are, filling those, sharing resources when appropriate, and acting more effectively.
Connect, cohere, and amplify. That is the mantra for transformation catalysts.
Waddock, S., and S. Waddell (2021). Transformation Catalysts: Weaving Transformational Change for a Flourishing World for All. Cadmus, 4(4), 165-182.
Lee, J.Y. and S. Waddock (2021). How Transformation Catalysts Take Catalytic Action. Sustainability, 13(17), 9813.
Sandra Waddock is Galligan Chair of Strategy, Carroll School Scholar of Corporate Responsibility, and Professor of Management at Boston College's Carroll School of Management.
Steve Waddell is founder and co-lead steward of Bounce Beyond, a transformation catalyst oriented to changing towards transforming towards next economies.
Photo by kalei peek on Unsplash
Posted on September 17, 2021 January 5, 2023 Categories About, Behaviour, Concepts, CSR, Development, Featured, News, Partnerships, Social, SustainabilityTags #catalysis, #catalyst, #change, #climateaction, #climatechange, #connecting, #emergency, #IPCC, #learning, #radicalaction, #seeing, #sensemaking, #systematicchange, #transformation, society
Social impact bonds in the Nordics: insights from 'Copenhagen Impact Investing Days 2021'
By Mikkel M. Andersen and Ferran Torres
A social impact bond (SIB) is an innovative model for public service delivery characterized by flexible service interventions and an outcomes-based payment structure. SIBs use private investments to drive new types of welfare activities, shifting the risk from the public to the private sector. Today, several SIBs are emerging in Nordic countries, but do rich welfare states even need these financing mechanisms? And in case they do, for what? These questions were discussed by three leading SIB-experts during the 'Copenhagen Impact Investing Days' 2021.
During the last few years, the use of social impact bonds (SIBs) and other social finance-instruments has increased dramatically in Nordic countries. SIBs were originally used as financing tools supporting public organizations in the UK experiencing budgetary restraints. Thus, as the model spread into other contexts, the question begged whether this tool would be appropriate for Nordic countries as well. The following piece summarizes some key reflections from the panel discussion regarding this question at Copenhagen Impact Investing Days 2021 (CIID).
SIBs in the Nordic countries: an emergent but fast-growing field
While more than 200 SIBs have officially been developed worldwide, they are still an emergent phenomenon in most Nordic countries. Currently, 17 SIBs have been initiated in Finland, Sweden, Denmark, and Norway – primarily within employment, preventive health, and social welfare. Also, at least 7 additional SIB-projects have been announced. The first SIB-evaluations are also starting to come up; for example, the assessment of the first Swedish SIB in Norrköping shows promising social effects, despite not creating a financial return for investors. Finnish intermediary-organizations are also planning to develop SIB-projects within environmental areas, including recycling and energy efficiency in housing.
Overall, Finland seems to be on the forefront in the Nordic regions, followed by Sweden, while Denmark and Norway are a few years behind. On the investment side, significant progression is also being made. A Finnish fund-of-funds is currently being developed with an expected capital of 100 million Euro. In Sweden, work is also being done to set up a national outcomes financing structure to ensure the scaling of future outcome-based initiatives. Last, legislative action to ensure social finance practices has been taken – most recently in Denmark with Børnene Først promising more focus on social investment-practices to ensure preventive social welfare.
Emerging practices for Nordic SIBs
Some early experiences regarding the relevance and usage of SIBs in the Nordic countries were discussed during the CIID-conference. First and foremost, SIBs seem to be a part of a much larger trend in public welfare, oriented towards measuring, incentivizing, and resourcing towards long-term social outcomes. While SIBs might constitute effective solutions in themselves, they are also catalysts for evolving social investment practices because they can 1) showcase the benefits of new types of welfare services by linking social and economic outcomes, 2) provide practical solutions for realizing preventive and proactive welfare services, and 3) facilitate cross-sectoral coordination through new procurement frameworks by bringing new stakeholders to the table.
The SIB can be a useful way to show the municipalities, and the government, how to buy the solutions that actually work.
Hans Henrik Woltmann, Investment Manager, The Social Investment Fund (DK)
What seems to be critical is also the perception that SIBs in the Nordic countries should not function as a replacement to or a privatization instrument for public welfare services. Instead, SIBs should be understood as a supplement to these, allowing public actors to change how they buy public interventions while testing new welfare solutions through de-risking strategies. Still, the novelty of the method, and its experimental character, makes it challenging to assess its true potential.
Does the SIB really allow us to scale or is it just a fancy way of financing projects? I think the question is still out there
Tomas Bokström, Project Manager, Research Institutes of Sweden
Looking into the future: necessities for a social finance-ecosystem
Summarizing the points from the debate, SIBs in the Nordics are on the rise and have the potential to become welfare instruments themselves, and a vehicle for promoting a social investment agenda. Looking ahead, three key aspects will be important for enhancing the Nordic social finance ecosystem:
Establish more evidence from practice and leverage these actively with public organizations to spark discussions.
Insist on experimentation and a methodological openness towards the SIB-model. Its value also resides in its ability to test innovative social interventions to later diffuse them through public practices fitting better into specific welfare situations.
Follow and engage in political discussions regarding the ambitions for SIB-practices. The SIB market is still in its infancy and relies heavily on market-maturement initiatives to develop better infrastructure.
Panelists for the discussion of Nordic Impact Bonds at 'Copenhagen Impact Investing Days 2021':
· Tomas Bokström, Project Manager, Research Institutes of Sweden
· Hans Henrik Woltmann, Investment Manager, The Social Investment Fund
· Mika Pyykkö, Director, The Centre of Expertise for Impact Investing, Finland
· Mikkel Munksgaard, PhD Fellow, Department of Management, Society, and Communication, CBS (moderator)
· Ferran Torres Nadal, PhD Fellow, Esade Entrepreeurship Institute & Institute for Social Innovation, ESADE (moderator)
Mikkel Munksgaard Andersen is PhD Fellow, at CBS Sustainability, Department of Management, Society and Communication (MSC) at CBS. Through his PhD-project, Mikkel studies the development and implementation of social impact bonds and payment-by-results methods in Denmark. His work centralizes around the distinct characteristics of Scandinavian impact bonds and their role in supporting and financing public services. The research is driven by a participatory research design and is co-financed by Region Zealand. Mikkel has earlier worked in the social finance-field both on an academic and practical level.
Ferran Torres Nadal is PhD Fellow at the Entrepreneurship Institute and the Institute for Social Innovation, ESADE Business School in Spain. His PhD advisors are Lisa Hehenberger and Tobias Hahn. His work is focused on understanding and explaining tensions and paradoxes around complex phenomena. He is particularly interested in studying the challenges and opportunities that come with cross-sector initiatives, such as social impact bonds.
Photo by Katt Yukawa on Unsplash
Posted on June 30, 2021 January 5, 2023 Categories About, Accountability, Concepts, Development, Economic, Environment, Featured, Investment, Issues, News, Partnerships, Policy, Social, Stakeholders, SustainabilityTags #CIID, #Copenhagen, #denmark, #finance, #Finland, #impactinvesting, #investment, #mechanism, #Nordics, #Norway, #publicservice, #SIB, #socialfinance, #socialimpact, #socialimpactbond, #Sweden, #welfare
The Concept of Fragmented Labour Markets
By Janine Leschke and Sonja Bekker
The employment and social impacts of the Covid-19 pandemic have been larger on some groups of workers than others. In particular, low-wage workers and workers in forms of employment that differ from full-time wage and salary work with a permanent contract seem to have been especially exposed to job and income losses (see ILO-OECD Covid-19 report). The concept of fragmented labour markets, which we propose here, highlights the large and growing diversity in employment relationships. It demonstrates the relevance of relating the impact of the crisis on jobs, income and social security to the degree of 'resilience' workers had prior to the crisis in terms of job stability and decent earnings. It is therefore very suitable for detecting vulnerabilities that have been built into labour markets over the past decades.
Rise of diverse types of non-standard employment relationships
The concept of fragmented labour markets focuses on the group of workers commonly termed 'outsiders' or the population in non-standard (also termed atypical) employment. It goes beyond traditional views on segmented, dual or primary versus secondary labour markets, which divide employment into 'good' and 'bad' jobs. There are a number of arguments as to why the use of binary divisions with regard to labour market status or outcomes are obsolete, such as the substantial variety within both the groups of standard and non-standard jobs.
Over the past decades, a further fragmentation of employment status has occurred. Some speak of an 'explosion' of diverse types of non-standard employment relationships, making these types of jobs an often occurring or even 'normal' phenomenon at least for some labour market groups, such as women. Consequently, within the group of 'outsiders', an ever greater variety of forms of employment is materialising, making the groups themselves far from homogeneous.
Call for a new approach
The inadequate binary division of the labour market into groups of 'insiders' and 'outsiders' has spurred a call for a new multidimensional approach to understanding inequalities in work and employment. These suggestions go beyond merely defining non-standard work as all forms of work that deviate from the standard employment relationship.
Based on the trends and observations highlighted above, we develop the concept of fragmented labour markets as a way to both define and explore the most vulnerable types of non-standard employment. We build on the work of authors who point at key elements of such a definition, including the different labour market groups that have different sets of rights and labour conditions, and refer to different employment statuses such as part-time work, fixed-term contracts, temporary agency work, self-employment, marginal employment, platform work and other 'non-standard' forms of employment.
Additionally, we look at the earnings that workers (can) generate with their jobs, and whether they combine several employment statuses (e.g. being part-time as well as fixed-term employed). Moreover, we zoom in on certain occupational groups. The latter focus is relevant in order to prevent certain vulnerable groups remaining 'hidden' in overall labour market averages (see, e.g., the example of the occupational groups of cleaners below).
Therefore, we define fragmented labour markets as:
Labour markets characterised by an accumulation of insecurities. Fragmentation is evident where workers combine non-standard employment with low wages or where they combine several forms of non-standard employment − situations that are dominant in particular occupational groups.
We argue that using the concept of labour market fragmentation may render visible which labour market groups are generally more insecure and vulnerable to job and/or income loss and fluctuations and would therefore need additional support particularly when crises occur.
Exploring selected occupational groups in Germany and the Netherlands
Using this concept exploratory with a focus on two affluent countries – Germany and the Netherlands – highlights vulnerability in some occupations, particularly among women, but at times also among men.
For instance, almost 70% of female personal care employees in Germany are part-time employed and 18% of those combine part-time employment with a fixed-term employment contract (see EU-LFS). In the Netherlands, 43% of women in the occupational group of cleaners and helpers & service employees are marginal employed (less than 15 working hours per week) and 27% of those combine marginal part-time employment with fixed-term employment. Both occupations, and particularly cleaning are at the same time characterised by low wages (see SES). These groups would have been 'invisible' if only data on the average economy had been used.
Additionally, the use of the concept of labour market fragmentation shows that in some occupations and groups, there are hardly any standard jobs left.
For instance, among women in the Dutch personal care and cleaners and helpers occupations, nearly everyone has a part time job (>90%), while in Germany the vast majority of women with a cleaning and helpers occupation has a part time job (>85%). At the same time these jobs are commonly relatively poorly paid and it is not uncommon that these part-time jobs are combined with other flexible forms of employment to make ends meet.
This not only has consequences for employment and earnings security while being in a job but also has important knock-on consequences for accessibility to and adequacy of social security, which is affected to a large degree by the level of earnings and job tenure (with the exception of social minimum benefits).
The concept of fragmentation thereby transcends labour markets and its value becomes particularly evident in times of crisis. As a result of the pandemic, low-wage workers and workers in diverse forms of non-standard employment relationships have been especially exposed to job and income losses. Moreover, in times of economic downturns, new jobs will often be more likely to be non-standard contracts than in times of economic upturns.
Both in Germany and the Netherlands, social security coverage has been problematic for some of these groups during the coronavirus crisis.
Understanding the growing flexibility in labour markets
The concept of fragmentation thus assists in achieving a more profound understanding of what growing flexibility in labour markets really entails in terms of cumulative insecurities for some labour market groups. It helps fuel discussion on making social security more inclusive for workers, regardless of their labour market position. Last but not least, with respect to occupations where up to 90% of (female) workers are in non-standard employment, often combined with other forms of non-standard employment and/or low wages, it helps raise questions as to how much labour market fragmentation affluent societies can legitimise.
Bekker, S. and Leschke, J. (2021), Fragmented labour markets in affluent societies: examples from Germany and the Netherlands, OSE Paper Series, Research Paper No.48, Brussels: European Social Observatory, 24p.
Sonja Bekker is an associate professor European Social Policy at both Utrecht University and Tilburg University. Her research interests include European employment policies and social policies, particularly focused on vulnerable groups such as people with flexible employment relations, youth, people experiencing in-work poverty. She is part of the Horizon 2020 WorkYP project.
Photo by Danny Sunderman on Unsplash
Posted on June 28, 2021 January 5, 2023 Categories About, Concepts, Development, Economic, Featured, Issues, News, SocialTags #covid19, #Employees, #fragmented, #germany, #inequalities, #inequality, #labour, #labourmarket, #netherlands, #pandemix, #socialimpact, #work, #workers, employment
The maker movement, the quiet, game-changing revolution near you #2
By Efthymios Altsitsiadis
One of the most overlooked and yet promising agents in the fight against climate change and towards realizing a circular society is the maker movement – a cultural trend that was founded on a simple premise: ordinary people manufacturing themselves what they need.
In the previous article, a glimpse of the transformative potential of democratized production for reaching the pressing societal, environmental and economic goals was attempted. The maker revolution, facilitated by the technological collaborative manufacturing capabilities can help citizens with getting access to advanced fabrication tools, skills and knowledge, to meet their own needs, reduce their carbon footprint, while creating new entrepreneurial opportunities for them and their community. For this potential to be realized, it is arguably increasingly important to understand how and why people become makers.
No movement can be successful, no community can be effective without engaging, growing, and sustaining its member base.
This was the organizing idea in the previous article. The empirical results from the Pop-Machina project were presented in overview to show the key motives, barriers and driving forces behind the decision to support and be involved in making. In this follow-up note, we complement this baseline with the next step: what can be done to act upon this knowledge.
We draw this time insights from another running EU project – iProduce. Two large scale studies collected data from regular citizens, makers and manufacturers around Europe and the synthesis of the main quantitative results is taking place to compile some clear and actionable recommendations on how to engage with makers, existing and potential ones. The recommendations below are a preview of the upcoming report on the full findings, so it should be treated as work-in-progress snapshot.
Recommendation 1: Clearly communicate the culture of the community
On the one hand, many new makers seem to be driven by ecological and community progress beliefs and attitudes. The majority of people believe that makerspaces can make a big difference. On the other, respondents reported a lack of information with regard to the exact makerspaces' scope and actions. Awareness about the maker-movement and its mission and benefits should not be considered a given, yet the alignment can make a considerable (and oftentimes ignored) difference in engagement. Community development and team building should be heavily promoted as in most makers, collaboration with like-minded peers is of highest priorities.
Recommendation 2: Encourage direct knowledge sharing: virtual training and skills exchange
Exchanging knowledge and gaining access to dedicated trainings is very important for makers. Such facilitations can take place digitally in which case users would expect to increase their knowledge and skills. Training could be targeted either to support a specific business venture, a creative project already underway, or for the primary purpose of gaining competencies for later use. Support in terms of direct knowledge sharing and mentorship, peer to peer online learning could be an additional option to allow existing technicians and experts to occasionally serve as mentors and advisors rather than teachers in platform-developed projects.
Recommendation 3: Support matchmaking and professional networking
Participation in makerspaces opens up new horizons, enabling makers to reach out to a wider network which could also yield more professional opportunities. Or at least this is what the majority of the respondents expect. Makers and consumers want to be empowered, not only to depict their ideas for new products but to also be able to find expertise and manufacturing capabilities to implement them. Matchmaking services are deemed essential and at the same time, the analysis of existing roles and collaborations can set the ground for new synergies to be established and new opportunities to be identified.
Recommendation 4: Diversity, inclusiveness, accessibility and empowerment
Makers tend to care a big deal about accessibility; they want to see action to involve groups which are underrepresented in the maker movement, such as women, elderly, low socioeconomic status groups or people with disabilities. They stress the importance of a respectful, inclusive and supportive culture, the unwarranted genderisation of tasks/interests and the need for more female role models in the social manufacturing world. While the maker movement has unique cultural elements, these are all cemented on the principles of diversity empowerment and unfettered access.
Obviously, this list is not exhaustive. There are still so many lessons to learn, angles to explore, and diverse experiences and stories to be shared and studied that one should not treat this as anything more than a humble start. The empirical nature of these insights provides some needed confidence to these results, but as is often the case with self-reported data and online data collection methods, there are some limitations to the transferability and generalizability/representativeness of these results. Nonetheless, the people working in iProduce have put considerable effort to help practitioners, policy makers and makerspace managers better reach out to the maker base. These stakeholders sometimes must face an uphill battle, especially in the covid-era, in keeping things afloat, exploring different tools, triggers and business models. One can hope that such insights can still be useful or bring up more discussion about the way forward.
This publication was based on the work undertaken by the European projects iPRODUCE "Unlocking the community energy potential to support the market uptake of bioenergy heating technologies". iPRODUCE has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 870037.
Assistant Prof. Efthymios Altsitsiadis, PhD (male) is a behavioural economist with a mind for interdisciplinary research. A user-centricity enthusiast, Efthymios is set to help provide evidence-based answers to some of the most persistent and evasive behavioural questions in a variety of areas like sustainability, health, energy and mobility. His Phd was in decision support systems and he is currently teaching Machine Learning and Digital Behaviour at CBS. He conducts research in collaborative production and circular economy, in advanced technological agents (smart apps, avatars, chat-bot services) and has worked as a social scientist in several cross-disciplinary research projects.
Posted on June 22, 2021 January 5, 2023 Categories About, Communication, Concepts, Economic, Environment, Featured, Initiative, Innovation, News, Partnerships, Social, Stakeholders, Sustainability, TechnologyTags #accessibility, #circular, #community, #diversity, #empowerment, #inclusion, #iPRODUCE, #knowledgesharing, #makersmovement, #makerspace, #manufacturing, #networking, #recommendations, communication, society
Is Seeing Knowing? When Visibility Reduce Transparency
We are arguably living in an era of visibility in which our communicative interactions with others are accessible to the gaze of third parties. Does this mean we understand our fellow beings, our organizations and our governments better? Well, not quite and maybe not as expected.
We tend to assume that we understand what we see. Yet, we see a lot that we do not grasp.
Increased visibility is often taken to represent an increase in transparency. Thus, for example, it is commonplace to associate organizational transparency with visibility management. Many writers use the notions interchangeably as if we automatically comprehend what we see. Such assumption is misguided. Although transparency has come to refer to a host of different qualities and activities, its original and fundamental promise is to increase knowledge and insight and, this way, reduce manipulation, ensure fairness and avoid power abuse (see previous blog). Visibility on its part merely signifies the ability to identify by the eye.
Although it intuitively makes sense to treat these terms as related, especially because they both invoke an ocular metaphor, they differ significantly in terms of the depth of the involved perception. Transparency, in spite of its complexities, absurdities and unexpected consequences when implemented in practice, continues to invoke the ideal of some deeper understanding. What is visible, by contrast, may arouse our attention only in passing without producing any further insight. The conflation of the two therefore weakens our approach to transparency and reduce society's ability to develop more sophisticated transparency practices.
Visibility is not the same as transparency and may not enhance understanding and insight.
'Visibility' has several related meanings, including the state of being visible, the ability to see or be seen under certain conditions, and the distance at which a given object can be identified with the unaided eye, also known as visual range. In all these senses, visibility is related to observation and suggests that the object in question is accessible to the eye and can be distinguished more or less clearly from its surroundings. While technological developments have turned visibility into a mediated quality freed from the temporal and spatial constraints of the here and now, the visible still refers to "that which is perceptible by the sense of sight", perhaps augmented by other senses.
What is perceptible to the eye is heavily shaped by contexts, such as norms, cultures and social structures.
In everyday usage, the notion of visibility is frequently invoked in a more abstract sense that combines sight with understanding. Notions such as discover, observe, notice, recognize, monitor, viewpoint, or perspective, for example, all invoke both dimensions and contribute to the impression that what we see is what we comprehend. As Brighenti (2007) puts it "vision is alias for intellectual apprehension" (p. 327). This belief may explain ambitions to uncoverand expose reality to the naked eye. Although such ambition is often driven by social indignation and a desire for fairness and change, major data leakages such as WikiLeaks illustrate that visibility may confuse, frustrate or pacify rather than inform.
The eye and what it allows us to see is a frequent source of illusion.
Leaving aside the possibility of optical illusions, although this is a quite realistic prospect in a world saturated with images, the gaze is a frequent source of blindness. While the promise of transparency is to help the spectator see into something, there is always the risk that the gaze is blunted or bored by impressions to the effect that objects accessible to the eye are seen through and ignored. Even when this is not the case, the lack of an Archimedean point of observation from which an observer can perceive the object of inquiry in its totality seriously challenges the notion of a single perspective on reality and thereby conventional conception of transparency as visibility.
Without knowing in advance what to look for, visibility is likely to confuse more than inform.
While the gaze is obviously never "naked" or innocent, it takes a trained gaze as well as understanding of local norms, mores and myths, as anthropologists are aware of, to look systematically and to know what to look for. This problem is evident when we are invited to "see for ourselves", but lack professional experience to differentiate between relevant and irrelevant material and events. When organizations of various sorts, for example, host "open house" days – a practice that is quite common in in all kinds of organizations from organic farming to higher education – visitors may be able to see a lot without necessarily knowing what to make of it. Here, visibility only makes sense because it is placed in a context of a well-known social ritual.
What happens to insight if visibility affects the objects we intend to understand?
In addition to the limitations of the gaze itself, it is well-known that objects of attention are significantly affected by processes of observation. While system theorists have argued that the properties of an object are relative to the observer, breakthroughs in quantum physics have demonstrated that even small particles behave quite differently when observed. The behavioural effects of visibility are likely to be even more dramatic when the objects of attention are human beings. In such cases, whatever is visible is likely to be shaped by power plays and image management.
Visibility is a trap.
(Foucault, 1977, p. 200).
The very possibility of being observed affects the behavior of those within visual range. While Foucault described this tendency in the context of prisons, Bernstein has demonstrated how it affects work practices. However, whereas Foucault emphasized that visibility enforce self-discipline, Bernstein illustrates that visibility may reduce productivity because it removes attention from working effectively to practices of signaling that the correct procedures are followed.
When impression management is prevailing, what we see are ideals rather than actual practices.
When scholars and social critics take visibility to mean transparency, they reproduce a deep-seated conviction that the gaze is a primary source of insight. By maintaining a close link between visibility and transparency, transparency is reduced to a surface phenomenon that only requires accessibly to the eye. Hereby, what visibility does or conceals is ignored. Increasing visibility may hide an object in plain sight. It may also dazzle the observer in ways that reduce the ability to understand what goes on.
The fascination with visibility needs to be tempered by a persistent aspiration for knowledge and real insight.
Bernstein, E.S. (2012). The transparency paradox: A role for privacy in organizational learning and operational control. Administrative Science Quarterly, 57(2), 181-216.
Brighenti, A. (2007). Visibility. A category for the social sciences. Current Sociology, 55(3), 323-342.
Foucault, M. (1977). Discipline and punish. The birth of the prison. London: The Penguin Group.
Neyland, D. (2007). Achieving transparency : The visible, invisible and divisible in academic accountability networks. Organization, 14(4). 499-516.
Roberts, A. (2012). WikiLeaks: The illusion of transparency. International Review of Administrative Sciences, 78(1): 116-133.
Stohl, C., Stohl, M., & Leonardi, P. M. (2016). Digital age—Managing opacity: Information visibility and the paradox of transparency in the digital age. International Journal of Communication, 10, 123-137.
Source: Photo by Jonathan Borba on Unsplash
Posted on May 18, 2021 January 5, 2023 Categories About, Accountability, Behaviour, Communication, Concepts, Featured, Issues, News, ReportingTags #behaviour, #insight, #knowing, #perception, #seeing, #transparency, #understanding, #visibility, communication
March for Gender #4: Leaving no one behind
By Maria Figueroa
To mark International Women's Day 2021, the University of Bath's Business and Society blog and Copenhagen Business School's Business of Society blog have teamed up to present March for Gender. This month we will explore research focusing on gender, or research findings that have specific implications for women.
In our final piece of the month Maria Figueroa looks beyond gender, and explains how business education and research can create a fully inclusive society that leaves no one behind.
The ethos of the Sustainable Development Goals (SDGs) is that society should be inclusive, environmentally just and enabling economic prosperity leaving no one behind. Business knowledge, education and research in these areas keep however advancing in separated disciplines, often directing the focus of attention to partial responses that may contribute to perpetuate conditions that leave people behind. Cohesion in achieving the SDGs goal of leaving no one behind cannot rely in adapting sameness of solutions. It requires attending to societal differences and facilitating the multiplication of ideas, creativity and forms of collective action and knowledge production and dissemination.
There is a critical role for research and education to help deepen the inquiry of what it takes to leave no one behind particularly a key role in business education.
The ethos of business education and research for sustainability is to prepare private actors, investors, new business models, organizations and institutional actors in finding ways of addressing SDGs. In the selection and adoption of seventeen development goals of 2015 involvement of a great array of societal actors, from national governments to business representatives, big corporations and civil society organizations was ensured. The resulting agenda for action made emphasis to acknowledge the central role in achieving SDGs to be played by private actors, private finance, and businesses in forms of public private partnerships.
However, more than five years later, only marginal changes are tangible within business school education and research and a weak articulation of the bold SDG agenda for change.
Besides individual courses and occasional initiatives, no major overhaul or programmatic educational shift effort within or across departments has challenge the operation and scope of business education.
A common approach in universities and business schools has been identification of how many SDGs goals are being targeted in their scope of education and current action, and reporting on these as evidence of engagement with SDGs. A similar approach serves to help businesses and public actors learn and report on what they are already doing to engage with SDGs. This together with helping business explore effective reactive stances to avoid societal or environmental crisis or challenges emerging. These two common approaches to business research and education make no clear inroad for how business and private actors can contribute to leaving no one behind.
The ethos of civil society is to generate voices and manifestations that reveal the extent of economic, social and environmental discontent, lack of improvement and unjust conditions and of articulating demands for action and changes at all levels. Recent events have elevated voices in movements such as Black Lives Matter, Me Too, Fridays-for-the-Future, Extinction Rebellion, Indigenous communities and other organized voices in society ranging from extreme right movements to nature representatives organizing other than human voices (forest, soil, pollinators, biodiversity).
The complexity of the current climate and environmental challenges and increasing volume and presence of these voices cannot be dismissed in business education and research, or handled in separated efforts as matter of concern only to businesses operating in international or developing regions and localities.
Leaving no one behind requires engaging in knowledge production that gives attention to all forms of engagement in business and societal interactions. This attention should facilitate changes in education that to produce exceptional novelty and innovation and to nurture a potential to advance knowledge of practical and academic high quality, education that is capable of setting new frontier research bringing in systemic interactions within a variety of academic disciplines and ensuring practical and transformative business knowledge with a holistic and environmentally just take toward sustainability transition.
Business schools are posed to advance breakthrough knowledge to meet the "leave no one behind" goal, tackling several areas from the production and service processes transparency specifically in value creation, to emphasising sustainability and environmental justice through the company's technological advancements and presenting sustainable values, mission and vision.
