Posts Tagged ‘CSR’

Noreena on Sustainability

October 29th, 2010 by admin

Dialogue magazine: ‘Sustainability in Context’ in support of Amsterdam’s Sibos 2010 conference.

Published: Quarter 4 2010

DIALOGUE:
Does sustainability have a broader application than the environment and environmental impact?

NOREENA HERTZ:
I think it’s a very reductionist definition of sustainability to think of it only in terms of green issues. The term has been used in a multiplicity of ways. From a company’s point of view, sustainability involves an understanding of what it takes to survive today, and in the future. That incorporates issues like the environment, but also things like labour relations, human rights, employee discrimination, equal opportunity, and the company’s role in society. In other words, what does it take for a company to succeed today and in the future, beyond what one would associate with a standard balance sheet or a profit and loss statement?

DIALOGUE:
Does that mean it goes beyond the things that the CFO of a company would think that shareholders should be interested in?

NOREENA HERTZ:
Well, it may go beyond what he or she currently thinks shareholders should be interested in, but I would argue that, actually, all of these issues are issues that shareholders should be interested in. If we take a case like BP and we look, with hindsight, at the company and how it works, we can see a host of issues that analysts and institutional investors should have been aware of and interested in: for example, the discrepancy between a very strong focus on personal accident safety reporting and a lack of reporting on the safety of industrial core processes.

DIALOGUE:
If I’m a bank executive and I want to address the issue of sustainability in a comprehensive and concrete manner, where do I start?

NOREENA HERTZ:
There are a few areas where sustainability interacts with what the bank does. One is the kind of products that the bank offers. Then of course, there’s the issue of how analysts evaluate companies where sustainability also needs to come into the picture. Then there are issues around the bank’s own brand and reputation. Those are three of the main elements we could look at. One of the most interesting is the area of valuation. I think we are increasingly coming to see that risk is being underestimated by analysts who are only looking at a very narrow set of metrics in judging the success of a company.

DIALOGUE:
Can sustainability issues be expressed in terms of metrics?…

To read the rest of the interview view Dialogue magazine’s PDF: Sustainability in context: measuring the impact on financial institutions.

Help the homeless, give free hugs or simply be nice — a wave of generosity is sweeping the country

By Jessica Brinton
Published: 29 November 2009

Cargo nightclub, Shoreditch, Saturday night. The MC on stage is wearing stretchy leggings, a tiny camisole, and holding a mike. “I turned 40, you know…” Dance, dance. Well, she looks 15. “And I was worrying about success…” Dance, dance. “And for a long time, it bothered me. How could I be more successful?” Dance, dance. “And I worked it out. You’ve just gotta keep giving!” She throws her arms in the air. “Because it’s the only way.” She spins around. “And if you do, if you really do…” She pauses for effect, hands cupped in front of her. “It’ll all come back to you!” And the crowd erupts. Everyone cheers, everyone hugs each other.

Two years ago, such a declaration might have cleared the dancefloor. There was something mawkishly earnest about this sort of chat, like you were out of touch, a bit of a hippie. Or didn’t have any friends. Now it’s different. Since the – you know, events of the past year – things have changed. We’ve changed. It’s suddenly rather sexy to be kind.

Consider the evidence. Kate Moss tells Women’s Wear Daily – with astounding disingenuousness, admittedly – “I’m not traditionally a beauty, but apparently people think I’m all right. If you’re a nice person, it definitely helps.”

Everyone who watches The September Issue, the documentary about American Vogue, falls madly in love with the creative director, Grace Coddington, the warm, romantic one, not Anna Wintour, the more powerful but cold one.

Tina Brown, Wintour’s longtime rival, launches a philanthropy section on her online news zine, The Daily Beast; Giving Beast documents “Hollywood’s hottest causes”. The latest: Emma Thompson leading the charge on human sex trafficking, and even a picture gallery of stars “speaking out” on the issue. Earlier this month, Toby Ord, a philosopher at Oxford University, announced that he is pledging a third of his £30,000 salary to charity this year, and will give away 10% for the rest of his working life.

What really did it for me, though, was Victoria Beckham in last week’s Hello!, doing charity work in Kentucky in America, accompanied by her eldest son. “We are incredibly proud that Brooklyn is growing up to be a thoughtful and responsible young man,” says Posh, looking very proud. “Someone who appreciates he has a blessed life and wants to understand and help those who have less than himself.”

We are, it seems, at the end of a grand experiment that tested self-interest as a method of ruling the world – the economist Noreena Hertz is calling it “the death of Gucci capitalism”. And this is our response to it: Barnado’s has seen a 12% increase in volunteers since last April, and by 17% among the under-25s, while 10:10, the climate-change campaign group, has signed more than 50,000 individuals and businesses to the cause. Last year 5,500 companies filed corporate social responsibility reports, proving that installing a CSR wing is becoming standard practice in the business world.

“The world went mental for a while,” says Ben Elliot, founder of the concierge service Quintessentially, who, two months ago, opened Q Soho at House of St Barnabas, a not-for-profit members’ club in a former women’s refuge. It was revamped using the favours of friends and is staffed by homeless people on a custom-designed life-skills programme.

“It was a tsunami of wealth creation. Everything seemed available to all, for a time,” he says. “Now it looks like it wasn’t, actually. The lifestyles our parents never imagined we’d have didn’t exist after all. People are beginning to derive far more satisfaction from helping people rather than making money. There’s a brilliant redress happening.”

