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My Sustainable Brands coverage of the Third Global Forum for Business as an Agent of World Benefit

UN Global Compact chairman Sir Mark Moody-Stuart used his time on the main stage at the Third Global Forum for Business as an Agent of World Benefit on Thursday to propose how business can join the global fight to eradicate malaria.

In addition to his role with Global Compact, Moody-Stuart also serves as the chairman of the IVCC Board of Trustees. IVCC is a not-for-profit public-private partnership that was established as a charity in 2005. The group’s mission is to save lives, protect health and increase prosperity in areas where disease transmitted by insects is endemic.

Moody-Stuart shared how IVCC is partnering with the Bill and Melinda Gates Foundation, UKAID, USAID and Swiss Development Corporation to engage with major agro-chemical companies to bring three new antimalarial insecticides into production. “Innovation funders and business partners have brought us this far,” he said, but the project still needs $50-100 million to come to fruition.

Malaria seen a remote problem that’s not connected to business, but Moody-Stuart argued it’s not.

“Healthy employees, customers and communities are good for business,” he said.

The problem, as Moody-Stuart explained, is that people fighting to eradicate malaria need to rely on the continuing generosity of governments and philanthropists such as the Gates Foundation. And as the problem continues, they’re asked to do even more.

“Or someone else has to do the job. To me, it has to be done by companies in the affected areas,” he said.

Which is where his proposal came in, with the question: “Would societal benefits be enough to get companies to give a few million dollars a year to bridge the gap?”

Companies that contribute to the effort would be helping bring a solution over the finish line.

Malaria is one of the world’s most preventable illnesses and causes of death. According to the World Health Organization (WHO), malaria kills over 600,000 people each year and sickens over 216 million more. Increased prevention and control measures have reduced malaria mortality rates by 42 percent globally since 2000 and by 49 percent in the WHO African Region.

But these gains are threatened because of increasing resistance to insecticides that are used in life-saving sprays and bed nets. Similar to antibiotic resistance, the long-term effectiveness of insecticides relies on more than one kind and the ability to rotate them. But with a lack of human welfare funding on a global basis, these new insecticides are not being made.

The economic case for eliminating malaria can be found in the research that tallies the annual costs of death and illness due to malaria to governments. The Centers for Disease Control estimates the direct costs from malaria from drugs, illness, and premature death to be at least US$12 billion per year. As the CDC outlines, the cost in lost economic growth is many times more than that: “Costs to governments include maintenance, supply and staffing of health facilities; purchase of drugs and supplies; public health interventions against malaria, such as insecticide spraying or distribution of insecticide-treated bed nets; lost days of work with resulting loss of income; and lost opportunities for joint economic ventures and tourism.”

Businesses bear many of the same costs with lost employee productivity and costs to care for ill employees.

Dr. Nick Hamon, CEO of IVCC, remarked: “For companies who want to grow in Africa, now’s the time to get your brand out there with a small group of motivated companies who want to be part of the solution.” Hamon estimates that 5-10 companies contributing $1 million a year for 10 years would be sufficient to bring these three already-tested insecticides to market and make malaria eradication closer to reality.

As well as being the right thing to do, for companies who operate in areas impacted by malaria, this can also be seen as an opportunity for companies looking to grow and be seen as a human welfare leader.

“They can be a part of the solution right up front, with something we know is going to be successful,” Hamon said.

My latest for EarthPeople Media and the wonderful Anna Clark.

Baders-Book600x350

Putting “Responsible Business” Out of Business

Christine Bader’s book The Evolution of a Corporate Idealist: Girl Meets Oil offers hope and practical advice for anyone trying to stimulate meaningful change in our multi-stakeholder, shareholder-beholden, profits-focused world. Doing this kind of work is hard, but then again, pretty much anything worthwhile usually is.

The book tells Christine’s story of working with BP before the Deepwater Horizon disaster, and then with a United Nations effort to prevent and address human rights abuses linked to business. In addition to her own “Corporate Idealist” story, the book profiles other outsider-insiders who are working for positive change from within major corporations. The book concludes with a must-read Corporate Idealist Manifesto that makes room for morality as well as the business case.

I first met Christine at the 2014 Sustainable Brands conference in San Diego this past June where she was a panel moderator. At lunch one day, we started talking about the role of human rights in the CSR conversation and then continued our conversation later by phone. We started our call by talking about how strange it is that “Responsible Business” is a category at all.