Furthermore, business education need incorporating appraisal of systemic change associated with challenging processes and their ecological and social impact and behavior change. With the capability to increase the value for the environment, participation of nature in business innovations, the understanding of what enhances people's agency, what provision safe wards participation, and improves cooperation and what helps to unleash individuals vitality and imagination and can contribute to co-create new market niches and business opportunities.
Maria Figueroa is an Associate Professor in Sustainability Management at the Department of Management Society and Communication at Copenhagen Business School. Her research intersects scholarship from urban sustainability science, comparative international politics of climate mitigation, innovation, and partnerships for sustainable development. She focuses on the assessments of drivers, trends and challenges of low carbon transitions and sustainable development.
Posted on March 30, 2021 January 5, 2023 Categories Concepts, Equality, Featured, Initiative, Innovation, Issues, News, Research, Social, SustainabilityTags #BusinessEducation, #change, #equality, #noonebehind, #research, #SDGs, #sustainability, #sustainableDevelopment, engagement
SFDR, NFRD and the EU Taxonomy – What is their relationship?
The new Sustainable Finance Disclosure Regulation (SFDR) is on the minds of many investors these days. While a lot has been written on SFDR itself, I discuss how it relates to the Non-Financial Reporting Directive (NFRD) and the EU Taxonomy on sustainable economic activities. Taken together, these regulations can be overwhelming and maybe even confusing. While this is not the right place to comprehensively discuss all three regulations, I make some clarifications on their interlinked nature.
SFDR, NFRD, and the EU Taxonomy – What are we Talking About?
To start with, let us briefly review the three legal instruments, all of which belong to a series of EU regulations under the EU Action Plan on Sustainable Finance.
NFRD is the EU legal framework for regulating the disclosure of non-financial information by corporations. It was adopted in 2014 and states that corporations have to report on ESG information from 2018 onwards (for the 2017 financial year). NFRD is rather flexible – it applies only to so-called "public interest entities" (basically rather big corporations) and it contains so-called comply-or-explain clauses (allowing for non-disclosure of information if this is made transparent and reasons are given).
SFDR is the new EU regulation that introduces rules for financial market participants (FMPs) and financial advisers (FAs) to report on how they account for sustainability risks. SFDR applies at the "entity level" (i.e. requiring financial firms to report on how the whole organization deals with such risks) and also on the "product level" (i.e. requiring firms to report on how their financial products are affected by such risks). SFDR contains few comply-or-explain clauses (e.g., smaller firms, with less than 500 employees, can opt out of reporting on due diligence processes). The regulation asks all FMPs and FAs to report on sustainability risks even if they do not offer ESG-related products. If an entity offers ESG-related products, SFDR requires additional disclosures depending on how "green" the product is considered to be. SFDR came into force on 10 March 2021.
The EU Taxonomy regulation (hereafter: the Taxonomy), which entered into force 12 July 2020, reflects a common European classification system for environmentally sustainable activities. Basically, the Taxonomy tried to answer the question: What can be considered an environmentally sustainable activity? Answering this question is essential for investors to prevent "greenwashing" – i.e. a situation in which financial products are marketed as being sustainable without meeting sustainability criteria. The taxonomy defines six environmental objectives, and it defines an economic activity as sustainable if this activity contributes at least two one of these objectives without, at the same time, doing significant harm to any of the other objectives.
Differences and Commonalities
To start with, it is important to note the different legal status of SFDR/the Taxonomy as well as NFRD. NFRD is based on an older EU Directive (2014/95/EU). Directives imply that EU member states have to translate the broad requirements into national regulation. By contrast, SFDR (2019/2088) and the Taxonomy (2020/852) are both based on European regulation, which is immediately enforceable and does not require transposition into national law.
To understand how the three legal frameworks relate to each other, look at the Figure below. NFRD applies to corporations of all kinds. Hence, for investors NFRD is mostly relevant because it stipulates how investee companies report ESG data. SFDR, by contrast, most concerns financial market actors and ensures transparency about how these report on sustainability risks to their audiences (e.g., retail investors). The Taxonomy was introduced to have a common reference point when trying to figure out whether an economic activity really is sustainable. The Taxonomy therefore has the power to further specify the regulations set out in SFDR and NFRD.
source: Andreas Rasche
Emerging Relationships
The linkages between the three frameworks will be further specified throughout the coming years. While SFDR has been in force since 10 March 2021, it is only in the so-called "level 1 stage of development". As with many EU regulations, level 1 development sets out the basic framework principles for a regulation, however without specifying technical details. SFDR level 2 will come into force once the regulation is complemented with Regulatory Technical Standards (RTS), which are developed right now. The RTS will also specify the linkages to the Taxonomy in more detail (e.g., related to the "do-no-significant-harm" concept inherent in SFDR).
So, what can we say right now? The current versions of SFDR and NFRD do not yet link disclosures to the Taxonomy. This is likely to change, especially with the SFDR RTS being further specified and rolled out (in early February the European Supervisory Authorities released their final draft of the SFDR RTS). Moreover, the NFRD regulation is currently under consultation and will be revised in the near future. However, two important linkages are important to consider right now.
First, the scope of the Taxonomy is defined through NFRD and SFDR. In other words, if an organization is affected by NFRD and/or SFDR, the Taxonomy will also be relevant for its disclosure practices. It is important to note here that the EU Taxonomy defines further mandatory disclosures in addition to what is laid out by NFRD and SFDR.
Second, the Taxonomy asks companies (incl. asset managers) to report the percentage of their turnover and capital as well as operational expenditures that are aligned with the Taxonomy. It also asks asset managers to report the percentage of their portfolio which is invested in economic activities that are aligned with the Taxonomy.
We will witness a good deal of technical specifications of all three regulations throughout the next years. SFDR level 2 reporting will kick in once the RTS standards are part of the reporting (probably by mid-2023); also by 2024 year-on-year comparisons of data points under SFDR will be likely mandatory. The six environmental objectives of the Taxonomy will be specified through technical screening criteria, some of which will be released very soon.
It is good to see non-financial reporting and sustainable finance being backed by strong European regulations. It allows for more comparison and benchmarking and hence transparency. But, of course, we should also be prepared for a good deal of clarifications that will be necessary until institutionalized reporting cycles can fully kick in and unfold their potential.
Andreas Rasche is Professor of Business in Society at the Copenhagen Business School (CBS) Centre for Sustainability. His latest book "Sustainable Investing: A Path to a New Horizon" (with Georg Kell and Herman Bril) was published recently. Email: ar.msc@cbs.dk Homepage: www.arasche.com
Posted on March 25, 2021 January 5, 2023 Categories About, Accountability, Concepts, Economic, Environment, Featured, Investment, News, Policy, Regulation, Reporting, Standards, SustainabilityTags #Environmental, #EU, #finance, #framework, #Investing, #NFDR, #regulation, #reporting, #sfdr, #sustainability, #SustainableFinance, #taxonomy, #transparency
March for Gender #3: We need a manifesto for Maya, not just a celebration of John
By Pierre McDonagh and Andrea Prothero
Here Pierre McDonagh and Andrea Prothero call out gender discrimination in the marketing academy. Their latest study, looking at gender representation in marketing's academic journals, showed that women were significantly underrepresented on editorial boards, and that special issues and awards favour men over women. They use these disappointing findings to call for meaningful change, outlining how the problem could be addressed.
Despite the progress made in recent years, gender inequality persists in all walks of life. In our workplaces, the statistics are especially troubling. In 2020, men earned 15.5% more than women for the same work. As of 2019, only 7% of FTSE 100 companies had a female CEO.
Discrimination also comes in less easily measurable ways, and many women feel that their work is not taken as seriously as their male counterparts or that their gender has caused them to lose out on a promotion.
Wake up! It's 2021!
We decided to explore this important issue in our latest paper in the Journal of Marketing Management. We looked at gender representation in marketing's academic journals, through three key areas – the gender composition of editorial boards, special issue celebrations and the awards process. This study is a continuation of a larger research project which examines 'the development of feminist thought within marketing scholarship from 1993 to 2020'.
Our results painted a disappointing picture. It's a sad indictment of our field that in 2021 the facts are as stark as they are. So, we think it's important to pause at this point in the process, to empirically call out one major issue – gender discrimination within our academy.
We wrote about this as we believe many scholars might not realise what is happening in our academy and, as our recent paper suggests 'it's hard to be what you cannot see'!
Our goal is to get scholars in the marketing academy to think differently about things that are hidden in plain sight. We also want them to join us in asking for meaningful change with respect to existing gender discrimination in the marketing academy.
A sad indictment of the field
For this study, we examined the gender composition of 20 leading journals [i], considering Editor-in-Chief, Co-Editor, Advisory Board, Associate Editor and Editorial Review Board positions within the journals. We found that, while there has been improvement since 2017, nonetheless in 2020 over two-thirds of the editorial board positions within leading journals in the marketing academy are held by men.
At the same time our research highlighted how journal celebrations also favour men. Special issues for example include reflections from previous editors (who are mostly men), and invited commentaries (who are mostly men). And, where journals and/or their related associations celebrate outstanding research through awards processes, those awards which are named after leading figures in the field are all named after men! We are not arguing that women are deliberately excluded from celebrations, but that there are structural, systemic and institutional biases at play, which means male colleagues are privileged over women. And this of course, also means that injustice and inequality for female academics are perpetuated.
Addressing the problem
How then can the marketing academy and the publishing houses which publish our research help rectify this sad state of affairs? First of all, we can all ask our journal editors and gatekeepers in the Academy to act now. Specifically, we are asking journal editors and publishing houses to review their activities, and we offer here 4 simple steps to tackle gender discrimination specifically, and inclusion and diversity more broadly, in the marketing academy:
Build diversity into existing journal review boards which extends across the globe. Cry out for each Editor-in-Chief to publish a statement for their journal making clear 'why' its gender and race composition is the way it is. Ask that they embrace the principles of unity & diversity. Editors-In-Chief are well positioned to lead the charge moving forward.
Introduce a quota system to ensure diversity of people involved in journals from advisory boards, manuscript review boards, Associate Editors, Co-editors, to the Editors-In-Chief.
We should ask awkward questions of the leaders in our field. Why do the majority of named awards in our field honour white men? We request awards which also honour the leading people of colour and females in our field. Quite simply the current status quo is an injustice – not everyone is a white male academic, so why do they dominate everything!?
Celebrations – Our Editors-in-Chief can shape the field by celebrating those who remain invisible within our field. We have female role models for younger scholars to inspire them to greatness, but they are not celebrated or included either in editorial boards or in special issue celebrations to the same extent as men. Let's rectify this.
Can we please bring the marketing academy up to speed in the year 2021? Let's not procrastinate here or leave it to DC or Marvel fantasy movies to inspire change, let's do it ourselves.
We know Rome wasn't built in a day and change takes time, but we've heard all the clichés before – we are fed up, we are here, and we want to be listened to. Our marketing academy should reflect the values we cherish and those we wish our students to emulate. For too long the marketing academy has favoured one gender (and one race) and as a result, women have been pushed to the periphery of the wider academy.
Change, not tokenism
What's more we want fundamental change, not tokenism.
We need an intersectional approach now more than ever; this recognises issues of race and gender, alongside other examples of subordination such as appearance, class, religion, sexuality and ability which are not independent of each other.
We need what Marian Wright Edelman (founder of the Children's Defense Fund and civil rights activist) calls a global sense of connection – where everyone can be seen, and all voices are heard and rewarded, whether by being invited to contribute to special issues celebrating our journals or by membership of our editorial boards! We deserve 'marketing joy' to underscore what we have in common with others in a multiracial, multicultural, democratic society.
This is important, not only in providing role models for aspiring academics who are not solely "pale, male and stale", as well as providing equal opportunities in terms of key indicators of esteem within our academy, but also in terms of harnessing what gets published in our journals. In 2021 it is simply not acceptable that 88% of advisory board members within our journals are men or that some journals in our field have never had a female Editor-in-Chief. When publishing houses claim on their websites to be fully committed to inclusion and diversity in their journals, we also need this to shine through within our journals. In the marketing academy, while there has been improvement in recent years, gender representation is still appalling.
We call on those who can to change this. We need parity. Now.
[i] Journal of Consumer Psychology, Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research, Marketing Science, Journal of the Academy of Marketing Science, Journal of Retailing, International Journal of Research in Marketing, European Journal of Marketing, Industrial Marketing Management, International Marketing Review, Journal of Advertising, Journal of Advertising Research, Journal of Interactive Marketing, Journal of International Marketing, Journal of Public Policy and Marketing, Marketing Letters, Marketing Theory, Psychology and Marketing, Quantitative Marketing and Economics.
Andrea Prothero is Professor of Business and Society at University College Dublin, Ireland, and Co- Director of the UCD Centre for Business and Society (CeBaS). Her research broadly explores the area of Marketing in Society with a key focus on sustainability and gender issues.
Pierre McDonagh is Professor of Critical Marketing & Society at the School of Management, University of Bath, UK. Pierre has researched sustainable consumption & production since the early 1990's and helps people understand what sustainable communication entails. He also writes about issues in gender equality in marketing and the benefits and challenges of critical marketing communications. He recently co-authored 'The Dark Side of Marketing Communications' with Tim Hill, which features as part of the Routledge series on Studies in Critical Marketing.
Posted on March 23, 2021 January 5, 2023 Categories About, Behaviour, Communication, Concepts, CSR, Development, Equality, Featured, Initiative, Issues, NewsTags #change, #changenow, #discrimination, #diversity, #gender, #genderequality, #manifesto, #marketing, #marketingacademy, journals
Arguing for Climate Adaptation
By Stella Whittaker
This month saw the publication of the Climate Policy Initiative's (CPI) long awaited analysis of climate finance flows in cities. Each year the CPI publish an analysis of the global landscape for climate finance but this year that work was supplemented by this urban analysis. There will also be another forthcoming CPI report due in April 2021 – State of Cities Climate Finance Report which will help paint the full picture.
Cities and urban communities across the globe are highly vulnerable to climate change – heat waves, extreme weather volatility, floods, droughts, coastal inundation, and vector borne diseases. The Carbon Disclosure Project (CDP) data indicates that in 2018, 85% of cities reported major climate-related disruptions, including flash and surface flooding and extreme weather events like heat waves and droughts.
There is an urgency for much more discussion, research and attention on climate finance to address climate adaptation needs in cities. While many cities have begun planning policies and programs to build resilience towards climate hazards, the how and where of finance for those activities is less understood.
It is plain to see from this practitioner-based work that climate finance for adaptation is not being supplied or demanded at a scale that is commensurate with the size of the impacts of climate change. Scholars have found that here are significant data and reporting challenges and a myriad of policy challenges and barriers. I am stressing here the need to argue loud and long for adaptation along with mitigation activities.
CPI recorded annual global climate finance flows of USD 546 billion in 2018. Of this only 4% can be attributed to adaptation. Finance flow in cities for adaptation is particularly problematic. The CPI also found:
Between 2010 and 2014, cities received less than 5% (in the range of USD 109 Million) of global adaptation finance.
Morgan Richmond, Nidhi Upadhyaya and Angela Ortega Pastor, CPI, 2021
So, based on current estimates, despite all the difficulties with measurement and tracking, potentially less than 1% of global climate finance is flowing to cities each year for adaptation, which is much less than the USD 11-20 billion that what the World Resources Institute (WRI) stated be needed on an annual basis to protect global urban infrastructure from climate risks (WRI, 2019).
This month I launched a new Linkedin Group Adaptation Finance – this is a discussion, research and professional development group for investors, governments and academics alike dedicated to developing an understanding of climate finance for adaptation. By following the Group there is an opportunity to participate in my PhD climate finance research (survey, interview, focus group or information provision), whilst learning and sharing in the latest research and trends from various industries. As climate adaptation practitioners, investors, governments, academics, scientists and researchers we rarely meet to share knowledge and experiences, please join in this unique collaboration. I want to build an active research environment for both investors and city government focused on climate adaptation.
In addition, in the Group:
WE will analyse climate finance flows in cities.
WE will also analyse activity against internationally recognized benchmarks for appropriate urban climate change adaptation financing.
WE will collate innovative climate finance practice.
WE will generate new knowledge on how to deliver and finance large-scale innovative city financing solutions through public and/or private stakeholders.
In Arguing for Adaptation there are five practical things to think about in getting the balance right:
Make climate adaptation an equal priority to climate mitigation
Understand future climate risks to your business and/or constituency (look at the guidance from the Taskforce on Climate-Related Financial Disclosures (TCFD)
Understand climate finance flows in your city and region(s) you operate in
Enter into a dialogue with investors and cities to understand each other's challenges and opportunities
Look for and prioritize climate initiatives that deliver dual or even multiple benefits – climate resilience, mitigation, natural capital etc. such as nature-based solutions NbS
If you like a good cause and a good argument, then please join me.
Stella Whittaker is a PhD Research Fellow who is undertaking a PhD in climate finance at Copenhagen Business School, at the department of Management, Culture & Communications. Stella is a specialist in the field of sustainability, circular economy and climate change. She has worked for over 30 years as a senior executive in sustainability, climate change, infrastructure sustainability & environment.
Posted on March 19, 2021 January 5, 2023 Categories About, Cities, Concepts, Development, Environment, Featured, Issues, News, SustainabilityTags #Adaptation, #cities, #climateadaptation, #climatechange, #CPI, #finance, #global, #LinkedIn, #research, #resilience, #urbandevelopment, Planning
March for Gender #2: The Gendered Impact of Covid-19
By Maha Rafi Atal
Most years, International Women's Day is greeted by articles highlighting both progress made towards gender equality, and the distance still to close. 2021 is different. This year, organizations from the European Parliament to UN Women have instead drawn attention to how women have been pushed backwards – economically and politically – during the coronavirus. It has been "a disaster for feminism,"and a "great amplifier" which has exacerbated existing inequalities and unraveled tenuous gains. What does the research show?
First, the global economic contraction of the past year has disproportionately harmed women. In the United States alone, more than 2 million women have dropped out of the labor force altogether, a regression to 1988 participation levels, erasing a generation of gains.
Globally, women account for 54% of jobs lost during the pandemic, even though they make up only 39% of the global formal workforce.
Women bore the brunt of job losses in 17 of the 24 member-states of the OECD in 2020, and in South Africa, a survey found that two-thirds of workers laid off or furloughed in the first wave of the pandemic were women.
In part, this is a reflection of the sectors women work in, such as travel, tourism, restaurants, and food production, which have been largely shut down over the past year.
Women are also more likely to be employed on precarious or zero-hours contracts within these sectors, which made them vulnerable to job cuts, or in informal roles which left them outside the reach of government income-support schemes.
Finally, 190 million women work in global supply chains, including garments and food processing, and these industries have contracted as buyers either withdrew orders from suppliers during the recession, or sought to re-shore production closer to home. Labor market dynamics also mean women who stayed in work are among the most exposed to contracting the virus itself. A majority – estimates range from 67 to 76 percent – of the global health care workforce are women.
Yet only one quarter of the gendered discrepancy in job losses can be explained by the sectors where women are employed. Far more significant is the burden of care labor, both paid and unpaid, which disproportionately falls on women in both developed and developing countries.
Working mothers in the United Kingdom, for example, are 50% more likely than fathers to have either lost their jobs or quit in order to accommodate the responsibilities of caring for children with schools closed, with European women doing on average twice as much care labor as men during this period.
Over a million women in Japan left the job market in the first wave of the pandemic due to childcare needs at home, erasing tenuous progress the country had made towards workplace gender equality in the last decade. This unequal weight of the pandemic builds on pre-existing inequalities, as women are lower earners in many societies, meaning their jobs are considered a lower priority – by both employers and households – in times of crisis.
This economic crisis is not just a blow to women's economic position, but to their political freedom. The "Local Diaries" podcast in India recounts the stories of women whose personal, political and sexual freedoms have evaporated as they have been locked down at home. As in pandemics past, covid-19 has seen a significant spike in domestic violence, femicide and other gender-bases violence in countries under lockdown. These include including developing countries like Nigeria, Argentina, Brazil, India, Pakistan, and China, and developed countries including the United States, the United Kingdom, France, Ireland, Lithuania, Sweden and Italy, a reminder that the home is not a safe place for many women. UN Women has referred to these spikes in violence as the "shadow pandemic."
Moreover, despite early warnings from international organizations and women's rights advocates, many countries shut down or diverted resources away from reproductive health care during the pandemic, leading to a rise in maternal deaths, unsafe abortions and pregnancy-related deaths. Finally, lockdowns themselves – and the expansion of policing and military powers associated with their enforcement – can themselves pose a risk to women, as police forces can themselves be significant perpetrators of violence against women, and as governments take advantage of these powers to suppress political organizing, including feminist organizing, as seen recently in both the UK and Poland.
At the same time, in a punishing political environment, women and feminist organizations have been at the forefront of pandemic response. The Chilean feminist movement has released a useful guide for governments and employers for responding to the pandemic in a gender-just way, while the Indian Kudumbashree women's collective organized grassroots community kitchens and takeaway restaurants to provide food and employment to women, especially migrant women, during the country's shut down, and repurposed textile micro-enterprises, largely women-owned, for the manufacture of PPE.
Despite calls from international experts for governments to respond directly to the crisis facing women by keeping services for reproductive health or shelters for victims of gender-based violence open, targeting cash transfers to women in informal employment and providing for paid child care, UNDP reports that only 12% of governments have adopted adequate gender-sensitive measures in their pandemic response.
Meanwhile, employers who have disproportionately laid off women in the crisis now report that gender equity will take a backseat to restoring their financial sustainability as the pandemic ends. This is made more difficult by the fact that some governments, such as the UK, have suspended requirements for companies to report on their gender pay gap or comply with other equality requirements, as part of pandemic support.
In our own research on corporate responses to covid-19, we found brands advertising luxury fashion goods to women and presenting the pandemic lockdowns as a welcome relief from labor in which women could enjoy them, a regressive image that shows how women's work is still seen as frivolous and extraneous.
This International Women's Day, then, we must reflect not on what progress we have made or can make, but on how women, internationally, can recover what we have lost.
Maha Rafi Atal is a postdoctoral research fellow at the Copenhagen Business School, where her research focuses on corporate power, corporate social responsibility and corporate influence in the media. She is a co- Investigator on the Commodifying Compassion research project. http://www.maha-rafi-atal.com
Photo by Giacomo Ferroni on Unsplash
Posted on March 16, 2021 January 5, 2023 Categories About, Behaviour, Concepts, CSR, Development, Equality, Featured, Issues, News, Research, SocialTags #consequences, #covid19, #data, #developing, #equality, #equity, #feminism, #gender, #genderequality, #impactofcovid, #inequality, #jobs, #research, #supplychain, #women, #womenrights
Is Pollution the Only Road to Business Prosperity?
Sustainable Visioning as a driver of Corporate Transformation
By Heather Louise Madsen
CO2 reduction is a hot topic for almost every company today. Here the focus is not just on the CO2 generated by the company itself, but also on the carbon emitted along its value chain. The problem is that changing processes, or even products and services, to make them more environmentally friendly can be a daunting and costly task. This can leave CEOs and other top managers wondering what the real cost and impact of CO2 reduction is, where to start, and whether it is even possible to create a prosperous business without generating pollution.
In answer to many of these tough questions, an increasing number of companies are succeeding in reducing carbon and completely transforming their businesses into sustainable and profitable powerhouses, using a combination of strategic vision and sustainability orientation.
A new CEO for a Company Topping the Sustainability Ranking Charts
January 1st, 2021 was Mads Nipper's first day as CEO of the Sustainable Energy Giant Ørsted. And before the end of his first month in this new position, Ørsted ranked the most sustainable energy company for the third year in a row, and the second most sustainable company in the world after Schneider Electric. This raises the question, what is Nipper's position on sustainability, and are these views important for his role as CEO of Ørsted?
In 2016, as the then CEO of Grundfos, Mads Nipper gave a presentation for the Global Compact Leaders Summit in New York where he stated: "I represent an SDG 6 and 13 company, who also happens to be the biggest water pump company in the world." The UN Sustainable Development Goals (SDGs), representing a global platform and common language for addressing 17 core sustainability issues and their impact, also figure prominently in Ørsted's corporate language. From Annual Reports to investor letters, Ørsted identifies SDG 7 (energy) and SDG 13 (climate action) as their primary impact areas. This indicates that there may be some very fundamental alignment between Nipper's visionary statement and the mindset of his predecessors at Ørsted.
What led Ørsted to up-end their core business and undertake a sustainable transformation?
In 2001, Ørsted (then DONG Energy) hired CEO Anders Eldrup, just as Denmark was going through a liberalization of the electricity and gas sectors, which was putting extreme financial pressure on the company. Eldrup was the former Danish Secretary of State, and as such had extensive experience with both financial and political mechanisms. Seeing an opportunity to take advantage of an emerging political demand for climate action and policies to accelerate the development of offshore wind, Eldrup began increasingly to focus innovation resources on offshore wind and renewable energy, while the primary business of the company remained oil and gas. As renewable energy subsidy schemes increased in Denmark and the EU in the years that followed, Eldrup formulated a new company strategy that was released in 2009 called 85/15: "to transform our company from a situation of 15% renewable energy and 85% of fossil-fuel based energy to the opposite". Jakob Askou Bøss, Head of Strategy and Communication at Ørsted, identified the strategic analysis of CEO Anders Eldrup as "The driving force behind formulating the new vision of the company," referring to the 85/15 objectives.
Despite the sacrifices that would need to be made as the core competencies of the company would have to be completely re-designed and transformed to focus on not-yet price competitive technology, the decision had been made. And this strategy was then further anchored to sustainability with Ørsted's vision: "creating a world that runs entirely on green energy". This vision made explicit the desire to reach outside of the organization with their "green" aspirations, connecting not only to ideals of wealth and prosperity, but also to planetary concerns.
These 'green aspirations' were then followed up by Eldrup's successor Henrik Poulsen, who became Ørsted's CEO in 2012. As stated by Poulsen:
"In the world of energy, the fundamental challenge we face is to transform our energy systems so that more and more of the energy we generate comes from renewable sources such as wind power, biomass and solar energy."
Ørsted, Our sustainability reports, 2012, DONG Energy's GRI Reporting 2012
Poulsen then backed these aspirations by setting very specific targets for the company including "quadrupling our offshore wind capacity, from 1.7 GW in 2012 to 6.5 GW in 2020". By 2017 Ørsted had completely divested all upstream oil and gas. This was also the year that newly built offshore wind became cheaper than black energy for the first time in history. By the time Ørsted reached 2020, the company was ranked number 1 of more than 7500 international, billion-dollar companies in the Corporate Knights' 2020 index of the Global 100 Most Sustainable Corporations in the World, making Ørsted the most sustainable energy company in the Global 100 index. As demonstrated by Ørsted, strategic vision and sustainability orientation were used as drivers for innovation, transformation and growing the company's sustainable business and investment portfolio. But how can Ørsted's story help other businesses? The answer lies in sustainable visioning.
How can sustainable visioning help businesses onto a path of prosperity AND sustainability?
Sustainable Visioning is a new term defining the management process of combining a strong strategic vision with the acknowledgement of the necessity of committing more profoundly to people, planet and prosperity concerns.
Madsen & Ulhøi, 2021
The following are guiding principals of sustainable visioning that Ørsted can be seen as applying, and which may be able to help other companies onto a similar path. First, in order for businesses to achieve sustainable visioning, they need to practice proactive, extroverted and visionary, rather than introverted approaches to sustainability. When working on sustainable innovations, it can also be wise to engage the Tripple Helix model including industry, universities and government working together. Innovation can also be usefully extended beyond products and services, to include business model innovation. This can help to navigate to a desirable sustainable future through direct planning, decisions, actions and behavior in all aspects of the business. And finally, taking a clear long-term orientation is also seen as important for sustainable visioning to be successful.
