Why do companies say they are responsible, but then act differently? Is it lip service, green washing, and double-speak? Or does this happen for a different reason?
The answer is that most companies are less sinister than skeptics might think, but often they don’t know what they don’t know. Good managers with strong values make bad decisions because they don’t see opportunities to make a difference on social issues. From the outside, they appear to be acting irresponsibly, but often it’s simply a reflection of in-line managers being uninformed about the intersection of their business with society.
I want to share a glimpse into the future of how companies will seek to understand and address social issues. Last week I jumped on a train from Boston to New York City to attend a launch event for the results of a “poverty footprint” study conducted by Oxfam America. This new study looks at the operations of Coca-Cola and its local bottler SABMiller in El Salvador and Zambia and the effects of those businesses on low income communities. The event was a lively and candid panel discussion of representatives from Oxfam America, Coca-Cola, SABMiller, and the UN Global Compact to share the two-year journey of conducting the research and developing the report.
On one hand, the event included a lot of the common themes ricocheting around the CSR field today: creating shared value, inclusive business, going beyond corporate philanthropy, etc. Not new ideas, but it’s heartening to see the continued momentum and debate on how companies can identify opportunities to address social challenges within their business.
On the other hand, the report sets a high bar for corporations “lifting the veil” on their operations and how they impact society. It’s substantive transparency. Think about it. Coca-Cola is one of the strongest brands in the world – they think about public relations and image management 24/7. If this were primarily a PR move, the report would have been a one-sided, splashy report with lots of media to give favorable headlines. But it wasn’t any of that. It was a humble acknowledgement that this research is only the beginning of their journey to improve on multiple fronts. It was a statement of intent – to find ways to address value chain challenges such as economic development, empowerment, gender equity, and water scarcity. It was a recognition that easy, single-actor solutions don’t exist and that collective impact solutions are required. It was an invitation for others to work collaboratively with Coca-Cola and SABMiller to identify paths that work better, both for the companies and to improve communities. For more on the motivations and dynamics of creating the report, see Oxfam’s Chris Jochnick’s blog about the report’s release.
In short, this type of research provides that much-needed platform for corporations to engage more productively in social change. It fills in some of those knowledge gaps that challenge business managers who typically focus on quality, efficiency, profitability, etc., but who may miss nuances of critical social issues.
However, this platform represents only a starting point for corporations to make a shift to truly creating shared value. Knowledge and transparency are necessary but not sufficient to change long-held corporate behavior. Companies need to use this knowledge as a launching pad for developing future strategies with goals and targets, integrating priorities within the business model, and establishing performance management systems that ensure achievement of both social and business objectives.
I look forward to seeing more companies “lifting the veil” on the full intersection of their business with communities and then taking the logical next steps toward collaborative solutions.