In Parts I and II of this Series, we gave evidence to support the unlikely hypothesis of an emerging conscience amongst some mainstream companies. For example, while the recent tipping-point-on-steroids reversal by southern governors to remove Confederate flags from their State Houses was a surprise to all of us, readers of this series would be less shocked to now see companies such as Sears/K-Mart and eBay taking parallel action by “disavowing, sometimes in strong moral terms, [flag-showing] merchandise”; as eBay stated: “…we believe it has become a contemporary symbol of divisiveness and racism.” Still, it is worth distinguishing which type of companies and actions we are talking about — and which we are not. Two areas we’re not talking about can help clarify what we are.
What we’re not talking about when we discuss a mainstream company conscience
We’re nottalking about mainstream companies’ now-fairly common “doing well by doing good” practices, philanthropy, or what some see as peripheral Corporate Social Responsibility (CSR). We’re not talking about “modest”efforts. As The Economist’s “Shumpeter Blog” says about these: “They focus on saving energy, cutting waste … they are “efficiency policies.” But “many of the schemes do not in fact do much for the environment or social equity. … [They] rarely amount to more than cost-saving measures.”
Jill Lipotidiscusses“too many companies still citing modest, modest, multi-year reductions in emissions or water use as the sum total of their sustainability goals,” and while there are “shining exceptions,” “…the corporate response wasn’t aggressive enough, brilliant enough or visionary enough.” Kevin Hagen even criticizes "green tech"— “as there are plenty of ‘greener’ technical solutions that are not being implemented in ways consistent with sustainable business thinking.”
So we’re not talking about the area that still gets much of the attention in the sustainable business world. Coming at this from another end, we are also not talking about non-mainstream companies or practitioners of certain versions of capitalism that are already there, as a conscience would either be readily conceded by them, or actually explicit (at least in their use of similar terms such as ethical or moral).
These are:
a) B Corps— companies certified by B Lab to “lead a global movement to redefine success in business,” and “encourage [them]…not just to be the best in the world, but to be the best for the world;”
b) Those practicing deeper levels of CSR, or placing it at their core;
c) Various forms of capitalism, be it: “2.0,” “Conscious,” “Regenerative,” "Common Good," (to some degree) “Inclusive” (now being considered as a Democratic party position);
d) “Principle”- or “value”-driven companies, Bottom-of-the-pyramid practitioners, social business;
e) Social entrepreneurs; or
f) Business participants in the new practice of engagement in public policy to advocatefor sustainability, such as Business for Innovative Climate & Energy Policy (BICEP).
Still, the existence of already self-identified principle-driven companies, socially responsible and impact investment firms, and initiatives such as BALLE show what is possible in not-necessarily extremely different circumstances. That is, while BALLE does not favor large, mainstream companies and prefers to keep things local, both its members and mainstream companies are still operating in the same mixed capitalist (though evolving) system.
A gray area
This classification system is certainly not perfect; this is a gray area. Which side of the line does the U.N. Global Compact fall, with links between businesses and near-universally held public ideals; the Sustainable Apparel Coalition, with members’ acceptance that cooperation, not a capitalist strong suit, is necessary if any one company is going to achieve its own ambitious sustainability goals; or the mainstream members of BICEP, such as General Mills and Gap?
Further, as things evolve, the differences between mainstream companies and those in the above list may become murkier as companies in each category learn from each other. Or mainstream companies may be pressured by stakeholders to become more like the latter. For example, B Analytics, a part of B Lab, has a new component in its "Measure What Matters" initiative to encourage their already-principle-driven member companies to use their leverage so that “all companies [can] “measure what matters most…”
As another example, according to Chris Miller, Social Mission Activism Manager at Unilever-owned Ben & Jerry’s: “We’re given the independence to take positions on controversial issues,” including labeling an ice cream flavor “Food Fight Fudge Brownie” to raise funds to defend Vermont’s GMO labeling law. He has “the support of management to pursue independent activism and advocacy campaigns,” with “some interesting discussions internally” with their independent board of directors. We could imagine the parent company learning from such actions.
What we are talking about
One way to look at what we are talking about is the way the Flourish Prizes discussed in Part 2 describe their draft criteria, currently under consideration: “We are looking for innovations that provide mutualbenefit to business and society. We aim to go beyond philanthropy, business ethics, and traditional CSR efforts.” (Personal communication with Claire Sommer.)
Other ways to directly look at this are: mainstream companies that are beginning to see the artificiality of conventional boundaries between where their business ends and society and the world begins, and taking helpful actions to cross these. Another are those becoming more comfortable with the ethical version of the meaning of the term “value,” which doesn’t then preclude them from marrying it with the more traditional profit-seeking meaning.
Hopefully, this classification scheme will help encourage the questioning of certainties, which may further serve to break down this very typology. And so while we’re not talking about explicitly principle-driven companies, some day we could be.
A skeptics’ likely sampler
Skeptics of a mainstream business conscience would probably charge:
a) These actions are just other ways to maximize profits, or something similar such as a new realization of a threat to their supply chain, a mere fit with their strategic direction, just some expression of good will or brand-building;
b) Companies often had to be pressured into it, usually through traditional adversarial means;
c) The contradictions (perhaps many) we noted in Part 1 between a company’s announcement and its performance elsewhere, which, to some, qualifies as greenwash;
d) There are so many other companies for which this series’ premises are not even remotely true; and
e) (Sometimes explicitly) the whole thing is simply impossible, by definition, in capitalism.
Now certainly we’re not saying there’s no profit element at all in these companies’ considerations (at least in most cases). But the extreme skepticism, seen in the common expression: “They’re not doing this out of the goodness of their hearts,” doesn’t mean there couldn’t be some good in their hearts that finds an outlet through these actions, even if asa part of more complex motives.
Rather than respond to the others, having noted and assembled the evidence we’ll see if more accumulates over time, and if interpretations start to shift. But one part of a response is that these initiatives were not anything any of us, including skeptics, saw coming. Afterwards, it’s easy, if not necessarily accurate, to continue to assert they must be explainable with standard business rationales.
What if there really is something new under the sun?
Implications
A few implications of a possibly emerging mainstream corporate conscience come to mind. In contrast to another conventional wisdom, motives actually do matter! If an unannounced principle actually exists, even within unexpected places, why not take advantage? Shouldn’t we explicitly raise the bar … and expect it to be reached from time to time?
If we do become ready to re-examine fundamentals, if the function of business is really changing to expect more, then it’s time to redefine the meanings of common expressions, such as “He runs it like a business,” or “I’m a businessperson.” Both currently have generally positive, practical, competent, if rather cold-blooded and overly simplifying associations. They can still be positive, if no longer as simple.
Finally, returning to the “Pitfalls of Metrics” series, we will look at some implications there.