Corporate Sustainability North, South, East and West
As a Canadian with more than 15 years in Mexico and work experience in over 35 developing countries, I am keen student of how corporate sustainability emigrates to and from developing countries. A particular interest is to identify what people believe is driving or blocking corporate sustainability in various regions of the world.
I have learned over the years that while there is an emerging global consensus on what constitutes corporate sustainability, many developed country folk tend to portray solutions as resolvable technical riddles. Some do “get” that fact that ultimately sustainability is more about the collective action desperately needed to remake a viable social contract with Mother Earth than just another more cleverer algorithm for recycling a few more cans. But I suspect even they would be shocked at the complex moral, social, political and economic challenges facing more and better corporate sustainability in emerging markets, I know I continue to be.
Things work differently here in the developing world. The egregious sham that was the recent trial of Alexei Navalny in Russia is illustrative flotsam of the million unfortunate and ugly transactions small and large betraying more transparent and sustainable economies. Worse yet is the almost inevitable culture of futile acceptance this spawns, one which daily undermines the efforts of so many to build the trust and collaboration required to move in place the building blocks of sustainability. Paying the petty bribe and moving on, so to speak, is still easier and far less dangerous than fixing a system that defies the intentions of any one good person or group. (See my article Jumping the Big Ditch of (Mis)Trust: Sustainability and Stakeholder Engagement in Developing Countries http://bit.ly/OsElth)
Then there are different priorities. In emerging markets, poverty alleviation takes priority over environmental degradation. Most here believe that to fix poverty is to fix the environment.
Given what we know about poverty and the hierarchy of personal needs, this is fair and the correct way of looking at the problem (need I reference Maslow?) but this says nothing of the Sustainability Paradox – or, that to achieve global sustainability many, many more people need to have economic security beyond that which provides daily survival but the dramatically increased disposable income implied within intractably powerful cultural and spiritual plague that is modern consumerism would be entirely unsustainable.
Politicians, corporate and civil society leaders in developing countries largely accept the notion that poverty and the environment are inextricably linked but despite some good effort, few effective integrated corporate or public strategies have been developed to accommodate this understanding.
Sustainability folks in developed countries mostly understand this though not always entirely, and very few actually act on it in a meaningful or in an appropriate-to-the-task at hand way. Supply chain experts, for example, have been trying to stimulate “international sustainability standards” in the textile sector for decades, but it would seem not fast enough or with the right mix of apple-rotten-transparentresources/acumen/will to get the job done right. The result so far is more a shiny certifiable image painted over the half rotten core of the bad things that happen in a business culture of mistrust, misdeeds and submissive compliance or frustrated acceptance. Distance, lack of data, and context have contrived to spoil much of the rest of any good intention to date.
Bangladesh, the poster child of not-fast-enough-sustainability outcomes, has been an avoidable crash course in emerging market supply chain management, chosen, willfully or not, over the better course of doing one’s homework early and often (let’s face it groups like Verite have known how to audit a firm for years but really get little support from others). Then again, some in developing countries could reasonably claim it takes a lot of poor brown people to die helping “overfed and spoiled” Westerners save money and live better before serious action is taken. Polemics abound, but in the end we are all complicit to a point: in the developed world we want cheap clothes, cheap appliances, cheap everything and enough people in the developing world are happy to meet this end with little discussion over the means. Talk about a leadership gap.
International Standards: Not so Much
By choice or context, many emerging market companies are far from virtuous. Most retain an old school approach to sustainability through notional charitable contributions which seldom dig at the roots of a problem over its temporary alleviation (e.g., build a school, fund an event etc.). Results, though well meaning, are normally low impact at best, or meaningless PR at worst.
Purchasing an economic license to operate this way tends to be standard practice and despite limited results, is more often favored over the harder work of developing effective sustainability strategy. True there is often less than ideal management capacity in emerging markets for managing a modern company let alone the more complex sustainability strategies. But it’s not like sustainability business models and a fair lot of very smart people concerned about sustainability don’t exist. There do, but sadly few firms have been inspired to emulate Unilever’s, Cemex’s, or Natura’s approach of simultaneously creating business and social value.
On the environmental front it is good to see that the majority of larger developing world companies are advancing quite nicely. Like their developed country counterparts, however, they often adopt and label Big Four (Carbon, Energy, Material Use and Water) efficiency schemes as sustainability strategy.
The more that is done on this front the better, but from two perspectives Big Four sustainability strategies are a bit wrongheaded and certainly outdated.
First, there is really little Big Four competitive advantage left to be had and any company aspiring to serve global markets must meet international best practice standards to simply maintain environmental performance parity. Second, a purely environmental focus tends to displace or stall interest in integrated sustainability strategies seeking to maximize social, economic and environmental value creation. Such an approach is so much better suited to addressing the emerging market priority of poverty alleviation and the creation of greater environmental awareness. As it stands now, a fuller sustainability approach in most emerging markets still provides unimaginable “first-in” advantage opportunities which are largely being squandered via inappropriate, haphazard, notional or just plain silly corporate investments passed off as sustainability “strategy.”
Bright Spotsbright spots
Despite myriad challenges, substantial positive change has been achieved around the globe and there is a notable convergence of thought and some action between and within South, West, East, and North even if change remains mostly at the conceptual level, within civil society and a handful of enlightened companies.
Much “where-the-rubber-hits-the-ground” work remains to be done. Don’t get me wrong, many points of success have been accomplished in emerging markets around corporate sustainability. But that which has been managed has failed to seize much space in the great majority of corporate planning rooms. Nor has it generated sufficient proof of value creation to inspire the critical mass of successful home grown corporate sustainability investments required to trigger greater interest in sustainability as a credible and integral part of corporate success.
The forces facing down sustainability challenges North, South, East and West won’t reach a tipping point soon unless there is greater empathy and understanding of both the shared and distinct barriers. As important is to success is the creation of a sophisticated sense of corporate sustainability mission, one that includes maximizing social, economic and environmental value creation.