So let’s do another little survey here.  Hands up anyone who’s crossed Gypsy Rose’s palm with silver in the hope of having their fortune told?  No-one?  Oh, maybe one person at the back.  Well, it doesn’t surprise me, we’re not really into such superstitious claptrap these days.

Nevertheless, every year every CSR practitioner seems to feel they too can be Gypsy Rose.  Crystal balls get polished and predictions made.  If you’re lucky, there may even be a waft of incense in the air .. or is that just over-ripe pot-pourri?

Myself, I try desperately to eschew this tradition but every year someone says something in their own crystal ball gazing which needs a response.  This year is no different.

But first….

Mandatory CSR reporting will happen 

CSR will be regulated in 2012.

I’ve said this for several years now, and often I get the response “oh no, we can work this out voluntarily”.  Well the EU seems to think otherwise.

In 2011 the EU adopted the Single Market Act.  Buried within its guts is a commitment to “present a legislative proposal on the transparency of the social and environmental information provided by companies in all sectors”.

That proposal is well under way and is due to be published sometime in 2012.  As we all know, once a regulatory proposal is made it become de facto law while businesses have time to adjust before it comes into effect.  But the regulation will be published in 2012 and businesses will then start to feel its bite.

To find out more, and keep an eye on the legislative progress, check out the EU’s CSR: Reporting and Disclosure website.

STOP PRESS: the first concrete legislative changes have just been announced.  I’ll be reviewing and blogging here later.

What about the revolution?

OK, so that’s out of the way.  Now what?

Well, first up here’s a quote from UN secretary General Ban Ki-Moon at the January 2011 meeting of the World Economic Forum:

We need a revolution. Revolutionary thinking. Revolutionary action…It is easy to mouth the words ‘sustainable development,’ but to make it happen we have to be prepared to make major changes—in our lifestyles, our economic models, our social organization, and our political life.

Now here’s a quote from Charles Handy, the leading Irish philosopher specialising in business and organisational behaviour.

To turn shareholders’ needs into a purpose is to be guilty of a logical confusion, to mistake a necessary condition for a sufficient one.  We need to eat to live; food is a necessary condition of life.  But if we lived mainly to eat, making food a sufficient or sole purpose of life, we would become gross.

The purpose of a business…is not to make a profit. Full stop. It is to make a profit so that business can do something more or better. That ‘something’ becomes the real justification for a business.

This strikes at the heart of our common understanding of what business is all about.  The idea that business is just about profit and wealth is a very recent one and dates back little further than Henry Ford and “the business of America is business”.

Since then it’s been accepted that creating wealth is a good in itself.  This is rubbish.  As Charles Handy says, eating isn’t a good in itself, if you believed that you’d be inordinately obese.

And how about electricity?  Today, one of the biggest sustainability challenges is how to generate the electricity we need while cutting out carbon intensive and nuclear methods.  But no-one has ever suggested that to overproduce electricity, to have gigawatts of power created but never used, is beneficial.  And why would they, the idea is ludicrous!

Yet this is exactly the attitude we’ve adopted on wealth.

Hello Future

In the past five years the CSR movement surmounted the huge obstacle, that of greenwashing.  Being Green isn’t about marketing, it’s about a fundamental change in business attitude.

Now it faces a tougher challenge.  Many proponents see CSR as being the next thing to “infiltrate” business from the client or consumer’s point of view, much as quality and customer service did in the 1980s.  That’s great, but only in so far as it goes.

CSR, or more accurately sustainability, is about a fundamentally different business model to the one we have today.  It’s the discovery of that model which I believe will drive 2012.  Businesses will get down to the nitty-gritty of sustainability and realise there’s a fundamental discord between wealth creation for the sake of wealth creation, and sustainability.

2012 will be about the emergence of this new business model.  Sustainability will start to move from waste reduction and green energy towards a different way, a different reason, for selling goods and services at a profit.  Quite where this will end up we cannot tell.  However I have a good idea of who might be steering the ship.

