Posted tagged ‘Sustainability’

The Week in Ethics: Corporate Citizenship in a Trump Administration

January 26, 2017

trump_white-house-photo-2017-featureCircumstances have caused an increasing number of companies and CEOs to speak out in recent years on hot-button social issues that previously weren’t part of traditional corporate citizenship. For example, nearly 400 companies filed an amicus brief on marriage equity with the Supreme Court, and employers and organizations banded together using economic leverage to fight legislation discriminating on the basis of sexual-orientation in IndianaNorth Carolina and Georgia. CEOs also weighed in against policies that exacerbated racial tension, like flying the Confederate flag and excessive use of force by local police.

This experience will serve corporate leaders well in navigating the challenges ahead. Issues of gender, race, sexual-orientation, pay equity, gun control and climate change are among the many hot-button social issues not going away – and likely to become more divisive — under the administration  of U.S. President Donald J. Trump. Corporate citizenship may be entering its greatest test.

Will a Trump presidency have the effect of muting CEO voices for fear of reprisals and Twitter attacks in a government now controlled by one political party? Or will corporate citizenship, acting out of a bigger sense of purpose, gain increased public trust and support?

The new landscape offers unknowns, perils and opportunity even as the administration’s agenda isn’t finalized. As president, Trump wields enormous power and a low tolerance for criticism which makes dissent tactically sensitive. Companies have a full plate keeping up with economic policies impacting their business. However, the hot-button social and environmental issues will create defining moments for leadership and corporate citizenship.

Three of my observations from recent corporate citizenship challenges: 1) how a company defines its purpose fosters momentum; 2) using economic leverage isn’t corporate bullying; and 3) it’s critical to speak up collectively for what’s right.

How a company defines its purpose fosters momentum

When company leaders see the purpose of business as delivering value to society and the environment in tandem with delivering financial results, things change. They create stakeholders, shifting into a more authentic and aware relationship with employees, customers and all those impacted by the business. It makes “community” personal and shapes values and behaviors around what enables the community to flourish or be harmed. If everyone has a stake in its success as stakeholders then what everyone does matters more. If a law or action discriminates against anyone in the community, for example, it is a catalyst in seeking out like-minded leaders to join in addressing the problem.

Using economic leverage isn’t corporate bullying

Under pressure from many business leaders, Indiana, former Governor Michael Pence, now Vice President Pence, backed down on provisions in the Religious Freedom Restoration Act that invited sexual-orientation discrimination. If the provisions weren’t dropped, Salesforce.com CEO Marc Benioff was the first to threaten economic sanctions  (like reducing investment in the state and offering employees a relocation option). Economic leverage, used in other states to address discriminatory legislation was called “corporate bullying”  by critics. As discrimination is illegal, how is it bullying for companies not to want their employees put at risk?

It’s critical to speak up collectively for what’s right 

Corporate Citizenship is an individual and collective act. It involves working continuously to reinforce ethical behavior in one’s own company and working collectively with other CEOs and like-minded organizations to address social and environmental concerns important to you and your stakeholders. There is strength in numbers, especially in uncertain and volatile times. Commenting  on corporate social activismBank of America’s  Chairman and CEO Brian Moynihan  said, “Our jobs as CEOs now include driving what we think is right. It’s not exactly political activism, but it is action on issues beyond business.”

Climate change is just one example of the persistence needed for progress. Climate action to create a low-carbon economy and support the Paris Climate Agreement faces a challenge getting President Trump’s commitment as he has called global warming a hoax. The most recent Gallup Poll on the subject, found 64 percent of Americans surveyed expressed some to great concern over global warming.

It is unclear how, if at all, dissenting popular opinion will impact the Trump presidency and social and environmental issues. He lost the election’s popular vote by an unprecedented 2.9 million ballots. The day after the Inauguration over 600 peaceful marches  – 400 in the U.S. cities and more than 200 around the world –  put the president on notice regarding grassroots support for human rights issues. The president’s popularity (and how it impacts members of Congress) will be a bellwether of his ability to get his agenda through. Likewise, a company’s continued strong financial performance creates latitude to address controversial social issues.

