Should We Boycott the FIFA World Cup in Qatar?

By Andreas Rasche

On 20 November, the FIFA World Cup in Qatar is opening its doors. Billions of football fans around the world will tune in and watch this mega sport event. As we are getting closer to the opening match, I am often being asked whether I believe it is responsible to watch the World Cup or whether it is better to boycott the tournament. Here is my personal assessment.  

Human Rights Problems – More Than Labor Rights Violations

While the labor conditions of migrant workers in Qatar have attracted most media attention, the human rights problems go much further. Journalists are thrown into jail while covering stories around working conditions, the LGBTQ+ community is subject to ill-treatment, and women’s rights are still significantly curtailed.

Those arguing that the country made progress in terms of human and labor rights have a point. The kafala system – a system leading to the exploitation of migrant workers that can potentially give rise to forced labor – has undergone some reform in 2020, however, this is ten years after the country was awarded the World Cup and it only happened after significant pressure. It is also true (and noticeable) that Qatar is the first country in the Arab Gulf region to have made such changes.

But should we celebrate this as an achievement of the World Cup taking place in the country? Following this logic, we should award countries that limit human rights mega sport events in the future hoping that these countries may agree to reforms that are long overdue. Also, who tells us that Qatar will keep making progress in terms of human rights after the World Cup has ended and media attention has vanished?  

Just a few days ago, one of the official World Cup ambassadors, Khalid Salman, talked about gay people in an interview with German television. He mentioned that “We will accept that they come here. But they will have to accept our rules.” He then moved on claiming that gay people are “damaged in their mind.” At this stage, a spokesperson of the World Cup organizing committee (who was shadowing the reporter while being in Qatar) stopped the interview.  

Some supporters of the Qatar World Cup argue that we did not “make such a fuzz” when the tournament took place in Russia in 2018, just four years after the illegal annexing of Crimea. In 2018, Russia faced significant human rights challenges, some of them very similar to the ones of Qatar (e.g., lack of freedom of speech and ill-treatment of LGBTQ+ community). While it is difficult to directly compare both cases (e.g., labor conditions were not that debated back then), it would be misleading to justify one problematic mega sport event through lack of attention to another one.

A Corrupt Bid

One of the strongest controversies around the World Cup has been around whether the bidding process was influenced by corrupt behavior, a claim that Qatar has long denied. However, a longstanding investigation of the U.S. Department of Justice claimed that representatives working for Qatar and Russia bribed FIFA officials ahead of the 2010 bid.

In 2020, the New York Times reported that three South American officials received payments to vote in favor of Qatar and Russia according to the indictment. In the end, Qatar defeated the U.S. in the bidding process. At the time of the vote, the FIFA committee was already diminished by two members who were secretly filmed while agreeing to sell their votes.

Of course, Qatar is not the only country to have won a World Cup through a corrupt bidding process. Investigations revealed that Russia’s bid for the 2018 World Cup was also linked to bribes, and the German World Cup in 2006 was also allegedly linked to dubious payments. Yet, we cannot legitimize or downplay corruption in the case of Qatar by reference to prior corrupt practices during World Cup bids. Grand corruption was and is a deeply problematic practice, regardless of where and when it occurs. No-one is suggesting to bar countries that are known for higher levels of corruption from future World Cup bids. What is needed are stricter compliance rules and better oversight.

The Net-Zero Winter World Cup?

The decision to move the World Cup to November/December was made so that players do not have to play in the middle of the unbearable summer heat. FIFA estimates say that the World Cup will produce 3.6 million tonnes of carbon dioxide during the tournament, which is about the carbon footprint of a smaller country. By comparison, the World Cup in Russia produced 2.1 million tonnes. It is uncertain whether we can actually trust these figures. A report by Carbon Market Watch suggested that the emission figures associated with the construction of the new stadiums are vastly underestimated due to the methodology used by Qatar.

Where do the emissions come from? Contrary to popular belief, stadium air conditioning does not contribute the lion’s share of the overall emissions. Emissions mostly come from the need to build totally new infrastructure (incl. housing and ground transport) and to get fans to Qatar (which is for many fans only possible via plane). Given that the U.S. (the main competitor in the bid) already had most of this infrastructure, makes the decision to place the World Cup in Qatar seem even more strange from an environmental perspective.

Qatar has promised the “first carbon-neutral World Cup in history”. However, so far only 1.8 million tonnes of carbon have been offset, and experts have argued that the quality of the carbon credits is low, for instance due to problems associated with additionality.

The problem with net-zero mega sport events is not only the credibility of the claim. It gives the false impression that we can build huge stadiums and fly in people from all over the world, and that all of this is somehow compatible with reaching Paris-aligned climate goals.

To summarize, we have placed the World Cup into a tiny desert state that significantly and systematically harms basic human rights, that has moved the World Cup final near Christmas to avoid the extreme summer heat, and that has allegedly won the bidding process through corrupt behavior.

Importantly, only pointing the finger at Qatar may be too easy, some of the problems reflected through the World Cup are part of much bigger problems surrounding football as such, most of all its extreme dependency on money.  

I am a football fan, and I will miss the matches, but I am also a fan of human rights, environmental protection, and anti-corruption. Football is for everyone and not just for those a repressive regime deems worthy. So, I rather stay away from the matches and instead spend time playing football with my son. In the end, the World Cup in Qatar will not have a true winner, because sustainability already lost…  


About the Author

Andreas Rasche is Professor of Business in Society and Associate Dean for the Full-Time MBA Program at Copenhagen Business School. More at: www.arasche.com

To stay or to go: Corporate complicity in human rights abuses after the coup d’état in Myanmar

By Verena Girschik & Htwe Htwe Thein

◦ 2 min read 

Foreign investors in Myanmar have come under increasingly intense pressure to cut ties with the Myanmar military since the military coup on 1st February 2021. Immediately after the coup, Japan’s Kirin Beer announced its decision to cut ties with its joint venture partner MEHL, i.e. the commercial arm of the military. However, fellow investors did not immediately follow Kirin’s withdrawal. Instead, they appeared to be treading water to rid out the storm. 

Myanmar had been undergoing democratic transition since 2011, promising developments and luring investors’ interests as the last frontier of the Southeast Asian market. Indeed, the democratic transition had pathed the way for economic and developmental achievements, attracted investments in several sectors such as garment manufacturing. Yet then the military took back power, among others to secure its economic interests.

Governments and civil society in their home countries have been calling on companies to act responsible and not to do business with the military. 

The pressure on companies who had been sourcing from Myanmar, including popular fashion brands like H&M and Bestseller, has been mounting. H&M and Bestseller did respond to the call and did suspend their orders from Myanmar before deciding to resume orders in May. Several foreign investors have withdrawn as the military’s attack on the civilians intensified and the international community stepped up their sanctions regime. The latest step was the refusal of the ASEAN not to invite the military leader Senior General Min Aung Hlaing to the summit in October 2021. 

But is leaving the country really “the right thing to do”?

Companies who stay support the military in one way or another, for example by paying taxes directly to the military or paying rent or other fees to one of the military conglomerates (MEHL). Such payments from corporate investors provide a financial lifeline to the continuation of the military rule, hence, funding is a very important aspect of this dilemma for foreign investors and policy makers alike. The governments of the U.S., UK, Canada, the European Union have imposed sanctions targeting military interests. However, those sanctions so far have fallen short of targeting it where it would really hurt the military, in particular in the oil and gas sector that provides a lot of revenue. To weaken the military’s financial lifeline, the shadow government and activists have been calling for companies to stop all kinds of payments to the military. Inside the country, boycotts of military intestates have intensified. For instance, householders have been participating in an electricity bill boycott, thus using the withdrawal of this kind of support as a form of resistance. Not surprisingly, many companies have by now decided to pull out. 

Yet while leaving the country ceases support to the military, it also entails that companies no longer provide goods and services (including essential services) and support to the workers and civil society (e.g. Telenor;  Germany’s food retailer Metro. Companies have been supporting workers by sustaining safe workplaces, thereby securing workers’ incomes and stability.  What is more, their support has enabled and sustained social movements. For example, women union leaders in the garment industry have been a driving force in anti-military protests. 

Given the severity of human rights violations by the military, companies ought not to continue business as usual. Only by leaving can they cut all ties with the military and avert their complicity in atrocious human rights abuses. But by leaving, they also cease support to their most vulnerable stakeholders. The impact on the social contributions (via CSR) and Myanmar civil society, especially their workers, might be devastating. 


About the Authors

Verena Girschik is Assistant Professor of CSR, Communication, and Organization at Copenhagen Business School (Denmark). She adopts a communicative institutionalist perspective to understand how companies negotiate their roles and responsibilities, how they perform them, and with what consequences. Empirically, she is interested in activism in and around multinational companies and in business–humanitarian collaboration. Her research has been published in the Journal of Management Studies, Human Relations, Business & Society, and Critical Perspectives on International Business. She’s on Twitter: @verenacph

Htwe Htwe Thein is an Associate Professor in International Business at Curtin University, Australia. She is internationally known for her work on business and foreign investment in Myanmar and has published in leading journals including Journal of World Business, Journal of Industrial Relations, Journal of Contemporary Asia, International Journal of Cross-Cultural Management and Feminist Economics (and international publishers such as Cambridge University Press, Routledge and Sage). She is also well-known as a commentator in media and press on the Myanmar economy and developments since the military takeover on 1 February 2021.

Moving towards mandatory CSR – EU’s mandatory Human Rights Due Diligence proposal

By Johanna Jarvela

◦ 2 min read 

Last March European parliament gave a proposal to create mandatory Human Rights Due Diligence directive. The aim is to prevent human rights and environmental harm in a more efficient way, through regulation. The commission proposal is based on the UN Guiding Principles on Business and Human Rights and has three core elements: firstly, companies should themselves assess the risks of human rights violations in their supply chains, secondly, take action together with the stakeholders to address identified threats, and lastly – and most importantly – offer a system for access to remedy for those whose rights have been violated.  The commission is expected to give their resolution on the matter before Christmas, though the decision has been delayed already few times.

The EU proposal can be seen as a part of a continuum towards more mandated forms of corporate social responsibility (CSR). Traditionally CSR has been defined as something voluntary that companies do in addition to the letter of law in response to stakeholder pressures and societal expectations. At the level of individual organisations this has meant providing societal good through philanthropy and partnerships with NGOs or avoiding harm by improving the sustainability of business operations. Also, a great number industry level voluntary standards have been invented to solve the environmental and labour issues in transnational supply chains (Fair trade and Forest Stewardship Council being good examples). 

However, the past 20 years of voluntary measures have not been able to eliminate human rights violations in business operations. Indeed, it seems that voluntariness works for inspiring collaboration and innovating for better world.

In situations of wrongdoing, exploitation, and harm, stronger frameworks are needed to hold organizations accountable and offer remedy to victims. 

The recent development towards more mandated forms of corporate responsibility, like the French Due Diligence reporting Act or the UK Modern Slavery act, can be seen as efforts to respond to the accountability deficit. In June this year Germany passed a HRDD law stipulating that companies must identify risks of human rights violations in their supply chains and also take countermeasures. Also, Norway passed a similar law that requires companies to conduct human rights and decent work due diligence. Similar issues have been discussed in most of European governments.

There are caveats in creating this type of regulation. It might lead to tick-the-box type of exercises without true consideration for the human rights risk, burden companies if not given enough time and guidance to adjust, and transparency reporting does not seem to be enough to change business behaviour. One of the most difficult, yet most important, area in developing the new binding standards is the pillar three of UNGP: Access to Remedy. This pillar tries to ensure that in cases of violations, the victims will have a channel to make claims and receive remedy. Whether it should be civil or administrative liability or whether there should be an ombudsman in each country receiving complaints or via whistleblowing is all still in the air. What is clear is that whatever the final design of well-functioning HRDD system requires inputs and cooperation from businesses, civil society, and governments alike. Companies know best their supply chains, but sometimes NGOs may be a useful counterpart for identifying the risks and setting up stakeholder consultations. Finally, governments should be final proofers of the system ensuring accountability and enforcement. 

