For the past two and half days I've felt a strange tension in this conference. It is about the thorny question of whether ethics pays. The business case for CSR. The harmony between economic, social and ecological sustainability.Most of the time panellists and speakers were hammering it home that joining the UN Global Compact and implementing the principles just makes good business sense. I had a very lively conversation with Peter Solmssen, Executive VP of Siemens about this, who joined the company recently as part of the revamp of the board in the aftermath of the corruption scandals. He was fairly bullish that fighting corruption makes good business sense, 'we are more profitable now' he argued. He argued that in most countries big conglomerates like Siemens or General Electric are doing business with public purchasers who at the top level are not interested in corruption, and that companies who are known for not engaging in it, in fact have a competitive advantage. His view is that big players have indeed the chance of forming a 'cartel of the good' to collaborate on addressing ethical issues like corruption – and be the better off with it.
A similar take I got from talking to Gustavo Grobocopatel, President of Grupo Losgrobo from Argentina. His company works in agriculture and adjacent supplies and services, and he sees the particular value for his organization in engaging with the UN Global Compact in improved stakeholder relations. In particular his customers value this inclusive approach and for him CSR is very much about competitive advantage. His organization is particular interesting as it tries to keep more of the value chain of agricultural products in the country, rather than just exporting commodities and falling victim to what is commonly referred to as 'Dutch disease'.
In some ways then it was quite a little 'scratch' (I mentioned my Teflon-ized ears) to hear Klaus Leisinger (President and CEO of the Novartis Foundation for Sustainable Development) say on Friday morning that the talk of 'ethics pays' or 'ethics is just good business' is – in his words – just 'bullshit'. Why, he argued, would companies not do the right thing anyway if it were just good business? Instead he called for a commitment to basic values, brought forward in the 'Manifesto for Global Economic Ethics', by companies a priori, simply because it is morally right, as in some cases it might even cost money in the short term.
I tend to agree with this. Again, we can turn to the ten year old-metaphor: at this age, kids are at the 'conventional' level of moral development (in Kohlberg's theory): they do right and avoid wrong, because mommy and daddy say so and he tries to be a nice boy, and he tries to avoid the smack on the back or wants to get that ice cream as a reward. At least on the rhetorical level, the UN Global Compact members – by and large - seem to be not much beyond the conventional level. Which – don't get me wrong – is quite an achievement. Whole societies have survived on that, so that's fine for our birthday boy.
This apparent reluctance to think about the firm beyond the immediate business case became quite clear today in the sessions dealing with Development. I put the question to Jeffrey Sachs, Georg Kell and Chad Holliday in the final press briefing. Kell re-iterated that we are seeing an 'evolutionary transformation', a re-orientation from short- to long-term and a stronger focus on the (financial) risk which non-financial issues can cause. But 'the basic model remains intact', he said. In a similar vein Holliday, who hinted at further economic incentives to internalize sustainability issues, such as pricing carbon. It was then Sachs, who I think took up the question of whether it is time to move beyond the current framework. He said, that providing malaria medications to poor people 'is not a money making venture'. But still he argued that the business contribution to achieving the Millennium Development Goals is vital. So he pointed more at models of shared responsibility and sees business getting much more involved in public-private-partnerships. This was re-iterated by Robert Orr, Assistant Undersecretary General of the UN, who moderated the press briefing. For him the UN Global Compact is very much about becoming/being a player in global governance. He stressed there is hardly no issue on the global political agenda, where business is not part of any possibly thinkable solution. I liked that candour and agree.
A similar take I got from talking to Gustavo Grobocopatel, President of Grupo Losgrobo from Argentina. His company works in agriculture and adjacent supplies and services, and he sees the particular value for his organization in engaging with the UN Global Compact in improved stakeholder relations. In particular his customers value this inclusive approach and for him CSR is very much about competitive advantage. His organization is particular interesting as it tries to keep more of the value chain of agricultural products in the country, rather than just exporting commodities and falling victim to what is commonly referred to as 'Dutch disease'.
In some ways then it was quite a little 'scratch' (I mentioned my Teflon-ized ears) to hear Klaus Leisinger (President and CEO of the Novartis Foundation for Sustainable Development) say on Friday morning that the talk of 'ethics pays' or 'ethics is just good business' is – in his words – just 'bullshit'. Why, he argued, would companies not do the right thing anyway if it were just good business? Instead he called for a commitment to basic values, brought forward in the 'Manifesto for Global Economic Ethics', by companies a priori, simply because it is morally right, as in some cases it might even cost money in the short term.
I tend to agree with this. Again, we can turn to the ten year old-metaphor: at this age, kids are at the 'conventional' level of moral development (in Kohlberg's theory): they do right and avoid wrong, because mommy and daddy say so and he tries to be a nice boy, and he tries to avoid the smack on the back or wants to get that ice cream as a reward. At least on the rhetorical level, the UN Global Compact members – by and large - seem to be not much beyond the conventional level. Which – don't get me wrong – is quite an achievement. Whole societies have survived on that, so that's fine for our birthday boy.
This apparent reluctance to think about the firm beyond the immediate business case became quite clear today in the sessions dealing with Development. I put the question to Jeffrey Sachs, Georg Kell and Chad Holliday in the final press briefing. Kell re-iterated that we are seeing an 'evolutionary transformation', a re-orientation from short- to long-term and a stronger focus on the (financial) risk which non-financial issues can cause. But 'the basic model remains intact', he said. In a similar vein Holliday, who hinted at further economic incentives to internalize sustainability issues, such as pricing carbon. It was then Sachs, who I think took up the question of whether it is time to move beyond the current framework. He said, that providing malaria medications to poor people 'is not a money making venture'. But still he argued that the business contribution to achieving the Millennium Development Goals is vital. So he pointed more at models of shared responsibility and sees business getting much more involved in public-private-partnerships. This was re-iterated by Robert Orr, Assistant Undersecretary General of the UN, who moderated the press briefing. For him the UN Global Compact is very much about becoming/being a player in global governance. He stressed there is hardly no issue on the global political agenda, where business is not part of any possibly thinkable solution. I liked that candour and agree. Followers of this blog familiar with our writings will know that this is where I see the future of CSR going: Business as a political actor, intricately involved in societal governance. In Kohlberg's model of moral development, this would be the post-conventional level: understanding social contracts and universal moral principles – and doing the right thing based on understanding this. So let's wish our ten year old a healthy further development – there are new stages to discover!
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