Why do we accept that as the default?” said Christine. “It’s like saying, ‘Some of my money is in socially responsible mutual funds.’ But what does that mean the rest of my money is in? I think the whole mission is actually to make the ‘corporate idealist’ label and ‘responsible business’ redundant.”

From there we talked about collaborations, how human rights can add structure to the CSR conversation, and what’s ahead for the world’s Corporate Idealists:

Claire: I’m interested in the business collaborations that are starting to pop up in our world like We Mean Business, the new Risky Business Report, and everything that BSR is doing. What do you see coming for the CSR world in the near future? Do you believe that business will be able to affect US policy in the next four years?

Christine: Well, I mean business has always impacted policy in the US, and I think that some would argue that business has too much influence over policy in the US. But you’re asking a slightly different question, which is can business influence policy for the better?

In the US, certainly I think it’s clear that business does have the capacity to influence policy. And so, yes, I think that business standing up and saying climate change is important and we need policy can actually spur regulators to act because sometimes they’re reluctant to act because they assume that business wants nothing less than more regulation. But actually that is not the case. What business wants is consistent regulation and predictability. And right now business does not have that on the environment or on corporate responsibility more generally.

So, I’m not at all surprised that there are coalitions of companies calling for legislative action on climate change because they need certainty to be able to invest at the scale that we need them to and want them to.

Claire: Are you aligned with any of these coalitions or collaborations besides BSR?

Christine: I’m part of the Global Network Initiative, which is the voluntary initiative by Google and Microsoft and Yahoo! It was created by them, and a few other companies have joined since working with human rights groups, socially responsible investors, and some academics, which is the capacity that I’m a part of that. And I’ve been involved with others over the years like the Voluntary Principles on Security and Human Rights when I at BP and the Business Leaders’ Initiative on Human Rights when I was working for the UN Special Representative on Business and Human Rights.

Q: Do you see any shifts happening in the industry for better business practices?

Christine: Yes. I think that these collaborative initiatives are really powerful. And I think they are really a positive trend. I really am heartened to see that companies realize that these are noncompetitive issues. At the beginning of the Global Network Initiative, seeing Google and Microsoft and Yahoo! get into a room with human rights groups was quite astounding. The extractive industries are sort of used to it because that’s part of their business. They’re fierce competitors, but they’re also joint venture partners in a lot of places around the world.

For the tech industry, it’s been interesting to see them on the same journey to build trust and recognize that these issues are noncompetitive, and that it behooves them to work together and to work with human rights groups. I think it was tough because a lot of tech companies are founded on the premise that they are all about free expression and changing the world. For them, it was new to say, “What do you mean we have problems and present risks to users? That’s not our intent.”

And of course it’s not their intent. But there are risks in many of their products and services. And so, to see them come around to collaboration with human rights groups has actually been really heartening. I think that’s really positive. I think companies and everybody else are understanding that these big issues will not be tackled by any company alone, and that collaboration is really the way forward.

Claire: Any predictions about what may be ahead for breakthroughs?

Christine: I think that it will be really interesting to see how the the role of human rights in this conversation evolves in the next few years because the endorsement of the UN Guiding Principles on Business and Human Rights in 2011 was a really big milestone. It was the first time that there was multi-stakeholder, global consensus on the human rights responsibilities of corporations.

I think that it’s a really helpful framework for companies to use because there is a universal declaration of human rights that was agreed more than 60 years ago by the international community. It’s helpful because there is no universal declaration of sustainability or CSR. And I think that’s where a lot of the frustration with CSR emanates from because companies have to kind of figure it out for themselves.

Claire: Where do you see openings or possibilities for companies to bring human rights more into the CSR conversation?

Christine: One of the things that I’m doing right now is facilitating a human rights working group for BSR. This is a few dozen member companies across industries who come together every couple of months to talk about how to integrate human rights into their companies. And I don’t think any of them have human rights in their titles. But they know that this is important and that it’s helpful and that the guiding principles are now an expectation of stakeholders.

Claire: How are you getting the message about being a corporate idealist out, in addition to speaking at industry and CSR events?

Christine: One important way is to speak at business schools. And when I go, I’m not just speaking to the Net Impact club or sustainability varsity team. Second is the writing that I’m doing in the general media, that I hope serves some of that purpose as well. The ones for The Atlantic have totally caught fire. And I’ve been a guest a couple of times on a BBC World service show called Business Matters.