While some industry associations have raised concerns about the new regulations and the ability of European companies to oversee operations elsewhere, companies also evaluate that the new EU directive might level the playing field and give them a new tool in managing supply chains. Indeed, it seems that we are moving towards regulated CSR not only within EU but globally. UN has launched an intergovernmental working group to prepare a binding treaty on Business and Human Rights, there is an initiative for  minimum global corporate tax and efforts to close tax havens. More and more reporting is expected by companies, not only as increasing ESG reports to shareholders but more and more also as part of the mandatory legal requirements. 

Societal expectations are one of the key drivers for CSR. According to the latest polls it seems that European citizens and consumers expect the companies to upkeep good human rights and environmental standards within their global supply chains. 


About the Author

Johanna Järvelä,  is a postdoc researcher at Copenhagen Business School and member of the advisory committee for Human Rights Due Diligence Law in Finland. Her research focuses on the interplay of public and private governance in natural resource extraction and she’s especially interested in exploring how steer private sector towards providing societal good. 


Photo by Lan Nguyen on Unsplash

Sustainable brands on Black Friday: What do consumers perceive as authentic?

By Nina Böntgen, Sara Derse and Meike Janssen

◦ 4 min read 

The fashion industry has repeatedly come under fire for its negative effects on the environment. With heightened attention towards the climate crisis and scandals highlighting the industry’s social shortcomings (Rana Plaza, 2013), more and more ‘native’ sustainable fashion brands have emerged. However, parallel, we witness a trend towards ever-increasing consumerism. Frequently, Black Friday is seen as the epitome of consumerism which raises the question: How do sustainable fashion brands approach the biggest shopping day of the year – Black Friday – and how do consumers perceive these campaigns?

We reviewed Black Friday Instagram posts by self-claimed sustainable fashion labels and found they can be conceptualized along two axes: (1) the level to which consumption is encouraged / discouraged, and (2) the degree of action taken by a brand to express its commitment to sustainability. This conceptualization accounts for existing societal marketing strategies, particularly Demarketing, Green Marketing, and Cause-related Marketing. On the one hand, the brand Raeburn closes its shops and urges consumers to use Black Friday to repair their clothing rather than buying new items (Demarketing). On the other hand, the brand People Tree promotes 30% off everything claiming that consumers should “add some green to [their] wardrobe” (Green Marketing). 

Business-as-usual, a revolution, or planet-saving purchases – what is actually authentic?

By interviewing 20 consumers, we found that they judge authenticity by inspecting various cues that are leveraged to identify authenticity drivers. For example, donating to WWF (Cause-related Marketing) yielded legitimacy for TwoThirds’ Black Friday campaign. Authenticity is a complex concept – it is multidimensional, subjective, dynamic and socially constructed. Multidimensionality implies that one cannot answer “what is authentic?” precisely; it is an interplay of different attributes. In our case, respondents described an advertisement as authentic when it was credible, relatable, congruent, original and/or impactful. Next, subjectivity means that what is authentic for one person is not necessarily authentic for another. Influential consumer characteristics are a person’s general scepticism towards advertising, level of environmental concern, and understanding of sustainability, resp. do we simply need less- or better/greener consumption to mitigate climate change?

“and it’s kind of a contradiction: ‘Please shop to help the planet’ and I think you can’t shop and help the planet at the same time. So less or no consumption is at all times the best option” (Consumer 1)

“you’re using capitalism to make the world a little bit better. And I think in my eyes, that’s a good strategy to go for” (Consumer 2)

Third, authenticity perceptions can change over time, for example upon new information. Last, authenticity does not exist as a stand-alone concept but is always sensitive to societal changes.

What does this imply for marketers of sustainable brands?

Black Friday is a dynamic context in which brands have to actively reflect on their communication strategy and respective consumer authenticity perceptions. Consequently, no communication strategy shows clear advantages or can be labeled ‘most authentic’. We advise brands to reflect on: 

  1. Their standpoint regarding Black Friday
  2. The needs of their target group
  3. The statement they want to make on Black Friday
  4. The tone they want to adopt in their campaign

Sustainable brands increasingly embrace creative ways to distance themselves from the traditional Black Friday, e.g. by closing shops, ‘selling rubbish’ or even raising prices. It remains unclear, however, whether these forms of brand activism reflect a brand’s honest opinion or are employed as a tool to stand out.

We also observe brands who are holding their customers responsible: on Black Friday 2020, Armed Angels let buyers choose between a higher discount or rainforest protection. After Black Friday, the brand revealed that the majority of their customers had chosen the higher discount, which raises the question: 

Can consumers be held responsible for making more mindful purchase decisions or is increased action by companies and governments needed? 

Upon stating its disappointment about the outcome, followers accused the brand of shaming their customers for choosing higher discounts. This translates to another relevant consideration for sustainable fashion labels – choosing the right tone. While radical messaging conveys urgency and appeals to environmentally concerned consumers, others feel opposed to it and, instead, want to be involved in dialogues. Again, this shows that when it comes to Black Friday, there is no ‘one size fits all’ solution – rather, brands should take time to think about their values and how they can make a meaningful difference on Black Friday 2021.

Throughout the interviews in our study, multiple consumers shared with us how they were inspired by campaigns of sustainable brands and respectively questioned their purchase decisions. This demonstrates that sustainable brands’ communications can actually exceed Black Friday and have lasting effects – not only on their brands’ perceived authenticity but also on our planet’s future.


About the Authors

Nina Böntgen is a recent graduate from MSc Brand and Communications Management program at Copenhagen Business School. Next to her studies, she was actively engaged as team lead and board member of oikos Copenhagen, a student initiative driving change towards greater sustainability. She’s happy to share further insights or engage in discussions on the post or the broader thesis (how sustainable brands navigate authenticity and greenwashing) via email (n.boentgen@web.de) or Linkedin.

Sara Derse is a recent graduate of the Msc Brand and Communications Management program at Copenhagen Business School. Fascinated by the topics of consumer psychology and purpose branding, she was involved in the sustainability-focused student initiative oikos as a Project Manager. She is happy to discuss her thesis (consumer perceptions of fashion brands with a purpose centred around sustainability) in further detail via email (saraderse@live.de) or Linkedin. 

Meike Janssen is Associate Professor for Sustainable Consumption and Behavioural Studies, CBS Sustainability, Copenhagen Business School. Her research focuses on consumer behaviour in the field of sustainable consumption, in particular on consumers’ decision-making processes related to sustainable products and the drivers of and barriers to sustainable product choices.


Photo by Ashkan Forouzani on Unsplash

White People and the Animals they Love

Book Review of Saving Endangered Species: Lessons in Wildlife Conservation from Indianapolis Prize Winners

By Lisa Ann Richey

 6 min read ◦

This book review has first been published by Conservation and Society and can be also found at CBDS blog.

According to the press website, Saving Endangered Species has wide and diverse aims:  ‘to win new recruits, inspire biologists and conservationists already in the field, and illustrate the profession’s fundamental scientific tenets through wildlife champions’ own exciting narratives.’ Overall the purpose of the book is to present a moral imperative for a conservationist approach to saving nature and to do this through a collection of personal experiences from great conservationists about their love of nature and experiences from the day-to-day workings of conservation. Seven of the book’s contributors are winners of the Indianapolis Prize ‘the world’s leading award for animal conservation’ (p. 12) and one that prioritizes the inclusion of people as a ‘primary factor in the equation’ of conservation, and high levels of exposure in celebration of these ‘heroes and role models’ (p. 13).  

The book is stunning. It is an aesthetically beautiful edited volume from its entrancing animal photographs, skilled illustrations and colloquial snapshots of its famous contributors. And yet, for all its beauty, this book could have been titled, ‘White People and the Animals they Love.’

I start with my fundamental critique because for some readers, this will be all they need to hear to check this book off their ‘must read’ list. These readers, however, will be hard pressed to find other works of conservation biography that aren’t also easily critiqued for their class, racial, gender, and geographical elitism.

Also, a disclaimer, I am a social scientist who works in some of the policy spaces, ‘partnership’ imaginaries of business and helping, and geographical areas covered in this book. Thus, I am among the ‘to be inspired’ of the intended audience for this book. Additionally, the introduction, written by Dr. Robert W. Shumaker (evolutionary biologist, president and CEO of the Indianapolis Zoo) calls for ‘a more integrative approach in which the centrality of humans is recognized in the conservation agenda’ (p. 6). Thus, a review by a scholar of humans might be reasonably appropriate. 

In spite of the fact that the index does not include the term ‘celebrity,’ the book epitomizes what has come to be called ‘celebrity environmentalism’ (see Abidin, et. al 2020). The practice of scientists, film stars and social media influencers among others, who ‘enjoy public recognition, publicly support environmental causes, and benefits from their sustained public appearances’ as celebrity environmentalism may be a way of bringing new resources to conservation. 

The celebritized approach to conservation is clear from the Introduction’s start. While the reader might expect the star of this chapter to be the American Bison, named the official mammal of the United States in 2016, and depicted as a steadfast and grandiose being in the illustration that precedes the text, it is not. The star is the celebrity conservationist William T. Hornaday who initiated the first-ever zoo-based conservation effort as a result of his initial desire to provide a live bison model for better taxidermy (p.2). Thus, the scientific model for which the book collects a series of testimonies, is linked to the efforts of Hornaday. He was the director of the Bronx Zoo in 1906 when Ota Benga, a Mbuti man from Congo, was displayed in a cage in the monkey house. Hornaday wrote to the New York city mayor that ’When the history of the Zoological Park is written, this incident will form its most amusing passage.’  

Many people at that time, such as the Black clergyman Rev. James H. Gordon, were not amused. Many readers today will question the unambiguous celebration of these violent and dehumanizing roots of a movement intended to provide a moral approach to saving nature. 

Distinctions are signaled between the scientific authors and the celebrity environmentalists through engraving the masthead of every other page with a  ‘Dr.’ before the scientists, with other names presented title-less. Yet, these contributors are all performing the limited scripts of celebrity environmentalism: notably contributions enact specific tropes outlined by Abidin and her colleagues. We see contributions from the ‘Ambassador’ trope of high-profile performers who are patrons of NGOs and foundations, but whose personal commitment varies between superficial co-branding and long-term engagement. Quite prevalent is the ‘White Savior’ trope in which ‘wild places’ need to be saved from ‘locals’ through the actions of white people.  The book also highlights the ‘Activist Intellectual’ trope promoting cerebral and scientific reasons to support conservation, that then become celebritized through a focus on funding, media and elite networking. Finally, the book’s promotional writing enacts the trope of the environmental ‘Entrepreneur’ where conservation is meant to provide a good investment for business-minded people. 

The book opens with a long vignette from Harrison Ford at the 2018 Gala celebration referring to his co-contributors and others like them:  ‘You can call them researchers or scientists or conservationists. But let’s call them what they really are: These are heroes. Real heroes.’ (p. 17). However, as this book shows, the heroic narrative structure makes forging alliances and political solidarity across lines of class, race, cultures and politics quite challenging. Heroes stand above others, they are exceptional. And, as such, conservation through heroism is unsatisfactory, if not oxymoronic.

Conservation and the environmental politics that can sustain life on our planet call for less singularity, fewer stories of individuals excelling over other people and nature, and more connectedness, cooperation and coexistence. 

The introduction tells us that  ‘these are the voices of the greatest conservationists of our time’ (p. 17). I have no reason to doubt that these are their voices and that they are great conservationists, whatever criteria make up ‘greatness’. The stories are full of passion and genuine concern for conservation, so there is no doubt that these heroes are acting from noble intentions. However, the heroic hubris prevents the reflection over either why chickens when pushed off a roof don’t ‘progress well in flight’ (p. 21) or why ‘with no prior thought’ wildlife conservation should be best achieved through ‘a big cash award’ and an ‘exciting and glamourous event’ (p. 305).

