On Monday and Tuesday, I attended the Business [Un]Usual: Profit from Purpose conference at the Beanfield Centre in Toronto. This was the Conference Board of Canada’s bi-annual Corporate Responsibility and Sustainability summit, meant to help business leaders navigate the complex challenges facing our society. I was happy to be invited and got a lot out of the event.
Conference topics included:
- the critical forces impacting Canadian business over the next three years, including data, transparency, increasing politicization in business, climate change, resource-use innovation and more
- how different stakeholders, from investors to consumers, view these forces, and business responses
- how to develop proactive, successful responses to outside changes
- how to persuade others in the business to follow
- the personal journey of a business changemaker to find business purpose
- industry specific working sessions exploring the implications of the critical forces for business”
As an ecological economist, increasingly interested and concerned about the role that corporations play in environmental change, I have some reflections:
The Good, the Great, and the Wonderful
Sweden and Ikea
The luncheon and showcase panel on day one focused on how business and government could drive toward purpose together. Diana Madunic, Swedish Ambassador for Corporate Social Responsibility from the Swedish Ministry for Foreign Affairs was joined by Marsha Smith, President of IKEA Canada. IKEA might not immediately jump out as a positive environmental force, given that it is a corporation selling short-use furniture, however there were some interesting facts provided. For instance, they claimed that globally, IKEA produces 4xs the amount of energy that Canada consumes. Most recently in Canada, IKEA purchased their second wind farm in Alberta. They are definitely looking ahead, and this is in no small part to the Swedish government’s commitment to doing the same.
The really striking thing about this session wasn’t just the great relationship between IKEA and the Swedish Government in ensuring a responsible work environment, but Diana and Marcha were not scared to call out Canada’s government for not doing enough. They suggested that the government should incentivize renewable energy that a corporation (such as IKEA) could capitalize on by providing the hardware (e.g.: incentivize solar panels and IKEA will sell them). And they called out the government for not doing enough to commit to socially responsible ways forward.
It was refreshing to hear two people talk so frankly and openly about both governments and corporations not doing enough to find innovative ways forward together.
Thinking in systems
In a few of the sessions I attended I heard people using systems thinking language. Some were actually taking systems thinking courses and others were using systems maps and diagrams to make their points understood. This was such a breath of fresh air and gave me some encouragement that the work that is done in academia actually does filter out into the world.
Thinking in systems is an important part of understanding how all parts of a system are interconnected and how relationships between problems may react when you intervene. It is also an active way to include the voice of multiple stakeholders - something corporations in Canada could definitely doing much better.
In this session we learned that Canada’s responsible investment industry is growing rapidly. In 2015, $1.5 trillion was invested in responsible investment strategies, a 49% increase over 2 years. This includes $93 billion in sustainability strategies. Investors are incorporating responsible investing to minimize their investment risks over time, improve their returns over time, and to fulfill fiduciary duty. However, the main problem identified is that there is an awareness gap for ethical and responsible investing. 73% of Canadian investors are not familiar with responsible investing, and so they do not participate.
Ethical investing entered into A/J line of sight when we met with the Catherine Donnelly Foundation and found out that they have shifted entirely to ethical investments without compromising their returns. You can definitely expect to see A/J do more coverage on ethical investing in the near future!
The Bad and the Ugly
Where is the barrier?
At almost every single session I went to, someone asked the question “what is the barrier?” This is a very fair question and a very good systems approach to change. However, the answer has to be honest. Lacking of lobbying and government inaction bore the brunt of criticism to this question. There was a lot of complaint that governments act too slowly and are ineffective at creating helpful legislation, that instead it just adds more barriers.
Others blamed the public. They claimed that if you get too preachy or wordy in relation to the environment, it turns people off. People don’t want to be reminded of the environmental impact of their purchases (no kidding). This got me thinking about a strategy though… you know how calories are listed next to food? Maybe we should be putting an environment destruction rating on our products!
Others blamed the business community at large - that the corporate world wasn’t providing a sufficient community of practice, without anyone mentioning that capacity builds capacity!