In practice, following these key guiding principals of sustainable visioning may make it more likely to effectively link strategic visioning to long-term sustainability objectives, providing the necessary support for corporate growth and innovation needed to ensure a successful transformation.
Madsen, H.L., Ulhøi, J.P. 2021. Sustainable visioning: Re-framing strategic vision to enable a sustainable corporate transformation. J. Clean. Prod. 228.
Heather Louise Madsen, Ph.D. is the PRME Strategy Manager at Copenhagen Business School, and has over ten years of professional experience working with sustainability. As a sustainability expert, she has worked with the organizational implementation of the UN SDGs in the private sector, and has extensive experience working with CSR, the UN Global Compact, carbon footprint reporting and social, environmental and economic sustainability. Heather is dedicated to topics of innovation, strategy, business transformation, organizational learning, business model innovation, renewable energy and sustainability.
Posted on February 2, 2021 January 5, 2023 Categories About, Accountability, Concepts, CSR, Featured, Innovation, Issues, Models, News, Reporting, Standards, SustainabilityTags #BusinessResponsibility, #carbonfootprint, #CO2emissions, #CorporateSustainability, #corporatetransformation, #CSR, #driver, #greenenergy, #innovation, #Orsted, #pollution, #renewableenergy, #reporting, #SDGs, #strategicvision, #sustainability, #sustainable, #transformation, #Vision, #visioning, UN
A Southern-centered perspective on climate change in global value chains?
The garment and textile industries account for around 10% of global CO2 emissions, and their fast fashion approach consumes huge amounts of water in production and processing stages. While the fast fashion model incentivizes the overproduction/consumption of clothes, more sustainable solutions lie in the configuration of value chains towards slow fashion (durable products produced on demand) and the introduction of circular business models. Such a transformation will have consequences for the environment, workers' conditions, and economic development.
This is particularly the case in the light of COVID-19, which led to a temporary disruption in the global garment and textiles value chains as stores closed in Europe and the United States in the spring of 2020. The cancellation and non-payment of garment orders particularly affected suppliers and workers in Bangladesh, leaving hundreds of thousands of workers without jobs and possibly facing destitution.
This is the focus of a new research and capacity-building project on 'Climate Change and Global Value Chains' coordinated by the CBS that has recently been funded by the Danish Development Research Council. In this research project, we will be working with colleagues from the University of Aalborg and Roskilde University in Denmark as well as BRAC University and the University of Dhaka in Bangladesh. Private sector partners include the Danish Ethical Trading Initiative and Danish Fashion and Textile.
I think that a key challenge in this new project is how we approach 'climate change' in the context of global value chains.
In the Danish debate on climate change, it is almost universally accepted that climate change should be at the top of the political and corporate sustainability agendas. However, both employers and workers in the Bangladeshi garment and textile industries may not perceive climate change mitigation as an immediate priority.
First, the purchasing practices of major brands sourcing garments from Bangladesh tend to result in downward price pressures, seasonal fluctuations in demand, and shorter lead times while, at the same time, these brands are also imposing ever greater environmental and labor standard requirements on their suppliers (not only in Bangladesh but elsewhere in the global South). Economic value is very unevenly distributed along the textile/garment value chain, with major brands reaping up to ten times higher economic value than suppliers – and even less reaching workers.
Hence, Bangladeshi suppliers often perceive the environmental and labor requirements of brands as adding to their costs without bringing additional business benefits.
In this context, suppliers may have very few, if any, incentives to address climate concerns in their value chains, while workers in the industry are trying to survive in a context of economic uncertainty.
In my view, a critical aspect of this new project is therefore that we will not only look at climate change from a Northern-centered perspective; that is, we are not only concerned with how brands and factories engage in the process of decarbonization. We will also zoom in on the importance of climate change adaptation, which I would label a more Southern-centered perspective on climate change in global value chains.
In fact, Bangladesh is one of the countries most affected by global climate change whose coastal areas and ports are prone to flooding, resulting in disruptions of the garment/textile value chain and economic losses for local manufacturers and workers.
Moreover, garment factories in greater Dhaka have extremely high lead and CO2 emissions, while many factory workers live in parts of the city that have unhygienic water supplies and must cope with living conditions that affect their health. Hence, integrating climate change and global value chain analysis from a Southern-centered perspective, I would argue, involves looking at the 'business case' for climate change adaptation – in other words, we must understand how can climate change adaptation can help in securing the future viability, competitiveness, and jobs in the garment industry and textile industries of Bangladesh.
Posted on January 28, 2021 January 5, 2023 Categories About, Concepts, CSR, Development, Economic, Environment, Featured, Issues, News, Research, SustainabilityTags #bangladesh, #BusinessCase, #climateadaptation, #climatechange, #CO2emissions, #covid19, #decarbonization, #development, #garment, #globalSouth, #globalvaluechains, #gvc, #industry, #research, #SouthAsia, #suppliers, #supplychain, #sustainability, #textile, Fashion
Do we need to sacrifice to mitigate climate change?
By Laura Krumm
It is not news anymore that a change of consumer behavior is needed in order to have a chance at mitigating climate change. Almost every consumer action today can be quantified in terms of environmental impact. We know that we should opt for the tofu sticks instead of the steak at our neighbor's barbeque, and we know that we should avoid the all-inclusive vacation to the Caribbean and take a cozy camping trip at Denmark's beaches instead. What we don't know is what those behavior changes mean for consumers. What are the consequences for our individual quality of life and well-being?
Self-sacrificing for the planet
The expectation does not seem to be very satisfying. Most of us have heard the word "sacrifice" in the context of environmentally friendly behavior before. The message we receive from climate activists, journalists and researchers is very clear:
We need to change our behavior today to avoid the catastrophic consequences of climate change tomorrow. We need to change our behavior for our children, the animals, other people in other countries, or our own future lives – even if we don't want to.
We are expected to change our behavior for the greater good, while our own desires have to wait in line [1, 2].
This sacrifice narrative cannot only be found in climate change communication but also in consumers' minds: When investigating what was hindering consumers to act environmentally friendly when they generally value the environment, the expectation of sacrifice and lowered quality of life was found to be one important factor [3]. Consumers seem to equate environmentally friendly behavior with a loss in quality of life and comfort. This anticipation, among others, prevents them from changing their behaviors and joining in the efforts of mitigating climate change.
While altruistic motivation – driving us to self-sacrifice for the greater good – is positively related to environmental behavior [4], it can only get us so far. Another main driver of our actions is egoistic motivation. And as it seems, behaving more environmentally friendly is not perceived as a particularly egoistic action. While there sure are people with very strong altruistic motivation who enjoy behaving in a morally right way, many people are egoistic some or most of the time.
If the perspective of an environmentally friendly life is a bleak one, environmental engagement will be limited.
This is not only relevant for individual consumer behavior and environmental engagement, but also for policy and activism. When an environmentally friendly life seems bleak and uncomfortable to many people, it will be a difficult task to get them on board. Why would I support or vote for somebody who wants my life to become worse right now as a tradeoff for a potentially less catastrophic future?
Aside from elections, citizens who equate environmentally friendly behavior with sacrifice and lower well-being may also have lower acceptance of necessary policy interventions aimed at mitigating climate change. Consequently, the necessary change towards more environmentally friendly consumption will be hard to realize without considering its effects on well-being.
Does it have to be sacrifice?
Is it even true that environmentally friendly consumption can be equated with sacrifice, discomfort and a bleak existence?
Contrary to what the public opinion seems to believe, the relationship between well-being and environmentally friendly (or unfriendly) behavior is empirically not yet clear.
Some correlational studies even suggest the opposite: a positive relationship between environmentally friendly behavior and well-being [e.g., 5, 6]. These studies find that people who behave environmentally friendly are more satisfied with their lives. We cannot infer any causality of course – but these findings at least challenge the sacrifice assumption. This means that there may be a discrepancy between consumers' expectations and the reality of behavior change. The sacrifice assumption might therefore not only be unhelpful in engaging consumers to behave differently, it may even be completely untrue.
What does that mean for us environmental researchers? We need to explore why consumers expect negative consequences of environmental behavior change and how to change that. We need to understand what these negative expectations are exactly. We need to take consumer well-being seriously and keep it in mind when designing behavior change policies and initiatives. And we need to rethink how we communicate about environmental behavior change and climate change mitigation.
[1] Kaplan, S., 2000 – Human Nature and Environmentally Responsible Behavior, in: Journal of Social Issues, 56 (3), 491-508.
[2] Prinzing, M., 2020 – Going green is good for you: Why we need to change the way we think about pro-environmental behaviour, in: Ethics, Policy & Environment, 1-18.
[3] Lorenzoni I., Nicholson-Cole, S. and Whitmarsh, L., 2007 – Barriers perceived to engaging with climate change among the UK public and their policy implications, in: Global Environmental Change, 17, 445-459.
[4] De Groot, J.I.M. and Steg, L., 2008 – Value orientations to explain beliefs related to environmental significant behavior, in: Environment and Behavior, 40 (3), 330-354.
[5] Binder, M. and Blankenberg, A., 2017 – Green lifestyles and subjective well-being: More about self-image than actual behavior?, in: Journal of Economic Behavior & Organization, 137, 304-323.
[6] Brown, K. W. and Kasser, T., 2005 – Are psychological and ecological well-being compatible? The role of values, mindfulness, and lifestyle, in: Social Indicators Research, 74, 349-368.
Laura Krumm is a PhD fellow at the Department of Management, Society and Communication and a member of the Consumer & Behavioural Insights Group. In her PhD project she explores the intersection of environmental consumer behavior and well-being.
Photo by Markus Spiske on Unsplash
Posted on January 26, 2021 January 5, 2023 Categories About, Behaviour, Communication, Concepts, Development, Environment, Ethics, Featured, Issues, News, Social, SustainabilityTags #action, #Activism, #altruist, #behaviour, #climateactivists, #climatechange, #comfort, #consequences, #consumers, #consumption, #desire, #environment, #mitigation, #motivation, #sacrifice, #wellbeing, communication1 Comment on Do we need to sacrifice to mitigate climate change?
How do the arts impact our societies in times of digitalisation?
By Kirsti Reitan Andersen and members of the Artsformation consortium
Two decades into the new millennium it is almost impossible to imagine a future in which digital technologies do not play a key role. Today, digitalisation changes the way things are done across business and society alike.
This includes for example the impact of new technologies on processes of democratisation, like the role of Facebook in the UK referendum in 2016. Or the increasing collection and analysis of personal data in the use of any social media. Another area in which technology is having an enormous impact is in our ways of communication and being together, for example through technologies like Zoom or Facetime.
Throughout history, the arts have always reflected major transitions as they unfold.
Therefore, it is perhaps no surprise that the social, environmental and economic consequences of the digital transformation are now also increasingly addressed by artists. For example, with the project SOMEONE (2019), Lauren McCarthy tries to address the advances in human-machine relationships represented in 'smart houses' and try to give back a human identity to artificial intelligent devices through active human participation.
As part of the H2020 research project Artsformation, we explore the current and potential role of the arts in the digital transformation. Exploring the role of the arts across both business and society, one part of the project has a particular focus on marginalized groups of people who today do not reap the acclaimed benefits of the digital transformation (e.g. Gangadharan and Niklas, 2019; Gebru, 2018; Neves, Franz, Munteanu and Baecker, 2018; Park and Humphry, 2019). In this context, the "socially engaged arts" (Bishop, 2012) is of particular interest.
In contrast to more traditional forms of art, socially engaged artists often work closely with their audiences in one way or other.
For example, by gaining in-depth knowledge of particular challenges in specific communities and creating awareness about such issues through the artwork or by directly engaging people in the production of art. One such example could be the engagement of people in the production of artwork using the so-called maker spaces as a place of work and thereby also introducing "audiences" to new digital technologies and skill sets. Catch, a center for art design and technology located in Elsinore, for example, has much experience facilitating such processes of learning.
In recent years we have seen artistic examinations of the digital transformation become increasingly complex, evolving from what we might understand as a fascination or embracement of digital tools to reflections on the transformation itself. In general, we find that socially engaged artists are addressing societal issues (of the digital transformation) in three ways (Andersen et al., 2020):
The artist as a commentator: The artist as a commentator is not directly concerned with audience engagement as part of the artistic process. The work of Dr. Ahmed Elgammal and an artificial intelligence named AICAN exemplifies "the artist as a commentator". In this case Dr. Elgammal and AICON created an exhibition of prints called Faceless Portraits Transcending Time. While there is no direct audience engagement, the work of Dr. Elgammal and AICON brings attention to current debates about technology and creative work.
The artist as one who gives voice to a community: More than ever, artists have become ever more important as voices of reason and clarity, pressing for social justice and engaging the public conversation about the controversial issues shaping the world in which we live. Forensic Architecture's attempt to raise awareness of oil and gas pollution in Vaca Muerta, Argentina, is a good illustration of this approach. Vaca Muerta has become one of the world's largest shale oil and gas fields. It is also the home of indigenous communities, including some of the Mapuche people who live between Chile and Argentina. In collaboration with The Guardian newspaper, Forensic Architecture investigated a local Mapuche community's claim that "the oil and gas industry has irreversibly damaged their ancestral homeland and eroded their traditional ways of life."
The artist as a social entrepreneur: consults and facilitates a community problem in a much more 'organised' and 'long-term' manner than is typical of the two previous roles. This, for example, is what happened when artist Olafur Eliasson and engineer Frederik Ottesen at London's Tate Modern launched the social enterprise Little Sun in 2012, setting out to change the world with 'solar art'. Little Sun aims to bring clean, reliable and affordable energy to the 1.1 billion people who live without electricity while raising awareness of energy access and climate action worldwide. Eliasson demonstrates his conviction that art can change the world by continuing to promote Little Sun as an extension of his art practice, arguing that many of Little Sun's "current and future projects stem from art, involve artistic thinking or use our products themselves to create art".
While all three roles co-exist, intersect and share the ability to imagine new ways and generate change, each role does so in slightly different ways. We suggest that each of the three roles requires artists to organise in different ways, which may also impact the kinds of change they can facilitate. Moving forward, we are extremely eager to explore the ways in which artists as social entrepreneurs may inspire and offer new and more sustainable ways of organizing.
The Social and Civic Impact of the Arts
Kirsti Reitan Andersen is a Post Doc at the Department of Management, Society and Communication, Copenhagen Business School. In her current work, she explores the role of the arts in the transformation towards more sustainable ways of organizing.
Photo by Stan Narten and Otto Saxinger, SOMEONE.
Posted on January 12, 2021 January 12, 2021 Categories About, Concepts, CSR, Development, Featured, News, Social, Sustainability, TechnologyTags #art, #artists, #challenges, #change, #digitalart, #digitalisation, #digitaltransformation, #Impact, #SocialChange, #socialentrepreneur, #societalissues, #sustainability, #voice, society, technology
Can we pay for success in healthcare?
By Mikkel Munksgaard
Demographic megatrends, such as ageing populations, challenges public health budgets in developed countries. Currently, health costs in OECD countries are growing at roughly double the rate as the average growth in GPD. 'Pay for Success' is an emergent, and highly innovative, partnership model promising both increased cost-effectiveness and patient-centric services in healthcare. Whether or not the model will constitute a critical feature of future health systems, only time will tell.
Due to critical leaps in modern healthcare and medicine, the average life expectancy in developed countries has doubled since 1900 [1]. While this is an important success, it also challenges public health systems because chronic diseases occur much more often at old age. In fact, a Danish report states that the average health costs for an 86-year-old are 16 times higher than for a 20-year-old [2].
In addition, public health sectors are experiencing structural challenges inhibiting their capacity to deliver services effectively.
The lack of systematic assessments towards quality and outcomes of services creates disproportionality on financial priorities. Evidence indicates that up to 30% of healthcare expenses are wasted on unproven or unnecessary treatments.
An example of this is the general de-prioritization of preventive health interventions over short-term illness treatment.
Introducing 'Pay for Success'
'Pay for Success' (PFS) has emerged as an organizational solution to the problems of asymmetry and ineffectiveness in public health. A PFS-program is fundamentally a public commissioning model based on two distinctive features 1) an outcome-based contract and 2) the engagement of an external 'investor'.
In an outcome-based contract service delivery is outsourced to a provider and the public commissioner pays for the realization of long-term health outcomes. Hence, the public "pays for success". Because services, such as preventive interventions, could take several years to deliver the PFS-model involves an 'investor' that provides working capital for the provider – and thus, takes the majority of the financial risk. This could either be a non-profit organization, a for-profit organization, or both. The first PFS-program was developed in 2010 and since then 200 programs have been initiated mobilizing a total capital of 420 Million Dollar [3]. Especially in the UK, the PFS-market has grown and is predicted to soon reach a total value of 1 Billion Euro (Carter 2019).
A simplification of the PFS-model inspired by Third Sector (2016)
Challenges and future directions of 'Pay for Success'
While empirical studies from the UK and US does indicate that the PFS-model performs better than other commissioning models [4], they also highlight a more complex organizational structure that takes time and resources to develop – which, consequently, creates high transaction costs ultimately challenging the model's cost-effectiveness. Technical problems related to valuating health outcomes, and creating a payment structure around such, has proven difficult and time-consuming. Additionally, the complex governance structure of PFS-programs in the UK and US has been criticized for being too rigid and focused on short-term performance – thus, inhibiting innovation.
The emergence of PFS-programs in Scandinavian countries poses an interesting field as emerging research indicates that these programs are fundamentally different from traditional PFS-models. The tendency to utilize more networked practices as well as the existence of comprehensive public data systems in Scandinavian welfare states could potentially solve some of the most critical challenges currently faced in PFS-development. What would seem critical for future PFS-development is to leverage these emerging insights and shine more light into the 'black box' of PFS-development.
[1] World Economic Forum 2017
[2] Kjellberg and Højgaard 2017
[3] The Brookings Institution 2021
[4] Albertson et al. 2018
Mikkel Munksgaard Andersen is Ph.D. Fellow at CBS, MSC. Through his Ph.D.-project, Mikkel studies the development and implementation of social impact bonds and payment-by-results methods in Denmark. His work centralizes around the distinct characteristics of Scandinavian impact bonds and their role in supporting and financing public services. The research takes a point of departure in the Danish research- and innovation project PreCare which seeks to develop new services and organizational models for preventive and digitalized healthcare. See more here.
Posted on January 8, 2021 January 8, 2021 Categories About, Concepts, CSR, Development, Featured, Innovation, Investment, Models, News, StakeholdersTags #development, #health, #healthcare, #innovation, #payforsuccess, #PFS, #Scandinavia
The maker movement – the quiet, game-changing revolution near you
Anyone can and should have access to the tools and knowledge necessary to build anything they might need or want. This statement struck me when I first read about the makers movement – a cultural trend that is associated with democratized manufacturing, 3D printing and maker spaces.
At the heart of the movement lies a simple premise – ordinary people manufacturing themselves what they need. Makers, alone or in communities, from any career or skill level are pulled into making something, from calligraphy to furniture to technology and lately to personal protective equipment.
Large institutions like the European Commission, the White house and the Chinese government herald the maker movement as a major driver for the new "industrial revolution", a thriving multibillion market and a potential asset in the fight against climate change.
But as with every nascent field, there are many hurdles on our way there – this piece will touch upon what many (including me) consider the most important: understanding how and why people embrace the movement.
We already know that the increase of availability and affordability of digital fabrication tools such as 3D printers and laser cutters and the advance in certain collaborative technologies have favored the creation of a rapidly increasing number of Do-It-Yourself communities. What we know much less about is why people choose to become makers. This matters gravely, not only because makers are the lifeline of the movement – but because we need to be sure that everyone can enjoy the same access to fabrication. In a large study supported by the EU, we asked thousands of citizens around Europe their opinions regarding the maker movement [1].
We wanted to understand better what people know about the maker movement, how aware they are about fabrication and how they perceive the different facilities (e.g. makerspaces). We also investigated various attitudes and potential reasons that could be driving or hampering people's support to the movement. More importantly, however, we asked participants about their intentions to become makers and what motivates them.
Findings of our study
What we found confirmed many of our initial thoughts.
Most of the participants were not well aware about the maker movement (40% had no familiarity with the term), but about 1 in 5 respondents had some previous experience with making. These people come from all walks of life, and despite some small differences in demographics, every cohort is represented.
A very positive finding was that most people were very open to visiting, supporting or participating in making activities in their local area. For the majority of respondents, their participation in maker spaces would provide them with benefits and help them improve their skills. The majority also believes that makerspaces will have a positive impact on their region and will open-up new professional opportunities. We dug a bit deeper so we can get a better understanding of people's motivations.
We found that respondents who have positive perceptions about sustainability and circular economy, who were familiar with the maker movement and who defined themselves as persons who like to repair or make things were significantly more likely to join the movement.
The results also indicate that demographics like gender and age could be playing a role in driving respondent's perceptions and participation.
This study is useful in providing some additional evidence and answers regarding the engagement of Europeans with the Maker Movement to the existing body of knowledge. But it is obviously not enough. There are literally dozens of overlooked dimensions and potential levers for getting people involved or at least for actively supporting the movement. Essential issues like awareness, knowledge and skills, safety and accessibility, tools and incentives are all open for inquiry and experimentation. The movement itself is still shaping and many of the key characteristics should not be taken for granted; least of all its openness to everyone and its sustainability/circularity character.
The good news is that there are already major initiatives being deployed at various levels that are working on many of these angles (for interested readers I would like to refer you to projects like Pop-Machina, iProduce, Reflow, all sponsored by the EC and open to interested members of the public). In all these initiatives, cross-collaboration is key. Academics should work hand in hand with practitioners, industry and policy makers to embrace and support this amazing revolution and help nudge it towards its greatest ambitions – democratized access to circular production.
[1] Panori, A., Piccoli, A., Ozdek, E., Spyridopoulos, K. and Altsitsiadis, A. (2020). Market research report. (Deliverable 2.2). Leuven: Pop-Machina project 821479 – H2020
Assistant Prof. Efthymios Altsitsiadis, PhD is a behavioural economist with a mind for interdisciplinary research. A user-centricity enthusiast, Efthymios is set to help provide evidence-based answers to some of the most persistent and evasive behavioural questions in a variety of areas like sustainability, health, energy and mobility. He is currently teaching Machine Learning and Digital Behaviour at CBS. He conducts research in collaborative production and circular economy, in advanced technological agents (smart apps, avatars, chat-bot services) and has worked as a social scientist in several cross-disciplinary research projects.
Posted on January 5, 2021 January 5, 2021 Categories About, Behaviour, Concepts, Development, Featured, Initiative, Innovation, News, Research, Social, Sustainability, TechnologyTags #3Dprint, #Circularity, #circularproduction, #community, #EuropeanCommission, #industrialrevolution, #innovation, #makersmovement, #makerspace, #manufacturing, #movement, #research, #revolution, #sustainability, technology
Friedman's critique of CSR at 50: birthday surprises
Sorry I am late in sending a 50th birthday card for Milton Friedman's essay "The Social Responsibility of Business Is to Increase Its Profits [1]. Many would say that it is a birthday not worth celebrating. I agree with my colleagues Steen Vallentin (see blog) and Sandra Waddock (see blog) that we should move beyond Friedman's assumptions and prescriptions. So why do I use a seemingly outdated newspaper article in my introductions to courses on corporate social responsibility (CSR)? In Steen's terms, should I continue to flog the 'somewhat dead horse'? As I think this horse still has legs I wouldn't flog it, but I would continue to take some of the CSR journey with it. And here's why.
By reading and thinking about "The Social Responsibility of Business Is to Increase Its Profits" students have gained insights into how business and its context changes, and into some key abiding issues (e.g. the relationship of business responsibility to government, the purpose of business). Friedman packs an awful lot into the essay. Despite my belief that it is anachronistic and misguided in parts, Friedman – sometimes unwittingly – brings a few interesting surprises to the class.
Surprise No. 1 is that it was even worth penning a critique of business social responsibility in 1970. It is sometimes assumed – especially in business schools – that business concerns with responsibility and sustainability are relatively new fads (the sad truth is that many schools have been slow to address these concerns). But, yes, there was a lot of talk about CSR in the late 1960s USA, and Friedman castigates GM Motors for its social initiatives. So CSR is not new but it has its ups and downs. Its focal issues, modes and rationales differ over time and vary among contexts.
The biggest change to CSR since 1970 is probably globalization bringing with it global supply chains and new corporate agendas of responsibility for labour & human rights and for the natural environment. Friedman envisaged that the only governments relevant for social issues were democratically accountable (i.e. American) and thus did not envisage the difficult responsibility issues for corporations in sourcing from, and selling to, countries which are undemocratically and corruptly governed.
Surprise No. 2 is for those who know that Milton Friedman had already achieved fame or infamy for his libertarian position. In his book Capitalism and Freedom (1962), he presented government as inefficient and ineffective on key public policy issues. As Sandra Waddock points out, neo-liberalism, of which Friedman is a standard-bearer, generally contends that 'less government is invariably good'. Yet in "The Social Responsibility of Business" Friedman is positive about government as an accountable and competent actor for resolving societal problems.
Friedman suggests a dichotomous view of the responsibilities of government and business because he assumed that business could best pursue its responsibilities – to increase profits – unencumbered by public policy obligations, and that government could legitimately raise taxes to address social issues. But this dichotomy rather belies the realities, then and now, of business organizations seeking favorable governmental intervention in markets and society… and of governments seeking business contributions to addressing societal challenges.
Surprise No. 3: Friedman acknowledges the virtue of social investments by business … 'excuse me?'. Yes. In a rather over-looked passage, he comments that:
It may well be in the long-run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government. That may make it easier to attract desirable employees …or have other worthwhile effects.
M. Friedman (1970). "The Social Responsibility of Business Is to Increase Its Profits", p. 124 col. 3.
This looks like an early version of the business case for CSR – re-labeled Creating Shared Value by Porter & Kramer [2]? But Friedman just doesn't want you to call social investments CSR. Like today's critics of CSR, Friedman sees this cloaking of a business strategy as a form of "window-dressing" and as "approaching fraud". This introduces the fascinating point of class discussion about whether something can be described as socially responsible if it also benefits the benefactor, and specifically the corporate benefactor?
Surprise No. 4 is for students of business and management. It lies in Friedman's misrepresentation of corporate governance. His main argument about CSR constituting misuse or even theft of shareholders' property is predicated on his contention that shareholders are the legal owners of publicly traded corporations. But in fact the corporation itself owns its assets: indeed the whole point about limited liability is that shareholders are exempted from liabilities that would otherwise rest on owners [3]. Of course, there are duties to shareholders – legal and ethical – but these are tempered in corporate governance regulation and judicial rulings (details vary among jurisdictions).
This is also a surprise for some corporate critics who see the problem of corporate irresponsibility as simply a function of a shareholder model [4]. In other words, they believe Friedman's myth of the managers simply being the agents of shareholders. That this myth has achieved such standing is, perhaps partly testimony to the appeal that Friedman's argument has had… and another reason why I like to introduce him to students.
Surprise No. 5 is one that, in retrospect, Friedman himself may have had to face. It is clear that investors do not conform to his fairly unidimensional assumptions of shareholders' motivation: not all are interested in short-term profit. Some are motivated by long-term security of their investment and others by values (e.g. avoidance of risky products, preference for products not tested on animals). Today we see evidence of greater mainstreaming of investor concerns with sustainability issues that Friedman would have contended are beyond corporate responsibility and which are properly in the sphere of government (see Rasche blog).