With some notable exceptions, this book presents the same old stories of great men who just happen to have no reproductive obligations (with the predictable exception of the female scientist), so they can go singularly or with the support of a doting wife into long-term relationships with animals.

These men also have friends with lots of money and political clout, and the documentation of elite networking practices that comes through in the chapters actually works counter to a singular hero at the helm of conservation. Finally, these conservation heroes rely heavily on a competent staff of Black and Brown people who can put lofty ideals into practice, while not usurping the limelight from celebrity environmentalists. 

Some of the more ‘Activist Intellectual’ celebrity environmentalists present compelling arguments in lively texts around global warming and the contentious politics of saving the polar bears. Many of them take the reader through a combination of wildlife daily habits, international fundraising, and management of research and training projects. These are narrated as a partial life-history of a single ‘hero,’ and while there are nods to ‘local supporters,’ ‘scouts’ and collaborations between ‘enthusiastic’ local staff and international volunteers, this book tells a dangerous single story.

It’s time to remind ourselves and our peers that the heroic narrative of celebrity conservation may be useful for raising funds from businesses and for garnering the attention of bored bureaucrats, but it has dangerous political consequences.

A close reading of the text finds examples such as four ‘community game scouts,’ the ‘local African supporters’ in Kabara, and the ‘young Samburu warrior’ who was ‘walking in the bush’ with David Quammen, a writer from National Geographic (p.80). Samburu people have proper names, no less notable than people from Cincinnati, and the young man was not working as a warrior when assisting on a conservation project. These people are being rendered mundane through the repetitive text of the white savior narrative. They are being de-humanized as they remain in the background of the African or Asian ‘habitat’ for animals. The heroic narrative is based on an ongoing history of inequality between races, classes, genders and cultures.  

The afterword, written by the CEO of the Indianapolis Zoological Society (2002-2019) reads like advertising copy for ‘Western Civilization’ complete with God, Guns and Gold. It is a colonial vision of men like Paul Erlich in which the ‘dangers of unchecked human population’ are called out as problems while fossil fuel addiction, or all those flights to the Galas celebrating conservation heroes, are left unmentioned. The ‘Danger of a Single Story’ by Chimamanda Adichie taught an important lesson in 2009: ’The single story creates stereotypes, and the problem with stereotypes is not that they are untrue, but that they are incomplete.’ This is a beautiful book in its intentions and its aesthetics; the stories are often compelling and transport us into the lives of cranes and elephants and into some of the world’s most notable conservation initiatives. Yet, despite its intentions, the people are missing from this heroic script of celebrity environmentalism.    

Perhaps these people are left-out by design. Dr. George B. Schaller writes clearly:  ’My account here demonstrates that conservation is not part of development’ (p. 78). But, conservation is part of development. It is impossible to define conservation otherwise (Adams 2004). Both conservation and development are part of the holistic process of living sustainably on our planet. This book is intended to celebrate ’people as a primary factor in conservation.’ We do learn a lot about a particular sub-group of privileged people, their psychology and insecurities, their dreams and aspirations, about networks of elites across the globe who happen to have farms, foundations or PhD scholarships to spare. But we learn far less about the non-celebrity people in the lives of animals. Surely a global conservation movement that manifests the holistic visions and ’the connectedness of all living things’ (p. 119) that many of these contributions also embrace, needs less heroism and single stories and more solidarity, comradery and complexity. 


Further Reading

Abidin, C., Brockington, D., Goodman, M. K., Mostafanezhad, M. and Richey, L. A. (2020) “The tropes of celebrity environmentalism.” Annual Review of Environment and Resources.

Adichie, C. (2009) “The Danger of a Single Story” TED Talk.

Adams, W.M. (2004) Against Extinction. The Story of Conservation. Earthscan, London.


About the Author

Lisa Ann Richey is Professor of Globalization at the Copenhagen Business School. She works in the areas of international aid and humanitarian politics, the aid business and commodification of causes. She is the principal investigator on the Commodifying Compassion research project. https://www.lisaannrichey.com


Photo by Katie Treadway on Unsplash

Nudging for a Better Workplace: How to Gently Guide Employees Towards Ethical Behaviour

By Leonie Decrinis

 2 min read ◦

Corporate scandals caused by unethical behaviour can have dramatic consequences for a company’s bottom line. The Volkswagen emission scandal created a financial damage of over 45 billion US dollars thus far. The Enron accounting scandal ended in the company’s bankruptcy back in 2001. Most recently, the #MeToo movement has brought to light sexual harassment at the Weinstein Company, Fox News and Uber, to name just a few, all subject to payments of significant fines. How can we explain such scandals and what can companies do about it? 

Why good people do bad things 

In general, when we think of bad behaviour we think of it as a matter of bad character: bad people do bad things. But research tells us that this is view is misguided. Normally, employees involved in unethical behaviour have high moral values and good intentions, in line with their companies’ sets of ethical standards. Yet, their behaviour can deviate significantly from personal and organisational principles.

In fact, the moment they engage in unethical behaviour, they might not even realise that they are doing the wrong thing. 

Context matters in explaining such ‘ethical blindness’. Environmental cues in the workplace, like monetary signals, trigger the adoption of a business decision frame, whereby people favour self-interested choices over ethical behaviour without necessarily being aware of it. By applying mechanisms of moral disengagement, they think that they are doing the right thing, while in fact acting unethically. For example, they may justify their detrimental conduct by portraying it as serving a socially worthy purpose, which makes them temporarily blind to the harm they are causing.

Building a culture of control does not solve the problem

In response to issues of moral misconduct, companies usually tighten their internal control systems. They strengthen the requirements for ethics trainings by making them mandatory and introduce monitoring and surveillance systems. They also try to incentivise ethical conduct through rewards and punishments. However, these instruments do not always lead to the intended behavioural outcomes and instead might even aggravate wrongdoing. This is because such instruments send signals that reinforce the adoption of a business decision frame, which is prone to moral disengagement. For example, in the case of Volkswagen, a CEO who led through fear and bound high expectations for engineer development to tempting bonus payments encouraged employees to circumvent the rules by engaging in emissions cheating. 

Nudging – beyond carrots and sticks

To promote ethics in the workplace, building a culture of fairness and trust is pivotal. Nudges are instruments that align with these principles. They do not mandate or forbid choices nor do they meaningfully alter the financial incentives related to various behaviours. Instead, by considering the psychology of decision-making, they try to gently guide people towards certain outcomes while preserving their freedom of choice. Nudges do so by subtly altering the context (choice architecture) in which humans make their decisions. Examples include default settings or social norm feedback as well as the simplification of information or the framing and priming of messages.

While initially mostly applied by governments to steer the behaviour of private citizens or consumers, more and more companies are relying on nudges to improve the choices of their employees.

JP Morgan, for example, uses proprietary algorithms to predict unethical trading behaviour before it occurs. Traders then receive pop-up messages prompting them to reconsider transactions when they are at risk of breaking the rules. Scientific studies further support the power of nudges in form of photos of close others or moral symbols at the workplace that encourage employees to adopt an ethical decision frame, which helps them to act in line with moral values. Overall, while much remains to be explored when it comes to ethical workplace nudging, the gentle steering tool seems to provide a promising route for improving behavioural ethics outcomes in organisations. 


Further Readings

Desai, S. D., & Kouchaki, M. (2017). Moral symbols: A necklace of garlic against unethical requestsAcademy of Management Journal.

Hardin, A. E., Bauman, C. W., & Mayer, D. M. (2020). Show me the … family: How photos of meaningful relationships reduce unethical behavior at workOrganizational Behavior and Human Decision Processes.

Palazzo, G., Krings, F., & Hoffrage, U. (2012). Ethical blindnessJournal of Business Ethics.


About the Author

Leonie Decrinis is PhD fellow at Copenhagen Business School with research interests in corporate social responsibility, sustainability governance and behavioral sciences. Her PhD project focuses on applying behavioral insights to corporate sustainability in order to align governance objectives with organizational behavior.


Photo by Shridhar Gupta on Unsplash

Like oil and water…. Shell’s climate responsibility and human rights

By Kristian Høyer Toft, PhD

◦ 4 min read 

In a landmark verdict at the district court in the Hague on 26th May this year, Royal Dutch Shell lost a case to the Dutch branch of ‘Friends of the Earth’, Milleudefensie, and other NGOs. The court ordered Shell to reduce CO2 emissions by 45% by 2030 against a 2019 baseline. The decision breaks new ground for the possibility of holding private corporations accountable for climate change – Shell-shocked and a Black Wednesday for the fossil fuel industry, according to expert commentators in international environmental law.

The verdict emphasizes the international consensus that corporations like Shell must respect basic human rights, such as the rights to life and family life. In the ruling, human rights are seen in the context of climate change and the aspirational 1.5-degree target stated in the Paris Agreement (2015), scientifically supported by the Intergovernmental Panel on Climate Change (IPCC 2018).

The verdict is a significant example of a general surge in climate litigation cases globally in which human rights are invoked.

Holding a fossil fuel company accountable based on the standard of human rights might sound as futile as the effort to mix oil and water.

And this sort of skepticism has roots in the recent history of attempts to connect business, human rights and climate change in what could be seen as a ‘bizarre triangle’ of irreconcilable corners.

However, the Shell verdict can be seen as a firm rebuttal to such skepticism. The court argued that Shell had violated the standard of care implicit in Dutch law. To clarify the content of the standard of care, the court used the United Nations Guiding Principles (UNGPs) which provide a global standard for businesses’ human rights responsibilities. This is, however, a bold interpretation in light of the UNGPs silence on human rights responsibilities with regard to climate change. 

In fact, human rights might not fit so neatly with the difficult case of climate change. Firstly, it is difficult to trace the causal links between the emitters and the victims of climate change, although this is contested by recent studies that have traced two-thirds of historical emissions to the big oil and gas companies, the so-called carbon majors.

Secondly, human rights basically apply only to the state’s duty to protect citizens, and thus only indirectly to private companies. This state-centric approach is core to the human rights regime and tradition, and the UNGPs uphold this by allocating less stringent responsibilities to non-state actors such as corporations.

However, the UNGPs also state that private companies have human rights responsibilities independently of the state. The district court in the Hague reaffirms this in its ruling against Shell, stating that corporate responsibility “exists independently of States’ abilities and/or willingness to fulfil their own human rights obligations, and does not diminish those obligations. [..] Therefore, it is not enough for companies to [..] follow the measures states take; they have an individual responsibility.” (4.4.13). 

A third source of skepticism resides in understandings of environmental law and the central role of the polluter pays principle. Accordingly, emitters are responsible for their historical output of COas enshrined in the United Nations Framework Convention on Climate Change (UNFCCC 1992), but the scope is usually taken to be limited to the unit of production (scope 1), e.g. the refining of crude oil. The standard view of pollution is local, as for instance when a factory pollutes the local river. 

However, in the Shell ruling scopes 1, 2 and 3 are taken into account, meaning that consumers’ incineration also counts and therefore Shell must take responsibility for consumers’ emissions as well. The consequences of including all three scopes incur far-reaching and demanding responsibilities on corporations, where previously the distribution of responsibilities between producers and consumers has been disputed, for instance in the carbon majors case.

In sum, the Shell verdict raises the bar considerably for the expected level of corporate climate responsibility. The verdict also challenges the assumption that human rights don’t fit the complexity of climate change; though in fact the UNs first resolution on human rights and climate change appeared back in 2008. Moreover, the verdict goes against the widespread liberal assumption that businesses’ responsibilities are mainly to comply with the law of national jurisdictions and that consumers are comparably responsible for causing climate change. 

It might be time to rethink such assumptions and not simply continue ‘business as usual’ by seeing climate change and human rights-based climate litigation as a managerial risk factor to be handled instrumentally and in isolation from the moral duty to solve the climate crisis. 