Claire: How can we help people move past the blocks of not wanting to think about things like child labor or human rights abuses?

Christine: A couple of the people who I interviewed who work in the supply chains said that there are a couple of different stages to their work. The first one is building awareness of issues like child and forced labor in their supply chains.

The second stage, which is perhaps more important, is getting their colleagues past wanting to say, “Oh my God, there’s a kid there. Cut and run.” It’s their job to try to explain that running from the situation will actually make it worse for the children. I think we’re all trying to figure out how to move into the next phase, which is addressing root causes.

Claire: Well, it’s incredibly helpful because that really diagnoses the problem and gives you a chance to fix it for good.

Christine: I think a lot of people are coming to recognize that having a multinational company in a developing country can help shine a light and help bring good practice.

Claire: What else can Corporate Idealists do to help their companies be better?

Christine: Know that sharing the stories of the people and communities that a company affects is part of your job. So many people that I interviewed talked about how important it was for them to get out in the field, for them not to lose sight of the workers in the factories and in the communities. And then bring those stories back into headquarters. I mean spreadsheets are important, but they only get you so far. Whether it was telling stories or bringing in photos or arranging senior executive trips out to the field, it was so important to bear witness. That’s when people really get it.

Did you know that Mars (the chocolate company) helped sequence the cocoa genome? Here it is: http://t.co/yQbaCefW0I

And Chinese Pres Xi Jinping too. Obama to Attend Sept UN Climate Event in NY. http://t.co/WwmrpPVYNA

NJ Nessie. This story has legs. Or doesn’t it?: Anaconda Possibly in Lake Hopatcong http://t.co/qefXJ0l7OY

Coffeebreak: Inspiring 15-mi vid w/ Levi’s Paul Dillinger. A Top 10 #SB14sd talk for me. http://t.co/jMCgCSWWz3

+1 for John Friedman’s thoughtful comment on Guardian Sust Biz green rankings piece. http://t.co/s2Oj4zoWXP

Great share! 8 Strategies To Strengthen Quality Of Yr Twitter Comm http://t.co/ZwX0DQdK3V

By me: Run a $100 Million 3BL Company for 5 Yrs, in Just 3 days. http://t.co/ObjM40RNiI @USCCFbiz4good

Read the new NJPACE newsletter: NJ biz & towns can fund conservation & renewables http://t.co/KZwBof1NDR

Millenials who care about #CSR issues, will also drive biz change, says Intel’s #CR head Jacobson. #CSR14

Intel’s Jacobson says B2B having big impact on #CSR right now because people are putting pressure on biz to do more #CSR14

Appreciate Renny Ponvert Management CV offering ethical, fiduciary responsiblity, long-term, & focus on ppl running the biz #CSR14

Renny Ponvert Management CV says his co focuses on good governance as “invisible hand” that drives good #esg & on to good returns #CSR14

AllianceBernstein’s Giuliano noting that E & S impacts can have diff time horizons with investor goals compared w/G. Interesting #CSR14

Surprised so small: #SRI mutual funds acct for 2% of long term assets under mgmt, per panel speaker | 2nd Annual #CSR14

Exclusionary fund design alone give returns at or below benchmark, but integrating #esg boosts average returns | 2nd Annual #CSR14 Summit

Hearing how investor community is integrating & considering #csr &#esg | 2nd Annual CSR Summit @snet_Indexes @thomsonreuters #CSR14

+1 for inspiring sustainable tech solutions from @WayneVisser http://t.co/mHlOSRkSE8

By me: Businesses Standing Up 4 #Climate Policy http://t.co/fk0nwAcdLP

How to track corporate action on #climate change http://t.co/ct9W2ilMOa

Skimp on #csr = leaving value on the table MT @AndreaLearned: @SSIReview The Upside of #CSR http://t.co/TqfLPZxwCY

“Modeling Complex Systems Is Really Hard” Grats for smart ppl like @Katenrg & journo @jeffspross http://t.co/nMx8TsbjJU

“Daring to live the lives we know we could.” Incisive, cutting, acidic insight by @umairh https://t.co/Io93Sn2xCC

By me. Why #sustainability requires #leadership training http://t.co/tHY7dEGIFm

Fascinating science. 1st-of-its-Kind Map Details Extent of #Plastic in 5 #Ocean Gyres http://t.co/B3MKJiwNwh