The two quotes above dropped in my email from Allen White, founder and former Director of GRI and VP of the Tellus Institute.  These days he gives a large slice of his energy to another Tellus project, Corporation 2020, and is involved in Tellus’ global citizens’ movement, The Great Transition Initiative.

If you want a vision of the future, I suggest you look here first.

Picture Credit: Crystal Ball Rocky Irish Beach by garlandcannon under CC Attribution Share Alike License.

• New CSR Regulation Coming Your Way
• 10 things a sustainability website should show | Part 2 of 2
• The Four Principles of Sustainability
• WANTED: Environmental management for SMEs
• Sustainability Reporting in the EU

 Corporate Eye

As has been stated many times, I’m a firm believer that the EU will introduce mandatory CSR regulation in the very near future.

This is not an article of faith (or want), simply a fact which springs from what the EU has said that it’s going to do.  In the timetable for implementing on the Single Market Act (PDF), passed in late 2011, the EU said the Single Market would include a “legislative proposal on the transparency of the social and environmental information provided by businesses”.

You can’t really get much clearer than that, can you?

EU CSR regulation

Now a little more of how the EU is thinking has come to light, thanks to an article entitled Responsible Business: a key to competitiveness in its online Enterprise and Industry magazine.

This article lays out the following points:

• the EU is embarking upon a strategy up to 2014 with the priorities of enhancing the visibility of CSR and improving the disclosure of social and environmental data
• the EU will soon publish proposals on how it will monitor the CSR policy commitments of EU based companies with over 1000 employees, regardless of where their operations are
• one aim of the legislative measures being considered is to “improve accountability and promote sustainable business among multinationals”
• the expectation is that all businesses should have in place “a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders”
• however most SMEs wil fall outside the regulatory requirements and changes to EU laws will be made to ensure this.

One of the best tactics when dealing with regulation is to look at what’s not said.  If the EU’s intention can be writ large, it’s in this statement:

for most SMEs the CSR process is likely to remain informal and intuitive

Therefore, for big business, it’s likely to be anything but.  You have been warned.

• The Great 2012 CSR Revolution
• Mandatory sustainability measures: a digest
• 10 things a sustainability website should show | Part 2 of 2
• The Four Principles of Sustainability
• Balfour Beatty : Building for the Future | FTSE 100 Website Reviews

 Corporate Eye

It seems obvious that not all your stakeholders are the same, with the same needs; yet for many companies it would seem that one size fits all when it comes to corporate responsibility reporting and communication. Simply producing a CR report isn’t enough to communicate with all of your audiences; and not all of them want all the information there is in your report.

Paul (Corporate Eye CEO) talked to Mallen Baker about the importance of identifying the different audiences for your corporate responsibility communications: about providing them with the information that interests them; about creating the opportunity to engage with them and to discuss the issues that matter.

I’ve broken the interview down into smaller pieces, so that you can quickly find particular points you’d like to hear about. I’ve also included the whole interview and a transcript.

Part 1: Tailoring content and conveying authenticity

Key topics:

• understanding the different audiences
• tailoring content for those audiences
• conveying authenticity and generating trust

Soundbites:

“The key distinguishing features between a good report online and a mediocre one are a couple of things. First of all is that the company is clear about who its audience or audiences are… and the second part is the integrity of information and the authenticity of the voice that you’re hearing.”

“If you care about your audiences, you use a medium and an approach that they will relate to as your starting point.”

“Consumers see through the fluff very quickly. And all of the polls show that they’re becoming more and more cynical about the claims that companies make in the environmental and ethical space.