One key lesson could be to acknowledge that corporate responsibilities are not just legal but moral as well, since the distinction is not so clear in soft law instruments like the UNGPs nor even in the notion of human rights themselves, not to mention the moral demands following from the need to respect and realize the targets of the Paris Agreement and related transition paths.

When the Special Representative to the United Nations on Business and Human Rights, John Ruggie, started exploring pathways for developing the field, he was inspired by the American philosopher Iris Marion Young whose ‘social connection model’ of global responsibility in supply chains suggests a forward-looking kind of responsibility for mitigating structural injustices. Young’s notion of responsibility was designed to solve large-scale structural problems like climate change by attributing responsibility to all agents according to their powers, privileges, collective capacities and level of complicity. 

This is the kind of thinking now supported in the court verdict against Shell, and it signals a new beginning where climate change reconfigures how corporations and human rights connect… perhaps making the ‘oil and water’ metaphor obsolete.


Acknowledgements

Among the many expert commentators, Annalisa Savaresi’s work provided particular inspiration for writing the blog. I am grateful to Florian Wettstein, Sara Seck, Marco Grasso, Ann E Mayer and Säde Hormio who all gave comments to my article ‘Climate change as a business and human rights issue’ published in the Business and Human Rights Journal (2020) 5(1), pp. 1-27. The blogpost is based on the approach of this article. Julie Murray was helpful with proofreading.


About the Author

Kristian Høyer Toft, PhD in Political Science, Aarhus University 2003. During 2020-21 a guest researcher at the CBS Sustainability Centre, Copenhagen Business School. His research focuses on corporate moral agency, political theory of the corporation and climate ethics and is published in Business and Human Rights JournalEnergy Research and Social Science, and in the book Corporate Responsibility and Political PhilosophyExploring the Social Liberal Corporation (Routledge 2020). 


Photo by Irina Babina on Unsplash

Distraction and manipulation: the two horsemen of the digital economy

By Jan Michael Bauer

◦ 2 min read

Even before COVID, people have spent more and more time online. Particularly mobile devices have become a large part of our daily routines and for many there are few moments when the phone is not within direct reach. While studies have shown that even teenagers think they waste too much time online, surprisingly little is done to stop this trend. 

But how did we get here? Several dovetailing factors enabled this development and give me little hope that this trend will slow down any time soon. While technological advancements in mobile internet and device components were necessary conditions that allow for an easy and enjoyable interaction with platforms and services at all times and places, the real champions of compulsive internet use are social and data scientists driven by monetary incentives and unrestrained by a lack of proper ethics training. 

Despite the frequent regrets about the many hours wasted on the internet, people are struggling with self-regulation and apps, like “RescueTime”, with to sole purpose to block oneself from using other apps are becoming increasingly popular. 

While internet addiction has not been officially recognized as a disorder by the WHO, close parallels can be drawn to officially acknowledge gaming and gambling addictions. 

And this is certainly no coincidence as tech companies hire psychologists and designers to make their products and services as tempting as possible, frequently borrowing elements from the gambling industry. However, even though some tweaks based on the knowledge of capable social scientists will increase user engagement, much more can be learned about consumer behavior and how to manipulate it through the application of the scientific method itself. The use of experimentation, collection of big user data and application of machine learning algorithms are the big guns in the fight for user attention and their money.  

All these efforts are used to make social media more “engaging” but ultimately sales and advertising campaigns more effective. To do so, user interfaces and features are explicitly designed to grab attention and contain what has been termed as “dark patterns”. Design elements that often tap into the subconscious decision-making processes and therefore manipulate user through purposefully curated interfaces. While such practices benefit the company, they can have detrimental effects on individuals and society as a whole. 

We know that individual choices reflect individual preferences only under certain conditions, including the absence of deceptive choice architecture or marketing messages. Hence, I can’t stop wondering about the opportunity costs and side-effects of these miraculous little devices in our pockets that have grown into an ugly hybrid between a snake oil salesman and one-armed bandit. 

We have free markets based on the belief that they create value for society and make people better off by efficiently satisfying their needs. The recent U.S. opioid scandal has shown that for some products, sellers’ profits might not be positively related to consumer value. It certainly gives me pause that the best offline equivalent to the “RescueTime” App is probably the Betty Ford Clinic.

We are faced with many pressing issues that would require our full attention, while people are increasingly plagued by credit card debt, the planet is suffering from overconsumption and we spent 30,000 years alone, watching Gangnam Style on YouTube. 

Regarding the larger point that any efforts against these trends would hurt innovation, jobs and growth; let us take one step back and point out that the Western world has made it an imperative to ensure individual property rights and outlaw the use of violence with the explicit goal to increase investment and productivity. People can just do more good stuff, when they do not have to spend time protecting their property and family. Given our current technology and knowledge from the behavioral sciences, I think we have seen enough and should start treating distraction and manipulation as similar threads to human flourishing. 

So, what could we do? In the short run, we need to find ways to reduce the stream of big data feeding these efforts, force these practices out in the open and raise awareness about their use and effects, and find effective regulation to limit manipulation efforts in a dynamic attention economy. In the long run, we probably need to go beyond those patches as these issues not only hurt individual lives and careers but also the fabric of our democracy. 


Further reading

We recently published a paper showing how users can be manipulated through dark patterns to provide more data:

J. M. Bauer, R. Bergstrøm, R. Foss-Madsen (2021) – Are you sure, you want a cookie? – The effects of choice architecture on users’ decisions about sharing private online data, Computers in Human Behavior.


About the Author

Jan Michael Bauer is Associate Professor at Copenhagen Business School and part of the Consumer & Behavioural Insights Group at CBS Sustainability. His research interests are in the fields of sustainability, consumer behavior and decision-making.


Source: photo by ROBIN WORRALL on Unsplash

March for Gender #1: How a feminist collective took on a media giant to challenge everyday sexism

By Sarah Glozer & Lauren McCarthy

◦ 4 min read

To mark International Women’s Day 2021, the University of Bath’s Business and Society blog and Copenhagen Business School’s Business of Society blog have teamed up to present March for Gender. This month we will explore research focusing on gender, or research findings that have specific implications for women.

Here Sarah Glozer and Lauren McCarthy present their latest research into the activities of the feminist group ‘No More Page 3’. They explain why online activists should take a step back for campaigning in order to maintain the energy needed to affect change. This piece was originally published in The Conversation.

The daily image of a topless woman on page three of the Sun newspaper was considered by some to be a “British institution”. Yet it was also increasingly seen as a relic of institutionalised sexism in the media and society.

Then in 2015, nearly 50 years after it was first introduced, the feature was quietly removed from the publication. This decision was credited, in part, to the online campaign efforts of the “No More Page 3” (NMP3) movement, which gained the support of 140 members of parliament and numerous charities, including Women’s Aid and Girlguiding. It also attracted more than 240,000 petition signatures.

The campaign, which helped to force change at one of the UK’s most popular and powerful media companies, was widely acclaimed, described by one MP as a “seismic victory”. Activist Katherine Sladden wrote, “No other campaign has done as much to inspire a new generation of young feminists,” adding that it “became the gateway for women finding the courage to speak out on issues they care about”.

But beneath this success story lies a complex tale of how emotional energy sustained the NMP3 campaigners through personal and painful trolling.

Our research into the campaign reveals how supporters were met with online abuse on a daily basis. They regularly encountered rape and death threats aimed at themselves and their families. Campaign founder Lucy-Anne Holmes has told how she suffered an “overwhelming feeling of helplessness” and “burnout”, recalling:

It was terrifying. I was spent: financially, emotionally, creatively. Just going on Twitter with all of those voices coming at me would bring on a panic attack. I felt like I was being strangled by invisible hands.

Her experience was far from unique. For while the liberating potential of social media to mobilise collective action is widely valued, the toxic climate many experience on social media is all too familiar, and can lead to stress, anxiety and depression.

Yet the relentless online abuse aimed at the NMP3 campaigners – who deliberately tried to engage with their opponents through reasoned and polite posts – was tempered by messages of encouragement, both from each other and from supporters of their cause.

This complex interplay of positive and negative emotions led us to dig deeper into the campaigners’ survival story, and investigate the powerful techniques which kept them going in the face of such overwhelming adversity.

One important element was the underlying sense of solidarity which became a powerful force in helping the campaigners to recharge and replenish, sustaining momentum through emotional highs and lows. Faced with trolling and harassment, many campaigners felt energised simply by being online with other women with shared experiences. This feeling of alignment with others created a valuable store of emotional energy.

As one campaigner told us: “It wasn’t just a campaign … it was a space where we could go and feel completely confident, we could share anything with each other, and work out what we thought about things.”

Stepping back to move forward

Interestingly, this solidarity led to the coordinated and tactical use of a relay system adopted by the team. An exhausted campaigner wrestling with a hostile social media thread would “pass the baton” on to a colleague via a system of online messaging or “tagging” across platforms.

This system became a vital part of keeping the campaign’s momentum at times when some members felt the need to retreat from the front line. There was time and space for activists to step away from their screens, to disengage with the onslaught of social media.

Usually temporary, these moments of stepping away were deliberate and empowering – they offered protection. And in preserving individual wellbeing, they also ensured the continuation of the campaign.

Retreating, far from being seen as a form of weakness or defeat, was supported by the campaigners. It was a strategy which allowed for recovery of emotional energy and healing and, crucially, it rejuvenated the campaigners to return to campaigning.

A genuine connection to the roots of the campaign was also something that sustained the (mostly female) volunteers. They drew on their aligned personal experiences, often reminiscing about teenage shame they experienced related to their bodies or of later episodes of sexual harassment. The emotions related to these experiences meant the campaigners didn’t just “think” shame or anger, they felt it deeply.

One explained to us: “The feminist stuff still remains the thing that really lights me up.” She continued: “I feel it’s personal, it’s maternal, because I have a daughter, and a son who’s affected by toxic masculinity. It’s in my experience of abuse in relationship. I’m angry about it and passionate about it because it’s personal to me and people that I love.”

Another said: “Standing up for what is right is enough to make your legs go weak, your voice grow hoarse, and your hands shake with rage.”

Six years on from the NMP3 victory, more action is needed to fight inequality in both our online and offline worlds – there is still plenty to campaign for. Digital platforms certainly need to better police social media channels which continue to tolerate and excuse trolling and hate speech, particularly that directed towards women.

But we should be encouraged by NMP3’s story of grassroots collective strength, and its journey to success. And we should also consider the lessons it provides about activism and the common advice for women to always “lean in”. Sometimes, it seems, it’s better to simply retreat, replenish and come back stronger.


About the Authors

Dr Sarah Glozer is Associate Professor in Marketing and Society in the School of Management at the University of Bath. She obtained her PhD from the International Centre of Corporate Social Responsibility (ICCSR) at Nottingham University Business School. Sarah has also held a number of industry positions, such as Global Sustainability Manager at Cadbury Plc, UK. She is also Deputy Director of the Centre for Business, Organisations and Society (CBOS). Sarah researches and teaches on topics including corporate social responsibility (CSR) communication, digital marketing and ethical markets / consumption.

Dr Lauren McCarthy is Co-Director of the Centre for Research into Sustainability (CRIS) and a Senior Lecturer in Organisation Studies and Sustainability at Royal Holloway, University of London. Her research explores in what ways business can contribute to gender equality, with a focus on global supply chains. Lauren’s research has covered cocoa production in Ghana, cotton farming in India, and most recently, the effects of the COVID-19 pandemic on women garment workers in Cambodia. Equally, her research has explored how feminist social movements interact with business and CSR, particularly through the use of social media.


Photo by John Schnobrich on Unsplash

How organizations avoid to hire highly-skilled migrants

By Annette Risberg and Laurence Romani

◦ 2 min read ◦

Labor integration of migrants is a topic frequently on the public and political agendas, as it is increasingly seen as the first step to successful societal integration. Often the light is turned on the migrants and what they need to change and improve to get a job. They are expected to make themselves employable by learning the local language, by adapting to local ways of applying for jobs, and by adding local skills to their existing competencies. So, it seems, the moment migrants show some form of adaptation, they should do fine on the job market. But do they?