Of course, much else has changed which students like to ponder, including:
the extent to which corporations adopt the business case for responsible and sustainable goods and services, be it for their own sake, or reflecting changing consumer, employee or investor preferences or, more broadly, reflecting their understanding of the expectations of societies and regulators.
the institutionalization of CSR through private authority (principles, standards, audits, reports) and its intersection with civil society and democratic government.
skepticism about corporate motivation for "promoting desirable social ends" is no longer the sole prerogative of libertarians like Friedman (and Hayek). I now also comes from the very socialist perspectives that Friedman feared the most.
So yes, we certainly need to move on, but we may move on more assuredly if part of our journey (on horseback or otherwise) is engaged in the conversation he spurred (sorry for flogging these equine metaphors…).
[1] M. Friedman "The Social Responsibility of Business Is to Increase Its Profits", New York Times Magazine, 13 September 1970.
[2] M. Porter & M. Kramer "Creating Shared Value" Harvard Business Review, Jan – Feb 2011.
[3] E.g. Lynn A. Stout. The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public, 2012.
[4] E.g. Not Fit-for-Purpose: The Grand Experiment of Multi-Stakeholder Initiatives in Corporate Accountability, Human Rights and Global Governance (Summary Report), MSI Integrity, 2020.
Photo Source: Milton Friedman blowing out the candles on his birthday cake, while his wife Rose and other party attendees look on. 15 July 1987. ©Hoover Institution Archives.
Posted on October 22, 2020 October 23, 2020 Categories About, Concepts, CSR, Education, Featured, Governance, Issues, Knowledge, News, SustainabilityTags #BusinessResponsibility, #CorporateSustainability, #Critique, #CSR, #Discussion, #friedman, #GoingBeyond, #Insitutionalization, #MovingOn, #Skepticism, #socialresponsibility
Making Corporate Sustainability More Sustainable
For too many firms corporate sustainability is itself not a sustainable endeavor
Corporate sustainability initiatives are blossoming around the world. While some firms have built robust infrastructures around their efforts, other firms struggle to do so, making their engagement a short-lived endeavor. In other words, corporate sustainability is itself often not sustainable enough to create lasting change in organizations. While there is hope that firms' sustainability strategies are becoming more robust (e.g., because basic market conditions have shifted in favor of sustainability and make it difficult to ignore), there is still much work to be done to create sustainable corporate sustainability efforts.
The Challenge of Integration
One important barrier is the belief that "integrating" sustainability is more important than having an own dedicated organizational infrastructure around it. In 2019, the Danish multinational Maersk laid off a significant part of its sustainability team (including the head of the division). The aim of the reorganization was to merge its ongoing sustainability activities with work undertaken in other departments of the company. While integration may sound like a sound strategy and for many years consultants advised firms to make sure that sustainability work is not detached from the core of the firm, it also comes at a price:
In many firms, integration "waters down" sustainability efforts, makes them less visible in the organization and hence easy to neglect.
Don't get me wrong: I am not arguing against integrating sustainability into organizations. I am arguing against using integration as a cover-up strategy to make sustainability efforts themselves less sustainable. Integration can easily be misused. Take the example of business education. For many years, business schools have struggled with finding the right balance between creating standalone courses on sustainability topics and integrating related content into the regular curriculum. Over time, integration proved to be difficult and only very few schools succeeded with truly embedding sustainability content across their curriculum. The main hurdle was to free up room in otherwise already packed courses and to also move beyond a symbolic adoption of sustainability content in classes.
Business schools' experience holds a lesson for corporations. If you integrate, you need to ensure that wherever integration happens enough resources support the journey (e.g., time, knowledge but also interest). Often, this is where integration fails…
The Challenge of Corporate Size
Another barrier to making sustainability more sustainable is corporate size. Recently, I published a paper that analyzed which types of firms are delisted from the UN Global Compact (UNGC). We analyzed over 11,000 firms (both active and inactive participants in the UNGC). One key finding was that small and medium-sized enterprises (SMEs) were much more likely to leave the initiative than larger firms. It would be easy to conclude from this that SMEs are less sustainable than larger firms – but this would be the wrong conclusion.
What it shows is that SMEs struggle to develop lasting organizational structures around their sustainability efforts. UNGC delisting is based on firms' failure to submit a mandatory annual implementation report. While larger firms usually do not struggle with such reporting, because this task is anchored somewhere in the organization, smaller firms find it more difficult to make reporting a lasting endeavor (e.g., because of resource constraints or lack of knowledge). Often, sustainability commitments by SMEs are based on internal champions who push relevant efforts and also sign the organization up to the initiatives like the UNGC. Once these people leave the organization or assume a different role within the firm, there are little formal structures that could fill the void that is left behind.
SMEs sustainability work is often more implicit and tied towards the communities they operate in. However, in a more transparent world where sustainability is increasingly datafied and benchmarked such implicit efforts may be easily confused with corporate sustainability lacking sustainable implementation.
Sustainable Corporate Sustainability
So, what is the bottom line? Making corporate sustainability itself more sustainable remains a key management challenge, both for larger and smaller firms. Creating durable organizational structures that can withstand the pressures of crisis situations and related cost-cutting efforts is one important way to address this challenge. Such structures have to be integrated with the rest of the organization to be not an add-on, but they also need to have a life on their own. What may even be more important is that corporate leaders and associated Boards need to develop an unambiguous vision for where the firm is supposed to go with its sustainability activities. This puts Board-level engagement with sustainability topics at the very top of the agenda, both for practitioners and academics.
Andreas Rasche is Professor of Business in Society at Copenhagen Business School and Visiting Professor at the Stockholm School of Economics. He just released "Sustainable Investing: A Path to a New Horizon" (together with Herman Bril and Georg Kell). More information at: http://www.arasche.com
Photo by Egor Vikhrev on Unsplash
Posted on October 8, 2020 October 8, 2020 Categories About, Communication, Concepts, CSR, Education, Featured, Issues, Knowledge, News, Policy, SustainabilityTags #BusinessEducation, #CorporateSustainability, #Corporations, #Integration, #Leadership, #OrganizationalStructures, #Organizations, #SMEs, #sustainability, #SustainabilityInPractice, #sustainableDevelopment, #UNGC, #Vision1 Comment on Making Corporate Sustainability More Sustainable
Making the case for and against and beyond Friedman in 2020
On the anniversary of Friedman's "The Social Responsibility of Business Is to Increase Its Profits"
September 13th marked the 50th anniversary of the publication of Milton Friedman's famous New York Time Magazine essay entitled "The Social Responsibility of Business Is to Increase Its Profits". This has occasioned a slew of testimonials and opinion pieces on Friedman's legacy in general and the legacy of this free market manifesto in particular.
Not surprisingly, the tone of testimonials have differed. From those lamenting Friedman's enormous influence on the discipline of economics, economic policy, modern business and finance over the last three to four decades in particular, to those celebrating these very same developments. One commentator, in The New York Times, speaks of how a generation of C.E.O.s have been brainwashed to believe that the only businesses of business is business. That the sole responsibility of business is to make money.
Dwindling relevance
Anti-Friedman sentiment, and this is nothing new, takes aim at the single-mindedness and moral blind spots of free market capitalism, market fundamentalism, the shareholder paradigm, finance capitalism, you name it.
Indeed, 'Friedman was wrong' was for many years a recurrent theme in arguments made in support of CSR and stakeholder capitalism. But Friedman is not as relevant as he used to be.
In recent years, as far as specialized discussions of CSR go, the Friedman doctrine has increasingly been displaced by 'the Porter doctrine', that is, the strategic view of business responsibilities promoted by renowned, now retired, Harvard Business School professor Michael Porter along with Mark Kramer.
Porter & Kramer's more accommodating brand of economic instrumentalism – encapsulated in the influential notion of Creating Shared Value (CSV) – has turned out to be much better attuned to present circumstances than the message of Friedman's antagonistic and polarizing opinion piece.
The critique of free market capitalism has arguably gained urgency and currency with the climate crisis and calls for sustainable development and green transition. This is not to say that the Friedman doctrine has been abandoned by all those who used to support it.
However, given the opportunity to reflect, supporters of Friedman tend not to dwell much on the minutiae of the 1970 essay.
The devil is in the detail, and few seem to be willing to argue that what Friedman wrote 50 years ago is a proper representation of how the problem of corporate social responsibility is constituted in the year 2020.
The strength of Friedman's wonkish essay was always its crude simplicity. For many years it seemed to encapsulate everything that needed to be said about CSR – according to mainstream economists and ideologues of a similar persuasion and the discipline of neoclassical economics. In other words, very little needed to be said. 3000 words were enough.
However, with the rise of ESG and sustainable finance it seems to be dawning even on the disciplines of economics and finance that more indeed needs to be said – and that the crudeness of Friedman falls terribly short in capturing the challenges, risks and opportunities ahead.
Friedman's article has served as a moral cornerstone for the shareholder value paradigm. Its moral shortcomings are increasingly showing, though.
The Friedman doctrine nonetheless
What supporters of the Friedman doctrine nevertheless argue, is that he was (and is) right about fundamentals: that the shareholder value paradigm is a superior economic principle and form of governance. The argumentative support structure for this paradigm does, however, need adjustment in order to achieve better alignment with changing historical conditions, opinion climates, societal norms and expectations.
In other words, supporters of shareholder capitalism need to fight for their cause. They need to renew their engagement in the ongoing 'battle of ideas' over business and society.
Their main opponent in this battle is well-known, but has been gaining new and more widespread support as of late. The opponent is stakeholder capitalism, the virtues of which have found high-level affirmation recently in the Davos Manifesto of 2020 and in the Business Roundtable statement on the purpose of business from 2019.
Importantly, the American brands of stakeholder and shareholder capitalism have a common denominator. Both Friedman and R. Edward Freeman (the great popularizer of stakeholder thinking) have described themselves as libertarians. Stakeholder capitalism, US-style, begins and ends with voluntary initiatives and stakeholder engagement by business. Government and regulation are not supposed to have central roles to play in such endeavors. They are supposed to work better, more smoothly and efficiently without government interference.
Thus, the first line of battle – for Friedman supporters – has to do with regulatory failure. Sure, there are market failures that we need to take account of when assessing the responsibilities of business. But regulatory failure should be no less of a concern.
The second line of battle has to do with principles and practices of governance. According to its supporters:
Stakeholder capitalism is supposed to be more open, democratic, responsive and responsible than its counterpart. But what does stakeholder governance mean in practice, at the corporate level, unchecked by government regulation and without agreed upon rules of engagement? It is far from clear.
Will it ultimately be good for business and society if companies are governed in accordance with the diffuse model and principles of 'stakeholderism'? It is equally well imaginable that stakeholder capitalism can turn out to create less value for the stakeholders whose interests it is supposed to reflect and serve, and that stakeholders will ultimately be worse off if this is the direction the development of the economy takes. And it may be that shareholder capitalism, with its more clearly defined purpose and governance principles, is ultimately better equipped to keep business leaders on their toes and create value not only for shareholders but for stakeholders at large. So the argument goes in conservative circles.
Ideology and the ongoing 'battle of ideas' over business and society
While many of these arguments seem to fly in the face of public opinion of the more progressive kind, we must acknowledge how, in a polarized opinion climate, public opinion is divided on many political topics. Andrew Hoffman (2012) speaks of how the climate change debate in the US has become enmeshed in the so-called 'culture wars'. Acceptance of the scientific consensus regarding climate change is now seen as an alignment with liberal views consistent with other cultural issues that divide the country (i.e., abortion, gun control, health care, and evolution). This tendency has only worsened under the Trump presidency.
On top of this we can observe how sustainable development and green transition are evolving as government-driven agendas, involving a high level of social and economic planning – not to mention the COVID-19 crisis and how the pandemic, for better or worse, has provided a large-scale affirmation of the primacy of government intervention in dealing with grand societal issues.
Under these conditions it has once again become relevant to speak not only of broader socialist tendencies in politics and society, but also of how CSR/corporate sustainability can be a Trojan horse or slippery slope leading from market capitalism into a new socialist order. In other words, the ideological underpinnings of the CSR debate are once again becoming more apparent.
This calls for more in-depth studies of the ideological commitments sustaining the theory and practice of CSR. It does not necessarily call for rejuvenation and regurgitation of Friedman's short essay, though. Friedman is not as relevant as he used to be in discussions of CSR. The anniversary has done nothing to change this.
We need to look beyond Friedman and see him (only) as one part of the larger ideological tapestry. We need contextualized, updated engagements, not more flogging of a somewhat dead horse.
Hoffman, A.J. (2012). Climate science as Culture War. Ross School of Business Working Paper No. 1361, June 2012 / Stanford Social Innovation Review, 10 (4).
Steen Vallentin is Director of the CBS Sustainability Centre and Associate Professor in the Department of Management, Society and Communication at Copenhagen Business School. His research is centred on CSR (corporate social responsibility) and sustainable development in a broad sense.
Posted on September 30, 2020 October 6, 2020 Categories About, Concepts, CSR, Featured, Governance, Issues, News, StakeholdersTags #Capitalism, #CSR, #friedman, #profit, #shareholders, #socialresponsibility, #stakeholderism, #stakeholders, #valuecreation1 Comment on Making the case for and against and beyond Friedman in 2020
Private Standard-setting Organizations and the Theory of Change
Theory of Change – Evaluating Supply Chain Outcomes
By Kamilla Hvid Andersen, Eileen Ryll, Dr. Caleb Gallemore and Dr. Kristjan Jespersen
Due to globalization, supply chains are becoming increasingly complex, challenging national governments' regulatory capacity, or, perhaps, political will. Amid these "governance gaps" some private-sector organizations have begun setting voluntary standards promoting sustainable production practices. As they are not backed with legal force, private standards must demonstrate both positive impacts, credibility and inclusive decision-making to be perceived as legitimate in the eyes of external observers and member firms. Due to the complex and interrelated nature of sustainability issues, it can, however, be difficult to relate outcomes back to activities of the standard setting system.
To monitor their programs and evaluate their impact, many standard-setting organizations have adopted a Theory of Change (ToC).
Based on Carol Weiss's theory-based evaluation approach, a ToC is a cause-and-effect illustration that makes explicit often implicit beliefs and assumptions about how different actions should generate impacts.
Evaluating impacts then requires collecting data that show how the proposed causal sequence plays out and, if discontinued, where it broke down. On this account, the ToC is necessary because practitioners often rely on tacit knowledge or even guesswork, rarely articulating the conceptual foundations of their actions explicitly.
ISEAL – The Standard for Standards
The ISEAL Alliance has been a key ToC promoter for many major sustainability standards. The organization is in essence a benchmarker for certification systems, working to disseminate better practices across sustainability standards. While the organization has a relatively small membership, its members include prominent standards like the Roundtable on Sustainable Palm Oil (RSPO) and the Forest Stewardship Council (FSC). Its Impact Code strongly encourages, though does not require, a ToC as the foundation for robust Monitoring & Evaluation (M&E).
While couched in an M&E framework, ISEALs' framing of a ToC as a way to articulate building blocks for long-term goals also links it to strategic planning. For the organization, a ToC is both product and process. As a product it maps out what to measure to assess a standard's impact. As a process, it can help define a shared vision of how the standard should be making change, helping get member and observer buy-in on its strategic trajectory.
Case in Point – RSPO
The RSPO is a good example of how ToC procedures can influence organizational operations. Following ISEAL recommendations, the RSPO constructed an elaborate ToC in 2017. While its stated primary goal of making sustainable palm oil the global norm has remained since the standard's early days, the ToC outlines the strategies deemed necessary to achieve this vision. By explicating the assumptions behind its actions, the RSPO's ToC is simultaneously an M&E tool and a strategy. Though, like ISEAL, the RSPO introduced the ToC as an impact evaluation tool, the process generated critical discussions on the organization's shared vision and explicated previously implicit beliefs regarding what making sustainable palm oil the norm actually means and how it could be achieved.
Because ToCs have both M&E and strategic planning components, responsibility for their development and implementation should not reside solely in M&E departments. Rather, effective ToC processes should include the whole organization and external stakeholders, requiring strategic decision-making support. Continuous feedback from all actors implementing elements of the ToC into their daily work can be valuable to highlight shortcomings of the ToC in place and guide future strategy reviews.
The Mechanics of TOC
A ToC process includes two broad phases. In the first, relevant actors develop or refine a shared vision and outline causal sequences necessary to achieve it. In the second, actors must incorporate the ToC into day-to-day routines.
The ToC as it emerges from the first phase is an intermediate outcome, part of a continuous learning loop that can be influenced by other processes surrounding the organization. It also may trigger other processes, as was the case within the RSPO when the ToC heavily informed another strategy document outlining member responsibilities across the value chain. The division between these phases, of course, is blurry, and it is always possible to re-evaluate and re-model the intermediate ToC, making the process iterative. All this work goes far beyond simple M&E, a lesson the RSPO learned the hard way, at first significantly underestimating the effort necessary to develop its ToC, regarding is simply as mapping out what was already there.
The Role of Interactive Adaptivity in Supply Chains Evaluation
Based on the example of their use by ISEAL and the RSPO, ToCs can serve several purposes:
First, they can support strategic planning while structuring strategic reconsiderations over time. Their iterativity might make it particularly important for organizations to revisit their ToCs before strategic re-alignments or in times of upheaval.
Second, in a complex field that spans multiple stakeholder groups, which as is case with the RSPO, most likely have divergent underlying assumptions, the ToC process can help illuminate blind spots. To be effective, the ToC needs to be inclusive of as many of the actors affected by the organization's activities as possible.
Third and more prosaically, a ToC, while more than impact evaluation, can support evaluative work, serving as the backbone for M&E activities.
Caleb Gallemore is an Assistant Professor in the International Affairs Program at Lafayette College. He holds a Ph.D. in Geography and within his teaching, he focuses on southeast Asia, global land use, sustainability, research methods and geographic information science.
Eileen Ryll graduated from CBS with a degree in MSc. Business, Language and Culture with a focus on Diversity and Change Management. She has previously studied Business and Cultural Studies in Germany and Sweden. Her main interests are organizational strategy and intercultural encounters.
Kamilla Hvid Andersen studied her bachelor's and master's degree at Copenhagen Business School. In June 2020, she graduated from the MSc. in Business, Language and Culture with a specialization in Diversity and Change Management. Her personal interests include sustainability, intercultural communication, and organizational change.
Kristjan Jespersen is an Assistant Professor at the Copenhagen Business School. He studies the growing development and management of Ecosystem Services in developing countries. Within the field, Kristjan focuses his attention on the institutional legitimacy of such initiatives and the overall compensation tools used to ensure compliance.
Photo by Jungwoo Hong on Unsplash
Posted on September 22, 2020 September 22, 2020 Categories About, Concepts, CSR, Featured, Governance, News, Policy, Social, Standards, SustainabilityTags #CSR, #Governance, #Impact, #stakeholders, #sustainability, Evaluation, FSC, M&E, Monitoring, Planning, RSPO, standards, Strategic, SustainablePractices, TheoryOfChange, ToC
Different pathways to sustainability standard adoption
How local norms may be able to help drive the spread of voluntary programs – the case of the RSPO in Japan.
By Hattaya Rungruengsaowapak, Caleb Gallemore & Kristjan Jespersen
There has been an explosion in voluntary programs targeting value chains' negative social and environmental impacts (Green, 2013). Working across boundaries, however, is challenging, and requires bridging different business cultures and moral expectations. Tensions and consequential misunderstandings between members from different countries are common.
The Roundtable on Sustainable Palm oil (RSPO) is a good example. It has seen a five-fold jump in Japanese membership in just five years, going from under 40 members in 2016 to more than 200 in 2020. This has happened in the absence of meaningful governmental support or even consumer demand, making it a particularly interesting case.
Source: The RSPO (as of August 9th, 2020)
The RSPO was founded in 2004, led by WWF, Unilever, and some upstream players in the palm oil value chain. Its objective is to incentivize sustainable palm oil production using voluntary certification. Although oil palm is one of the most efficient oil-producing crops, its growing consumption has led smallholders and large agribusiness to convert tropical forests to plantations, causing habitat and biodiversity loss, greenhouse gas emissions, and wildfires.
While the RSPO welcomed its first Japanese members the year of its founding, it only recently saw memberships skyrocket, despite limited concern among Japanese consumers. These developments took place in three main phases.
Phase 1 – Testing the waters (2004 – 2011)
For nearly the first decade of the RSPO's existence, Japanese membership growth was sluggish. Japanese companies that joined the RSPO early on mostly relied on international markets for a significant part of their business.
These companies included major trading houses like Mitsui & Co., Ltd, and consumer goods manufacturers like Kao. Multinational companies headquartered in the West, such as Unilever and Walmart, also implemented sustainable palm oil commitments in Japan, but these actions had little impact on their Japanese suppliers.
Some smaller Japanese companies also joined the RSPO in this phase, in response to some niche consumer demand. These niche actors, however, did not scale up demand across the country.
Phase 2 – Setting the groundwork (2012 – 2016)
Between 2012 and 2016, a larger number of Japanese firms joined annually than in the previous period, though never more than ten in any given year. In 2012, when Tokyo became a host city candidate for the ultimately ill-fated 2020 summer Olympics, the RSPO began directing more attention towards the Japanese market.
A central goal was to convince the local Olympic Committee to include the RSPO in their official sourcing code. According to an informant, the World Wildlife Foundation (WWF) began to hold corporate sustainable palm oil workshops the same year. Other events helped boost RSPO recognition during this period. For example, in 2015, the Japanese government officially adopted and started to promote Sustainable Development Goals (SDGs). In the same year, the Consumer Goods Forum, a global network of manufacturers and retailers, issued its Sustainable Sourcing Guideline. T
The period closed with the largest sustainable palm oil event in Japan to date – the RSPO Japan Day 2016 – where RSPO advocates draw on these events and urged more than 350 attendants from major companies in Japan to become members.
Phase 3 – Takeoff (2017 – 2020)
By 2017, many companies using palm oil in their products were aware of the issues associated with oil palm production. Two powerful actors, however, were central in pushing firms from awareness to action. The first was the Tokyo Organising Committee for the Olympics Games (TOCOG), which officially included certified sustainable palm oil in the Games' sourcing code. The other was AEON, the biggest retailer in Japan and a member of the Consumer Goods Forum, who vowed to procure 100% certified sustainable palm oil for more than 3,500 of its house-brand items by 2020.
These moves forced several suppliers to seek certified sustainable palm oil sources. Thankfully, RSPO advocates ongoing work had led to the creation of various programs to support Japanese firms' RSPO membership.
The RSPO opened a Japan office in 2019, and at around the same time, the WWF started Japan Sustainable Palm Oil Network (JaSPON). With suppliers already prepared, some downstream firms found it more attractive to join the RSPO at this time. Competitors of existing RSPO members, in turn, started making sustainability commitments for fear of public criticism.
Throughout the RSPO's development in Japan, end-product consumers' pressure has had a limited impact on firms' decisions to join. The pressure to conform to sustainability standards created by the advocates targeting lead firms with vast supply networks, however, appears to have accelerated RSPO's market growth. One possible explanation for this phenomenon is the Japanese norm of long-term relationships between firms with buyers-suppliers ties, which, in some cases, include cross-shareholdings between them. Such a group of firms is alternatively known as a keiretsu.
Although keiretsu is not well defined, it is generally referred to as personal, capital, and business relationships in relation to business transactions (Yaginuma, 2014). Collective commitments commonly observed in firms within a keiretsu may have made lead firms more likely to support their suppliers' efforts to get certified, rather than switching to other suppliers.
Even though RSPO memberships in Japan have increased rapidly, it is unclear whether this will translate into substantial increases in certified sustainable palm oil uptake. Many manufacturers' suppliers are relatively small. They are often sensitive to any additional costs, and limited bargaining power with which to procure certified oil.
Moreover, since end consumer awareness continues to be low, businesses receive no additional remuneration for their sustainability investments, which may force them to cut costs elsewhere.
These problems aside, Japan exemplifies an intriguing model of sustainable business practice adoption resulting from the local business norms. Thanks to the strong ties between Japanese firms, the RSPO was able to establish a foothold in the industry despite the lack of demand for sustainable palm oil from the civil society – a sharp contrast to patterns in the West.
Green, J. F. (2013). Rethinking private authority: Agents and entrepreneurs in global environmental governance. Princeton University Press.
RSPO. (n.d.). Members. Retrieved 2020-08-09
Yaginuma, H. (2014). The Keiretsu Issue: A Theoretical Approach. Japanese Economic Studies.
Hattaya Rungruengsaowapak is a fresh graduate from Business, Language and Culture at CBS. She has extensive experience in Japan, especially within supply chain and sustainability from a leading consumer goods manufacturer prior to her studies at CBS.
Photo by Nazarizal Mohammad on Unsplash
Posted on September 4, 2020 September 4, 2020 Categories About, Behaviour, Communication, Concepts, CSR, Development, Environment, Equality, Featured, Initiative, News, Partnerships, Policy, Regulation, Stakeholders, StandardsTags #stakeholders, #SustainableConsumption, behavioural change, certificates, palm oil, society, standards, Sustainable Consumption, value creation
I Am What I Pledge – The importance of value alignment and crowdfunder behavior
By Kristian Roed Nielsen
Together with my colleague Julia Binder we recently published a paper on the role of values in driving crowdfunding backer behavior. The study found that altruistically framed campaigns have a higher chance for funding as compared to campaigns that emphasize egoistic or environmental motives, but even more importantly, that message framing needs to be aligned with the personal values of the backers. As such, our study highlights important similarities between resource mobilization in social movements and in crowdfunding.
The growth of reward-based crowdfunding as an alternative source of innovative financing has recently triggered great enthusiasm for its potential to enable a greater diversity of entrepreneurs to access to important seed funds (Gerber and Hui, 2013; Sorenson et al., 2016). This enthusiasm is in part related to the fact that – as compared to other forms of innovation capital and indeed other models of crowdfunding, such as lending or equity-based – the consumer plays a central role as a financier of the reward-based innovation. Considering that consumers represent a different kind of investor (Assenova et al., 2016), they are also driven by a wider and distinct range of motivations as compared to traditional investors (Lehner, 2013).
Understanding this new kind of investor has thus been subject to increasing academic debates, especially regarding the success criteria of reward-based campaigns (Mollick, 2014).
However, empirical evidence to date has produced mixed results – while some studies suggest a social- or environmental value orientation of a given reward-based campaign to significantly increase its odds of receiving funding (Calic and Mosakowski, 2016; Lehner and Nicholls, 2014), other studies have found no such effect (Cholakova and Clarysse, 2015; Hörisch, 2015).
Thus, despite enthusiasm from a range of actors, it is unclear under which conditions reward-based crowdfunding campaigns are successful in receiving funding. In this respect, the role of message framing has received little interest, despite its potential for shedding light on the criteria for crowdfunding campaign success. Against this background, we sought to examine how founders' framing of a reward-based crowdfunding message affect the mobilization of backers and what values are conveyed in successful crowdfunding efforts.
The study in a nutshell
The study draws on framing theory as utilized in the literature of social movement mobilization, which focuses on how messages attract audience attention and in turn plays a pivotal role in securing movement participation (Benford & Snow 2000). Considering that in reward-based crowdfunding entrepreneurs are equally concerned about mobilizing backers for their campaign, we investigate whether entrepreneurs' framing affects backer's attention and influences their interpretation and action towards the crowdfunding campaign.