And at least one person said that the margins are too small to make it ‘worth it’ - this is the closest anyone got to the real barrier. The real barrier? The bottom line. Profit. Income. Corporations have to have growth, but the environment can’t sustain growth anymore. The biggest barrier is everyone in the room and their bosses. We'll need a new paradigm, a paradigm where everyone is willing to take a pay cut and scale back.
Being prosocial in the workplace
One plenary was by Bea Boccalandro. I was so interested and excited about her talk as she got going. She did an exercise to demonstrate the benefits of prosocial behaviour - small acts of charity lead to lower blood pressure, increased white blood cells, reduced anxiety and better sleep.
However, my enthusiasm started to dwindle when she started giving examples of how corporations can do that. Let workers call to say thanks for donations and the good work of others. Give people ideas of where to find financing help. And the example that ‘won’ from the room? Getting forklift workers to take health and safety classes and to become a health and safety champion of their workplace. That’s the moment I really snapped out of it. Should a CEO sleep better because they’ve asked a forklift driver to be a champion of health and safety?
Of course not. First of all, that worker doesn’t want to be a health and safety champion. Are you going to pay them more? Or is this more responsibility for more work? Or exploitative because you don’t plan on paying them and instead say that their pay is their own satisfaction? And does this really increase a worker’s happiness in the workplace? Probably not.
People need real meaning in life, outside of work. The best thing you can do inside of work is give them community and meet some of the most human needs of a worker - community, food, and appreciation. Any sociologist knows that dissatisfaction comes from being away from family and being separated from the end product - so make work something different. But again, having people work less, for more money, while increasing community means less income for the company. We can’t run on efficiency anymore, folks.
No, that’s not the circular economy
The most disappointing sessions was the one on the circular economy. It started out well, with great examples being shared such as the Toronto Tool Library; Car2Go and other sharing services. It’s true, people now see the value of not spending $10k per year on their car and instead sharing with a service. But when these corporations that were not built on this model try to implement this, it starts to fall apart. They frame it as a necessary movement to a business model of “products as service”. The example given was Phillips. Instead of selling lightbulbs they now have a “service” of light that is more holistic. Huh? How is that the circular economy?
And another example was an ink subscription. Again, how is that circular? That’s just making sure even the most unorganized people buy your product. More than that, why are we still using printers? And why is it often cheaper to just buy a whole new printer than to buy ink refills? There is a bigger problem here.
This is just greenwashing on a whole new level. It’s not real change, and it’s just taking advantage of the heart of the circular economy. The circular economy is based on sharing, modularity, and decreasing production overall. Do these corporations want to decrease consumption? I don’t think so… and yet there was no sense of irony in the room. HP (a corporation arguably doing more than any other corporation, but still running for profit) showed a video of people in Haiti working to help their recycling project in exchange for wages to send their kids to school - and yet no one raised their hands to point out that people in developing countries live the way they do because people in developed countries live the way we do. The solution isn’t to get them to help us to continue to live the way we do, it’s to stop living like we do, and help empower developing countries by giving up some of our privilege.
In the end...
Did the conference meet the goal of helping businesses face new demands and embrace long-term changes without always reacting to defend their bottom line? I don’t think so, but they’re probably closer than they were at the last bi-annual summit. The fact that these conversations are emerging at a corporate summit at all is a positive sign. It’s not enough, but it’s something. What the conference really could have benefited from was a plenary that really demonstrated the hard truth about what corporations will have to do in the future.
It’s not going to be enough to use recycled materials. It’s not going to be enough to simply invest ethically. It’s not going to be enough for corporations to invest in renewables. Solving the ecological crisis is going to require a reorientation of how corporations and governments do business. There is no way around it, it’s going to be an uncomfortable transition. But, after a crisis, there is always time for creative renewal and innovation. It’s time for businesses to take the words “profit”, “growth”, and “bottom line” out of their plan for the future entirely. We’re going to be living in a whole new world - one without growth.
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