Why do organizations under-employ highly-skilled migrants? 

Well, maybe there is more to it. Highly-skilled migrants are often underemployed. This means they get jobs below their qualification level. We have all heard of the medical doctor driving a taxi. But who asks ‘why does a taxi company hire a medical doctor as a driver’? In a recent study, we decided to turn the light on the employers, the hiring organizations, instead of the migrants. We searched for an answer to the question of why organizations under-employ highly-skilled migrants.

We followed a mentor program aiming to integrate highly-skilled migrants in the labor market through mentorship and internship. In this program, support was given to migrants to learn the rules of the Swedish employment game, how to write a strong CV, cover letters, the importance of networks, for example. In our interviews, we talked to both mentors and mentees (migrants). They told us about arguments used in organizations to explain (or shall we say justify?) the under-employment of highly-skilled migrants. 

Alleged risk, but for whom?

They said that migrants are often described as lacking local job-seeking skills, how to write a CV, how to present oneself in the application letter, how to get in contact with a potential employer. At times, they may lack local language skills too. Yet, these skills were precisely what they acquired in the program (and in internships) and many of the migrants we interviewed possessed those skills, yet, remained unemployed. More interestingly, we got to hear that the highly-skilled migrants were also talked about in terms of bringing with them the unknown and the unfamiliar: unknown diplomas, unfamiliar job references, unfamiliar working cultures, and habits, for example. And, interestingly, in the interviews, this unknown was associated with a risk… but a risk of what? And, a risk for whom?

Keeping migrants in a lower symbolic position to maintain the power of ‘normality’.

Using the relational theory of risk, a theory where risk is seen as socially constructed, we realized two things. First, if people talked about risk, it was because they felt that something that they value was being threatened.  We found that they valued their usual (habitual) ways of doing things, the organizational normality, more than the new skills and experiences the skilled migrants could bring to the organization.

Hence, highly-skilled migrants were perceived to be a risk to the valued organizational normality and kept away from employment, to avoid disruption of this normality.

Second, if employed, they were hired at a level that did not allow them to fully contribute to the organization, at a level that indicated: your skills are not valued here, they are not to be considered, they are not to transform our usual way of doing things. 

These findings point to an organizational ground for the underemployment of migrants, independent from migrants’ skills and adaptation efforts. In simple terms, organizations may have an interest in under-employing migrants: they assure that their ‘normal’ way of working is not changed, that they are not challenged in their comfortable, everyday routines. The organization’s interest in under-employing migrants goes beyond having a (cheap) skilled workforce without recognizing its value, it is also to clearly indicate that ‘the way we do things around here is valued and we don’t want to question it’.

Who should be seen as a risk? The migrants or the organizations?

In a nutshell, we got to hear that migrants are presented by some as being a risk. But, frankly, a risk for whom? For those comfortably installed in their routines? How about we turn things around and consider that those organizations, not the migrants, should be seen as a risk.

Indeed, by stopping the integration of highly-skilled migrants, are those organizations not a risk to a sustainable society and the (labor) integration of the migrants we welcomed?

The good news is that often, this comfort of the ‘normality’ is not so difficult to change. Organizations’ routines are constantly in the making and it is actually beneficial to challenge and change them from time to time to continuously adapt to the organization’s changing environment.  So, the next time you hear that it is ‘normal’ to expect a local degree for this position, ask yourself: who really benefit from this ‘normal’? And, who should be seen as a threat here?


Further reading

Risberg & Romani (forthcoming) “Underemploying highly skilled migrants: An organizational logic protecting corporate ‘normality”. Human Relations. 


About the Authors

Annette Risberg is a Professor of Diversity Management at Copenhagen Business School and Professor of Organization and Management at the Inland Norway University of Applied Sciences. Her research focus is on practices of diversity management in general and the inclusion of immigrants in organizations. Her latest co-edited book is The Routledge Companion to Organizational Diversity Research Methods and Diversity in Organizations.

Laurence Romani is an Associate Professor at the Stockholm School of Economics. Her work focuses on representation and interaction with the cultural Other in respectful and enriching ways. She currently investigates the conditions of integration of the perceived cultural Others (e.g. ethnic minorities, migrants) in the Swedish labor market. She critically studies race, gender and class hierarchies in organizations’ work with cultural diversity.

Do we need to sacrifice to mitigate climate change?

By Laura Krumm

3 min read

It is not news anymore that a change of consumer behavior is needed in order to have a chance at mitigating climate change. Almost every consumer action today can be quantified in terms of environmental impact. We know that we should opt for the tofu sticks instead of the steak at our neighbor’s barbeque, and we know that we should avoid the all-inclusive vacation to the Caribbean and take a cozy camping trip at Denmark’s beaches instead. What we don’t know is what those behavior changes mean for consumers. What are the consequences for our individual quality of life and well-being?

Self-sacrificing for the planet

The expectation does not seem to be very satisfying. Most of us have heard the word “sacrifice” in the context of environmentally friendly behavior before. The message we receive from climate activists, journalists and researchers is very clear:

We need to change our behavior today to avoid the catastrophic consequences of climate change tomorrow. We need to change our behavior for our children, the animals, other people in other countries, or our own future lives – even if we don’t want to.

We are expected to change our behavior for the greater good, while our own desires have to wait in line [1, 2].

This sacrifice narrative cannot only be found in climate change communication but also in consumers’ minds: When investigating what was hindering consumers to act environmentally friendly when they generally value the environment, the expectation of sacrifice and lowered quality of life was found to be one important factor [3]. Consumers seem to equate environmentally friendly behavior with a loss in quality of life and comfort. This anticipation, among others, prevents them from changing their behaviors and joining in the efforts of mitigating climate change.

Why is this important?

While altruistic motivation – driving us to self-sacrifice for the greater good – is positively related to environmental behavior [4], it can only get us so far. Another main driver of our actions is egoistic motivation. And as it seems, behaving more environmentally friendly is not perceived as a particularly egoistic action. While there sure are people with very strong altruistic motivation who enjoy behaving in a morally right way, many people are egoistic some or most of the time.

If the perspective of an environmentally friendly life is a bleak one, environmental engagement will be limited.

This is not only relevant for individual consumer behavior and environmental engagement, but also for policy and activism. When an environmentally friendly life seems bleak and uncomfortable to many people, it will be a difficult task to get them on board. Why would I support or vote for somebody who wants my life to become worse right now as a tradeoff for a potentially less catastrophic future?

Aside from elections, citizens who equate environmentally friendly behavior with sacrifice and lower well-being may also have lower acceptance of necessary policy interventions aimed at mitigating climate change. Consequently, the necessary change towards more environmentally friendly consumption will be hard to realize without considering its effects on well-being.

Does it have to be sacrifice?

Is it even true that environmentally friendly consumption can be equated with sacrifice, discomfort and a bleak existence?

Contrary to what the public opinion seems to believe, the relationship between well-being and environmentally friendly (or unfriendly) behavior is empirically not yet clear.

Some correlational studies even suggest the opposite: a positive relationship between environmentally friendly behavior and well-being [e.g., 5, 6]. These studies find that people who behave environmentally friendly are more satisfied with their lives. We cannot infer any causality of course – but these findings at least challenge the sacrifice assumption. This means that there may be a discrepancy between consumers’ expectations and the reality of behavior change. The sacrifice assumption might therefore not only be unhelpful in engaging consumers to behave differently, it may even be completely untrue.

What does that mean for us environmental researchers? We need to explore why consumers expect negative consequences of environmental behavior change and how to change that. We need to understand what these negative expectations are exactly. We need to take consumer well-being seriously and keep it in mind when designing behavior change policies and initiatives. And we need to rethink how we communicate about environmental behavior change and climate change mitigation.


References

[1] Kaplan, S., 2000 – Human Nature and Environmentally Responsible Behavior, in: Journal of Social Issues, 56 (3), 491-508.

[2] Prinzing, M., 2020 – Going green is good for you: Why we need to change the way we think about pro-environmental behaviour, in: Ethics, Policy & Environment, 1-18.

[3] Lorenzoni I., Nicholson-Cole, S. and Whitmarsh, L., 2007 – Barriers perceived to engaging with climate change among the UK public and their policy implications, in: Global Environmental Change, 17, 445-459.

[4] De Groot, J.I.M. and Steg, L., 2008 – Value orientations to explain beliefs related to environmental significant behavior, in: Environment and Behavior, 40 (3), 330-354.

[5] Binder, M. and Blankenberg, A., 2017 – Green lifestyles and subjective well-being: More about self-image than actual behavior?, in: Journal of Economic Behavior & Organization, 137, 304-323.

[6] Brown, K. W. and Kasser, T., 2005 – Are psychological and ecological well-being compatible? The role of values, mindfulness, and lifestyle, in: Social Indicators Research, 74, 349-368.


About the Author

Laura Krumm is a PhD fellow at the Department of Management, Society and Communication and a member of the Consumer & Behavioural Insights Group. In her PhD project she explores the intersection of environmental consumer behavior and well-being.


Photo by Markus Spiske on Unsplash

Sustainability claims: In what sense are they performative?

By Lars Thøger Christensen

The number of products advertised as “green” or climate neutral has exploded in recent years, according to several newspaper articles. Should we be alarmed? To some extent, yes. In addition to cases of blatant fraud and manipulation, there is reason to be concerned when a plethora of green labels for products – ranging from milk over burgers to gasoline – competes for attention, especially when the variety confuses understandings of what it means to be sustainable.

Moreover, since carbon offset programs tend to obscure the fact that neither air travel nor fashion clothing is or can be CO2 neutral, the need to question and test green advertising claims is more pressing than ever. It is therefore commendable that politicians and NGOs in some countries call for more control with corporations that claim to market green or CO2 neutral products. 

The growth in green advertising claims attracts increased scrutiny, regulation and control.

At the same time, the expansion in green advertising claims illustrates the growing social, political and economic premium put on sustainability. Even if many such claims are superficial and hypocritical, their combined existence is performative beyond what individual corporations, NGOs and regulators can imagine and control. 

When all social actors express the significance of sustainability, something has changed.

Scholars of communication often emphasize that communication is constitutive of organizational and social reality. Communication, in their view, is performative because it does something more than simply describe a preexisting reality. Yet, in what sense does this logic apply to issues of climate change and the broader sustainability arena? 

To what extent has communication performative potential in the sustainability arena?

Critics of the performative view on communication view argue that green messages often fail to change anything, either because the senders are insincere or because larger social forces, such as profit motives or efficiency demands, override any talk about sustainability. The power of sustainability communication to shape organizational practices is therefore often described as naïve or overly optimistic. These are important objections to the performativity perspective. Yet, communication still plays a significant role in instigating better practices.

The articulation of sustainability ideals is often “the leading incident” in its performance (Austin, 1962, p. 8).

It is certainly true that sustainability communication is insufficient in and of itself to ensure more sustainable practices. Some sustainability claims may even prevent organizations from moving in the right direction. Nonetheless, communication about sustainability is an important dimension of sustainable action. Without a communicative engagement of major corporations with the values and ideals of sustainability, changes in that arena are likely to be significantly slower. 

Interestingly, critique and control of sustainability claims may help such claims to perform.

Talk about sustainability and green products tend to attract attention of critical stakeholders and increase internal and external pressure to walk the talk. Bold statements combined with public exposure and critique are important dimensions of what we might call the performativity “cocktail”. Green advertising claims and public statements about CO2 neutrality can be used to apply pressure on corporations and remind them of their promises. If major corporations, out of fear of attracting negative stakeholder attention, decide to remain silent on the sustainability issue, critics and regulators have less material to work with. In other words, a willingness on the part of corporations to expose themselves to critique is key.

Communicative performativity in the sustainability arena is a macro phenomenon.