This matters because #carbon #divest is a morals issue: World Council of Churches #FossilFuels announcement http://t.co/PjAauF0DQX

MT @chadbolick Dusty piece on biz and society feels 10 y/o no mention of #sharedvalue? http://t.co/6L5mIMn8PE

How much do I love that Bittman talks #externalities: The True Cost of a Burger http://t.co/60J4D314nB

Motivating Corporations to Do Good http://t.co/6L5mIMn8PE

Great ending: If you’re not interested in long-term success, maybe you aren’t really a stakeholder. http://t.co/IWSDedD4ho

“Because it’s the right thing to do” +1 MT @AmanSinghCSR Companies & This #Sustainability Thing http://t.co/RnIQeF4PWN

VERY helpful explainer on where NJ gets its power today & future issues http://t.co/1YSM5ZbcnP

Many thanks to NJ Spotlight for covering NJ climate issues! There’s imp. momentum for #RGGI & #GWRA. http://t.co/PExiSEpdK6

 

When customers talk, brands listen. And act.

Or at least the smart, winning ones do.

After a bruising shareholder vote-down on executive pay last week, Chipotle sure needed a win.

It got one yesterday, courtesy of some loaded semi-automatic weapons and some pissed-off moms.

The company’s leadership responded quickly to parents and advocates who are working for sane, sensible, eminently reasonable gun control as a public health and safety imperative.

This is another great example of what I’m calling the “CVS Effect”–the growing trend of companies doing the right thing, because it’s the right thing to do.

Every time a major brand, retailer or company speaks up or takes positive steps for their customers’ well-being, health, and the environment, they create a little more safe ground for others to follow their lead.

Here’s how Chipotle’s win came about.

Four days ago, open-carry gun rights advocates in Dallas, Texas decided to display their guns at a Chipotle restaurant.

Then, they posted the photos of their “open-carry rally” on social media.

That’s when the gun-control group Moms Demand Action for Gun Sense in America decided to, well, demand action.

They launched a viral campaign, #BurritosNotBullets, asking Chipotle to ban guns from its restaurants.

Just two days later on Monday, Chipotle responded by asking customers not to bring guns into their restaurants.

Via Huffington Post:

The Pro-Gun Invasion of Chipotle Totally Backfired

Gun-rights activists have shot themselves in the foot, again, with a gun rally that caused another major American retail chain to declare firearms unwelcome.

Chipotle on Monday said it wanted customers to stop bringing guns to its restaurants, after photos of an open-carry rally at one of its Dallas restaurants went viral — thanks in part to the shrewd social-media campaign of a gun-control group. The striking photos showed a dozen or so people brandishing firearms, including semiautomatic rifles, both inside and outside the restaurant.

I think that Chipotle Mexican Grill deserves this CSR win (that’s Corporate Social Responsibility), a ton of good publicity after last week’s executive pay black eye, and hopefully a bump in sales.

That’s because the company’s leadership acted fast and unequivocally to do the right thing.

Because come on, there’s no good reason, of any kind, ever, to bring a loaded semi-automatic weapon into a public dining establishment.

In my mind, the open-carry advocates weren’t there for the burritos. They were there to make a point–their point.

Sure, Chipotle took a risk in making their public statement, but it was a calculated one bolstered by public, customer support. They had 10,000 petition signatures and a Twitter storm to back them up.

As well, coming out on the side of moms and families is consistent with Chipotle’s brand value of putting their customers’ needs and wants for healthy food first.

Plus, it’s worth remembering too that, besides being the right thing to do, good CSR action is good business.

From a cold-hard cash perspective, there are a lot of moms (and dads and caretakers and aunties) who like taking their young ones to Chipotle.

And just want to eat their burrito in peace.

Why plastic bags suck. Great global overview w/stats & links http://t.co/Fr5jugobnQ

Amazing New Yorker read, bringing sustainability convos into mainstream http://t.co/IiXuFaJkuQ

Important climate risk drum beat for summer’s Risky Business report from Next Generation  http://t.co/r7eRwApRqM

Great job from Greg Harman  on what the skeptics are dishing up next. http://t.co/7xQluh7MaO

Divestment empowerment will have ripple effects. Expect more empowered actions from citizens, like Rutgers students saying “no thanks” to Secretary Rice. http://t.co/T9a76aC7F5

Talking economics, opportunity cost and susty metrics. http://t.co/EdTBCsIo0P

Faith leadership joins for climate action “Blessed Tomorrow.”  http://t.co/kosdLZeXLl