Based on the theoretical literature on human values (Schwartz 1994), we operationalize these linguistic frames as egoistic, altruistic, and biospheric (Axelrod, 1994; Groot & Steg, 2008; Stern, 2000). These three values respectively reflect considerations on "what is in it for me", "what is in it for others", and "what is in it for the environment" when purchasing a given product (de Groot and Steg, 2008). In order to observe causality between these three linguistic value frames and individual pledging behaviour the study employed an experiment which replicated an online crowdfunding platform to better resemble what individuals would see in the real world and thus providing us with what we hope are more external valid observations (Grégoire et al., 2019).
More specifically, we investigated how the framing of reward-based crowdfunding messages as either egoistic, altruistic, or biospheric affected the success of eight hypothetical projects seeking financing in return for the respective product. Especially this designing of a realistic experimental setting represented a huge hurdle, but also a necessary one.
We find that too often experiments lack the realism of what they are seeking to study which we believe is a real detriment to results they yield. We thus wanted to move outside not only the lab but also create a user experience that best captured what an actually crowdfunding platform looks like.
For researchers entering with minimal programming experience it was a steep, but really rewarding learning curve. If a professional programmer saw our work, they would likely have a meltdown over the messy coding, but it worked and inspired many new ideas.
Fresh insights
The results provide fresh insights into an emerging debate relating to the potential of crowdfunding to support entrepreneurship.
Firstly, our findings show that while some consumers respond positively to campaigns emphasizing intrinsic benefits, an emphasis on such collective benefits cannot be seen as a silver bullet for crowdfunding success. Indeed, while we find that an emphasis on altruistic benefits leads to an overall higher willingness to support the campaign, we find no such effect in the case of products emphasizing the benefits for the environment, but rather that the attractiveness of a crowdfunding campaign is dependent on the alignment with the values of the respective target audience.
Secondly, when seeking to garner funding via a crowd, the importance of customer segmentation and a thorough understanding of these customers' values and expectations remains the most relevant task before designing and launching the crowdfunding campaign.
Our results clearly show that the willingness to invest in a campaign largely depends on the alignment between backers' values with the values transmitted in the campaign.
Finally, the findings provide implications for sustainable entrepreneurs, for whom crowdfunding has been emphasized to provide a relevant fundraising opportunity (Testa, Nielsen, et al. 2019).
On the one hand, the fact that crowdfunding is driven largely by consumers rather than professional investors does not in itself change consumer demands; demands which more often than not fail to correlate with sustainable behavior (Sheeran 2002; Webb & Sheeran 2006). While one may argue that the motivations of funders for pledging towards a campaign may be different from those of a professional investor, our results seem to confirm that consumers seek to satisfy their own values when deciding to invest in a crowdfunding campaign. On the other hand, this does not imply a lack of significant potential for sustainable entrepreneurs' success in reward-based crowdfunding.
Considering the increasing concern for sustainability and because of our finding that value alignment has a particularly high potential in a crowdfunding context, sustainable campaigns focusing on a clearly delineated target group have a high likelihood to reach their aspired funding goal.
Kristian Roed Nielsen is Assistant Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research strives to examine what, if any, potential role the "crowd" could have in driving, financing and enabling sustainable entrepreneurship and innovation. Kristian's Twitter: @RoedNielsen
Assenova, V., Best, J., Cagney, M., Ellenoff, D., Karas, K., Moon, J., Neiss, S., Suber, R., Sorenson, O., 2016. The Present and Future of Crowdfunding. Calif. Manage. Rev. 58, 125–135.
Axelrod, L., 1994. Balancing Personal Needs with Environmental Preservation: Identifying the Values that Guide Decisions in Ecological Dilemmas. J. Soc. Issues 50, 85–104. https://doi.org/10.1111/j.1540-4560.1994.tb02421.x
Benford, R.D. & Snow, D.A., 2000. Framing Processes and Social Movements: An Overview and Assessment. Annual Review of Sociology, 26, pp.611–639. Available at: http://www.jstor.org/stable/223459.
Calic, G., Mosakowski, E., 2016. Kicking Off Social Entrepreneurship: How A Sustainability Orientation Influences Crowdfunding Success. J. Manag. Stud. 53, 738–767. https://doi.org/10.1111/joms.12201
Cholakova, M., Clarysse, B., 2015. Does the Possibility to Make Equity Investments in Crowdfunding Projects Crowd Out Reward-based Investments? Entrep. Theory Pract. 39, 145–172.
de Groot, J.I.M., Steg, L., 2008. Value Orientations to Explain Beliefs Related to Environmental Significant Behavior: How to Measure Egoistic, Altruistic, and Biospheric Value Orientations. Environ. Behav. 40, 330–354. https://doi.org/10.1177/0013916506297831
Gerber, E.M., Hui, J., 2013. Crowdfunding : Motivations and Deterrents for Participation. ACM Trans. Comput. Interact. 20, 34–32. https://doi.org/http://dx.doi.org/10.1145/2530540
Grégoire, D.A., Binder, J.K., Rauch, A., 2019. Navigating the validity tradeoffs of entrepreneurship research experiments: A systematic review and best-practice suggestions. J. Bus. Ventur. 34, 284–310. https://doi.org/https://doi.org/10.1016/j.jbusvent.2018.10.002
Hörisch, J., 2015. Crowdfunding for environmental ventures: an empirical analysis of the influence of environmental orientation on the success of crowdfunding initiatives. J. Clean. Prod. 107, 636 – 645. https://doi.org/http://dx.doi.org/10.1016/j.jclepro.2015.05.046
Lehner, O.M., 2013. Crowdfunding social ventures: a model and research agenda. Ventur. Cap. 15, 289–311. https://doi.org/10.1080/13691066.2013.782624
Lehner, O.M., Nicholls, A., 2014. Social finance and crowdfunding for social enterprises: A public-private case study providing legitimacy and leverage. Ventur. Cap. 16, 271–286.
Mollick, E., 2014. The dynamics of crowdfunding: An exploratory study. J. Bus. Ventur. 29, 1–16. https://doi.org/http://dx.doi.org/10.1016/j.jbusvent.2013.06.005
Schwartz, S.H., 1994. Are There Universal Aspects in the Structure and Contents of Human Values? J. Soc. Issues 50, 19–45. https://doi.org/10.1111/j.1540-4560.1994.tb01196.x
Sheeran, P., 2002. Intention—Behavior Relations: A Conceptual and Empirical Review. European Review of Social Psychology, 12(1), pp.1–36. Available at: http://dx.doi.org/10.1080/14792772143000003.
Sorenson, O., Assenova, V., Li, G.-C., Boada, J., Fleming, L., 2016. Expand innovation finance via crowdfunding. Science (80-. ). 354, 1526 LP – 1528.
Stern, P.C., 2000. New Environmental Theories: Toward a Coherent Theory of Environmentally Significant Behavior. J. Soc. Issues 56, 407–424. https://doi.org/10.1111/0022-4537.00175
Testa, S. et al., 2019. The role of crowdfunding in moving towards a sustainable society. Technological Forecasting and Social Change, 141, pp.66–73. Available at: http://www.sciencedirect.com/science/article/pii/S004016251831953X.
Webb, T.L. & Sheeran, P., 2006. Does changing behavioral intentions engender behavior change? A meta-analysis of the experimental evidence. Psychological bulletin, 132(2), pp.249–268
Photo by Ian Schneider on Unsplash
Posted on June 10, 2020 June 12, 2020 Categories About, Behaviour, Communication, Concepts, Environment, Ethics, Featured, Innovation, Investment, Knowledge, News, Research, Social, Stakeholders, Standards, SustainabilityTags #CrowdFunding, #EffectiveAltruism, #Fundraising, #innovation, #SharedValue, behavioural change, society, value creation
Fresh Air: An Impact Story
By Lara Anne Hale
What do fresh air, canaries, and research all have in common? Academics often humbly conduct and publish research, hoping but not knowing if it had any impact on society (we hope very strongly!). This becomes even more bewildering when it comes to the advent of research impact metrics, such as with the UK's Research Excellence Framework (REF) (UKRI, 2020). It is a rare and wonderful occasion in which one can not only bear witness to impact but actually physically touch it. As an industrial researcher with CBS and the VELUX Group, I am often moving between theory and practice, but the tale of an innovation process stands out. This impact story is the story of how research became related — albeit several steps removed — to the development of an innovative product, AirBird®, co-created by GXN, the VELUX Group, and Leapcraft. Moreover, it is the story of inspiration in practice, a breath of fresh air in the academic realm.
The academic story starts with a group of nine researchers. The 'Smart Buildings and Cities' research group is composed of nine industrial PhDs and postdocs employed in diverse Danish organizations and universities, housed in the BLOXHUB Science Forum and supported by Realdania and the Danish Innovation Fund. Some of us are social scientists engaging with engineering (that would be me), some are architects engaging with computer science, and yet others are engineers conducting social research. I've never seen such a mad mess of transdisciplinarity, and it's beautiful (and also very much guided by our Science Forum coordinator, Pernille Berg).
The innovation process parallels the fourth research case I have been building to better understand and theorize business model innovation for smart technology in the building industry. This case concerns indoor climate data-driven building renovations as a potential business model and involves collaboration among CBS and the VELUX Group (the research), Kokkedal Skole (the building), and Leapcraft (the technology). Fredensborg Kommune has allotted nearly 1 billion DKK (120 million euro) to the improvement of its schools in a program called 'Fremtidens Folkeskoler' (Primary Schools of the Future); and it is kicking off the program with an investment of over 35 million DKK (4 million euro) in renovations at Kokkedal Skole. Prior to renovations, we needed to answer the questions: How is the building being used now? What is the indoor climate like? How do teachers and students interact with space? And then we can compare the data post-renovation. This kind of research, as it turns out, is especially timely, given the Danish government's commitment of 30 billion DKK for sustainable housing renovations.
Kokkedal Skole
Image by Lara Anne Hale
The Kokkedal Skole project is a fascinating one to discuss with others, given the visionary leadership of their principal Kirsten Birkving and excellent building management of their facilities manager Lars Høgh-Hansen. They have in fact been featured on CNN Business for bringing new technology into the classroom, namely Leapcraft's AmbiNode sensors and SenseMaking tool, the latter having been developed by VELUX based on the Green Solutions House project. Two of the Science Forum group's companies, GXN and the VELUX Group, started to take discussions at length about the emerging findings on health in buildings, the invisibility of indoor climate, and the need for a simple alert when the situation is dangerous. They posed the question, is it possible to make an indoor health equivalent of the canary in the coal mine, who would start tweeting to coal miners when in contact with dangerous air?
Early in 2019 these talks came to fruition when Realdania invited applications for seed funding to research group members interested in collaborative innovation. This led to the Smith Innovation-coordinated workshop "The Canary in the Goalmine" with the VELUX Group and GXN working on the goal of defining how the 'canary' would look like, and – based on the research at Kokkedal Skole and renovation challenges presented by the Student and Innovation House – how it would function. A year later, I am working with VELUX and Leapcraft to finalize the one-year monitoring report from Kokkedal Skole, and AirBird® is ready to hit the shelves. The concept is simple and beautiful, just like the bird: when the CO2 levels indicate unhealthy air, AirBird sings a bird song to let its users know they should bring in some fresh air; which TV2 Lorry featured at Kokkedal Skole on the 25th of May. The AirBird® has been ideated, designed and developed in co-creation between GXN, VELUX Group and Leapcraft.
Airbird introduction
Although the development of AirBird® does not tell the story of sustainability dynamics within innovation ecosystems (Oskam et al., 2020), nor the story of smart technology-facilitated business models for health and well being (Laya et al., 2018) – two examples of academic work that resonate with my research – it does challenge the idea that business model innovation precedes product innovation. Nudging tools like AirBird® may stimulate awareness and behavioural changes that anticipate business opportunities for a healthy indoor climate. Further, serendipitous product innovations may serve as artifacts embodying value negotiation, the foundations of business model innovation.
But ultimately, the AirBird® story is attractive because it presents impact that is tangible. And whereas the physical product is the most tangible of all, this innovation has had other impacts as well: collaborative innovation experience among the organizations involved; encouragement within the Science Forum of the value of transdisciplinary research; and the need to face directly the tensions between the academic and practice worlds. For my part, it's uncomfortably different from the impact implied in academic publications and absolutely refreshing — something fresh air, canaries, and research should all have in common.
Laya, A., Markendahl, J., & Lundberg, S. (2018). Network-centric business models for health, social care and wellbeing solutions in the internet of things. Scandinavian Journal of Management, 34(2), 103–116.
Oskam, I., Bossink, B., & de Man, A.-P. (2020). Valuing Value in Innovation Ecosystems: How Cross-Sector Actors Overcome Tensions in Collaborative Sustainable Business Model Development. Business & Society, 000765032090714.
Rafaeli, Anat, & Pratt, Michael G. (2006). Artifacts and Organizations: Beyond Mere Symbolism. Mahwah: Lawrence Erlbaum Associates Inc,US.
UKRI (2020). REF Impact. Accessed 29 May 2020 from: https://re.ukri.org/research/ref-impact/
Lara Anne Hale – Ph.D., M.Sc., Assistant Professor, Industrial Postdoc Fellow with CBS and VELUX. Lara conducts transdisciplinary research on sustainability in the built environment, including aspects of digital transformations, circularity, user-centered design, and systems thinking. Her current project focuses on business model innovation for smart buildings in the BLOXHUB Science Forum 'Smart Buildings & Cities' research group, supported by the Danish Innovation Fund and Realdania.
Photo by Kinga Cichewicz on Unsplash
Posted on June 2, 2020 June 2, 2020 Categories About, Concepts, CSR, Development, Environment, Featured, Initiative, Innovation, Issues, News, Partnerships, Research, Social, Stakeholders, Standards, Sustainability, TechnologyTags #GreenBuildings, #innovation, #sustainability, researchers, society
Normalizing Sustainability
By John Robinson, University of Toronto
We often hear the argument that, given the urgency of climate change and sustainability concerns, significant changes to individual behaviours and lifestyles are required. This has led to a wide array of public education and climate literacy campaigns aimed at changing such behaviours. In this blog, I will argue that some fairly strong research findings suggest that such campaigns are of limited value in influencing behaviour change, and moreover that focusing on changes in individual behaviours may be distracting us from much more significant possible steps.
There are many models of behaviour change in the literature, and of the relationships among values, attitudes, intentions and behaviours. It is probably fair to say that many of the most influential conceptualizations of behaviour change assume that most individual behaviours are the result of some form of conscious decision-making about desirable outcomes based in turn on some assessment of the consequences of different courses of action. [1]
On this view, people act in environmentally irresponsible ways because they lack the information they need to make better decisions. Such an 'information deficit' model leads in turn to what we might call a persuasive communication approach to stimulating behavior change, which assumes that providing more information as to those consequences, through information provision, educational programs, and science and climate change literacy campaigns, will lead to better and more environmentally responsible decision-making [2].
Unfortunately, the relevant research on the relationship between information and behaviour shows that persuasive communication approaches based on an information deficit model are not only ineffective in changing behaviours in the desired direction [3], but may in fact have perverse consequences.
Studies of the relationship between knowledge and attitudes have found that increased science literacy does not lead people to become more concerned about climate change, but on the contrary, actually increases polarization on this issue[4]. It seems that educating people on the science of climate change, or other sustainability problems, will not lead them to change their views on the problem itself, but instead may further reinforce their prior position.
In fact there is evidence from many fields of study, going back multiple decades, that information is only weakly connected to behaviour change. Studies of the effectiveness of energy efficiency programs [5], research in health promotion[6], or community-based social marketing[7], over many decades have all reached similar findings. So widespread are these findings that it can be said, in the words of my colleague David Maggs that:
The best evidence that information does not change behaviour is that we have decades of evidence in multiple fields that it does not do so, yet we continue to create and implement pubic education campaigns intended to change individual behaviour.
While this is bad enough, the problem gets worse.
It turns out that it is not clear that changing individual consumption behaviour is the right goal anyway. A number of studies have shown that there is no significant difference in either the carbon or ecological footprint of individual who cares deeply about environmental issues and behave accordingly, and those who do not care at all and do not behave in environmentally responsible ways [8]. The reason is that the ecological and carbon footprints of individuals are determined much more by their income than by the degree to which they choose more environmentally appropriate behaviours such as recycling or buying sustainable products.
So we seem to be in a depressing circumstance: information and literacy programs won't change behaviour; moreover, it wouldn't much matter, in term of overall environmental impact, if they did.
But rather than ignoring this evidence and intensifying our efforts to educate people into sustainability, or else throwing up our hands and retreating into apathy, perhaps a more fruitful approach is to reframe the original questions and ask whether a different approach altogether might be useful, on both these questions.
With regard to information provision, instead of a persuasive communication approach, it might be more useful to take what we might call an emergent dialogue approach [9]. Instead of assuming that we know the right answers and we have to get those answers into the heads of our audience, perhaps we need to listen as much as we speak, and to find two-way approaches to dialogue in order to co-create narratives with citizens that describe our circumstances in ways that are more faithful to the disparate views and values of different groups and that thereby offer the possibility of finding common ground on controversial societal problems.
The goal switches from a focus on changing behaviours to a focus on trying to create shared narratives, in order to better inform collective decision-making processes, and to foster social mobilization in support of policy change.
With regard to individual behaviour change, perhaps we need to rethink our ideas about change itself. As long as sustainability requires change, then it is fragile because human activities and practices will often snap back to prior unsustainable normals. Instead, we need to normalize sustainable practices, so that they become the default, not the required change [10]. In this connection, it might be useful to move from a focus on conscious individual behaviour and pay more attention to more collective processes of activity. There has been an upsurge of work on social practice theory approaches to human activity, which suggests that much of that activity is unconscious and collective, connected to social processes and relationships, and social and cultural norms [11]. Can a focus on collective social practices lead us towards processes of normalization of sustainability?
Following this line of thought, it is not about encouraging behaviour change instead of technological change, but of exploring how the overall socio-technical system itself, including powerful social norms, influences and is influenced by individual choices and actions, including political demands or support for changes in collective decisions. Perhaps we need to try to create 'virtuous cascades' 12 of positive normative change and identify leverage points that will allow us to foster and encourage more sustainable outcomes. Trying to convince people to change their lifestyles in the absence of change in the overall system will be ineffective and may even work against larger system change.
John Robinson is a Professor at the Munk School of Global Affairs and Public Policy and the School of the Environment at the University of Toronto. He is also an Adjunct Professor at Copenhagen Business School. His research focuses on the intersection of climate change mitigation, adaptation and sustainability; the use of visualization, modelling and citizen engagement to explore sustainable futures; sustainable buildings and urban design; the role of the university in contributing to sustainability; creating partnerships for sustainability with non-academic partners; the history and philosophy of sustainability; and, generally, the intersection of sustainability, social and technological change, ways of thinking, and community engagement processes.
[1] E.g. see Ajzen, I. (1991). The theory of planned behavior. Organizational Behaviour and Human Decision Processes, 50(2), 179-211
[2] Masud, M.M., Al-Amin, A.Q., Junsheng, H., Ahmed, F., Yahaya, S.R., Akhtar, R., & Banna, H. (2016). Climate change issue and theory of planned behaviour: relationship by empirical evidence. Journal of Cleaner Production, 113, 613-623. See the discussion in Kollmuss, A., & Agyeman, J. (2002). Mind the Gap: Why Do People Act Environmentally and What are the Barriers to Pro-Environmental Behaviour? Environmental Education Research, 8(3): 239-260.
[3] See, for example, Kollmuss & Agyeman, op. cit.; Sheeran, P., & Webb, T.L. (2016). The Intention-Behaviour Gap. Social and Personality Psychology Compass, 10(9), 503-518; Ungar, S. (1994). Apples and oranges: probing the attitude-behaviour relationship for the environment. Canadian Review of Sociology, 31(3); Steg, L., Perlaviciute, G., & van der Werff, E. (2015). Understanding the human dimensions of a sustainable energy transition. Frontiers in Psychology, 6; Owens, S. 2000. `Engaging the public': information and deliberation in environmental policy, Environment and Planning A, 32, pages 1141-1148; Shove, E. 2010. Beyond the ABC: climate change policy and theories of social change, Environment and Planning A, 42, 1273-1285.
[4] Kahan et al, (2012) The polarizing impact of science literacy and numeracy on perceived climate change risks, Nature Climate Change, 2(10), pp.732-735; Drummond, C., & Fischhoff, B. (2017). Individuals with greater science literacy and education have more polarized beliefs on controversial science topics, Proceedings of the National Academy of Sciences, 114(36), 9587-9592.
[5] Stern, P. C. 1986. "Blind spots in policy analysis: What economics doesn't say about energy use." Journal of Policy Analysis and Management, 5(2), 200-227; Hirst, E. (1990). Progress and Potential in Evaluating Energy Efficiency Programs. Evaluation Review, 14(2), 192–205; Robinson. J. (1991). "The proof of the pudding: Making energy efficiency work." Energy Policy, 19(7), 631-645; Abrahamse, W., Steg, L., Vlek, C., & Rothengatter, T. (2005). A review of intervention studies aimed at household energy conservation. Journal of environmental psychology, 25(3), 273-291.
[6] Green, L. W., & Kreuter, M. W. (1993). Health promotion planning: An educational and ecological approach. McGraw-Hill
[7] McKenzie-Mohr, D. (2011). Fostering sustainable behavior: An introduction to community-based social marketing. New society publishers.
[8] Csutora, M., 2012. One more awareness gap? The behaviour–impact gap problem. Journal of Consumer Policy, 35(1), pp.145-163; Tabi, A., (2013). Does pro-environmental behavior affect carbon emissions. Energy Policy, 63, pp.972-981; Moser, S., & Kleinhückelkotten, S. (2018). Good intents, but low impacts: diverging importance of motivational and socioeconomic determinants explaining pro-environmental behavior, energy use, and carbon footprint. Environment and Behavior, 50(6), 626-656.
[9] Robinson, J. (2004) "Squaring the Circle: Some thoughts on the idea of sustainable development", Ecological Economics, 48(4): 369-384; Antle, A. N., & Robinson, J. (2011). Procedural Rhetoric Meets Emergent Dialogue: Interdisciplinary perspectives on persuasion and behavior change in serious games for sustainability; Bendor, R., Lyons, S. H., & Robinson, J. (2012). What's there not to 'like'? sustainability deliberations on facebook. JeDEM-eJournal of eDemocracy and Open Government, 4(1), 67-88; Maggs, D. and Robinson, J. (2016) "Recalibrating the Anthropocene: Sustainability in an Imaginary World", Environmental Philosophy, 13(2), 175-194; Robinson, J. and Cole, R. (2015) Theoretical underpinnings of regenerative sustainability, Building Research & Information, 43(2), 133-143; Westerhoff, L. and Robinson, J. (2013) "'Practicing' narratives: exploring the meaning and materiality of climate change", Proceedings of Transformation in a Changing Climate, June 19-21, 2013.
[10] John Robinson, "Normalizing Sustainability: from behavior change to metamorphosis", Keynote Presentation at IST2019: Accelerating sustainability transitions: Building visions, unlocking pathways, navigating conflicts, Ottawa, Jun 25 2019
[11] Gram-Hanssen, K. & Georg S. 2017. Energy performance gaps: promises, people, practices, Building Research and Information 46(1), 1-9; Strengers, Y., & Maller, C. (Eds.). (2014). Social practices, intervention and sustainability: Beyond behaviour change. Routledge; Shove, E., Pantzar, M., & Watson, M. (2012). The Dynamics of Social Practice. London, UK: SAGE Publications; Hargreaves, T. (2011). Practice-ing behaviour change: Applying social practice theory to pro-environmental behaviour change. Journal of consumer culture, 11(1), 79-99; Reckwitz, A. (2002). Toward a theory of social practices: A development in culturalist theorizing. European journal of social theory, 5(2), 243-263.
[12] Homer-Dixon, T. Coronavirus will change the world. It might also lead to a better future. The Globe and Mail, Mar 5, 2020 https://www.theglobeandmail.com/opinion/article-the-coronavirus-is-a-collective-problem-that-requires-global/
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Posted on March 18, 2020 March 19, 2020 Categories About, Behaviour, Communication, Concepts, Education, Environment, Featured, News, Policy, Regulation, Research, Social, SustainabilityTags #SocialChange, #sustainability, behavioural change, society
Teaching (and doing) anthropology in a business school
For a while now, the discipline of anthropology has studied relatively marginalized or dispossessed people and communities, often in developing countries or poor parts of developed countries. What this means is that anthropologists are often critical of powerful organizations like governments, banks, and multinational corporations.
For the past year, I have tried to integrate these critical perspectives into my teaching at Copenhagen Business School. Although CBS is not a typical business school in the sense that it is not primarily an MBA-granting institution, many of my students are pursuing careers in finance and consulting that are typical of business school graduates.
Challenging business students
For young professionals who have been trained in both their classes and their internships to simplify and synthesize difficult concepts, it can come as a bit of a shock to be asked to read an essay about climate change adaptation in Guyana or vanilla bean farming in Madagascar, and unpack the theories and methods to think about how they relate to questions of corporate sustainability and sustainable finance.
But while this may be challenging, I've found that students often find it exceedingly valuable.
One of the hardest things to deal with as a young professional is often the tension between personal, ethical values and the pressures a company puts on you to increase profits.
The critical theories that anthropologists use to make sense of the world help students make sense of their work, especially those who are planning to go into sustainability-related careers. Understanding the way humans have navigated the relationship between nature and culture across time and space turns out to be a key piece to the puzzle of how the financial system or tech companies mediate that relationship in more familiar contexts.
Just as important, it helps them learn to critically reflect on their choices as consumers, investors, citizens, and the numerous other social roles they inhabit, roles that tend to evolve fairly dramatically over time (for example, after they graduate, after they get their first promotion, after they've started families, etc.). This kind of reflection is key to building a more just and sustainable society.
Thinking about the role of emotions in determining who has access to clean water in Bangladesh, for example, might seem far removed from concerns here in Denmark about pension funds and money laundering, but as we've learned in my classes over the past few semesters, emotions like hope and anxiety play a big role in the way financial resources are distributed and accessed.
Anthropological theories and methods might seem far removed from the quantitative approach to management that defines contemporary sustainability. But to understand the role of businesses in society, the study of societies has to be taken at least as seriously as the study of business, and anthropology is a fruitful way of introducing this perspective in business schools.
By the same author: Sustainability's Infrastructure
Photo by José Martín Ramírez C on Unsplash
Posted on December 18, 2019 December 18, 2019 Categories About, Behaviour, CBS, Communication, Concepts, Featured, Initiative, Innovation, Issues, Knowledge, News, Research, Social, SustainabilityTags #innovation, #sustainability, #SustainableFinance, Business Schools
When is a banking scandal a corporate social responsibility scandal?
I arrived in Australia to discuss and research corporate social responsibility (CSR) with colleagues at RMIT University and the University of Melbourne to see the papers covered in … a banking scandal.
The Westpac Bank product 'Litepay', designed to enable customers to transfer small amounts of money overseas, is alleged to have enabled money-laundering on 23 million occasions. It is alleged that 12 customers used this service to transfer $500,000 to child exploitation criminals in the Philippines.
There is the usual background that senior management was aware of the failures but did nothing. There is the usual foreground that the bank's leadership made light of the problems, and was strangely slow to accept responsibility. So far so depressingly familiar.