Obviously, an organization does not become sustainable by simply “talking green”. In fact, it is a mistake to think of performativity – especially in complex areas such as sustainability – as a result of discrete and isolated organizational messages or claims. It doesn’t work that way. Even with the best intentions, green talk takes considerable time and effort to materialize into more sustainable practices. Moreover, it is rarely an organizational effect. Performativity is an outcome of multiple claims that are repeated and reformulated again and again over time and across multiple organizations, public as well as private. The sedimented effect of such dynamic interaction that lead to what Butler (2010) calls “socially binding consequences” (p. 147).

The performativity of sustainability claims should be understood as sedimented effects of multiple claims and understandings. 

The communicative performativity of sustainability claims involve reactions of stakeholders, competitors, legislators and consumers who are variously affected, inspired or provoked by the claims to expect and demand better practices. Still, there is no guarantee that the claims will stimulate significant changes. That, of course, is true for all types of messages. Messages and claims can be ignored, forgotten or outright contradicted by subsequent claims or other types of action. Without the claims, however, society and the physical environment is likely to be worse off. The trick is to use them actively to remind the senders of their social and environmental responsibilities. 


Further readings

Austin, J. L. (1962). How to do things with words. Oxford: Oxford University Press.

Butler, J. (2010). Performative agencyJournal of Cultural Economy, 3(2), 147-161.

Christensen, L. T., Morsing, M., & Thyssen, O. (2020). Talk-action dynamics: Modalities of aspirational talk. Organization Studies

Fleming, P., & Banerjee, S. B. (2016). When performativity fails: Implications for Critical Management StudiesHuman Relations, 69(2), 257-276.


About the Author

Lars Thøger Christensen is Professor of Communication and Organization at the Copenhagen Business School, Denmark. 


Photo by Helena Hertz on Unsplash

Insecure work: rethinking precarity through Kenya’s tea plantations

By Hannah Elliott

Over the last decade, the term ‘precarity’ has become ubiquitous in studies of work and labor, as jobs are increasingly characterized by temporary and insecure contracts; lack of basic welfare provisions such as paid leave; and low pay. The informalization of work has gained pace in a post-Fordist world. And we can expect to see more precarity. The COVID-19 pandemic is pushing employers the world over to think of new ways to reduce labor costs as economies flounder.

Anthropologist of work Kathleen Millar has argued that we need to be careful about how we think about ‘precarity’ when we talk about insecure work. The term can inadvertently “smuggle in a conservative politics”, valorizing and romanticizing a Fordist past of full-time wage labor. This employment past is not universal. In the majority of the world, economies have historically been characterized by informality. Here, formal secure work has been more of an idea, a promise tied up in teleological ideals of modernization and development, than a reality. Furthermore, in former settler colonies such as Kenya and South Africa, formal wage employment has roots in colonial capitalism, coercion and exploitation.  

I’ve been thinking about precarity through the case of changing employment conditions on Kenyan tea plantations, where I’ve been researching the production of certified sustainable tea as part of the SUSTEIN project. I carried out my latest fieldwork between January and March this year, right up until the majority of European countries went into lockdown. A few weeks later, Kenya followed suit. In Kericho, the heart of Kenya’s tea production and where I spent most of my stay, there was little sense that the world was on the brink of an impending global pandemic, let alone reflection on what that could mean for the tea industry. And yet, in conversations with diverse actors in the sector, there was a shared narrative that the industry, responsible for one of Kenya’s biggest export commodities and foreign exchange earners, was struggling.

Enduring low prices of tea on the global market and rising costs of production have led multinational companies owning large tea plantations to look for ways to cut labor costs.

Tea is a labor intensive crop, and companies have historically depended on large resident workforces to pluck tea, plant and prune tea bushes and operate factories, among a multitude of other tasks required to maintain vast tea plantations. Biannual collective bargaining agreements led by the workers’ union have seen wages increase at a rate companies say is unsustainable for business. Citing high wages relative to other agricultural sectors in Kenya and the additional costs of employee benefits such as free housing and water, payment of retirement funds, and contributions to health insurance, along with the costs of maintaining infrastructures used by workers and their dependents such as schools and dispensaries, companies argue for the need to reduce labor forces.

The gradual reduction of company-employed low-level or ‘general’ workers has been taking place through parallel processes of mechanizing tea harvesting and outsourcing tasks outside of companies’ core activities of tea harvesting and factory processing. While workers carrying out core tasks continue to be employed directly by the company, thus receiving a union-negotiated wage and the package of employment privileges described above, outsourced workers are hired on insecure terms by external service providers who hold contracts with tea plantation companies. Outsourced workers are typically employed on short contracts, sometimes for as little as a few days. This renders them ineligible for union membership, and most earn less than half the daily salary of a company employee. If they are unable to work due to sickness, they will not be paid. The contractors who employ them are required by the company to make deductions from their salaries to national health insurance and social security schemes, but low wages and short-term employment mean that contributions are meagre.

Kenya has a large work-seeking population, and people are prepared to take outsourced jobs because of few employment opportunities.

In spite of the striking unsustainability of labor outsourcing for these workers, international sustainability standards say surprisingly little about this category and establish few mechanisms to safeguard them.

In the context of decreasing opportunities for employment in permanent company jobs on tea plantations, current and former workers talk with nostalgia about a time when company jobs and their related securities were a plenty. This nostalgia echoes the valorization of stable, full-time wage labor that Millar identifies as lurking in the notion of precarity. But, without dismissing workers’ nostalgia, we should be careful not to romanticize plantation jobs of the past which were, in spite of their securities relative to outsourced work, inherently precarious.

During the early twentieth century, the colonial administration sought to disrupt and undermine subsistence economies so that people would be forced to seek work on infrastructure projects and in settler industry and agriculture, including tea plantations. For decades, the industry struggled with labor shortage which undermined its growth and expansion. During the 1940s and 50s, efforts were made to create permanent resident labor forces through welfare provisions such as housing, kitchen gardens and retirement funds. Yet workers could never own the houses they lived in, nor the land they were given to cultivate, which remained the property of the company.

In seeking to create a stable workforce that could make Kenya’s tea industry sustainable, the colonial administration destabilized rural economies and created a class of people who would be forced, for generations, to seek wage labor.

If, in these uncertain times, we shouldn’t wish for a whole-sale return to permanent, full-time wage labor, what might we hope for instead? Millar argues for a critical politics of precarity that problematizes the centrality of economically productive work and its promise in contemporary capitalism rather than calling for a return to stable full-time work. Campaigns that propose alternatives to work include Universal Basic Income – where governments makes regular unconditional payments to every individual – and Universal Basic Services. A 2017 study by UCL’s Institute for Global Prosperity proposing Universal Basic Services in the UK argues that government provision of basic services such as food, shelter and transport has the potential to reduce dramatically the cost of living for those on the lowest incomes, making participation, belonging and cohesion possible in the face of increasingly precarious work. These initiatives are becoming more compelling as the world reels from the pandemic and we try to imagine a recovery that prioritizes social and environmental justice.


References

Kathleen M. Millar (2017) ‘Towards a critical politics of precarity’. Sociology Compass, 11 (6), pp. 1-11.

Henrietta Moore, Andrew Percy, Jonathan Portes and Howard Reed (2017) Social prosperity for the future: A proposal for Universal Basic Services. Social Prosperity Network Report: Institute for Global Prosperity, UCL.


About the Author

Hannah Elliott is a postdoc at MSC focusing broadly on the political and economic anthropology, in particular in eastern Africa where she has been conducting research since 2009. Her current research examines the production of certified sustainable tea in Kenya as part of the SUSTEIN project. 

Cultural sensitivity and diversities in the measuring of sustainable development

Lessons learned from the responsible behaviors of individuals during the Covid-19 crisis

By Fumiko Kano Glückstad

The Covid 19-crisis has had – and still has – a very serious impact on a global scale. The New Normal guideline published by WHO [1] suggests that the responsible behaviors of individuals during the Covid-19 crisis have a critical impact on how a country is able to control the spread of  infection. However, the reactions of individuals to aspects of the New Normal such as “social distancing” and “wearing a mask” have been considerably diverse depending on who they are and which society they belong to [2].

Who they are?

To overcome a challenge like the Covid-19 crisis, but also e.g. the long-term crisis on climate change, socially responsible behaviors from individuals are required. Roughly speaking, such behavioral changes may be motivated by four types of personal value priorities [3]: i) anxiety-free values, ii) anxiety-based values; iii) personal-focused values; and iv) social-focused values (See the Figure).

Adapted from Schwartz (2012) [3]

Schwartz [3] states that: 

Socializers and social control agents discourage values that clash with the smooth functioning of significant groups or the larger society. Values that clash with human nature are unlikely to be important. The basic social function of values is to motivate and control the behavior of group members (Parsons, 1951). Two mechanisms are critical. First, values serve as internalized guides for individuals; they relieve the group of the necessity for constant social control. Second, people invoke values to define particular behaviors as socially appropriate, to justify their demands on others, and to elicit desired behaviors. Socializers seek, consciously or not, to instill values that promote group survival and prosperity.

Schwartz, 2012, page 12

This statement is highly relevant to the two aforementioned challenges: Covid-19 and climate change. 

Let us for instance think about the economic situation that the Covid 19 crisis has brought upon the tourism and experience economy (EE) sector. In order to thrive and secure the jobs of the employees involved in the sector, the EE sector needs to maintain a certain number of tourists visiting its destinations. On the other hand, society needs to prevent further spreading of Covid-19. Hence, the responsible behaviors of individuals expressed in association with their travel activities play a crucial role in maintaining the EE businesses.

However, individuals’ attitudes to traveling and to the Covid-19 crisis substantially differ, and manifest in different behaviors. For example, some individuals may prefer to enjoy traveling because they prioritize “personal-focused” values, seeking to fulfill their hedonistic needs, their needs of self-expression and to obtain a sense of achievement. Such internalized personal values may trigger a negative reaction to the constant social control enforced by Covid-19. On the other hand, a person inclined to “social-focused” values may instead tend to choose socially appropriate behaviors required to prevent the spread of Covid-19.

Which society they belong to?

While the value priorities of individuals within and across societies may differ, cultures also influence the formation of selves. Markus & Kitayama’s [4] [5] phenomenal theory, ‘Culture and Self’, defines the independent and the interdependent self-schemas that demonstrate “how sociocultural contexts can shape self-functioning and psychological functioning (Markus & Kitayama, 2010, page 425)”.

Adapted from Markus & Kitayama (2010)

Markus and Kitayama (2001; 2010) explain that:

When an independent schema of self organizes behavior, the primary referent is the individual’s own thoughts, feelings, and actions. Alternatively, when an interdependent schema of self organizes behavior, the immediate referent is the thoughts, feelings, and actions of others with whom the person is in a relationship.

Markus and Kitayama, 2010, page 423

Accordingly, feelings of happiness also differ depending on whether a person is rooted in a culture emphasizing the independent or interdependent self-schemas [6].

Specifically, in North America happiness may most typically be construed as a state contingent on both personal achievement and positivity of the personal self. Negative features of the self and negative feelings are thus perceived to be a hindrance against positivity and happiness. In contrast, in East Asia happiness is likely to be construed as a state that is contingent on social harmony and, thus, on a balance among different selves in a relationship.

Uchida, Norasakkunkit, & Kitayama 2004, page 227

Following the arguments of the aforementioned East Asian cross-cultural psychologists, the formation of value priorities might have been influenced by such culture-rooted self-schemas. Thus, the value priorities and culture-dependent self-schemas of individuals become important factors when scholars do research on sustainable and responsible consumer behaviors. In other words, if the mechanism of feeling happiness is fundamentally different between the independent and the interdependent cultures or between the social- or the personal-focused individuals, the motivations for behaving in a socially responsible way may substantially differ.

Socially responsible reaction to the New Normal

These existing individual and cultural differences may cause us to think about the definition of “socially responsible behaviors” in the context of the Covid-19 crisis.