Those companies whose business purpose is more than just profit are likely to avoid ethical problems longer if federal regulations and enforcement are relaxed. According to the 2017 Edelman Trust Barometer, 75 percent of respondents agree that “a company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.” While 53 percent believe the current overall system has failed them, many continue to have faith in business as an institution. “Among those who are uncertain about whether the system is working for them,” the survey found, “it is business (58 percent) that they trust the most.”

Whether or not progress can be made on hot-button social issues in a Trump administration, acting out of a bigger sense of purpose and drawing strength from collective voices will likely gain increased public trust and support of corporate citizenship.

Photo via Whitehouse.gov.

Gael O’Brien, a Business Ethics Magazine columnist, is an executive coach and presenter focused on building leadership, trust, and reputation. She publishes The Week in Ethics.

Reprinted with permission: This column was originally published January 23, 2017 entitled “Corporate Citizenship in an Age of Uncertainty” in Business Ethics Magazine.

Gael O’Brien, January 26, 2017, The Week in Ethics

The Week in Ethics: Words Conveying Empowering Values Falling Out of Use

May 22, 2013

photo of courageWords matter. We know that from the impact they can have on us. And the reaction our words can have on others.

Words can package the fuel that inspire us to behave in a way that brings out the best in ourselves and in others.

Using words like “courage,” “decency,” “honesty,” “conscience,” “patience,” “compassion,” and “modesty” paint a picture of someone who has qualities that inspire trust, whose behavior gives life to values we can admire. Perhaps someone whose leadership we’d willingly follow.

When we use the word “courage,” for example, to reflect back to a friend how we see her meeting cancer head on or whisper it to ourselves before having a difficult conversation with a boss or customer…..the word, and its connotation, fortifies.

“Courage” is one of many words that empower. However, to be a sustainable resource “courage,” and words like it have to be expressed; they need to describe behavior made evident or desired. And ironically, evidence points to these words falling out of use at a time when we need them most.

Shifts in language reflect a shift in culture based on the frequency of their use, according to New York Times columnist David Brooks who cites several studies in “What Our Words Tell Us” that indicate that words like “courage,” and the others just mentioned, decreased in use in the 20th century.

“A study by Pelin Kesebir and Selin Kesebir,”Brooks writes, “found that general moral terms like “virtue,” “decency” and “conscience” were used less frequently over the course of the 20th century. Words associated with moral excellence, like “honesty,” “patience” and “compassion” were used much less frequently.” Of the 50 words associated with moral virtue that their study identified, Brooks says that the Kesebirs found “that 74 percent were used less frequently as the century progressed.” According to the findings, particularly hard hit were courage words like “bravery” and “fortitude” which fell by 66 percent; while words like “thankfulness” and “appreciation” dropped by 49 percent.

We know that ethical behavior doesn’t flow from throwing the right words into a speech or on a website, poster or piece of paper. Enron’s Code of Conduct (63 pages) and personalized note paper printed at the bottom with the values “Respect,”Integrity,”Communication,” and “Excellence” attest to that. However, words in the mouths of leaders whose behavior consistently strives to model the values they talk about set a benchmark about what is expected. It sets the standard for “how we do things around here” where getting to stay means you “opt in.”

Low trust in institutions and leaders is a consequence of words and actions not matching. However the remedy for lost trust isn’t talking less about values so as not to hold one’s behavior up to scrutiny. It is having the courage — yes, courage again — to give voice to values and give support, as well as draw support from others, in the ongoing process of practicing, modeling and living the values that make the individual, the organization, and society stronger.

Community can be the best re-inforcer of values. And herein lies the rub. Brooks also cites a study by Twenge, Campbell and Gentile that found that between 1960 and 2008, words like “community,” and “common good” receded from use, while terms like “self” and “I come first” increased in use.

The reality is that what we focus on we get more of. “I come first” doesn’t inspire the trust of other stakeholders and calls into question the capacity for long-term sustainability. Leaders making a mid-flight correction to restore trust in their institutions will need courage, one of many words that enrich all of us when practiced and used.