I also noticed Johannes Leak's cartoon published in The Australian newspaper (27.XI.2019). OK, it is a caricature with the CSR consisting of activities that seem trivial and causes that, notwithstanding their social significance, are adjacent to the legality and ethics of Westpac's main business!
But caricature is part of the cartoonist's craft and it highlights the main message: the way that Westpac went about its business appeared untouched by the department ostensibly standing for its social responsibility.
So what lies behind this contradiction?
CSR professionals may well be educated, trained and experienced in other society-related issues. But as the cartoon suggests they were unable to address some key social impacts of the bank's business models. This may be no accident. It may well suit corporate leadership to have a CSR department to focus on 'the worthy causes' and to distract from the business of money-making. So whilst the CSR staff engage in legitimation activities, the main CSR message (i.e. to serve societal good) is disconnected from conducting the core business.
So we need to construe CSR as something more pervasive and robust such that it addresses the core business in all its complexity and technicality. This may mean corporations re-thinking how their products are evaluated, who is around the table at strategy meetings, who leaders listen to, who they collaborate with, what sort of qualifications and capabilities are expected of senior managers and board members.
One positive
One positive in the Westpac story is that the triggers of social sanction operated. Whistleblowers within Westpac (who advised the media), governmental leaders (who expressed grave disquiet and suspended Westpac from a public policy initiative), and major investors (who threatened exit), brought immense pressure on Westpac's leadership for more proportionate responses.
This is a belated success for the main message of CSR: that business needs to be responsible, and that failure here will be very costly.
Sadly, it comes at a price that investors and customers may have to share. The bank needs to ensure that it has sufficient and appropriate CSR capacity to build the message into the practices of business as usual.
Jeremy Moon – Director of CBS Sustainability, professor of Sustainability Governance at Copenhagen Business School and BOS blog editor. Jeremy has written widely about the rise, context, dynamics and impact of CSR. He is particularly interested in corporations' political roles and in the regulation of CSR and corporate sustainability.
By the same author: Wonder Tech and the Institution of Gender
Cartoon's author
Johannes Leak
Posted on December 5, 2019 December 4, 2019 Categories About, Concepts, CSR, Ethics, Featured, Governance, Issues, Knowledge, News, Social, Stakeholders, StandardsTags #Banking, #CSR, #Governance, corporate responsibility
Football and the Meaning(lessness) of Management Concepts
By Esben Rahbek Gjerdrum Pedersen
Romanticized management concepts often seem to fall short in capturing actual management practices in today's corporate world. Experiences from other types of organisations may help deepen the understanding of the concepts and the phenomena they are trying to portray.
Romanticized concepts
The management literature is full of concepts, which indicate passion, engagement and community. Internally, terms like corporate culture, values, karma, spirituality, passion and even love and religion express a deep symbiosis between the individual and the organization. Externally, corporate communication is soaked in references to sustainability, citizenship, social responsibility, and community engagement.
If we are to believe the "About Us" sections, corporations today are more about benevolence than business.
There is a problem though.
What happens if you compare the rosy picture of business with harsh business realities? One illustrative example is the talk about management commitment. How does it go along with the fact that the average tenure of CEOs is steadily decreasing? And how do you combine talks about commitment with the recurrent discussions about bonus schemes? It seems like an awful waste of money to approve exorbitant compensation packages to CEOs if they were driven solely by an inner sense of duty and dedication to the job.
What all these management concepts have in common is that they try to give business personality, heart, spirit, and soul.
However, if we are interested in concepts like commitment, passion, and loyalty, today's corporate world is perhaps not always the right place to look. Probably more than ever before, these concepts seem more meaningful in private life and collectives rooted in the local community.
Like community football…
As part of a survey among Danish football clubs (supported by a UEFA research grant), I asked club representatives a simple, open question: – What is the main reason to be engaged in the club? A few quotations are found at the bottom of the text and well illustrate some of the differences between the corporate world and community sport. A few examples:
Stickiness. Commitment means being in it for the long haul. It is not unusual that volunteers are members of football clubs for 20, 30, and 40 years. When managers drift from one company to another, it serves as proof that they are committed to their career. Not the organisation.
Obligation. The quotations from the survey indicate that commitment to community sport is often linked to an obligation to support the local community and paying back for own experiences as active players.
Community. In community sport, commitment has roots. You are committed to something: – the sport, the people, the club, and the community. It is probably no coincidence that local club names usually refer to a city or a region, whereas the corporate names are mostly faceless abstractions referring neither to activity nor geography.
The real motives
The point is not that club volunteers are all saints dedicated to the greater good of society. Most volunteers probably start off with instrumental motives when they become engaged in club life; either because they play themselves and/or have children in the club. However, for some volunteers club life gradually becomes part of one's identity and network.
The question remains, however, why the management literature seems so eager to wrap business in romantic rhetoric about commitment, loyalty, authenticity etc. when these concepts often seem to reflect what has been lost rather than what can be found in today's corporate world. Of course, part of the management vocabulary can be passed off as organizational bullshit, but even the disregard of truth may reveal some truths about our society.
Maybe the abundance of romantic management concepts reflects a dream about relationships in a market characterized by transactions.
A seek for passion in a highly professionalized work life. Longing for a community when people have all become individuals. Whatever the reason, a researcher should restrict the use of concepts to organisations where they have not yet become emptied of meaning.
Table 1: Respondents about the main reasons for being active members of the football club (Translation from Danish)
– "Make a difference in my local community and support my interest in grassroot football. Jeg am a club person and believe voluntary work should be a "citizen duty" (…)"
– "After a whole life as active in the club, also as trainer and board member, it was natural to continue (…) and give something back. I think it is fun to work with kids and people, who also give me a lot I can use in the work life".
– "I like the social life in the club and want to help others in getting the same experience".
– "I have played football from when I was a kid and had wonderful experiences that I like to hand over to the youth"
– "Because I love football and like to give something back for all the years when I was more on the field than outside. Moreover, it is important that somebody do something in the associations in our community".
– "Because my kids play in the club and because I think you should make an effort in the associations in the city. And not least because I like to be part of making a difference in the local associations.
– "Have been an active football player all my youth, where I met engaged trainers and leaders. So it is probably to give something back"
– "Help our city in having a place where children, young and elderly can play football under good conditions"
– "Funny, I have asked myself the same question:-) I have been an active player from when I was 8-9 years old, to league player, to old boys – so it is simply paid back time for all the experiences (…) to all the people who made it possible."
– "Always been involved in football. Somebody helped me when I was playing myself. Think that you have to give something back."
– "Payback to the club which has given me a lot of good experiences. My contribution to Danish associations – the voluntary brigade!"
– "Lifestyle after more than 30 years of voluntary work. Help young athletes to get a good future. This has been my goal throughout the years and has given me a lot of good experiences"
– "Voluntary work helps in creating a well-functioning local community. For children, it is important to promote active living. And it is also developing you personally. Unity and identity"
– "For many years, I had children in the club and therefore I am involved in the work. I have enjoyed playing football and would like to give others the same experience. "
"As a child, I experienced a lot of good things. Now when I have the opportunities, I feel obliged to give something back." "Have always been a volunteer in community sport and for more than 50 years. Nice to see things grow and do something good for a lot of people. Not least the social element of the club. And you get to know a lot of people and build some friendships for life".
– "Have been involved in football for 45 years. Good friends and good network. Be part of making a difference on a voluntary basis".
– "For 20 years, I have played football in the same club. To have a good club I also have to take responsibility"
– "The community and the joy of working with other people who love football"."Football has always meant a lot to me and I think you have an obligation to contribute to the continuation of football. Every community needs a football club. Everyone should have an opportunity to do team sport which can also be a great foundation for your future life."
Learn more about our research on football and CSR here: https://www.tandfonline.com/doi/full/10.1080/16184742.2018.1546754
Esben Rahbek Gjerdrum Pedersen is Professor at the Department of Intercultural Communication and Management at Copenhagen Business School. He researches CSR, Corporate Sustainability, Non-financial Performance Measurement, Supply Chain Management and Process Management.
By the same author: The Business (and Politics) of Business Cases
Photo by Click and Boo on Unsplash
Posted on December 3, 2019 December 4, 2019 Categories About, Behaviour, Citizenship, Communication, Concepts, CSR, Featured, News, Partnerships, Research, Social, SustainabilityTags #CSR, #management, #sustainability, business, business repsonsibility, concept, corporate responsibility, society
How SDGs help us see buildings through a different lens
By Ingrid Reumert
Despite a lot of focus on climate change recently, the impact of one 'hidden climate' on people's lives often goes unnoticed – the indoor climate. And the indoor climates in the buildings that we normally feel most comfortable in – our homes – are much worse than we are aware of.
Safe and sound at home?
Our homes are traditionally seen as places where we recharge our batteries. They are where we seek shelter and refuge from the hustle and bustle that we often experience in our everyday lives when away from them. As we wind down at the end of a busy day in the comfort of our homes, we take it for granted that we can relax, knowing that our health is not at risk when inside.
However, there's increasing evidence that although we might arrive home safe and sound, the time we spend at home might not be safe and sound after all.
As 'safe as houses'?
The saying 'it's safe as houses', which is used to describe things as being completely safe, cannot be used about many homes in Europe. We know from our Healthy Homes Barometers, an annual research-based report designed to take stock of Europe's buildings, that one out of six Europeans lives in unhealthy homes. For children in Europe, it's worse, with one out of three being exposed to health risks in their homes. And the health risks are not just isolated to our homes. The same also goes for the environments inside buildings where we work and learn.
Furthermore, we know that people spend 90 percent of their time indoors, where the air can be up to five times more polluted than outside. The potential risks to people's health and wider society are not insignificant, with poor indoor climates directly leading to conditions such as asthma or allergies, due to dampness and mould.
Ongoing dialogue and modified solutions
For years we have been using such well-documented research to engage in dialogues with legislators, housing professionals, building owners and industry representatives to push for steps to make buildings healthier. In recent years, we have also modified our solutions, which bring daylight and fresh air through roofs, to be more automated and also compatible with digital technologies and the internet of things, and thereby make creating healthy indoor climates hassle-free.
Using SDGs to push harder for healthier indoor climates
At VELUX Group, it is our strong belief that if indoor climates are not good for our health, then we'll see problems for individuals and for society. Now, with the help of the United Nations Sustainable Development Goals, we have an extra toolbox to support our efforts to address this.
We believe that by embracing this common global language of SDGs, we can leverage our efforts to make buildings healthier.
More specifically, we use three SDG goals to help people see the world through a different lens and to reveal the possible negative effects on their health from the 'hidden climate' – the indoor climate. We do this by showing how good indoor climates and healthy buildings can safeguard good health and well-being (SDG 3) and also how this can contribute to more sustainable cities and communities (SDG 11), with the help of partnerships for the goals (SDG 17).
Revealing what's right under our noses for a more sustainable future
With much of the current climate change and sustainability focus on natural renewable energy sources or companies' steps to reduce their carbon footprints, the climates inside our homes and other buildings, and their potential negative effects on our health and well-being continue to be ignored. That's why the VELUX Group will persist with research and activities to boost indoor climate awareness and continually improve our products, to address what's right under our noses but often overlooked – the indoor or hidden climate. By improving indoor climates to help make buildings healthier, we are confident that we will contribute to a more sustainable future.
Ingrid Reumert – VP, Global Stakeholder Communications & Sustainability at VELUX Group
Photo by Timothy Buck on Unsplash
Further reading: Researchers in BLOXHUB seeking to improve indoor climate
Posted on November 26, 2019 November 26, 2019 Categories About, Concepts, CSR, Environment, Featured, Innovation, Issues, Knowledge, News, Partnerships, Regulation, Reporting, Research, Social, Standards, Sustainability, TechnologyTags #community #CSR #goodintentions, #GreenBuildings, #innovation, #SDGs, #sustainability, indoor climate
Consumers fall for food products with nutrition claims – what about you?
By Meike Janssen
In a recent study, colleagues from the University of Kassel, Germany and me discovered that consumers fall for food products with nutrition claims on the package front.
Nutrition claims?
Nutrition claims are short claims highlighting a particular beneficial nutritional property, e.g. fat-free, high protein, or rich in vitamin C. In the study, we sent consumers shopping in a laboratory supermarket with real products on the shelf. The interesting fact: Consumers could choose between three orange juices with identical nutritional profiles; only that one orange juice carried the nutrition claim rich in vitamin C. And this was the orange juice most consumers bought, even though the other two orange juices contained the same amount of vitamin C (for details about the experiment, which claims were tested, and how the claims rotated across the brands, see the end of this post).
Interestingly, all types of consumers fell for the orange juice with the nutrition claim: consumers seeking for healthy products as well as consumers not caring about healthy products; consumers who knew a lot about nutrition as well as those who knew relatively little about nutrition.
Source: Johann Steinhauser; Meike Janssen; Ulrich Hamm (2019)
You might wonder: Is it allowed to prominently highlight, on the package front, an ingredient that is typically included in all products of a certain type? For vitamin C in 100% orange juice, the answer is yes.
The good and bad news
The good news is: EU law stipulates the conditions under which nutrition claims are allowed. So nutrition claims can generally be considered trustworthy. The bad news is: A nutrition claim does not mean the product is overall healthy. A nutrition claim only refers to a single ingredient.
>>For instance, it is allowed to label candy containing high amounts of sugar as fat-free. If you ask me, that is a problematic issue. <<
Are consumers stupid or irrational?
How come consumers can be 'manipulated' so easily, by simply highlighting one beneficial ingredient that is, in fact, in all 100% orange juices? Is it because consumers are stupid and know little about vitamin C in orange juice? No, that would not explain why even consumers with a high nutrition knowledge fell for the product with the nutrition claim. Then is it because consumers behave irrationally when they do grocery shopping? Again, the answer is no.
Squirrel_photos on Pixabay
Consumers look for simple heuristics when choosing between similar food products. When grocery shopping, we are confronted with a lot of information. Since most of us do not want to spend hours in the supermarket comparing several products and reading all information on product packages, we use 'cues' that help us navigate through the information jungle.
Every consumer has his/her own cues that he/she uses, often subconsciously. These cues simplify our choice tasks and allow us to make quick decisions. And the important thing is: in the end, we are usually quite happy with our product choice. Most of us walk out of the supermarket and do not worry about whether we really made the best possible choice. So in that sense, relying on simple choice heuristics and using cues like ingredients, brand and price makes perfect sense for us, at least when we do grocery shopping. There is nothing irrational about it.
Take-home message: Better check nutritional information
Whether or not you want to use nutrition claims as one of 'your cues' when choosing food, remains your own decision. Just bear in mind the following: Only because one brand highlights that the product contains a beneficial ingredient, does not mean other similar products do not have the same benefits. And only because a product carries a nutrition claim, does not mean the product is healthy – it might contain high amounts of other unhealthy ingredients.
If you are really interested in buying a nutritious product, better check the nutritional information on the back of the package and compare several products. You might find a product with better nutritional properties without a nutrition claim on the front.
Details about the experiment
The study participants were recruited in the pedestrian area in the city of Kassel, Germany. The 156 participants went shopping in a laboratory supermarket. They could choose between three orange juices, each of which labelled with a claim:
taste claim 'simply delicious',
health claim 'Vitamin C contributes to the normal function of the immune system', or
nutrition claim 'rich in vitamin C'.
To make the purchase simulation as realistic as possible, existing brands and products were offered on the shelf. We only added the claims. The products were from other German speaking countries (Austria and Switzerland) so that the participants were not familiar with them. We wanted to rule out strong brand effects. Across the sample, the three claims rotated among the three brands.
The study results are published in two journal articles:
Johann Steinhauser; Meike Janssen; Ulrich Hamm (2019). Consumers' Purchase Decisions for Products with Nutrition and Health Claims: What Role Do Product Category and Gaze Duration on Claims Play? In: Appetite, Vol. 141, 1 October 2019, 104337, https://doi.org/10.1016/j.appet.2019.104337
Johann Steinhauser; Meike Janssen; Ulrich Hamm (2019). Who Buys Products with Nutrition and Health Claims? A Purchase Simulation with Eye Tracking on the Influence of Consumers' Nutrition Knowledge and Health Motivation. Nutrients, Vol. 11, No. 9, 12.9.2019, https://doi.org/10.3390/nu11092199
Meike Janssen is Associate Professor for Sustainable Consumption and Behavioural Studies, CBS Sustainability, Copenhagen Business School
Photo by Joshua Rawson-Harris on Unsplash
Further reading: Let Me Lend You a Hand: How Behavioural Economics Can Restore Trust in Science
Posted on November 20, 2019 November 18, 2019 Categories About, Behaviour, Concepts, CSR, Economic, Education, Featured, Knowledge, News, Research, SustainabilityTags behavioural change, Economy, food, nutrition
Towards a Realization of Sustainability Ambitions?
Governments are increasingly being sued by citizens and NGOs for not living up to their sustainability ambitions.
Recently, for example, three German farmers along with Greenpeace arraigned Chancellor Angela Merkel's government for failing to achieve its ambition to reduce Germany's CO2 emission by 40 percent in 2020, as measured from 1990. Already last year, the government acknowledged that it would not be able to meet its goal. It expects to achieve a 32 percent reduction. The consequences for the farmers, the complainants argue, are dire in terms of long periods of drought and other extreme weather conditions that threaten to destroy their livelihood.
In other parts of the world – including USA, Peru, Colombia and Fiji – similar cases and complaints are arising. It is difficult not to sympathize with these complaints and their underlying concern for our shared planet.
>>It was therefore remarkable that the administrative court in Berlin rejected what was the first climate complaint against the German government.<<
The complainants, the court argued, have no basis for demanding a specific set of actions from the government whose climate protection program 2020 was described as a "political aspiration". According to German media, the judge said that society needs to respect the executive power's discretion and room for maneuvering. Understandably, this ruling has spawned lots of criticism.
Governments are currently not legally required to live up to their sustainability aspirations.
This case calls on us to discuss what it takes to make sure that sustainability aspirations are actually being fulfilled by governments as well as by corporations. First, however, we need to consider whether a different decision by the German court – a decision that backed the claims by the farmers and Greenpeace – would have ensured a faster and more certain goal fulfillment. In a short-term perspective, that is quite likely. Although such ruling probably would have been appealed, it would at the same time have applied immense pressure on the government to launch more intense climate initiatives here and now. The more wide-ranging effects of such ruling, however, might not have been in the interest of the sustainability agenda.
What happens if governments and corporations are legally forced to walk their talk?
Without exonerating empty sustainability talk and lack of sufficient climate initiatives, it is important to acknowledge that governmental and corporate aspirations serve multiple functions in changing and improving existing practices. While sustainability aspirations may be used to impress and seduce voters and consumers, something that is often the case, they are simultaneously likely to shape expectations and mobilize stakeholders to apply pressure for action.
Here, the level of optimal pressure is crucial. If governments and corporations know that unfulfilled promises and aspirations will be met with damaging court cases that support their complainants, they will be less likely to announce ambitious goals, and more inclined to articulate ideals that they already, or almost already, live up to. In such cases, changes may happen slower than society may desire.
>>Conversely, lack of stakeholder pressure is likely to result in "aspirational inflation" or overbidding, thereby reducing the performative power of aspirational talk to instigate changes.<<
Under which conditions should we expect governments and corporations to live up to their own aspirations?
Obviously, the aspirations in question need to engage with salient social, political or environmental issues in order to attract external attention and interest. Most sustainability aspirations are likely to fulfill that criterion.
At the same time, aspirations need to be bold and challenging in order to mobilize conflicting opinions and critical comments.
Without visionary idea(l)s and without critical attention and interest from stakeholders, aspirations are likely to be soon forgotten or perhaps ignored. Lofty organizational aspirations define a collective horizon of excellence that empowers stakeholders – internal as well as external – to expect and demand better practices. To ensure that the aspirations are taken seriously by all parties, they simultaneously need to be announced in public media of high status. Public announcement communicates the formal status of the ambitions to external audiences but simultaneously signals their authority and truth-value to organizational members. Hereby, they have the potential to stimulate both internal and external involvement and activism. Without such conditions, the German climate protection program 2020 might not even have reached 32 percent of CO2 reduction.
Aspirations need to be visionary, bold and public to mobilize pressure for action.
Obviously, the emphasis on consistency between words and action is important in forcing organizations to take their own words seriously. At the same time, such emphasis might breed a growing fear of criticism – a fear that can lead organizations to restrain their announcement of ambitions in the hope of escaping public attention and scrutiny. This risk is important to keep in mind when deciding how to apply pressure on governments and organizations to honor their own words.
Suggestions for further readings:
Christensen, L.T., Morsing, M., & Thyssen, O. (2013). CSR as aspirational talk. Organization, 20(3), 372-393.
Font, X., Elgammal, I., & Lamond, I. (2017). Greenhushing: the deliberate under communicating of sustainability practices by tourism businesses. Journal of Sustainable Tourism, 25(7), 1007-1023.
Girschik, V. (2018). Shared responsibility for societal problems: The role of internal activists in reframing corporate responsibility, Business & Society. https://doi.org/10.1177/0007650318789867
Haack, P., Schoeneborn. D., & Wickert, C. (2012). Talking the talk, moral entrapment, creeping commitment? Exploring narrative dynamics in corporate responsibility standardization. Organization Studies, 33(5-6), 815-845.
Kim, E-H., & Lyon, T. P. (2014). Greenwash vs. brownwash: Exaggeration and undue modesty in corporate sustainability disclosure. Organization Science, 26(3), 705-723.
Lars Thøger Christensen is Professor of Communication and Organization at the Copenhagen Business School, Denmark
Photo by Ahmed Bibi on Unsplash
Posted on November 7, 2019 November 6, 2019 Categories About, Cities, Citizenship, Concepts, Economic, Environment, Featured, Governance, Issues, News, Policy, Regulation, Social, Stakeholders, SustainabilityTags #germany, #sustainability, government
Is it a right policy to focus on SDGs during Economic Slowdown?
By Anirudh Agrawal and Ashish Tyagi
Economic problems of India were not addressed either in the 2019 electoral debates or in the recent annual budget. Markets are showing a deep imbalance between demand and supply, leading to a significant rise in loan defaults, banking crises and job losses.
MSME has not shown a tendency to grow or create jobs along expected lines despite a nationwide program of targeted lending. Indiscriminate lending in the past has increased Non-Performing Assets (NPAs) in the banking sector. The industry is still adjusting to the new GST regulations while the real estate sector has still not recovered from the demonetization shock. On top of all this, pollution is at an all-time high and climate change is manifesting itself in the form of droughts and floods in different parts of the country.
In such a slowdown, a knee-jerk policy reaction is to spur investment and growth through any means possible, including reversals on climate and Sustainable Development Goals (SDGs). Quite recently, the government allowed 100 percent FDI in the coal mining sector to spur a revival.
But in this article, we argue that a renewed focus on Sustainable Development Goals (SDGs) presents an opportunity to revive the economy, create a new wave of jobs and potentially increase the competitiveness of Indian economy vis-à-vis the SDG laggards. The discussion that follows is in the context of India but is equally relevant for the rest of the developing world.
NPA crisis and an opportunity towards SDG oriented portfolio
The main reason for a steep rise in credit default rate is that while industries expanded capacity over time, domestic and global demand has slowed down considerably, stranding the new assets. The lack of market demand causes firms to default on loans. This increases the stress on the banks, which consequently, stall the liberal credit lines to firms, further weakening the economy.
One of the significant factors causing the NPA crisis in India is the MSME loan portfolio. MSME is the backbone of any economy. In developing countries, MSME account for 90 percent of job creation and economic activities. Over time, through hard work, market and government support, these MSME entrepreneurs are able to grow, engage in employment creation, disruptive innovation and ultimately become unicorns, which are nascent businesses with high market valuation and growth potential.
>>>However, despite the important role in job creation and liberal credit lines, MSME entrepreneurs in developing countries generally remain poorly skilled, lack proper business support, access to markets and are many times bullied by bigger firms. In the end, a great deal of capital channelled to MSME is not converted into higher value. <<<
To transform the MSME sector, government and other business-sector actors must treat MSME as students who need to learn and adopt skills related to competitive management, sustainability, marketing and financial reporting so that competitiveness and sustainability become inherent within the firm. MSME entrepreneurs can aspire globally through exposure from government-sponsored programs to attend MSME events in Denmark (for their dairy and animal industry), Germany (manufacturing), Italy (leather and fashion). They can learn more about international market trends and technologies where the bottom lines are firmly grounded on SDG compliance.
Unlike bigger players which are slow, suffer from legacy issues; MSME is flexible enough to embed elements of sustainability and SDGs in their supply chains and value creation processes.
To survive and grow in a world with increasing climate change regulations, better cooperation is required between public institutions, banks and MSME entrepreneurs to work hard in sync, learn new practices and standards. Long-term growth requires MSME to make sustainability and SDG compliance inherent in the business plan, business model, management structure and type of service and product offered.
>>> Indian banks must actively focus on new industries creating products with lower environmental footprints. <<<
For example, instead of providing loans to typical plastic manufacturing SMEs, they must provide loans to entrepreneurs setting up green-materials factories, alternative plastic (biodegradable) factories, bio-diesel, or EV vehicle factories, which are environmentally efficient, follow international standards and are helping the nation achieve its Paris Agreement targets. The growth of competitive, innovative and greater SDG compliant MSME would make Indian economy stronger and mitigate job crises.
SDG focused Real-Estate Sector Regulation
Another cause of NPA crises in India is the rising real-estate inventory. Real estate sector was one of the largest employers during the 2004-2016 boom years of India (which is also true for most of the developing world). The assumption among investors during that period was that the real-estate will continue to grow and their investments will remain secure and ensure above-market returns. However, in the boom period, real-estate prices far exceeded their value, causing market failure in the current economic downturn.
But during economic downturns, it is relatively easier for politicians to make difficult decisions (as the public mandate is easier) and enforce innovative policies.
To address the issue of real estate inventory, the government must introduce regulations in the real estate market with quality controls, sustainability measures, green building codes, controls on the number of floors constructed, the green area within the apartment, restrictions on distance from the essential public services like a train station, police station, college, hospital, schools.
The regulations must forcefully move the industry towards significant sustainability goals (like those in Western Europe) with higher compliance on long-term sustainability, energy efficiency, and reliability. In addition to explicit sustainability actions like certification, greenified surroundings; firms and the government must focus on developing the real-estate sector, which is firmly embedded in a social, cultural and artistic milieu. Research has shown that housing where the communities have active social and cultural interaction tends to have higher value and lower crime.
Specific SDG driven controls would decrease the supply, increase the quality offered, and would significantly increase the value of the real-estate sector. If the buyers feel that their real-estate investments have greater value for a more extended period, the buyers and sellers will invest in the sale and purchase of the real estate, which would relieve the banks from possible NPA risks. The increased transactions in the real estate market would generate liquidity in the market that would further spurn growth. This suggestion on regulating the market stands in contrast to current appeals for liberalizing the real-estate sector. The liberalization of the real-sector has led to a rise in indiscriminate investment, increased half-built and abandoned sites which are causing a rise in water pollution, dust pollution and even dengue.
Pollution and Climate Change
Extreme climatic events and increased pollution are related to externalities that are threatening the sustainability of the Indian economy. The winter smog around the national capital Delhi significantly reduces the productivity of the city while putting residents under severe health risks. Lengthening of summer and unpredictability of monsoon is increasing water stress, as well as floods, which is putting households under stress and decreasing the overall national productivity.
To address these challenges, research-based and region-specific adaptation and mitigation investments will enable different regions to transform towards climate-resilient economic societies.
