Welcome to the Greenleaf at 21 blog series. To celebrate our 21st birthday, over the next few months we will be sharing original posts by influential Greenleaf authors, in which they discuss how their field has changed over the last 21 years and what they hope to see change in the future. This article by Tim Mohin reflects on the evolution of CSR:
Having worked in both government and industry, I have seen at least two sides of the environmental debate as it matured over the years. It is interesting (at least to me) to reflect on these changes and project the future of the green movement.
The Past – Regulation
Working in the US Environmental Protection Agency in the 1980s and ’90s, the battle lines were clear. Industry was on one side, environmental groups were on the other side, and we in the government were the referees trying to establish regulations that balanced costs and benefits. We had a saying back then: “you know you have a good regulation when everyone is mad at you…”
Over time, a regulatory framework emerged that resulted in cleaner air, cleaner water, wiser waste management and better use of land. But the major shift was about attitudes toward environmentalism. In the battle for hearts and minds, the “green wars” are over and the green movement won.
The Present – Reputation
Like the end of the cold war, the news of the green victory filtered into our collective consciousness and a new world order emerged. In this world, all things green are good. Greening became a verb. Cigarette packages carry environmental messages and defense contractors publish sustainability reports.
Being against green today is like being against technology – guaranteeing Luddite status. Think about all of the ways that environmental values are now part of our lives:
• The twinge of guilt you feel when you throw an aluminium can in the trash
• The slightly smug sense of pride you feel wheeling around in your Prius
• That feeling of victory when you remember to bring your re-usable bags into the grocery store
From a company perspective, the reputation era of began with a flurry of voluntary disclosures the form of corporate social responsibility and sustainability reports. At this writing you can search http://www.corporateregister.com for 50,036 reports across 10,172 companies.
Like the end of the cold war, the news of the green victory filtered into our collective consciousness and a new world order emerged.
Companies now compete to be on the Dow Jones Sustainability Index, Newsweek’s list of the 500 Greenest companies, or one of the hundreds of other sustainability rankings out there. You can debate the results of these efforts, but the overall message is clear, a lot of companies are eager to establish their green credentials.
Today, publishing a CSR report or being on a sustainability list is less of a differentiator. Business leaders are starting to look for more than reputation as a return on their sustainability investments.
The Future – Rewards
In a relatively short time, prevailing attitudes regarding sustainability in the private sector have shifted from a cost to be avoided, to a badge of honour, to a business strategy.
This is not wishful thinking – it’s already happening:
• General Electric reported $105 billion in revenues from energy efficient designs in their Ecomagination line
• Solazyme is extracting fuel from algae and selling it to the US Navy
• Startup companies like EOS Climate are generating carbon trading revenues by removing harmful refrigerants from industrial equipment
And there are thousands of other clean tech ventures, some of which may emerge as the mega-corporations of tomorrow. Another sign of this shift is that few of the clean-tech startup companies publish CSR reports… likely because they are too busy competing with each other to deliver winning technology and service.
Political leaders are slowly catching on and putting in place frameworks for the new green economy. Carbon credit trading, feed-in tariffs and renewable portfolio standards are a sampling of the government mandates that can complement market forces to drive the green economy.
Being against green today is like being against technology – guaranteeing Luddite status
So, as we enter an era of green rewards, the optimistic view is that we will reap the benefits of a better economy while achieving needed environmental protections…in other words everything will work out. A more sceptical view is that, with or without incentives, green business innovations are insufficient to lead us to sustainability.
The reality is that sustainability challenges are increasing and – most importantly – create business opportunities. Just as the scarcity drives up commodity prices, dwindling natural resources are opportunities for green businesses. The trend is clear, business of all types have incorporated sustainability into their strategies and will reap the rewards.
Tim Mohin is the director of Corporate Responsibility at AMD. He has worked in similar roles for Apple and Intel. He is the author of Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations, heralded as “the ultimate insider’s guide, from someone who has been at the front lines of corporate change-making at some of the world’s biggest companies”.
You find more information about Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations on the Greenleaf Publishing website.