Gael O’Brien May 22, 2013

The Week in Ethics

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. Gael is also a columnist for Business Ethics Magazine; her May 2013 column takes on the siren song in “hip” and “edgy” advertising. 

Note: Photograph is of a rock painted by a student at Robert Adams Middle School displayed on the grounds.

The Week in Ethics: The Challenge of Sustainability

September 20, 2010

Sustainability as a global movement has for more than 20 years had an aura of ambiguity, meaning different things to different companies – from PR strategies, to building trust and reputation, to marketing strategies, to being a core business strategy, to inspiring a vision that redefines a company. It has operated both like an umbrella, crowding under it many issues — including environmental, social, and economic — as well as a buffet from which companies, communities, and governments could address that which most directly impacted self-interest.

While PR/marketing ploys have often backfired and gotten the label greenwashing–Sara Lee’s Ecograin bread is a recent example – there are many illustrations of companies working with former critics. Lipton committed in 2007 to sourcing its tea from “sustainable, ethical sources” by 2015  and works with the Rainforest Alliance which certifies its teas and is duly noted on its labels.

Sustainability is about how products are sourced, made, distributed, and how the people involved with the products are treated and paid. It is also about the bigger picture of cause and effect on the global community. Consider that cities and their surrounding areas — where most businesses reside — take up about three percent of the earth’s surface while those who live and work in them consume more than 75 percent of the world’s natural resources.

In a survey McKinsey did earlier this year more than 50 percent of the nearly 2,000 executives polled considered sustainability very or extremely important in new product development, reputation building and overall corporate strategy.  However, only 30 percent say their companies actively seek opportunities to invest in sustainability or embed it in their business practices.

Strengthening brand trust and reputation was one of the strongest motivators for taking action on sustainability in a 2010 survey billed “A New Era of Sustainability” done by The UN Global Compact and Accenture. Nearly 800 CEOs globally responded (among others). While 96 percent of CEOs believe sustainability issues should be fully integrated into the strategy and operation of a company, 49 percent cite the complexity of implementation across functions as the most significant barrier to implementing a company-wide approach to sustainability.

This begs the question how did the companies who have fully committed to sustainability and redefined their businesses managed to overcome obstacles? It has to be about leadership, about a CEO having courage, believing that ultimately shareholders won’t be harmed. It has to be that in expecting there are answers to what a company can do to integrate sustainability into the strategy and operation of the company, you find those answers.

Take for example Ray C. Anderson, the founder and chairman of Interface Inc. Anderson says in his 2009 Confessions of a Radical Industrialist that in 1994 when Interface was a petroleum-intensive modular carpet company he began to get questions from the field about customers asking what Interface was doing for the environment. He said he didn’t have an answer beyond complying with existing laws. So he created a company task force and before the group met, read a book given him by one of the task force invitees called The Ecology of Commerce by Paul Hawken, published in 1993.

Hawken’s book woke him up, Anderson said. Its message resonated about seeing what we take from the earth, the collateral damage we do, and what we waste. Anderson saw that global business and industry had to change their ways to survive. He looked at his company’s pollution stream – without a push from government or critics – and saw that while the company had two decades of substantial profits under its belt, “Interface consumed enough energy each year to light and heat a city,” and that each day just one of his plants sent six tons of carpet trimmings to local landfill.

Interface began a 26-year strategy to achieve its Mission Zero goal in 2020, to be “the number one place to work based on its undisputed leadership in environmental and social sustainability.” The results so far include: the world’s largest manufacturer of modular carpet has reduced the energy used to manufacture carpet by 43 percent, decreased Greenhouse gas emissions 44 percent in absolute terms, and the company has grown by a net sales of 27 percent.

More than the need to rebuild eroded trust with stakeholders, or even avoiding the ethical risks of business as usual, sustainability is about creating a viable, dynamic business model to ensure that a company, its products and services, its customers and the environment in which it operates can continue and grow.

Gael O’Brien, September 20, 2010

The Week in Ethics

You can read another column I wrote on sustainability in Business Ethics Magazine, October 6, 2010