The government must invest in energy-efficient, global standard-compliant power plants to reduce smog around North India.
In addition, the government and private sector must invest significant capital in solar panel production, the infrastructure of EV automobiles, greener-sustainable materials, circular economy and responsible consumption. The green climate fund (GCF) has a specific mandate for adaptation finance for climate resilient agriculture and flood resilient infrastructure. The GCF is an interesting and evolving repository of knowledge which should help governments in designing and implementing climate mitigation and adaptation policies and investments.
Businesses around these emerging technologies are most likely to generate the next wave of job growth in the manufacturing sector.
Economic downturns are stressful times, but it is also said that "never let a crisis go to waste". The downturns offer opportunities to re-write innovative policies as the public mandate is stronger for a change. India must use its current economic downturn as an opportunity to re-write public policies by incorporating elements of SDGs at each level of conception and decision and transform towards a greener, climate-sensitive and sustainable space. Sustainability at each level is the new competitive advantage and the emerging nations must capitalize it.
Anirudh Agrawal is a doctoral fellow at CBS. His research interests are MSME finance, impact investing, social entrepreneurship and organizational 4.0. He is a chief strategy officer at Tvarit AI GmbH focusing on sustainable AI driven IT solutions and a visiting professor at Flame University India and formerly Assistant Professor at Jindal Global University.
Ashish Tyagi is currently a post-doctoral fellow and lecturer at Frankfurt School of Finance & Management. He completed his PhD from Penn State University. His research interests are environmental economics, climate change policies and sustainable transformation.
Photo by Sudha G Tilak
Posted on October 14, 2019 January 5, 2023 Categories Concepts, CSR, Development, Economic, Environment, Equality, Ethics, Featured, Investment, Issues, Models, News, Policy, Regulation, SustainabilityTags #development, #GreenBuildings, #SDGs, #sustainability, #SustainableFinance1 Comment on Is it a right policy to focus on SDGs during Economic Slowdown?
Business + purpose = big trouble. But wait, here is one surprising point of agreement
By Dieter Zinnbauer.
Reactions to the recent statement by the Business Roundtable that recognizes a regard for stakeholders rather than a narrow focus on shareholders as a pillar of corporate purpose have been swift, strong and predictably diverse.
They run the entire gamut from enthusiastic embrace (a landmark shift towards a new form of capitalism) to sarcastic dismissal (the usual PR stunt to parry bad press and imminent regulation). Adding to this cacophony is the fact that the frontlines in this longstanding debate do not closely align with political or disciplinary dispositions but criss-cross ideological and scholarly camps.
Some corporate governance experts see just another blatant power grab of unaccountable CEOs, while others believe to witness a much-overdue assertion of responsible corporate leadership and holistic thinking in a complex world. Similarly, stark disagreements run through the advocacy community: some sense an opening for a constructive conversation, while others reject the statements as a distraction and cul-de-sac on the path towards building the economic governance that we really need for a sustainable and inclusive future.
So all has been said and we are left with the usual trenches and irreconcilable viewpoints?
Maybe. But wait – amidst all the quarrels and soliloquies here is one astoundingly consensual point that lots of commentators from very different backgrounds have been making:
>> if companies are serious about good corporate conduct strengthening transparency, responsibility and accountability of their lobbying and other corporate political activity is an essential piece of the puzzle. <<
Consider as illustrative examples these five quotes from influential commentators/organisations:
A corporate governance expert in favour of more, not less shareholder influence:
"If the top executives were serious about improving the way their companies are run, what about a commitment to reduce their lobbying and making it more transparent?"
Luigi Zingales in Wall Street Journal, August 20, 2019
A non-profit group working closely with progressive corporations:
"the statement skirts the issue of the private sector's role in our societies… Poll after poll shows that the public is deeply upset about the role lobbying plays in Washington… The critiques of capitalism which are being heard across the political spectrum are a natural consequence of the sense by many that the system is deeply unfair and manipulated to benefit the few. This statement does little to address that, and to the degree it is intended to respond to the public challenge to capitalism, it is unlikely to succeed."
Business for Social Responsibility, website, August 22, 2019
An eminent economist and former senior US government official / chief economist of the World Bank:
"What obligation are roundtable companies now under not to subvert American democracy with campaign contributions or extensive lobbying operations?"
Larry Summers in Washington Post, September 2, 2019
An environmental NGO proposes the following as one of "three crucial additions" to move the BRT statement from rhetoric to meaningful action:
"Using corporate brands and political influence to support systemic changes that ensure equitable opportunities for all. This means lobbying for climate-positive legislation and increasing corporate transparency; driving change to move trade associations from lowest common denominator to highest common factor"
World Resources Institute, website, August 22, 2019
Finally, the assessment of an eminent commentator on business and economics
"Members of the Business Roundtable and their peers have tough questions to ask themselves…. They must, not least, consider their activities in the public arena. What are they doing to ensure better laws governing the structure of the corporation… a fair and effective tax system, … and a democracy responsive to the wishes of a broad majority?"
Martin Wolf in Financial Times, September 18, 2019
Perhaps it is just me and a very selective reading of the flood of reactions – as I am just embarking on a European Union-funded research project on corporate political activity and non-market strategy. But I cannot help thinking that this time is perhaps really a bit different. A bewilderingly diverse bunch of opinions from very different backgrounds and perspective appear to hone in on a very specific point of convergence with remarkable regularity: The road towards good and perhaps even better corporate conduct will have to lead through more accountable, transparent and responsible exercise of corporate political activity – irrespective of the model of the corporation and its role in society you subscribe to. Such an unexpected, cross-cutting agreement bodes well for a broad coalition of change and actual shifts in norms, policies and practice.
Back at the Business Roundtable.
The position on corporate political activity has already shown signs of evolving. In 2013 it's then-president still campaigned on an unrelenting stance that corporations do not and should not even support disclosure of corporate lobbying activities. By 2016 it had begun to acknowledge that the board should assume an oversight role of political activities within the firm and also have the say on disclosure. Still, a long way to go for developing a substantive and meaningful position on responsible corporate political activity attuned to the times. But it will be very exciting to track how this conversation that is so central to any notion of corporate purpose and the role of business in society evolves, both at the Business Roundtable and in the business community more broadly.
Dr. Dieter Zinnbauer is a Marie-Skłodowska-Curie Fellow at CBS' Department of Management, Society and Communication. His CBS researches focus on business as political actor in the context of big data, populism and "corporate purpose fatigue".
Twitter: @Dzinnbauer
Essays: https://medium.com/@Dzinnbauer
Working papers: https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1588618
Photo by Octavian Rosca on Unsplash
Posted on September 25, 2019 September 25, 2019 Categories Accountability, Concepts, CSR, Featured, Governance, Issues, Models, News, Social, Stakeholders, Standards, Sustainability
Social Enterprises = Sharing Economy Organizations?
By Johanna Mair, Nikolas Rathert and Georg Reischauer.
Sharing Economy Organizations
Uber, Airbnb, and Lyft are frequently cited and popular examples of new organizational forms operating in the sharing economy, which is growing at a stunning pace. One way to make sense of the sharing economy is to conceive it as a web of markets in which individuals use diverse forms of compensation to transact the redistribution of and access to resources (Mair & Reischauer, 2017).
These transactions are mediated by a digital platform run by an organization that focuses on the governance of these transactions (Reischauer & Mair, 2018a, b). Besides the focus on platform-enabled business models, the sharing economy has also spurred discussions about the implications of the sharing economy for society. Many commentators have argued that the sharing economy can become key in making modern societies more environmentally sustainable (Frenken & Schor, 2017) and inclusive (Etter, Fieseler, & Whelan, forthcoming). This debate parallels the debates on another important organizational form, social enterprises (Mair & Rathert, 2019).
Social enterprises encompass a diverse set of legal and organizational forms that use market means to effect social change (Mair & Marti, 2006). They address a range of social problems on different scales, including local communities and countries, and target societal groups that usually remain outside the reach of both commercial markets and state-run welfare schemes (Mair, Wolf, & Seelos, 2016). Social enterprises use a variety of commercial activities, including the selling of products and services, and include beneficiaries in various stages of the value creation chain (Mair & Martí, 2006; Mair, Battilana, & Cardenas, 2012). As this discussion suggests, social enterprises might have much in common with sharing economy organizations.
Social enterprises and sharing economy organizations are both alternative forms of organizing that have developed to overcome the deficiencies of contemporary capitalism (Mair & Rathert, 2019). But what are the similarities and differences of these forms, especially with respect to dimensions that have been identified as relevant for both forms, community (Fitzmaurice et al., forthcoming; Venkataraman, Vermeulen, Raaijmakers, & Mair, 2016) and growth (Mair & Reischauer, 2017; Seelos & Mair, 2017)?
We shed light on this question with a comparative analysis of a sample of German social enterprises and sharing economy organizations, which we surveyed in 2015/2016 (social enterprises) and 2018 (sharing economy organizations). This sample encompasses 108 social enterprises and 233 sharing economy organizations that can be meaningfully compared along several indicators, including age and profit orientation. These organizations span a variety of activity fields (e.g., health care and education in the case of social enterprises, or mobility and accommodation in the case of the sharing economy).
Social Enterprises ≠ Sharing Economy!
Our analysis provides first insights that social enterprises and sharing economy organizations are, in fact, quite different animals when it comes to community and growth.
Asking both about the role of community for improving existing products, the community seems more relevant for social enterprises (Figure 1). In fact, on a 7-point scale, social enterprises' score is over 6 on average, compared to 3.9 for sharing economy organizations. This difference remains significant after controlling for age, profit orientation, and activity field.
Figure 1: Role of Community for Product Improvement
There are also differences when asking about the role of community for entering new markets. As shown in Figure 2, sharing economy organizations use the community for this purpose to a slightly greater extent (using a yes/no variable whether or not they use the community for this purpose, with the difference being statistically significant). At the same time, the salience of the community for this purpose appears as overall lower than for product improvement.
Figure 2: Role of Community for New Market Entry
There are notable differences when it comes to growth orientation. While 79% of the surveyed social enterprises have a strong growth orientation, this is only true for 36% of sharing economy organizations. When we regress growth orientation on profit orientation and fields of activity, we find that the lack of growth orientation appears to be driven by membership in the field of room sharing, while the fields of mobility, development and housing, and health appear to be associated with a greater growth orientation.
Besides, not all growth challenges are the same (figure 3). Our analysis suggests some that some growth challenges are specific to sharing economy organizations and social enterprises, respectively. Social enterprises are more worried about three aspects: preserving program quality, securing capital, and managing growth internally. Sharing economy organizations, in contrast, care more about fidelity to the mission and managing growth internally. When accounting for profit orientation, we find that those who are profit-oriented worry about securing capital, while those that are not worried about fidelity to the mission as they grow.
Figure 3: Growth Challenges
Our analysis further identifies the variation concerning geographical growth (Figure 4). Sharing economy organizations are not looking to change their geographical scope. At most, some are considering changing from a local orientation to a regional orientation. Social enterprises are more ambitious here, often looking to scale their model to a national scale or even beyond.
Figure 4: Aspirations for Geographical Growth
Embracing Alternative Organizational Forms
Our comparison of sharing economy organizations and social enterprises for the role of community and growth indicates that alternative forms of economic organizing differ in various ways. We take this as a positive sign that also reflects a societal ability to nurture and institutionalize alternative forms of organizing that can potentially overcome well-known deficiencies of capitalism. Future research will tell how these two forms will develop, create impact, and contribute to a more sustainable society.
This research was funded by the German Federal Ministry of Education and Research (Grant Number 01UT1408C) and the European Union Seventh Framework Programme (Grant Agreement 613500).
Johanna Mair is Professor of Organization, Strategy and Leadership at the Hertie School of Governance, Germany. She is also the Co-director of the Global Innovation for Impact at the Stanford Center on Philanthropy and Civil Society and the Academic Editor of the Stanford Social Innovation Review.
Nikolas Rathert is Assistant Professor for Organization Studies at Tilburg University.
Georg Reischauer is a postdoctoral research associate at Vienna University of Economics and Business (WU) and at Johannes Kepler University Linz (JKU).
Etter, M., Fieseler, C., Whelan, G. forthcoming. Sharing Economy, Sharing Responsibility Corporate Social Responsibility in the Digital Age. Journal of Business Ethics, doi: 10.1007/s10551-019-04212-w.
Fitzmaurice, C. J., Ladegaard, I., Attwood-Charles, W., Cansoy, M., Carfagna, L. B., Schor, J. B., & Wengronowitz, R. forthcoming. Domesticating the market: moral exchange and the sharing economy. Socio-Economic Review, doi: 10.1093/ser/mwy003.
Frenken, K., & Schor, J. 2017. Putting the sharing economy into perspective. Environmental Innovation and Societal Transitions, 23: 3-10.
Mair, J., Battilana, J., & Cardenas, J. 2012. Organizing for Society: A Typology of Social Entrepreneuring Models. Journal of Business Ethics, 111(3): 353-373.
Mair, J., & Martí, I. 2006. Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business, 41(1): 36-44.
Mair, J., & Rathert, N. 2019. Alternative organizing with social purpose: Revisiting institutional analysis of market-based activity. Socio-Economic Review, doi: 10.1093/ser/mwz031.
Mair, J., & Reischauer, G. 2017. Capturing the dynamics of the sharing economy: Institutional research on the plural forms and practices of sharing economy organizations. Technological Forecasting and Social Change, 125: 11-20.
Mair, J., Wolf, M., & Seelos, C. 2016. Scaffolding: A process of transforming patterns of inequality in small-scale societies. Academy of Management Journal, 59(6): 2021-2044.
Reischauer, G., & Mair, J. 2018a. How organizations strategically govern online communities: Lessons from the sharing economy. Academy of Management Discoveries, 4(3): 220-247.
Reischauer, G., & Mair, J. 2018b. Platform organizing in the new digital economy: Revisiting online communities and strategic responses. Research in the Sociology of Organizations, 57: 113-135.
Seelos, C., & Mair, J. 2017. Innovation and scaling for impact: How effective social enterprises do it. Stanford, CA: Stanford University Press.
Venkataraman, H., Vermeulen, P., Raaijmakers, A., & Mair, J. 2016. Market meets community: Institutional logics as strategic resources for development work. Organization Studies, 37(5): 709-733.
Posted on September 11, 2019 September 10, 2019 Categories Concepts, Economic, Environment, Equality, Featured, Issues, Knowledge, News, Research, Social, Sustainability, TechnologyTags #community #CSR #goodintentions, business in society, Business Model, Sharing
Crowdfunding as a cooperative movement – The present and future of crowdfunding in Denmark
By Kristian Roed Nielsen.
How does crowdfunding look like in Denmark and where is it heading? Drawing on empirical data from two well-known reward-based crowdfunding platforms (Kickstarter and IndieGoGo), I try to give a quick overview of the two most famous examples of crowdfunding in Denmark. After which I will give my predictions for where the Danish crowdfunding sector will head and how the emergence of lending-based platforms like Coop Crowdfunding could help take crowdfunding into mainstream in Denmark. Doing so by tapping into our cooperative movement roots by allowing customers to decide, through their loans, what we will eat in the future.
The bank, they don't understand shit now, especially not in my business.
An entrepreneur's view on banks (Junge & Bech, 2019)
Trust in banks is for many good reasons at an all-time low as consequence of a series of damning money-laundering scandals, the facilitations of offshore tax havens for the super-rich (i.e. Panama Papers), and not least the lingering resentments from the 2007 financial crisis. Despite these and other indictments, the sector as whole has seemed remarkably unaffected, perhaps because despite our moral reservations they hold a near monopoly on the purse strings not least when seeking a loan for an entrepreneurial endeavor. Or at least they used to.
The emergence of crowdfunding as an alternative source of finance for entrepreneurs is increasingly challenging the banks near monopoly as entrepreneurs now are increasingly engaging consumers and citizens directly for financial support. Citizens have thus become increasingly common enablers of product and service innovation in their own right (Belleflamme et al. 2014) and the global value of funds raised through crowdfunding have already hit US$ 32 billion in 2017 with continued strong growth expected (Statista 2018).
In Danish context, where loans for SMEs remains restrictive (Nielsen 2019), crowdfunding nonetheless remains a uncommon practice and is generally outside the awareness of many entrepreneurs and consumers (Junge & Bech 2019). This is arguably somewhat surprising given the historic strength of cooperatives in Denmark that were driven forth in part due to strong consumer engagement in businesses. The question then is what is the current state of crowdfunding in Denmark? Drawing on empirical data from respectively Kickstarter and IndieGoGo – the two arguably best known examples of crowdfunding – I have sought to provide you with a quick overview of reward-based crowdfunding in Denmark. After which I will give my predictions for where the Danish crowdfunding sector will head.
Crowdfunding in Denmark: A Quick Overview
Reward-based crowdfunding emerged as means to finance creative endeavors, which is also apparent when we look into which campaign categories that are most popular amongst Danish founders (i.e. Film, Fashion and Music).
Figure 1: Number of Projects by Category (2015-2018).
Among these projects, about 22 pct. succeed in meeting their funding goal, while 78 pct. fail to hit their target[1]. However as is illustrated in the Figure 2 these rates vary significantly depending on for example the project category. For example, the project category 'Art' is nearly a 50/50 proposition, but campaign categories like 'Animals' have a 100-pct. failure rate.
Figure 2: Average success rates by project category (2015-2018).
Finally, as illustrated in Figure 3 and 4 respectively success rates are strongly affected by geographic location and the regional distribution of crowdfunding resources thus remains strongly tied to the major cities. For example, Copenhagen alone accounts for 50 percent of resources garnered via reward-based crowdfunding. To see why please read my other recent blog post on this topic. So, while certain municipalities outside the major cities have high success rates one should not assume that they have many successful campaigns. In fact, the two municipalities (Vallekilde and Morud) with a 100-pct. success rate have only one campaign per respective municipality.
Figure 3: Success rates by municipality.
Figure 4: Distribution of crowdfunding resources by city.
Future of crowdfunding in Denmark
Crowdfunding in Denmark remains a rare source of income for entrepreneurs and is generally challenged by a lack of awareness from both entrepreneurs and citizens. This lack of awareness furthermore results in a lack of trust in this new form of financing. However, while reward-based crowdfunding remains niche and tailored to specific entrepreneurial endeavors that can offer tangible perks for their supporters, the emergence of other crowdfunding models provides an arguable basis for a strong competitor to the banks. For example, lending-based models, exemplified by Lendino and Coop Crowdfunding, provide entrepreneurs with an access to loans from their customers (and others) that are often cheaper then what banks are willing to offer (Junge & Bech 2019). The lenders on the other hand, who face little incentive to keep their saving in a fixed interest account at a negligible interest level, are increasingly incentivized to look for alternatives like these lending-based models especially as many loans are guaranteed.
I therefore believe that especially Coop Crowdfunding's focus on driving new and more sustainable business models within the food sector represents, as they say themselves, a return to a type of cooperative movement 2.0 that is well-placed in Danish context. Coop Crowdfunding provides a platform for entrepreneurs to find engaged citizens who want to drive new and more sustainable food practices and are willing to put their money where their mouth is by offering cheaper loans as compared to the banks. In a country with high levels of trust and in context of an engaging story were consumers themselves can decide what we will eat in the future, I believe Coop Crowdfunding model could signal an opportunity for crowdfunding and not least green growth in Denmark.
[1] It is important to bear in mind that there are some significant differences between the two platforms analyzed. While Kickstarter is an "all-or-nothing" platform, which means that the creator of the campaign only keeps the money if (s)he hits their funding goal IndieGoGo is primarily a "keep-it-all" platform, where the creator of the campaign can choose to keep the money if (s)he thinks that they can provide the promised service or product for the money raised. This translates into significantly different "success rates" for respectively IndieGoGo and Kickstarter if hitting the creators funding mark is definition of this. Whereas on Kickstarter 46,4 pct. of Danish campaigns hit their funding goals only 5 pct. do so on IndieGoGo.
Belleflamme, P., Lambert, T. & Schwienbacher, A., 2014. Crowdfunding: Tapping the right crowd. Journal of Business Venturing, 29(5), pp.585–609. Available at: http://www.sciencedirect.com/science/article/pii/S0883902613000694.
Junge, I.C. & Bech, L.L., 2019. Choosing Crowdfunding: A study of why entrepreneurs choose to engage in crowdfunding and how the choice of crowdfunding model and purpose change throughout the startup life cycle. Copenhagen Business School.
Nielsen, B., 2019. 10 år efter finanskrisen: Mange små virksomheder får stadig et nej i banken. Jyllands-Posten. Available at: https://finans.dk/erhverv/ECE11308747/10-aar-efter-finanskrisen-mange-smaa-virksomheder-faar-stadig-et-nej-i-banken/?ctxref=ext.
Statista, 2018. Crowdfunding – Statistics & Facts. Statista. Available at: https://www.statista.com/topics/1283/crowdfunding/ [Accessed April 24, 2018].
Kristian is Assistant Professor at the Department of Management, Society and Communication and Visiting Researcher at Mistra Center for Sustainable Markets – Stockholm School of Economics. His research explores the potential role that "the crowd" could play in enabling sustainable entrepreneurship and innovation. Follow him on Twitter @RoedNielsen.
The Winners and Losers of Reward-based Crowdfunding
Reward-based Crowdfunding for Sustainable Entrepreneurs: A Practitioner's Guide
Photo by Rob Curran on Unsplash.
Posted on June 26, 2019 June 26, 2019 Categories Concepts, Development, Featured, Investment, Models, News, StakeholdersTags #CrowdFunding
Let Me Lend You a Hand: How Behavioural Economics Can Restore Trust in Science
By Noah Peters.
Society's declining trust in science in general and economics in particular is a much debated topic. Martin Wolf's recent commentary for the Institute of New Economic Thinking (INET) is only one way of addressing the conundrum. This blog post draws on two prominent contentions underpinning the obscure notion of distrust in economics. Firstly, economists (allegedly) live in their ivory towers surrounded by mathematical formulas no outsider would even vaguely understand. Secondly, they are accused of not being able to adequately forecast crises, let alone fend them off.
One increasingly influential sub-discipline in economics tries to overhaul these stereotypes. Stemming from psychology, behavioural economics shows that humans are multi-faceted, empathetic and guided by values and social surroundings. For readers not familiar with economics, this finding might not be a major surprise. But it goes against the grain of long-standing economic traditions emphasising people's pursuit of profit maximisation. Acknowledging people's genuine driving forces and behavioural patterns counteracts the first contention I presented earlier: economists' penchant for technical abstractions of human action.
Moreover, behavioural economics and behaviourally informed policy interventions address everyday problems – retirement savings, administrative procedures or identifying the healthiest product on a supermarket shelf. Behavioural policy interventions aim at improving the lives of ordinary people. Economic and financial crises unequivocally affect the lives of everyone, from investment bankers to bakers. But loosening people's daily constraints is as important and contributes to the bigger picture. This is what behavioural policy does.
Consequently, those interventions and their economic foundations are relatable. I argue that this relatedness to the real world is pivotal in regaining societal trust and convincing citizens of the value that economic theory can add.
While this demand is not new and maybe trivial, it is worth stressing over and over again. And especially behavioural economics got the message. Unsurprisingly, key topics for policy-makers are sustainability and public health. Behavioural interventions address these challenges from an individual-level, demand-side perspective. By inquiring how people really judge and decide (using experiments and investigating people's motivations), the overarching challenges of the 21st century can be traced to the consumer level. This way, we can elucidate how every single person can make a difference. Today's urgencies become vivid and tangible.
A couple of examples in the domain of food choice shall underpin this connection of behavioural economic theory and everyday applications. A supermarket, for example, constitutes the perfect playground for behavioural scientists. Traffic-light labels indicating how healthy a certain product is draw on the plain fact that simplifications can enhance people's decisions. Likewise, plate size can affect how much people eat. Restaurant menu design could steer which option customers choose. One additional strategy are default options, e.g. vegetarian snacks automatically ordered for meetings if not otherwise changed for non-vegetarian alternatives. This feature is informed by the fact that people prefer the status-quo and are sometimes too lazy to make simple changes.
This list is not exhaustive, and the interventions presented above are widely discussed in academia and rather trivial. Thus, every serious scholar would automatically defend the originality of her ideas. Others would go even further and completely demonise any form of real-world application.
I contend, however, that the frivolous essence of many behavioural interventions explains their efficacy and acclaim. Psychological underpinnings inform policy interventions in a way that relates to people's everyday lives thereby addressing the questions of our time.
But it's not entirely rosy for behavioural economics either. Critics contend that consumers – citizens (!) – are manipulated and deprived of their own capacity to judge. There are compelling reasons why this notion is short-sighted, though. Thus, behavioural scientists must establish guidelines ensuring their legitimate intentions and communicate their toolbox transparently. And of course: mathematics and technical tools are invaluable instruments for the empirical sciences; they are the very departure point to extrapolate the world we live in.
The combination of scientific rigour, tangible applications, and sincere motivations can help restore societal trust. Scientists who are successful in applying and communicating this trinity, can evade the curse of post-truth sentiments and latent hostility to experts.
Noah is a visiting research assistant to the Department of Management, Society and Communication (MSC). He studies sociology, politics and economics at Zeppelin University, Germany. In his research he focuses on behavioural economics and policy applications, as well as economic and urban sociology. Partaking in an exchange programme between Copenhagen Business School and Zeppelin University, Noah supports current research at MSC's Consumer and Behavioral Insights Group (CBIG). Connect on LinkedIn or ResearchGate if you are so inclined.
Photo by Neil Thomas on Unsplash
Posted on May 6, 2019 May 8, 2019 Categories Behaviour, Communication, Concepts, Economic, Featured, Models, News
Temporal Dimensions of Hypocrisy
By Lars Thøger Christensen.
Hypocrisy is a serious charge for social actors, especially organizations and politicians, whose profession depends on perceptions of sincerity and credibility. To call someone a hypocrite is to challenge his or her moral integrity and to indicate that the object of the accusation cannot be trusted. In spite of their seriousness, however, hypocrisy charges are frequent occurrences in public debate. Whereas the notion of hypocrisy used to refer specifically to the practice of engaging in the very same immoral behavior for which one castigates other actors, today it is likely to be mobilized whenever gaps, imbalances or disparities between one set of activities and another can be observed and claimed. Hypocrisy, in other words, has become an expansive arena.
Hypocrisy charges have become dissociated from moral preaching and refer today more broadly to perceived inconsistencies between talk and action.
For organizations, such inconsistencies are countless. This is especially the case when their talk concerns complex activities that extend far beyond the immediate present and involve dimensions of the organization's past and future. Organizations, for example, are often accused by stakeholders for inconsistencies between their current ideals and their former practices. Similarly, stakeholders frequently reject future-oriented goals with reference to present-day activities. Since hypocrisy charges can be damaging to one's reputation, however, organizations are likely to counter such challenges by reasserting some sort of consistency between their past, present and future. While such endeavours tend to attract criticism, they are quite common practices in contemporary organizations.
Influenced by an expanded understanding of hypocrisy, many organizations are engaged in practices of consistency management.
Instead of admitting the existence of inconsistencies, disjunctures or dilemmas among different dimensions of their practices, organizations engage in "communicative acrobatics" in order to navigate in the unruly waters of their past, their present and their future. Examples of such acrobatics are aspiration, deferment, evasion and re-narration.
Aspiration denotes organizational ambitions camouflaged as accurate self-descriptions. While aspirations might come across as more credible if they were presented as future-oriented goals, the combined desire to improve the organization's reputational standing and motivate internal audiences towards better practices implies that such self-descriptions tend to be formulated as if they reflect already existing practices.