On Wikipedia, “social responsibility” is defined in the following way:

Social responsibility is an ethical framework and suggests that an individual has an obligation to work and cooperate with other individuals and organizations for the benefit of society at large. Social responsibility is a duty every individual has to perform so as to maintain a balance between the economy and the ecosystems. A trade-off may exist between economic development, in the material sense, and the welfare of the society and environment…

From this viewpoint, the Covid-19 crisis could be an excellent opportunity for individuals to exercise “socially responsible behaviors” for the benefit of society, i.e. in order to return to a Covid-19 free society. However, it generally seems that the young generation of Scandinavians who have been world-leading in sustainable behavior changes have been less engaged in the socially responsible behaviors encouraged during the Covid-19 crisis. What we have learned from the Covid-19 crisis is that the cultures emphasizing the interdependent self-schema have had a smoother path to the New Normal behaviors.

An Australian writer, Paul De Vries posted his interesting observation of the Japanese people’s reactions to Covid-19 in Japan Times [7]:

A stumbling block of the “assumption of carrier” countermeasure is that it requires people to endure discomfort for the sake of the collective good, despite the likelihood of being COVID-19 free. Persuading a critical mass of the population to accept such an imposition is a challenging task, especially when new case numbers are in decline.

Three of the motivating factors that induce Japanese nationals to adhere are courtesy, obligation and shame. Courtesy is the willingness to act out of genuine concern for others. Obligation involves placing the needs of the group before those of oneself. Shame is fear of what others might think if one does not comply to group or societal norms.

There is no shortage of courtesy among the silent majority of the West, as unlikely as that can sometimes seem. A sense of obligation also exists, but typically toward groups less large than society as a whole. Shame, on the other hand, is not a dominant Western trait.

Cultural sensitivity and diversities in the measuring of sustainable development

The diverse reactions to the Covid-19 crisis observed in the past months are good examples demonstrating a need “to prepare a new cultural map of developmental goals, and to create and adapt development indexes that are more culturally sensitive [2]”.  

However, the mapping of cultural differences is not enough to capture heterogeneities of the respective societies. Here, the individuals’ value priorities play in. The theory of basic human values by Schwartz [3] implies that individuals prioritizing the “self-transcendence” value, for example, might be more prone to engage in the socially appropriate behaviors specifically required to prevent the spread of Covid-19. In order to effectively implement a policy for the various sustainable development goals, a new cultural map integrating the heterogeneities of societies will become necessary. In this way, a policy maker could distinguish messages suitable for the respective target segments and optimize their effects on the citizens’ responsible behaviors.

The recent development of machine learning technologies has made it possible to classify populations into such personal value typologies, to describe who they are, and to predict how they will respond to various situations [8]. In our project, UMAMI (Understanding Mindsets Across Markets, Internationally) [9], we developed a workflow and methodologies to investigate such heterogeneities of societies based on personal value priorities. It would be interesting to explore how these can be exploited in various application domains addressing the sustainable development goals in the coming years.


References

[1] https://www.who.int/westernpacific/emergencies/covid-19/information/covid-19-new-normal

[2] Krys K, Capaldi CA, Lun VM-C, et al. Psychologizing indexes of societal progress: Accounting for cultural diversity in preferred developmental pathways. Culture & Psychology. 2020;26(3):303-319. doi:10.1177/1354067X19868146  

[3] Schwartz, S. H. (2012). An Overview of the Schwartz Theory of Basic Values. Online Readings in Psychology and Culture, 2(1), 1–20. https://doi.org/10.9707/2307-0919.1116

[4] Markus, H. R., & Kitayama, S. (1991). Culture and the self: Implication for cognition, emotion, and motivation. Psychological Review, 98 SRC-(2), 224–253.

[5] Markus, H. R., & Kitayama, S. (2010). Cultures and selves: A cycle of mutual constitution. Perspectives on Psychological Science, 5(4), 420–430. https://doi.org/10.1177/1745691610375557

[6] Uchida, Y., Norasakkunkit, V., & Kitayama, S. (2004). Cultural Constructions of Happiness: Theory and Empirical Evidence. Journal of Happiness Studies, 5, 223–239. https://doi.org/10.1007/s10902-004-8785-9

[7] https://www.japantimes.co.jp/opinion/2020/05/22/commentary/japan-commentary/covid-19-versus-japans-culture-collectivism/

[8] Albers, K. J., Mørup, M., Schmidt, M. N., & Glückstad, F. K. (2020). Predictive evaluation of human value segmentations. The Journal of Mathematical Sociology, 1–28. https://doi.org/10.1080/0022250X.2020.1811277

[9] http://sf.cbs.dk/umami


About the Author

Fumiko Kano Glückstad is Associate Professor of Cross-Cultural Cognition at Copenhagen Business School. She works in the area of cross-cultural psychology. She has developed a workflow and methodologies enabling data-driven segmentation and typological analysis of consumers based on their personal value priorities in close collaboration with the Section of Cognitive Systems, DTU Compute at the Technical University of Denmark during the UMAMI project (2017-2020) funded by Innovation Fund Denmark. She previously worked as a consumer researcher and product concept designer of kitchen appliances at Panasonic Corporation, Japan and as a Japanese market specialist at Phase One A/S, Denmark.


Photo by Kate Trifo on Unsplash

Top Leadership Compensation: From Hockey-Stick to Shared Pay-checks

“Sharing is Caring” is a way to manage post-COVID19 Economic Crises and Layoffs

By Anirudh Agrawal & Bharat Dhamani

10 of the 25 Linkedin review of best companies to work in India published in 2019 are firing their employees in 2020.  They paid huge performance based salary to top management, who drove performance by reducing pay of the lower rung employees [1].

There is a moral dilemma when we compare top management compensation with those employed at the lower levels or those employed on temporary contracts in India Inc. The median top management salary in India is as much as 243 times than those at the lowest strata of the organisation [2]. During the recent Covid-19 crises, this wage asymmetry between the lowest rung employees and top management the resulting crises of legitimacy were further highlighted. This opinion piece discusses three strategies to control hockey stick pay-outs to the corporate leadership. Contrary to current narrative on free market  and invisible hand, the corporate must self-reflect and implement policies for greater employee rights and dignity, collective bargaining and equality of pay to create  sustainable competitive advantage. 

India Inc. must learn from Scandinavian enterprises about their top leadership compensation model where the compensation is decided collectively ( along with the employee union), ensuring fairer pay and shared accountability towards organizational performance. Scandinavian strategy of collective bargaining has ensured multiple benefits [3].

  1. It has ensured that the rights of the lowest-ranked individual is protected.
  2. It has ensured that organizations follow sustainable policies both internally and externally, keep sharing the impact from shareholders to stakeholders, and
  3. The employees at each level and the communities work in sync towards ensuring organisational mission and competitiveness politics, cliques and influence of personal interest groups are limited.
  4. The collective agreements ensure that the employee flights to competitors are limited.

The effect of Scandinavian model has ensured an overall positive impact on organisational longevity, brand recall and competitiveness [4].

The India Inc should engage with their Indian public sector counterparts and learn their functioning and how they treat their employees through fairer pay and work conditions. India Inc should reflect and study the pay structure adopted by the Indian Public sector [5].

The public sector salaries have ensured respect for each, preservation of rights, longevity in the job and service to all irrespective of caste, colour or religion.

For example, the public sector banks like SBI ensure delivery of financial services to the poorest of the poor while ensuring that its banking officials are paid well. Our common sense would suggest that the Indian private sector to emulate some of the public sector compensation methodology, ensuring that the employee at the lowest strata get decent wages. The private sector can learn from the public sector on how to manage organisational compensation and increase organisational loyalty and in doing so, it must also increase benefits to the lowest ranking employee in the organisation. Similarly, the public sector should develop agility to reflect on market forces and learn to innovate to ensure that it is aligned and competitive as the competition demands. 

Narayan Murthy of Infosys rightly questioned his senior management about the lack of accountability despite hockey stick payouts. He pointed out that shareholders might approve the actions of the top management but the corporate leadership must be accountable to the stakeholders that includes the public and the employees [6]

Therefore, top management compensation should be duly decided by following a strong corporate governance principles, transparency and by installing elements of corporate ombudsman

Firms with strong accountability and stakeholder interests would perform better in the long run, than those firms which are driven by offering high incentives to top management for performance.

Some Indian private sector organisations belonging to distressed industries and markets had taken large public owned capital to run their businesses, paid hefty compensation to higher management but when things went wrong, both the promoters and top management had no public accountability. Besides, when the business failed to perform, the top management were just let go while the lower-ranked employees struggled to pay their bills. The audit reports were hardly made public and the accountability measures and corporate governance rules of such organisations were never questioned.  

The organisations while deciding top management compensation must also bring proportionality in accountability and stakeholder engagement.

Collective bargaining, equality in pay similar to public sector and corporate social and moral accountability are three strategies that the Indian corporations must reflect and incorporate in their managerial processes. Some of the NIFTY fifty Indian corporations like the Tata Group, Infosys, Mahindra and Mahindra, Hero Motors, ICICI Bank have implemented in their processes and one can see these effects on the employee satisfaction on Glassdoor employer ratings, brand recall by the consumers and overall stakeholder satisfaction is reflected positively.

Therefore, if the Indian private sector implements the policies that lead to greater accountability, equality in pay, collective decision making while ensuring its flexibility to market forces, we will see a disruptive and positive change in the image, governance mechanism, competitiveness and longevity of Indian corporations.

While the hockey stick model of compensation shifts the responsibility entirely on the top management, the collective bargaining and equitable compensation distributes the responsibility to each and every employee, bringing greater sense of employee engagement and employee accountability. Such a strategy has a potential to create long term competitiveness and shareholder value.


References

[1] https://www.businessinsider.in/here-are-the-25-most-popular-workplaces-in-india-according-to-linkedin/articleshow/68704338.cms
[2] https://economictimes.indiatimes.com/news/company/corporate-trends/india-incs-top-executives-earn-243-times-more-than-average-staff/articleshow/63359591.cms
[3] https://www.socialeurope.eu/why-trade-unions-at-work-do-work
[4] http://norden.diva-portal.org/smash/get/diva2:816030/FULLTEXT02.pdf
[5] https://www.spjimr.org/blog/learning-public-sector
[6] https://www.hindustantimes.com/india-news/narayan-murthy-recounts-his-spat-with-vishal-sikka-to-drive-home-point/story-YNG126VbaGMO5nDgFx0XCM.html


About the Authors

Anirudh Agrawal is Impact Investing and Social Entrepreneurship Fellow at Copenhagen Business School and Lecturer of Entrepreneurship and Strategy at Department of Entrepreneurship at FLAME University India. He is researching on the institutional theory framework to reflect on debates in social entrepreneurship and social innovation. 

Bharat Dhamani is a Lecturer of Entrepreneurship and Strategy at the Department of Entrepreneurship at FLAME University India. He practices engagement oriented learning through simulation and practical work. His subjects include financial management, business plan preparation, new venture business strategy and social entrepreneurship.


Photo by Sharon McCutcheon on Unsplash

Branding in the COVID-19 pandemic

Not every time is the right time for real-time marketing

By Maha Rafi Atal and Lisa Ann Richey

This article is based on previously written piece for the Centre for Business and Development Studies.

As the global Covid-19 pandemic spread through Europe and North America, companies raced to communicate how they were responding to the crisis. Advertising that focuses on a company’s response to humanitarian crises is hardly new. Every holiday season features a parade of brands touting their seasonal partnerships with charitable causes. Yet these exercises in “Covid-branding” struck a particular nerve with both consumers and media commentators because so many of the brands stuck to the same script. Quickly that script even became the subject of satire.

‘The hallmarks of the coronavirus ad are so consistent they could be generated by bots. They begin with eerie drone footage of empty streets, a shot of a child staring plaintively out the window and then — cue the upbeat musical key change — a medical worker peeling off a mask, a guy jamming on a home piano, maybe a deeply pregnant woman rubbing her belly as if summoning a genie from its bottle.’