When we get the money people on board, we’ve won. “Why don’t economists get climate change?”. http://t.co/BXU6dWJbcB

Good on McDonald’s for new sustainability plan. Now let’s talk about it. http://bit.ly/McDSusty

The changing tide pulls everything in its wake. Paddle with it. Stanford to divest $18B in coal. http://t.co/bWH5JoQqcT

Message in a bottle of our planet’s plastic burden at @5gyres plastic event. http://t.co/NFkEpajXih http://t.co/PcP0z0NEYT

Love Obama’s climate plan, needs more business.  http://t.co/02yFV91z5I

DEP hosting Northeastern climate change prep conference. http://t.co/IAxJn59rbo

More “consumers speak, brands respond” action | Teen spurs Pepsi & Coke to dump flame retardant chemical. http://t.co/TzvA0sx2dD

Refreshingly transparent talk from UK KFC’s CSR exec 1. KFC doesn’t market 2 kids in the UK. 2. “KFC is a treat.” https://t.co/uwJgy0Yy04

Unilever’s ‘Help A Child Reach 5’ campaign reports that child diarrhea rate are plummeting. http://t.co/5yuZbk2tpA

Kudos to KFC.

I generally have a bone to pick with fast food brands on sustainability issues, on everything from workers’ rights and marketing to kids, to health concerns, agriculture practices, and animal welfare.

Not this time.

Check out this surprisingly candid interview by 2Degrees’ Tom Idle with Ian Hagg, who is KFC’s head of corporate and social responsibility in the UK.

How can KFC be a responsible business when you are fuelling child obesity?’ The chicken business responds

Refreshing in its acknowledgement that there is still a long way to go – “we’ve only been managing our CSR in a joined-up way for the last four years” – the UK and Ireland arm of the company has just issued its very first CSR update. Inside the swanky offices of its London PR agency, I caught up with head of CSR, Ian Hagg to find out what the chicken business is actually doing to make a difference – and why it is so far behind the likes of McDonald’s in communicating its efforts to the masses.

KFC exec Ian Hagg hits every single one of these topics without flinching.

Admittedly, my bar for what constitutes honest communication from fast food brands is pretty low, but he really surprised me by saying that “KFC is a treat.”

A treat! Not for every day, or more than once a day.

Based on what we know about fast food and junk food business strategy, I simply can’t imagine a U.S. exec saying anything like that.

 

Here’s my latest trend piece for Sustainable Brands.

In earlier articles, I asked whether consumers will back up brands that makes decisions “because it’s the right thing to do” over pure profit motives.

My bet is that these decisions will be rewarded by consumers as it become more normal for companies to make bold pro-health and pro-environmental choices. Here are five recent examples that point positively in that direction.

1. On April 1, Avon announced that it will stop using the antibacterial chemical triclosan in its products “based on the preferences expressed by some of our customers.” This move isn’t that surprising, since triclosan is already on the phase-out list for Proctor & Gamble and Johnson & Johnson. But nonetheless, it’s a statement that some customers’ voices matter enough to stop selling products that other customers might still want to buy.

2. Two days later, on April 3, Nabisco’s graham cracker brand Honey Maid released a video called “Love” as a response to anti-gay comments about the brand’s March 2014 “This is Wholesome” commercial. That commercial, which shows gay and multi-racial families, had been blasted by conservative group One Million Moms as “promoting sin.”

We don’t know yet how the “Love” response video will impact sales. But with 3.5 million views and counting, I predict a graham cracker bump. On Twitter, the #thisiswholesome feed was awash with feel-good comments about wanting to make s’mores and one photo showing empty shelves.

3. Also on April 3, Mozilla’s new CEO Brendan Eich resigned after only two weeks on the job. He faced pressure to do so after online protests and a brief boycott campaign by OKCupid for his support of California’s anti-gay marriage law, Proposition 8, including a $1000 donation Eich made to the campaign in 2008. The OKCupid boycott caught eyeballs, but the real story, in my view, was about talent war pressure.

You can see that in Mozilla’s official corporate apology for Eich’s brief appointment, which cites an “organizational culture” that values “equality for all.” In other words, the most in-demand people want the best workplace. That increasingly assumes pro-equality and pro-environment policies.

The Eich resignation story is also notable for how fast it happened: his resignation was an about-face from his weather-the-storm stance just days earlier.