Deferment refers to delays, extensions or suspensions of organizational action towards better futures. While such delays may be accepted in some contexts, they are likely to be met with suspicion when they involve responsible or sustainable practices. Organizations that find themselves behind schedule or not yet able to evidence the results of their initiatives, must therefore engage vigorously in justifications.
Evasion describes organizational attempts to bypass, neglect or otherwise distance themselves from dubious or irresponsible decisions and behaviors of their past. Since the past is frequently evoked by critics to dismiss the credibility of current organizational goals and visions and to support charges of hypocrisy, it is crucial for many organizations to stress that what used to be common practice has been terminated long time ago.
Re-narration refers to attempts by organizations to mobilize and reedit their past in self-flattery ways. As a particular practice aimed at retroactively editing the past in the interest of the present and the future, re-narration involves selecting and rearranging specific events and symbols of the past into an idealized picture that can be used as a resource to guide and justify current practices and future goals.
These are just a few examples of organizational attempts to bypass hypocrisy charges in the shape of inconsistencies or tensions between their past, their present and their future. Interestingly, such attempts tend to reproduce hypocrisy in new forms – forms, which are just as likely to attract attention and criticism. As such, hypocrisy has potential to do something to organizations and society over time.
The combination of hypocrisy and stakeholder criticism has performative potential.
Many aspirations, for example, are hypocritical because they exaggerate organizational abilities and accomplishments. At the same time, they have performative potential to the extent that they mobilize employees and NGOs to demand better practices. Also, aspirations may inspire similar aspirations among competitors such that they become self-fulfilling prophecies. Similarly, while deferment practices may relieve the organization from immediate pressure to do exactly as they say, they simultaneously indicate that organizations are sensitive to their social standing and hold on to their future-directed ideals and goals.
Such sensitivity might be used by stakeholders to demand further explanations and updated timeframes. By holding on to long-term-ideals and goals, even when they are difficult to implement in full, organizations seem to acknowledge what is right and what they ought to do. Similarly, even if evasion may be a tempting way out for organizations when facing negative publicity about their past, such practice indicates that organizational actors are aware that certain practices no longer are acceptable.
Finally, the fact that many corporations seek to re-narrate their past indicates some awareness that change is called for and that organizational endeavors are being vigilantly observed by others.
Without hypocrisy, organizations may relieve themselves from pressures to become better.
None of this is to suggest that hypocrisy automatically generates better practices. Rather, it is a call to investigate further how hypocrisy in the shape of inconsistencies can be mobilized to perform in the interest of society.
Suggestions for further readings
Brunsson, N. (2003). Organized hypocrisy. In B. Czarniawska & G. Sevón G. (Eds), The Northern lights – organization theory in Scandinavia (pp. 201-222). Copenhagen: Copenhagen Business School Press.
Cho, C. H., Laine, M., Roberts, R. W., & Rodrigue, M. (2015). Organized hypocrisy, organizational façades, and sustainability reporting. Accounting, Organizations and Society, 40, 78-94.
By the same author: License to Critique: Inoculating Standards against Closure.
Photo by Pierre Bamin on Unsplash.
Posted on April 17, 2019 April 17, 2019 Categories Communication, Concepts, Featured, Issues, News, Reporting, SocialTags hypocrisy
"We're just geeks": Do emergent disciplinary identities among business students affect their sense of personal responsibility?
By Maribel Blasco.
Georg*: I don't think people from Maths are like that [selfish] because it's another environment. We treat each other kindly. We are not like these types that want to be in front and want to be the best, and want to be in the top.
Fransisca*: We are more down to earth, just because we are geeks and people don't show up in suits and small briefcases.
Mette*: I think we are much more down to earth than other study programs at CBS. And I think the environment at Maths makes us more responsible in some way and that we are not like "I just have to reach the top no matter what."
(Quotes from group interview with undergraduate business and math students).
*Names changed.
Business schools invest a great deal of effort in forging a sense of shared identity among students from different subject specializations. Freshers' weeks, introduction events, team-building exercises, and invited speakers are just a few examples of initiatives designed to strengthen students' sense of belonging to a particular professional group.
But what if this is backfiring? Although belief in the positive features of one's own group is known to support teamwork and cooperation, among other benefits, we also know that it can have a dark side in the form of responsibility disavowal, prejudice and discrimination towards groups perceived as outsiders. These dynamics beset firms and other organizations, where sub-groups can be a major source of conflict, and where silo thinking – unwillingness to collaborate or sometimes even communicate with other groups in the same organization – has been found to erode responsibilities and foster a culture of promoting one's own group rather than the organization as a whole. Recent financial scandals have also revealed how such groupthink can lead people to deny personal responsibility for wrongdoing.
In this research, I show how students' emergent professional identities can work against their sense of personal responsibility by providing rationalizations for moral buck-passing. The data consist of group interviews involving students from fifteen undergraduate business programmes. Among the most intriguing findings that emerged were three logics that students used in talking about responsibility.
Logics of Responsibility Talk
The first logic was the notion that the intrinsic nature of certain disciplines, notably numbers-oriented subjects like maths and economics, obviated the need for a responsibility focus. The second logic was that students generally felt that their own disciplinary specialization was 'more responsible' than others'. The third logic was that almost all students appeared convinced that decisions about responsibility were an individual matter – but they mostly regarded irresponsibility as something that other people or groups got up to.
So even though most insisted that responsibility was ultimately up to the individual, that individual was seldom itself.
"Missing from most students' accounts was a critical appraisal of their own fallibility."
All three logics provide rationales for disavowing personal responsibility. Missing from most students' accounts was a critical appraisal of their own fallibility, that of their discipline, or that of their disciplinary in-group, in regard to the potential for irresponsibility. Only a few questioned their ability to resist temptation if placed in a morally dubious situation.
Particularly worrisome was that business students across all specializations regarded so-called 'harder' subjects, notably maths and economics, variously as neutral, objective, technical, theoretical or basic subjects that were not 'about' responsibility. Students tended to accept the models and theories taught in those subjects pretty much unequivocally, arguing that since these were 'used by major institutions' they must be responsible in and of themselves.
Separation Thesis
This kind of thinking reflects what scholars have referred to as the 'separation thesis', i.e. the notion that business decisions have no moral content and moral decisions have no business content (Harris & Freeman, 2008; Freeman, 1994; Wicks, 1996). This idea that facts can be separated from values is, according to some scholars, 'ingrained in all that we do in business schools', and leads to the notion that business theories can be morally neutral 'while surreptitiously encapsulating certain ethical values and assertions' (Harris & Freeman 2008: 543; Freeman, 1994: 412; Ghoshal, 2005).
Alongside this, many students, notably those from numbers-oriented specializations, associated responsibility with so-called 'softer', 'discussion' subjects like organizational studies and corporate social responsibility, and displayed a disdain for these that is also mirrored in the business world where 'financial and market strategists who have been conditioned to respect only "hard" and quantifiable "facts" 'with "hard" data to support them' find it easy to dismiss human factors as '"soft" or "mushy" issues' (Cartwright & Cooper 1995: 35).
As management educators, what can we learn from this study? First, the findings open up for a debate about how to educate for subject-specific forms of responsibility without fostering a 'silo mentality' that may serve to disavow personal responsibility.
To address this, first, we might explore ways to render disciplinary boundaries more porous by explicitly and critically discussing, with students, their disciplinary mental models and the beliefs, identifications and behaviors they foster. Second, initiatives that encourage cross-disciplinary collaboration should be encouraged. Finally, we need to raise students' awareness of the limits of their individual agency, and of their own fallibility when confronted with the appeal of solidarity, when it comes to responsibility decisions. In sum: we must find ways to teach students to take personal responsibility even in situations when they do not consider that it is theirs to take.
Maribel Blasco, Associate Professor, Department of Management, Society & Communication, Copenhagen Business School. Research area: Management learning and education.
Cartwright, S., & Cooper, C. L. (1995). Organizational marriage:"hard" versus "soft" issues?. Personnel Review, 24(3), 32-42.
Freeman, R. E. (1994). The politics of stakeholder theory: Some future directions. Business ethics quarterly, 409-421.
Harris, J. D., & Freeman, R. E. (2008). The impossibility of the separation thesis: A response to Joakim Sandberg. Business Ethics Quarterly, 18(4), 541-548.
Ghoshal, S. (2005). Bad management theories are destroying good management practices. Academy of Management learning & education, 4(1), 75-91.
Wicks, A. C. (1996). Overcoming the separation thesis: the need for a reconsideration of business and society research. Business & Society, 35(1), 89-118.
Photo by Alex Chambers on Unsplash.
Posted on March 8, 2019 March 8, 2019 Categories Communication, Concepts, Economic, Education, Featured, Issues, News, Social1 Comment on "We're just geeks": Do emergent disciplinary identities among business students affect their sense of personal responsibility?
Conquer the Lock-In: How Food Companies can act on their Political Responsibility towards Children
By Levinia Scotti and Thomas Eichenberg.
The overconsumption of sugar, especially among children, and its long-term health risks re-gained public awareness with the introduction of the British soda tax in 2018. What can we learn for 2019?
Food and beverage manufacturers and retailers produce, advertise and sell their products to millions of people every day. We therefore consider them political actors (see for a similar argument, Whelan 2017) with a responsibility to respect the Human Rights of Children to a healthy diet (OHCHR 1999).
By using sugar as a proxy for the healthiness of children's dietary patterns, we sought to learn more about the capabilities of food companies to act in favour of children's long-term health. Children's health does not only affect themselves and their families, but also implies important economic spill-over effects (e.g., Brownwell et al. 2009, Belli et al. 2005, Heckman 2006).
In order to better understand existing corporate efforts, we conducted a number of interviews with representatives of Danish and German retailers as well as international food and beverage manufactures. Additionally, we analysed their annual and sustainability reports of the last five years.
Glopan, 2016.
For our analysis, we assumed that individual food choices are contingent on the social and environmental factors that constitute the food system. Dietary patterns and food systems can thereby be seen as a two-way street (GloPan 2016) in as much as consumption choices are being shaped and shape (future) food system configurations. The innovation challenge in improving children's dietary quality is thus systemic. (See also the Global Nutrition Report 2018 for more on malnutrition).
Corporate Challenge: 'Sense-Making', and the Quasi-Objectivity of Materiality
Across our data, our informants emphasized 15 distinctive patterns as 'enablers of' and 'barriers to' business efforts to effectively address children's sugar consumption. These perceived enablers and barriers can, broadly speaking, be broken down into two 'corporate mind-sets' that crucially affect successes in reducing children's sugar intake. The common pattern among organizational enablers went along the lines of "The organization itself can and must drive change!", which we associate with a proactive corporate mindset. The reasoning of the perceived organizational barriers, however, tended to be more like "The organization must foremost account for external demands!", which we describe as a reactive mindset.
Own illustration (1), 2018.
Drawing on the literature on sense-making (Weick 1995) in general, and the notion of "ethical blindness as the result of a sense-making process based on interactions between framing and context factors" (Palazzo et al. 2012: 328) in particular, we suggest that a mere concentration on the second, rather reactive mind-set, mirrors a perceived 'lock-in' within external pressures that can be conceived of as a sense-making process that risks to entail a blindness to the ethical dimension (Palazzo, et al. 2012: 324) of organizational priority-setting (i.e. values).
Example: Corporate materiality assessments are one area in which this blindness becomes performative. Although materiality may refer to different things, the outcome of a materiality assessment is often regarded as tangible. We tend to forget, however, that materiality is nothing absolute or objective. Rather, it is constructed on the basis of (often) taken-for-granted organizational processes and priorities. The design of a materiality assessment itself and the definition of materiality as such has thus an enormous influence on the interpretation of the outcomes (Eccles & Krzus 2014). The question that needs to receive more attention is: Which stakeholders' interests and needs are 'worthy' of prioritization beyond their impact on pre-existing strategic targets?
At this point, the case of sugar reduction in children's food can be transferred to other industries and future investments of resources. The bottom line is, values are performative.
What is valued, gets measured, gets done
Rather unsurprisingly, our findings suggest the following relationship: The success of corporate efforts to reduce children's sugar consumption is contingent on whether or not child malnutrition is a corporate priority prior to the assessment of environmental influences.
That leads us to question the almost sacred status of the "outside-in" perspective, which has become somewhat of a gold-standard in corporate sustainability management.
Instead of conducting yet another stakeholder engagement workshop, it may actually be more enlightening to scrutinize from the 'inside-out' who decides what is (most) valuable to the organization.
This will require strong leadership among executive decision-makers since the implications of corporate strategies cannot be merely delegated to external stakeholders.
Our research shows that a reactive approach risks to foster an organizational "lock-in" and thus tighten barriers to innovations that make a real difference for children's diet and health. The challenge food and beverage manufacturers and retailers thus face is to avoid this 'lock-in' within the preferences, values and beliefs of their environment (such as 'the persistent consumer demand for sugar products'). This, in turn, implies the need for original corporate values and a mission that is informed, but not determined by their environment, and inspires organizational decision-makers to proactively meet and anticipate social and environmental challenges.
Start with Values
The key-take away from our research is that the future evolution of internal processes within food and beverage retail and manufacturing industry need to be driven by an organizational (social) innovation mind-set (see, e.g. Osburg & Schmidpeter 2013), as well as internally recognized and lived values and priorities (see especially Breuer's & Lüdeke-Freund's work on 'values-based' innovation management).
Very concretely, a starting point for (more) proactively addressing Children's Right to a healthy diet could be to ask:
How can we strategically contribute to a healthier food environment for children, considering the direct and indirect "touch points" we have with children?
How can we effectively drive the individual and organizational recognition of children's nutritional health, within and beyond organizational risk management, as a material issue?
Are our global corporate knowledge management practices aligned with the goal of respecting and supporting Children's Right to a healthy diet?
How can we initiate or contribute to collaborations with other stakeholders to reduce children's sugar consumption
Active Corporate Support for the Children's Rights and Business Principles
In light of our research, it became clear that against the background of the respect and support framework of the UN, it is not sufficient for corporations to interpret the "respect" for Children's Rights in terms of 'doing no harm'. The Children's Rights and Business Principles define respect as "avoiding any infringement of the Human Rights of others, including children, and addressing any adverse Human Rights impact with which the business is involved" (CRBPs 2012: 5).
The aim of "doing no harm" is insufficient in so far as it implies the existence of a cause-effect relation, which corporations can directly steer. Children's sugar consumption is, however, influenced by the overall configuration of their food environment. Therefore, there is no such direct cause-effect relation, rendering a mere commitment to do "no-harm" insufficient (see e.g., Schrempf 2014 on the social connection approach to corporate responsibility in the case of the food industry). Rather, food and beverage manufacturers and retailers need to actively support the Child Right to a healthy diet by anchoring positive contributions to social health at the core of their corporate values and operations.
On a more general level, our research demonstrates that an alignment of current food systems with public health objectives is to a large extent contingent on corporations' capability to innovate and act upon corporate values that put the active support of healthy food systems at the centre of their business practice, i.e. their innovation, marketing and sales activities.
Thomas is based in Copenhagen and graduated from CBS in 2018. He studied economics, business administration and philosophy. He enjoys addressing dilemmas and ambiguities of social, economic and business transformation processes. Feel free to connect with Thomas on Linkedin.
Levinia recently graduated from CBS with a MSc in Business Administration & Philosophy. She is passionate about identifying and driving innovative organisational strategies that effectively address the systemic nature of local and global sustainability challenges across value chains. Learn more about what Levinia is up to on Twitter and feel free to be in touch on Linkedin.
Breuer, H. & Lüdeke-Freund, F. (2017): Values-based innovation management – Innovating by what we care about. London: Palgrave.
CRBPs (2012): 'Children's Rights and Business Principles', Save the Children, UNGC & UNICEF. Accessible online.
Eccles, R. G. & Krzus, M. P. (2014): The Integrated Reporting Movement: Meaning, Momentum, Motives, and Materiality. ISBN: 978-1-118-64698-4.
GloPan (2016): 'Food systems and diets: Facing the challenges of the 21st century', London, UK.
HLPE (2014): 'Food losses and waste in the context of sustainable food systems – A report by the High Level Panel of Experts on Food Security and Nutrition of the Committee on
World Food Security. Rome.
HLPE (2017): 'Nutrition and Food Systems – A report by The High Level Panel of Experts on Food Security and Nutrition of the Committee on World Food Security, Rome.
OHCHR (1999): CESCR General Comment No. 12: The Right to Adequate Food (Art. 11) Adopted at the Twentieth Session of the Committee on Economic, Social and Cultural Rights, on 12 May 1999 (Contained in Document E/C.12/1999/5), accessible online.
Osburg, T. & Schmidpeter, R. (2013): Social Innovation –Solutions for a Sustainable Future', Berlin: Springer.
Palazzo, G. et al. (2012): 'Ethical Blindness', Journal of Bussines Ethics, 109: 323–338. DOI 10.1007/s10551-011-1130-4.
Schrempf, J. (2014): 'A social connection approach to Corporate Responsibility: The Case of The Fast Food Industry and Obesity', Business & Society, 53(2), 300–332.
Whelan, G. (2017): 'Political CSR: The Corporation as Political Actor', in: Rasche, A., Morsing, M., Moon, J. (eds): Corporate Social Responsibility – Strategy, Communication, Governance. Cambridge: Cambridge University Press.
Weick, K. E. (1995): Sensemaking in organizations. Thousand Oaks: Sage.
Photo by Food Photographer | Jennifer Pallian on Unsplash.
Posted on February 26, 2019 January 5, 2023 Categories Accountability, Concepts, CSR, Education, Ethics, Featured, Food, Issues, News, SocialTags corporate responsibility, nutrition, sugar consumption
Why Corporate Sustainability is Bullshit (And Why This is a Good Thing)
Corporate sustainability is full of statements, terms, and concepts that are empty, unclarifiable and vague. Instead of rejecting such vagueness altogether, we should embrace it. Bullshit can be productive.
Consider the following statement:
"The concept of shared value can be defined as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress."
The sentence is taken from Michael Porter's and Mark Kramer's well-known article Creating Shared Value (2011, p. 66).
Now, consider this statement:
"The concept of strategic CSR can be defined as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Strategic CSR focuses on identifying and expanding the connections between societal and economic progress."
You are right, I replaced "shared value" with "strategic CSR". What is interesting is that both statements sound equally plausible. I consider such statements to reflect bullshit, and I am using the term not in a disrespectful sense. I refer to bullshit, because I think we need to be precise.
What is Bullshit?
In 1986, Princeton Professor Harry Frankfurt published a little essay titled On Bullshit in the Raritan Review, which was later published as a book (2005). Frankfurt's argument was this: While the liar is aware of the truth, but seeks to avoid it, the bullshitter does not care much about the truth. As Frankfurt writes:
"It is just this lack of connection to a concern with truth – this indifference to how things really are – that I regard as the essence of bullshit."
(2005, p. 33)
The bullshitter deceives others about his enterprise. He does not want others to know that he is not interested in the truth. And, of course, we are all thinking about current US President Donald Trump here. He not only is a notorious liar (The Washington Post has counted more than 5.000 false or misleading statements so far), but also a skilled bullshitter.
"Unclarifiable Unclarity"
Frankfurt defines bullshit with regard to the bullshitter. This is helpful, but it may also be problematic for a variety of reasons (e.g. an assumed intentionality). Others have, therefore, expanded this debate. Cohen (2012), for instance, looks at the bullshit itself rather than the bullshitter. He sees bullshit as statements that are characterized by an "unclarifiable unclarity" (p. 105) – i.e. statements that are vague, airy, and hard to render unobscure. He suggests that when it is possible that key terms within a statement can be exchanged without altering its plausibility, at least a sufficient condition for the existence of bullshit is met.
Corporate Sustainability as Bullshit
Corporate sustainability (and related discourses such as CSR, ESG etc.) are full of bullshit. Actually, the very fact that it is still unclear whether relevant practices are labelled "CSR" or "sustainability" (and that both labels are often used interchangeably), shows that there is a lot of unclarifiable unclarity.
Within corporate sustainability there are at least two sources of bullshit.
First, academics and management gurus produce a lot of it. Recently, André Spicer has offered a sharp and entertaining analysis of such kind of bullshit in his book Business Bullshit (though mostly without reference to corporate sustainability). The mere fact that concepts like "shared value" and "strategic CSR" are exchangeable without any loss of plausibility shows that the discourse is "full of it" (on the lack of distinction between CSV and strategic CSR see also Andrew Crane and colleagues 2014, p. 134). Also, a lot of emphasis has been placed on "transforming business models" in discussions around corporate sustainability. But, the very term "business model" faces a certain emptiness and means different things to different people. I have seen many different interpretations of what a "business model" could be or should be. These are just two examples, but the list is long… just think about "materiality" or "transformative leadership".
Second, corporations are also in the business of bullshit production. Especially the communication of sustainability aspirations is often based on bullshit. Consider Carlsberg's recent Towards Zero campaign. One pillar of the campaign is to reduce irresponsible drinking to ZERO. Of course, this is not only an ambitious goal, but a nearly impossible one (also because the company's control over peoples' level of responsible drinking is limited). Understood in this way, this broad claim is bullshit in the Cohenian sense – there is unclarifiable unclarity involved. But, most people know that the statement should not be taken at face value; it is supposed to raise awareness and signal a high level of ambition. And this is exactly what can make corporate sustainability as bullshit a productive (and maybe even inevitable) enterprise.
Why We Need Bullshit
Bullshit is a two-edged sword. It certainly comes with a number of problems (and Spicer's book, which I mentioned above, discusses some of these complications). Also, too much of it, can be dangerous, because it may obscure important pillars of meaning construction.
But, corporate sustainability as bullshit can also be productive. Ambitious statements, like the one by Carlsberg above, have a certain necessary emptiness. The resulting ambiguity can motivate employees and hence change corporate practices, especially as the statement was publicly communicated, which, again, increases the likelihood that others will hold the company accountable (on this see also Christensen et al.'s discussion of Aspirational Talk, 2013). In other words, corporate sustainability as bullshit may spur self-fulfilling prophecies.
"Bullshit sells."
The same can be said about concepts like "Creating Shared Value" (CSV) or "Strategic CSR". Their meaning is vague and it is certainly difficult to make them less obscure. Bullshit is built into these concepts, and usually this is a deliberate choice of those people who create and diffuse them. Considering the enormous success of concepts like CSV, we could even say: Bullshit sells! Why? Because the ambiguity that surrounds the concept makes it attractive to a large audience. Firms can bend the concept in ways that fit their specific needs.
So, what is the bottom line? I would say it like this: Let us be clear about when corporate sustainability is moving towards bullshit. Let us also understand the productive nature of such bullshit. But, let us also be aware that "too much of it" can be a major problem for the future of sustainable business practices, both in theory and in practice.
Andreas Rasche is Professor of Business in Society at Copenhagen Business School and Director of CBS's World-Class Research Environment "Governing Responsible Business". He is Visiting Professor at the Stockholm School of Economics. Andreas can be reached at: ar.msc@cbs.dk and @RascheAndreas. More at his personal homepage.
Christensen, L. T., Morsing, M., & Thyssen, O. (2013). CSR as aspirational talk. Organization, 20(3), 372–393.
Cohen, G. A. (2012). Complete Bullshit. In M. Otuska (Ed.), Finding Oneself in the Other (pp. 94–114). Princeton, NJ: Princeton University Press.
Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the Value of "Creating Shared Value". California Management Review, 56(2), 130–153.
Frankfurt, H. (2005). On Bullshit. Princeton and Oxford: Princeton University Press.
Porter, M. E., & Kramer, M. R. (2011). Creating Shared Value. Harvard Business Review, 89(1/2), 62–77.
Photo by Bryan Minear on Unsplash.
Posted on November 29, 2018 November 29, 2018 Categories Communication, Concepts, CSR, Featured, Issues, Knowledge, News, SustainabilityTags #CSR, bullshit, communication, CSV
Corporate contributions to United Nations' Sustainable Development Goals
By Amanda Williams.
The days of corporate greening are over. Many companies kicked off their sustainability strategies decades ago by picking the low-hanging fruit. But there is nothing left within arm's reach to pick. Now we expect companies big and small to demonstrate their contribution to broader societal and environmental sustainability challenges beyond firm boundaries.
The United Nation's Sustainable Development Goals (SDGs) are arguably the most pertinent framework for corporations to demonstrate commitment to broader sustainability goals. The SDGs were adopted in September 2015 by 193 world leaders. They offer a comprehensive agenda of pressing economic, social and environmental issues. The goals are for everyone—governments, nonprofits, businesses, universities—everywhere—in all countries.
What are Companies Doing?
Encouragingly, the SDGs are showing up everywhere on corporate websites and reports. However, all this hype around the goals may not necessarily translate into more sustainability action. Many companies are taking advantage of the SDGs to repackage their existing sustainability initiatives. For example, let's say a beverage company has a water stewardship program to increase access to clean water in the countries that they operate. It is easy for the beverage company to demonstrate a contribution to SDG 6, Clean Water and Sanitation. But this approach does not leverage the full potential the SDG framework nor business contribution to the goals.
"All this hype around the goals may not necessarily translate into more sustainability action."
More ambitious companies are taking the SDGs as an opportunity to embed sustainability across the firm and improve their sustainability strategy. This goes beyond using the SDGs to highlight existing sustainability efforts. It requires an in-depth analysis of business operations against the goals to identify positive and negative impacts. Then it requires setting ambitious goals and developing a strategy to achieve those goals. It requires radical changes in the way the business operates. Companies that are taking the goals seriously have much to gain. Research by the Business Commission for Sustainable Development finds that there is over $12 trillion in market opportunities created if the goals are achieved by 2030.
Challenges of Implementing the Goals
Despite the potential benefits of engaging, implementing a corporate strategy that truly aligns with the goals is not easy. Many managers express that the SDGs are too complex. With over a 169 targets, it is no wonder that some sustainability managers might feel overwhelmed.
In addition to complexity, another challenge is language. The SDGs are a political framework and working with the framework requires some work to translate them into actionable business strategies and targets. It may be tempting to prioritize and identify a handful of SDGs that are most material for the company without going into much detail. But the goals were designed as a holistic agenda to capture connected economic, social and environmental issues. For the beverage company, that means they have to consider how their operations and supply chain positively and negatively impacts all the SDGs, not just singling out the positive contributions to SDG 6 through their water stewardship program.
Overcoming the Challenges
There are many success stories out there to show that making a meaningful contribution to and aligning corporate strategy with the SDGs is possible. Here are some tips for making it happen:
1. Partner
The goals are broad and complex. To help cut through some of the complexity, managers can collaborate with international organizations or universities. Many international organizations offer services related, helping companies understand the complexity of the SDGs. Collaborating with scientists can give you access to specialized and local knowledge about SDG issues and help set firm specific goals that are based on science.
2. Engage the entire company
The goals are not just for the sustainability department. They are for the entire company. Sustainability managers might take the lead on engaging with the SDGs but involving the entire company helps to create a culture of sustainability and embed sustainability across the firm. Safaricom, Kenya's largest mobile phone operator, provides a best practice example. They embedded the SDGs into their purpose statement and each one of their business units made a specific commitment to the goals.
3. Use tools
Don't start from scratch. Luckily, many tools are out there to help managers formulate a strategy to achieve the goals. The SDG Compass offers advice on how to deliver on the goals and is a large database of commonly used business indicators to measure and report on contribution to the goals. Also, the World Business Council for Sustainable Development runs the