Download audio file (mallen-baker-interview-pt-01.mp3)

Length: 8:40
Download: Mallen Baker interview: part 1

Part 2: Communicating commitment

Key topics:

• the Centrica report interviews
• CEO commitment; embedding sustainability in the business
• discussing issues that are in the public domain

Soundbites:

“[they] had the courage to step up and say ‘We are prepared to be placed in an area that’s just slightly outside of the comfort zone’ ”

“Whenever there’s a controversy in the press relating to a company the first thing that I will do is go to their website and see what they say about it… the mind boggles just how often the answer to that question is ‘Nothing’”

Download audio file (mallen-baker-interview-pt-02.mp3)

Length: 4:13
Download: Mallen Baker interview: part 2

Part 3: Authenticity and audit

Key topics

• third party commentary
• collaborating with the audience to solve a problem
• using neutral spaces to exchange ideas and information

Soundbites:
“Having trusted third parties who have had the time – and the incentive presumably – to look carefully at what the company’s doing and to talk to them, and then to give their own reflections, good and bad… that generally plays pretty well”

“The other thing that provides authenticity is when people not only are admitting that something has gone the wrong way this year but actually seek to engage their audiences with problems that they face that they haven’t yet worked out how to solve”

“It’s shifted the focus a little bit from ‘the company is the star, the company is the centre of the universe’ and puts it into a position where there are sustainability issues and the company is one of the actors… one of the creators of environmental consequences alongside the rest of society”

Download audio file (mallen-baker-interview-pt-03.mp3)

Length: 7:15
Download: Mallen Baker interview: part 3

Part 4: Audience and integrated reporting

Key topics:

• integrated reporting
• importance of the audience
• interim sustainability reporting

Soundbites:

“integrated reporting could be … a very positive thing, and potentially a dangerous thing in equal measure.”

“The encouraging thing is that… it will lead you to be clear about the communication that you send to one of your key audiences… the danger, the downside, is if you begin to believe that that integrated report is whyat you produce for all of your stakeholder audiences.”

“Many of your direct stakeholders do not get their information from reports.”

“Where you are engaging your customers or your supply chain or your employees with what you are doing and what’s happened, then the more up-to-date and current that is, and preferably more of a discussion and two-way flow that is, then the more likely you’re going to succeed.”

Download audio file (mallen-baker-interview-pt-04.mp3)

Length: 6:47
Download: Mallen Baker interview: part 4

Part 5: Social media and CSR

Key topics:

• the right social media mindset
• going to where the audience is
• expanding the audience for CSR

Soundbites:

“You can’t have a discussion with a corporate entity. You can only have a discussion with a human being or a highly trained parrot.”

“One of the big challenges for the companies who are used to corporate communications and to being faceless – except for maybe the CEO in certain contexts – is that they find it very difficult to shift to a medium where it’s personal.”

“If you really want to engage the people who are your stakeholders… you need to go to where they naturally gather. And social media potentially creates tools that enable you to do that.”

Download audio file (mallen-baker-interview-pt-05.mp3)

Length: 9:13
Download: Mallen Baker interview: part 5

Part 6: Trends in CSR communication

Key topics:

• conflicting trends in CSR communication
• legislation and innovation
• the human element; stories

Soundbites:

“The evolution of corporate responsibility reporting or sustainability reporting to date is completely unsustainable in itslef, ironically, because… the current state of the art doesn’t connect with audiences.”

“The trend has been more and more GRI reports, more and more standardisation. And I start to see a counter trend now, which is from the leading companies [who are starting to say] “We’re going to find ways that actually communicate better with some of our key audiences… we’re interested in finding the way that works.”

“It’s the human element, the story. … and it is the most elusive element because it requires you to be prepared to corporately communicate on a human level. That will always be a minority sport. But I think there can be some very, very good rewards for those who will pick up the intelligence about how it’s done well and give it a go.”

Download audio file (mallen-baker-interview-pt-06.mp3)

Length: 7:32
Download: Mallen Baker interview: part 6

Here’s the whole interview, in case you’d rather listen to it end-to-end; and the transcript, for those who prefer to read.

Download audio file (mallen-baker-interview.mp3)

Length: 43.43
Download: Mallen Baker interview (whole interview)
Download: Transcript

Many thanks to Mallen for taking the time to talk to Paul.

Who were we speaking to?

Mallen Baker is a writer, speaker and strategic advisor on corporate social responsibility and Founding Director of Business Respect. He is responsible for the Business Respect email newsletter on CSR, which is the longest running CSR internet newsletter in the world.