4. Then on April 6, restaurant brand Chili’s announced that it was withdrawing support for an autism-awareness group’s fundraiser, scheduled for the next day. Chili’s said it cancelled the event “based on feedback we heard from guests.” Others have noted that the autism awareness group’s website includes questionable statements about vaccination safety and the causes of autism. By responding fast to customer feedback, on a Sunday no less, Chili’s was able to extinguish a volatile public relations situation with a minimum of lost face.

5. And finally, on April 8, California lawmakers considered the so-called “Blackfish bill” that would ban keeping orcas in captivity. State assembly member Richard Bloom says that he wrote the bill after seeing the film Blackfish. Months of positive citizen support on social media surely helped, too.

The April 8 hearing attracted hundreds of people, but after testimony from the bill’s supporters and opponents, the committee declined to take up a vote. Instead, they sent the bill for further study, a process that could take up to a year.

For now, SeaWorld’s orca shows will go on as scheduled. I’m curious about what anti-captivity campaigners will do next, and if they will be able to influence ticket sales.

Together, what the first four examples show is that being a good business is good for sales. When customers speak up, and brands respond, everyone wins. Most of the time, at least.

That’s because what’s good for SeaWorld visitors, and good for sales, and good for California jobs, is really bad for these animals. Keeping captive orcas has been compared to spending one’s whole life in a small bathroom. SeaWorld has a huge opportunity here to be a world leader for truly responsible oceanic stewardship. It’s up to the company’s leadership to imagine — and create — that reality for its next generation of guests.

They won’t have to do it alone. As more customers speak up, there will come a day when SeaWorld says, “It’s wrong. So we’re stopping.” I plan to be a customer who supports them in that decision.

Between Two Rear Ends of a Horse

That’s the title I choose for this report from the Apr. 23 CSR Investing Summit: Measuring Responsible Leadership in New York City.

Topline: CSR Investing offers opportunities for long-term, sustainable value creation. But we won’t find them unless we stop siloing ESG factors mainly in terms of risks and negative screens and start applying ESG factors as value drivers. This holds true not in spite of, but because of, our increasingly unstable and unpredictable world.

*  * *

The past was about how ESG helped companies demonstrate their virtue by aligning a company’s actions with its values. The future of Responsible Investing builds on this by also creating value. That’s how Stephen Davis, Associate Director and Senior Fellow – Harvard Law School Programs on Corporate Governance and Institutional Investors, framed the CSR Investing landscape with the first presentation of the day.

Today, we’re somewhere in the middle, according to Davis. We’re searching for the tools, technologies and culture changes that will allow institutional investors to calculate the full impact of extra-financial—but highly material—ESG factors into their portfolio decisions. He cited three converging trends that are transforming the Capital Markets:

  • A growing awareness of potential risks and impacts from extra-financial material factors, such as environmental disasters and social issues.
  • A surge in measurement and reporting frameworks to help corporations and shareholders measure risks and how to better manage them, such as GRI, SASB, IIRC and S-Networks.
  • And thirdly, the rise in what Davis called “shareholder ownership with authority.” Institutional Investors are using the first two trends to take a far more assertive role in how companies are run.

Davis then contrasted these trends with a description of how today’s legacy culture and obsolete infrastructure are unprepared and unsuited to manage these new financial market realities. His analysis is that the Capital Markets are currently stuck between the status quo of “we’ve always done it this way” and the changes bearing down on them.

Thus putting us for the moment, he said metaphorically, “between the two rear ends of a horse.”

He went on to explain that this expression springs from the curious fact that the United State standard railroad gauge is precisely 4 feet, 8.5 inches. A historical review of how we build roads, so the story goes, leads all the way back to the original specification for an Imperial Roman war chariot. So in essence, our railroads are designed to accommodate the back ends of two war horses rather than the key performance needs of a modern transportation system.

While this story paints a vivid picture of how the status quo suffocates innovation, and it pains me to disagree with Professor Davis, the conclusion—modern rail gauge follows Roman road construction—is false. While U.S. rail gauge is exactly 4 feet, 8.5 inches, a strangely precise number, this is a case of convergent evolution rather than direct descent. (The full debunking can be found in this delightfully named 2001 U.S. Department of Defense journal article: “Roman Chariot, Railroad Tracks, MilSpecs and Urban Legends.”)

