Thursday, January 24, 2008


A few days ago, my friend Ludovic, founder of the Social Venture Forum, sent me an article called The Responsibility Paradox. It comes from the Center for Social Innovation at Stanford, and it discusses "corporate social responsibility" practices and their failure to evolve with globalization and the institutional shape shifting that's come along with it.

Maybe one of you will read the article and tell me I'm crazy to say this, but I think it's a real bummer of an approach.

The article sees corporations as having obligations to its stakeholders. Obligations to be charitable. Obligations to set examples as upstanding social beings. It notices that, given global supply chains and international trade agreements, it's becoming unclear who hold which stakes in what. And it proposes that global regulation and global standard-setting are the surest paths to "soulful corporate behavior."

Now, since there's been little on my mind over the past few days that doesn't find a way to connect to my grandmother, I want to bring her in here and draw a little analogy about obligation.

On Tuesday night, I prepared my portion of Mimi's eulogy. I changed topics three times. I outlined. I re-outlined. I cut and pasted. I re-wrote. And I noticed one detail that crept into every structure I explored: the fact that I have never once felt obligated to spend time with Mimi. Visiting her and calling her was never a chore, never something I did because I knew it was the right thing to do, never something I did because my parents made me do it, never an obligation. Mimi got excited about the things that got me excited, told stories with me, made me laugh, and treated me like a real person instead of a little kid. Hanging with her was always something I wanted to do, something I looked forward to doing.

It's a good thing for grandchildren to pay attention to their grandparents. Good for the children. Good for the grandparents. Good for the parents in between.

Making it happen doesn't require obligation, however. It doesn't require guilt. It doesn't require philanthropic time-giving on the part of the grandchildren. It doesn't require iron fisted parental tyranny. It requires grandchildren understanding that it's in their best interests to hang with their grandparents.

So what if we looked at corporations as grandchildren and ourselves as their grandparents? How could we make healthy relationships?

Corporations feeling guilty about their relative wealth and begrudgingly giving it all away? Governments making rules, and corporations rolling their eyes, whining, and doing the absolute minimum required to follow those rules? Or corporations realizing that its in their long term (if not immediate) interest to engage in the relationship, find common ground, and work together toward a better future world.

I don't mean to say that philanthropy has to be guilt-inspired or insincere. I don't mean to say that governments shouldn't make rules; they absolutely should; they absolutely must. And I realize I'm oversimplifying. But I think it's important to remember that responsible behavior need not have roots in obligation.


Danny Shapiro said...

I wholeheartedly agree. I would like to put something witty and caustic down, but I got nuthin. Actually, there is an apostrophe missing, but IT'S not a big deal.

-Tomato Pie

I think your use of the word "begrudgingly" was key in reflecting the sentiment of the companies working toward better environmental practices. It is, as you say, a "bummer". Do you propose a solution? Or is it impossible to change the mentalities of these corporations/executives?

Jake de Grazia said...

The solution I propose is education. People need to know what it means to buy something: the ecological and social impacts. We need to know which big businesses we are supporting when we shop, and we need to know what we like and don't like about those businesses. Basically we need to know something meaningful about our options. If consumers understand the choices they have, and if it's true that almost everyone would prefer to support (buy from) companies that do positive things for communities, ecosystems, and economies, then companies will be more than happy to do the right thing. No begrudging necessary.

And here's another inelegantly posted link URL for you all.

Finally getting to the Jan 17 Economist today. Lots of CSR in there. We all know it, but it's still frustrating to hear that "the connection between good corporate behaviour and good financial performance is fuzzy at best." We need to do something about that. Organizing and developing a collective voice for everyone wanting the best businesses to make the most money has to be part of the solution...

Jefferson Parke said...

I think the solution may ultimately have to be three pronged:

1) Education so that we are aware of social costs.

2) Tools that allow consumers to assess relative social costs so that we are equiped to make decisions that are in line with our education.

3) Increasing the personal (as opposed to social) cost of consumables to incorporate the social cost.

I think we all know someone, likely even ourselves at times, who act in their own best interest to the detriment of others in spite of their awareness of social costs. It's very difficult to incorporate these distant costs into our decisions.

I was thinking about different ways to incorporate these distant costs. There are progressive consumption taxes, trade tariffs, and so on. I think these policies play a role but they suffer somewhat from the subjectivity of assessing social costs. That led me to something I haven't heard before, or at least not quite like this: what about making it really expensive to dispose of non-renewable waste? Manufacturing waste. Exhaust from power plants. But also simple, personal trash. Any waste that can accumulate unnaturally.

If we are forced to incorporate the cost of waste disposal into our purchases, perhaps we would be more careful about how much we consume and where it ends up. Same for businesses. This may not address all issues under the CSR umbrella but it may go a long way.

There has got to be some agreeable way to make us all feel long term or geographically distant costs immediately or education can only go so far.

Jake de Grazia said...

I like the pay for personal waste idea. I'm going to have to go see who might have proposed it and what's holding it back.

My knee-jerk concern about it has to do with enforcement. How do you make it difficult to cheat? How do you make sure it doesn't just lead to more trash in rivers and on the sides of roads?


I really like its bottom-upness. It's kind of like the grassroots cousin of the idea that consumers should never own any non-consumable (non-edible, etc.) materials or products. We should instead lease use rights. We lease transportation services from automakers. We lease TV screen services from electronics companies. When we're done with the cars and the TVs, we send them back, and the companies assume waste management and recycling responsibility.

There's actually a really interesting example of this kind of thing that the Aussie government was considering: leasing their uranium. Providing access to Aussie uranium to some country looking to build a nuclear reactor. Being accountable for the responsible use of the uranium. And being accountable for the useful disposal of all the nuclear waste it generates.

Have I told you about that, Jeff?

Jefferson Parke said...

No, I hadn't heard about leasing materials but it makes a lot of sense. In some countries, Ecuador for example, the lease term on glass soda (pop) bottles is fairly strict. You can't leave the store with them. Drink on the spot and turn in the empty bottle or you don't drink at all.

There are some similarities between this materials lease idea and states that pay consumers for recycling their glass bottles and aluminum cans. But maybe positive incentives don't work as effectively as negative incentives in this context. Maybe we can understand costs, like disposal costs, more easily than benefits, like cash for turning in a bottle.