Eugenie Harvey of 10:10 agrees. “There’s no doubt in my mind that kindness is the new currency,” she says. “As life becomes tougher, which I’m afraid it’s going to do, being generous to your fellow man will keep the world afloat.”

In August last year, a group of twentysomethings launched The Kindness Offensive, a social experiment designed to “do good in the world, have fun doing good, and be seen to have fun doing good”. It began on Hampstead Heath, where the group approached people walking their dogs and asked if there was anything at all they could do for them. Someone suggested a box of chocolates for their grandmother, who had a sweet tooth, another asked for a birthday party for a little girl. They pulled off these kind-hearted acts by begging favours from companies. The companies responded. The thing snowballed. Last October, an articulated lorry containing 25 tons of food arrived from General Mills, the world’s sixth largest food producer, and the group used it to feed 75,000 people all over London. It’s goose-bump-making stuff.

“On paper, it doesn’t add up that someone at General Mills should have done that,” says the group’s co-founder David Goodfellow (yes, really). “But the paper version of the world is different from the real world. To make sense of it, you have to feel how it feels to be nice to someone.”

Fast Company: ‘How an economist’s cry for ethical capitalism was heard’

Not long ago, economist Noreena Hertz lived at the lefty margins of her field. But her (widely ignored) prediction of the credit crisis and her call for a more evolved form of capitalism have suddenly put her at the center of the universe.

By Danielle Sacks
Published: November 1, 2009

Noreena Hertz had to seduce Bono. The Cambridge University economist was writing a book on the developing world, and Bono’s personal saga of getting the U.S. government to cancel more than $400 million of debt was just the pop-culture bridge she needed to move her ideas beyond the wonkish corridors of academia. After all, Hertz’s motive for The Debt Threat — a deep dive into the debt trap that, she argued, would have global consequences for all — was to juice the campaign that had been building slowly in activist ranks. The book itself would be a battle cry (a postcard inside made it easy for U.K. readers to urge the prime minister to cancel billions owed by the world’s poorest countries), and its release was pegged to hit before the 2005 G8 meeting. Hertz sent Bono an email, unsure if it would find him. To her astonishment, it did: “I’m so glad you got in touch,” read the rock star’s reply. “I’m a real fan of your work. Bono.”

Few academics have leaped from the critical fringes to the role of prophet as adroitly as Hertz. Wielding her contrarian message — that markets need to serve the interests of people as much as they serve companies or shareholders — Hertz has been campaigning for the past decade against the mantras of mainstream economists, urging a more ethical form of capitalism. But her message isn’t some yoga-infused spiritual quest. As she explained in her 2001 European best seller, The Silent Takeover, it is about the unsustainability — environmentally, socially, and economically — of laissez-faire capitalism and the idea that markets are stable. If the surge of corporate power was going to leave governments relatively impotent, Hertz argued, then those corporations themselves needed to fill the void. “She moved the conversation from what corporations can do to be socially responsible to a much more profound examination of the boundaries of corporate behavior and public behavior and where they have failed,” says Debora Spar, who was a dean at Harvard Business School for nearly two decades and is now president of Barnard. “She’s much more radical.”

Read the rest of this profile on the Fast Company website

Hertz shares her views on Corporate Social Responsibility (CSR) in an interview with Chinese broadcaster CWTV (6:47) (Video in English with Chinese subtitles).



The New Statesman: ‘Doing the right thing is good for business’

By Noreena Hertz
Published: 4th September 2006

Back in the 1970s, Kodak tried to give $25m to a black civil rights organisation in Rochester, New York. The company’s shareholders rose up in arms: making this politically charged offering wasn’t the reason they had entrusted Kodak with their money. The donation was withdrawn.

Fast-forward to the past 12 months. The Norwegian Petroleum Fund, the world’s largest institutional investor, has hired an ethical phil osopher to determine what it should and should not invest in: it sells its shares in Wal-Mart allegedly because of its serious and systematic vio- lation of human and labour rights. A group of 17 leading US pension funds and investors controlling $658bn in assets have pushed for face- to-face meetings with the Exxon Mobil board of directors to discuss the company’s persistent lack of acknowledgement of climate change. In Britain alone, socially responsible investments have increased by 31 per cent.

Today, an increasing number of shareholders are not only not objecting to radical behaviour on the part of the companies they invest in, but they are actually demanding it of them. And this trend is going to accelerate.

I make this claim for the following reasons. First, radical businesses are valuable: witness Cadbury’s glee in acquiring the organic chocolate company Green & Black; ditto ‘Oréal’s acquisition of the Body Shop and Ford’s recent decision to invest one billion dollars in envir onmentally sound cars. Second, it is no longer simply fringe groups that care about these issues, but, increasingly, mainstream pension funds and charities looking to invest in companies whose values are aligned to those they represent. Many young internet and high-tech magnates (the new coterie of high-net-worth individuals) are also keen to put their investment dollars in environmentally and ethically sound companies. Third, because of a legal opinion issued a few months ago by Freshfields.

The renowned international law firm was asked by the United Nations Environment Program to check whether pension funds, public and private insurance companies and mutual funds could incorporate environmental, social and governance issues into their investment decisions. The opinion Freshfields came back with in October 2005 was startling. Not only could they do so, but they have an active duty to have regard to these issues in every single decision they make.

It’s not, to quote Milton Friedman, that the business of business is no longer business. Of course, it is. Nor is it the case that investors are no longer mandated to realise maximum profits for those who entrust their money to them. Of course, they are. It’s just that, as society evolves, the nature of what will ensure the greatest profitability evolves too.

Read the rest of the article on the New Statesman website