He is a regular columnist and contributing editor with Ethical Corporation.

Mallen was formerly the development director with Business in the Community, where he was responsible for developing BITC’s approach to marketplace issues, which includes how companies manage issues that arise around their core products and services. He produced the Marketplace Responsibility Principles working with a leadership team of CEOs from major companies headquartered in the UK.

He initiated the Business Impact Review Group – the group of 20 companies who developed a common approach to CSR reporting, and was responsible for the work of the Business Impact Taskforce which produced the landmark “Winning with Integrity” report.

Mallen chaired Kingfisher plc’s Stakeholder Advisory Panel 2007-2010, and was a board member of CSR Europe 2006 – 2008.

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 Corporate Eye

The Corporate Responsibility and Reporting conference wound up with a session from a panel of activism experts talking about how companies should respond to defuse a potential crisis before it blows up.

The description of the activist strategy was fascinating. Having identified a potential issue, and done their research to establish the scale and detail of the problem, they will target brands that they see as a catalyst for change: either the market leader, where potentially the most publicity is available, or the laggards, where potentially the most change is possible.

The first approach will be a fishing letter raising the problem; the purpose of this is to establish what your likely response will be – will you call in the legal team, pass the letter to PR, or hide the letter at the bottom of your inbox?

If a respected organisation such as Greenpeace have sent you a letter like this, it is because there is a problem… hiding won’t help, and may trigger an active campaign.

The activists advise:

• don’t ignore the letter
• do acknowledge receipt
• do investigate the claim
• and call them to organise a meeting with as senior a member of management as possible.

Interestingly, they say:

• talk directly to the activists
• don’t send a lawyer or your PR company, as doing this is likely to confirm to the activist group that there is indeed a serious problem and that you have something to hide.

Better by far is to work with the activist group, visiting the field with them to see the problem. Then establish an action plan and communicate your progress against these targets. Not only to the activist group, but also – to aid transparency – publicly.

Best of all would be to have established a good working relationship with the activist organisation in advance – and if CSR is ‘in the DNA’ of the organisation, then they would have such relationships in place.

Transparency about the challenges an organisation or industry faces would deflate any potential campaign in the future; and, just as in the case of blogger outreach, relationships with respected organisations might mean they come to your support if you are criticised unfairly by other – perhaps less respectable – activist organisations in the future.

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 Corporate Eye

Were you at Ethical Corporation’s Corporate Responsibility Reporting and Communications conference last week? If you weren’t, you missed a treat.

1 word

The word of the conference, had we been asked to choose one, would have been:

Humility

The number of times people urged that companies should display some humility in their corporate social responsibility reporting was striking…

1 central theme

Whether talking about reports, communications, stakeholder groups or engagement approaches, the clear message from many of the discussions was that there is not One True Way of ‘doing’ CSR, of reporting on it or of talking about it.

One size does not fit all

There were, though, lots of examples of different ways that companies had found that worked for them, and so might work as part of someone else’s toolset. It helps to be a chameleon, using different language and information for different groups.

4 quotes

There were many tweet-worthy snippets that came out of the discussion. Here are 4 that I noted down:

A CR report, then, is both more and less than people might think. It isn’t – or shouldn’t be! – spin; it isn’t – or shouldn’t be – about sitting in a bathtub of baked beans; it does matter to the business and it is necessary but not sufficient to explain your approach to responsibility to your various audiences.

6 topics

It wasn’t physically possible to attend all the sessions without a time-turner, so this is my pick of the themes I identified; it would be interesting to see someone else’s selection.

My six:

• Driving performance: integrated reporting and Board conviction
• Different stakeholders; different stories
• Global-local, sector storytelling and authenticity
• Collaborating with activists
• Stakeholder outreach
• The investor view of your CSR work

I hope to look at some of these topics in more detail over the next couple of weeks; I’ll add links in this post as I get to them. Or, of course you could subscribe to our RSS feed.

If you’re intrigued, make sure you get to the next conference; this is my pick, and I’m quite sure others will have gone home with a different set of ideas.

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 Corporate Eye