Said another way, the problem is that we’re hamstringing our future performance by replaying the moves that got us past results. Business-as-usual will not suffice for coming systematic disruptions in how Capital Markets work and the increasingly climatically unstable world in which they seek to operate, according to Davis.  We need better ways of looking forward.

Davis’ recommendations for where Responsible Investing needs to head include a vastly better educated and engaged citizen investor community, broad access to transparent ESG reporting tools, and political will.

Much of the rest of the day built on this foundation, with discussions of Board and Director fiduciary duty and performance, calculating ESG valuation, acknowledging supply chain risks and impacts that happen “outside the factory walls,” and integrating ESG factors into the investment process.

I’d like to direct readers to some of the reports and research mentioned during the day:

With the exception of Koehler’s presentation, the day’s presentations were mostly silent on the explicit risks of climate change disruptions as outlined by the World Bank’s Nov. 2012 report “Turn Down the Heat.” I was encouraged to hear about admirable progress being made by committed professionals to change hugely complex, interconnected financial systems for the better. And yet, I came away with a feeling of creeping around the edges.

I support a bolder stance by sustainable business and finance leaders to go beyond relative improvement goals based on past performance, to science-based absolute goals based on planetary limits.

So this is the challenge facing the Responsible Investing community: to champion the technology and business changes that allow ESG factors to carry their full weight in investment considerations. And then to make business and investment decisions that accurately reflect the risks and realistically embrace the opportunities that lie ahead.

I’m hopeful for a time when we will no longer need to identify externalities, and measure them, because we will have successfully learned how to responsibly claim them as a natural part of successful, sustainable business.

When this happens, we’ll no longer be behind the horses. We’ll be out in front.

 

Do investors care about CSR issues? 

Thanks to Capital Link for hosting their first annual CSR Forum called “CSR & IR – Maximizing Shareholder Value” yesterday in NYC at the astonishingly gilded Metropolitan Club.

I attended to hear first-hand from the investor community about how they make decisions, and whether CSR issues carry weight.

The answer, writ large? No.

What I heard is that Sustainability, CSR, resilience, whatever you want to call it, is still, still, not front and center.

It’s something that’s on the list, but not at the core of the decision-making process.

Maximizing shareholder value. That’s the core.

As one panelist put it, “When my CEO talks to investors, ESG factors aren’t part of the conversation.”

There’s a U.S. bias, too. Another shared that, “When my CEO talketo U.S. investors, I move the SRI slides to the back of the deck.”

The status quo. It’s powerful.

The highlight of the day for me was hearing Bennett Freeman from Calvert Investments finally mention Climate Change.

He, along with representatives from the Socially Responsible Investment world, were a welcome counterpoint to the traditional investor community perspective.

The status quo. It’s powerful.

For a flavor of the day, read what I and others tweeted live:

Tweet Story: March 13, 2013 Capital Link CSR Forum

Mark your calendars.

Here are upcoming NYC & Northern NJ events centered on Business Sustainability, Corporate Responsibility, and Social Enterprise.

Sept. 21
“Springing beyond Rio+20: Toward a True Global Compact for Sustainable Development”
Fairleigh Dickinson University’s Institute for Sustainable Enterprise
Madison, NJ
view.fdu.edu/default.aspx?id=5033

Sept. 21
GoGreenNYC
NYC
newyork.gogreenconference.net/program
@gogreenconf

Sept. 24-30
Climate Week NYC
www.climateweeknyc.org
@ClimateWeekNYC

Oct 2-3
COMMIT!Forum 2012
CR Magazine
www.commitforum.com
@commitforum

Oct. 3
2012 Innovation Summit: “Sustainability through Innovation”
FDU’s Institute of Enterpreneurship/The Institute for Sustainable Enterprise
Madison, NJ
view.fdu.edu/default.aspx?id=3712

Oct. 5
2012 Social Enterprise Conference
Columbia Business School
NYC
www.columbiasocialenterprise.org/conference2012/
@SEProgram

Oct. 15-19
After Rio+20: Moving Beyond 2015:Peoples’ Sustainability Treaties in a Post Rio+20 Future
Ramapo College Masters Program in Sustainability Studies
Mahwah, NJ
afterrioplus20.eventbrite.com

Nov. 9
Global Conference for Social Change: Making the Business Case for Sustainability
NYC Stern School of Business/Foundation for Social Change
NYC
www.stern.nyu.edu/experience-stern/news-events/global-conference-change-2012
foundationchange.org
@FoundChange