Amanda Hess, The New York Times, May 22, 2020

These patterns are important. In the uncertain early weeks of the pandemic, as governments were still crafting their responses, the stories brands told played a role in shaping how the public made sense of the crisis. What kind of a crisis was it? What sort of solutions did it need? What role should business play in delivering them? Covid-branding offered answers to those questions.

In this briefing note, we present a preliminary analysis of Covid-branding by companies in Europe and North America during March and April 2020. Our analysis finds that messaging clustered clearly into two ways could engage: ‘Covid-helping’ and ‘Covid-coping.’ These messages of ‘managing the pandemic’ and ‘managing yourself’ frame the consumption of goods and services as a way that consumers can show they care, presenting shopping as a form of everyday heroism. In this way, they make the case that private sector has a role to play in humanitarian response.

Economic Context

The Covid-19 pandemic has taken an extraordinary toll on the global economy. Measures to combat the spread of the virus, including border closures, and national lockdowns affecting one-third of the world’s population, shut down much industrial production and pushed white-collar professionals to remote work. These measures, coupled with a fall in consumers’ own confidence in response to the health crisis, contributed to rising unemployment, falling consumer activity, and the worst global recession since the Great Depression.

This context, with consumer activity declining overall and shifting from closed stores to online retailers, placed pressure on brands to compete for a share of the smaller e-commerce pie. At the same time, the recession placed pressure on marketing professionals to demonstrate their relevance at a time of overall corporate retrenchment.

Marketing Context

We focus our analysis on online communications, especially social media output. Social media marketing is often informal in tone and crafted quickly to respond to real-time events, so that brands can ride the waves of attention paid to viral news stories, from royal babies to sporting events.4 Most research about this practice has suggested brands choose to focus on positive or neutral stories to avoid mistakes, as humorous tweets about a serious event can backfire. That makes Covid-branding in the early weeks of the pandemic, when infection and death rates were rising, unusual.

We also examine promotional emails and newsletters, a form of content marketing. Content marketers have begun to develop more journalistic skills, including as storytellers and explainers of complex phenomena, and indeed many former journalists are employed as content marketers. Covid-branding, in which brands help consumers make sense of the emerging crisis, is an example of this phenomenon.

These online forms have not received much attention from researchers of corporate humanitarianism, which has focused on more traditional forms of print and broadcast advertising. We hope that this brief typology of how marketers used these newer forms in the Covid-19 pandemic encourages further research into these formats.

Covid-branding as Covid-helping

Brands that emphasized their role in helping to manage the pandemic did so in distinct ways. To understand this, we considered two aspects of each marketing message: First, whether companies are making an engaged or disengaged intervention. Companies which are engaged use their own business capacities toward the Covid-19 cause. Second, we consider whether companies are claiming to directly or indirectly impact the Covid-19 crisis itself. We investigate whether the brand claims to address the medical situation (direct) or indirect societal outcomes of the pandemic, including economic impacts.

The four modes of engagement
Direct Engaged: Business puts its core capacities into directly fighting Covid

Some companies with core operations in the fields directly linked to fighting the pandemic (i.e. health care or logistics companies) quickly began communications around their role.

This Novo Nordisk Facebook advertisement shows healthcare workers holding up a sign reading “Thanks” in Danish. Novo Nordisk is a leading pharmaceutical company. Photographs of healthcare professionals at work in Novo Nordisk-made protective gear signaled company’s direct engagement.


Examples of countries where these products are in use underscores that the company serves a modern, global, and racially and gender-diverse group of professionals. Other direct engagement included shipping company Mærsk tweeting about “Mærsk Bridge,’ an air bridge and supply chain operation to transport PPE to healthcare workers.

Indirect Engaged: Business puts its core capacities into indirectly managing Covid

Since direct business engagement was only possible for companies whose core business was in medical or logistical operations, many companies emphasised managing indirect societal impacts of the pandemic in their early response.

As a food and drinks business with a national supply chain, Starbucks was able to use its core capacities to address indirect economic impact of pandemic on food supply. Promotional email highlights corporate donations of 700,000 meals to food banks and use of company logistics network to assist foodbanks with transport.

Makes the case that hunger “is part of the crisis” to underscore relevance of this indirect engagement.

Other indirect engagement included Draper James, the American actress Reese Witherspoon’s fashion brand, announced on its Instagram account on April 2, donations of dresses for teachers (deemed essential workers during pandemic); campaign backfired when dress supplies ran out.

Direct Disengaged: Business helps others directly fight Covid

Businesses who could not easily link their core operations to medical needs instead highlighted partnerships to help others managing the Cover crisis.

A promotional email from Camper highlights the use of 3D printers from its manufacturing operation to produce medical visors. The Email also highlights donations of shoes and slippers to staff and patients in hospitals.


Camper does not claim that they are themselves engaged in work to combat the medical crisis, but rather that they are making resources and equipment available to others who can do so.

Other direct disengaged examples included fashion brand Armedangels making cloth masks while explicitly stating on Facebook that they could not protect the wearer – “we can’t produce medical masks” – but that 2 euro from the sales of each mask would be donated to Doctors Without Borders, or gas company Crusoe Energy Systems announcing that they were donating computing power to Stanford University coronavirus research.

Indirect disengaged: Business helps others indirectly manage Covid

Businesses who could not easily link their core operations to urgent economic or societal needs instead highlighted partnerships to help others managing the impact of the Covid crisis.

Instagram post by crowd-funding platform GoFundMe promoting that its platform can be used by consumers to identify causes to support. Following the link to “learn more” shows company also offering free consulting to nonprofits on how to raise additional funds.


The company is not mobilizing its own resources to support Covid-related causes, but rather facilitating donations to other organizations through information sharing. Such consulting activity is not an ordinary part of the company’s core business.

Other indirect disengaged examples included Facebook offering grants for small businesses in the United States and using its network to promote the existing loan program from the US government.

Covid-branding as Covid-coping

Many brand engagements we examined did not make any claims to be helping combat the crisis, or its social impact, at all. Rather they focused on helping individual consumers to cope with the circumstances surrounding the crisis and its personal impact on themselves.

Because these “Covid-coping” messages focused on helping individuals, rather than society or the economy, our analysis focused on the demographics of what kind of consumers each type of “coping” message addressed, as well as what the messages said. We identified three coping mechanisms brands sold to consumers in these Covid-coping messages: coping-through-practicality, coping-through-pleasure and coping-through-denial.

1) Coping-through-practicality

Like indirect Covid-helping, it portrays shopping as way to address consequences of the pandemic, but instead of focusing on consequences for society, it targets how consumers can address their own needs.

An Instagram post by Zoku, a real estate company managing coworking spaces, offered private office rooms for professionals needing a socially distant office away from their household. Emphasis is put on a spare and clean layout of the office and “peace and quiet” for workers.


It suggests appeal to professionals with children struggling with disruption to work practices in shared family homes. Coping-through-practicality engagements largely addressed themselves to consumers in their identities as professionals and parents.

Other coping-through-practicality examples included laptop manufacturers advertising tools for working from home; home furnishings brands advertising tools for cooking at home; and phone, internet and electricity providers advertising their services as essential infrastructure for remote working and home-schooling. Marketing of this type emphasizes how brands could help families and businesses carry on “as normal” during a period of crisis.

2) Coping-through-pleasure

Exclusively comprised of brands in the fashion, fitness and lifestyle industries, with messages targeted to young and predominantly white women; present luxury goods as means of coping with pandemic through ‘self-care’.

A promotional newsletter for the “athleisure” brand Jolyn depicts a slim and muscular white woman on an inflatable pool float wearing sunglasses and painted toenails. Sunlight appears to reflect off the body of water in which she floats, with a caption advertising a “Bikini for staycation.” The Image and caption present the lockdown, which compelled individuals to stay home from their usual recreational activities, as a “staycation,” an unexpected source of free time at home.

Other coping-through-pleasure messages included advertisements from fashion brands including Anthropologie and Nicole Miller advertising loungewear as “self-care style” and clothing for “virtual dates or happy hours,” as well as make-up brands offering online tutorials for those with “more time (inside) on our hands.”

These messages present the health crisis as an opportunity for women to take a “break” from work outside the home and relax with home-bound versions of their usual recreational activities. They draw on influencer culture, which depicts recreation as a full-time occupation. Coping-through-pleasure offers the chance to purchase some of the influencer lifestyle, where the pandemic is not a stressor, and one can escape at a moment’s notice to a sunlit pool.

3) Coping-through-denial

Targeted widely to all consumers, these messages suggested that consumers shop as though the pandemic were not taking place, or advertised products which made light of the pandemic.

A full page newspaper advertisement in Corriere della Sera, Italy’s mostread newspaper, on 7 March, by two Italian ski resorts, Bormio and Livigno, captioned “Live the mountain with full lungs: There’s a snowy place where feeling great is contagious!”


At the time of advertisement running, lockdown was dissuading tourists from traveling to Italy, putting pressure on ski resorts, while deaths from the respiratory virus – which kills by targeting the lungs specifically – were at their highest in northern Italy, where ski resorts are concentrated.

Other coping-through-denial advertisements included Passports, a travel rewards program, contacting members in mid-March, when concerns about virus spread were focused on cruise ships, to advertise “the best pricing and exceptional bonuses” on celebrity cruises, and online retailers of topical and humorous T-shirts advertising limited range clothing with coronavirus-related captions. Notably, these engagements came broadly from the early weeks of our sample, and brands appeared to shy away from explicitly seeking to make light of the crisis or encouraging consumers to travel in spite of it, by the end of March 2020 when more severe lockdown and suppression measures were in place across Europe.

Implications for Brands

The different types of early Covid-branding in our sample, whether they focus on helping or coping with the pandemic, offer some cautionary lessons for brands.


About Commodifying Compassion

‘Commodifying Compassion: Implications of Turning People and Humanitarian Causes into Marketable Things’ is a research project focused on understanding how ‘helping’ has become a marketable commodity and how this impacts humanitarianism. An international team of researchers funded by the Danish Council for Independent Research (2017-2021), we examine ethical consumption intended to benefit humanitarian causes from the perspectives of consumers, businesses, NGOs and recipients. The research will produce a better understanding by humanitarian organizations and businesses leading to more ethical fundraising, donors weighing consumption-based models as part of more effective aid, and consumers making more informed choices about ‘helping’ by buying brand aid products. To learn more about our work, visit the website.

Download full briefing here


About the Authors

Maha Rafi Atal is a postdoctoral research fellow at the Copenhagen Business School, where her research focuses on corporate power, corporate social responsibility and corporate influence in the media. She is a co- Investigator on the Commodifying Compassion research project. http://www.maha-rafi-atal.com

Lisa Ann Richey is Professor of Globalization at the Copenhagen Business School. She works in the areas of international aid and humanitarian politics, the aid business and commodification of causes. She is the principal investigator on the Commodifying Compassion research project. https://www.lisaannrichey.com


Photo by Colton Vond, “Obey Consumerism,” March 3, 2019. Licensed under Creative Commons CC BY 2.0.

Tax havens, COVID-19 and sustainability

By Sara Jespersen

At CBS we will host a workshop and two public events (see below for sign up) on corporate tax and inequality next week 24th – 26th June 2020 – the COVID-19 crisis has underlined the pertinence of this topic in major ways.

Taxation, tax havens and corporate tax have been high on the agenda for a while. Since the outbreak of the global financial crisis of 2008 corporations seeking to minimize their tax payments have been under close watch from the media, civil society and politicians with a focus on ensuring that corporations pay their “fair share”. The OECD and the EU have gone to quite some length to try to stop tax-optimizing behavior through revising and modernizing existing rules and legislation. In collaboration with the IMF and the World Bank they have invested time and resources in strengthening tax systems, governance and improving domestic resource mobilization in low- and middle- income countries. This work is ongoing and corporate taxation is already high on the list of priorities for the world community. But then along came COVID-19.

Taxation is central in two ways when we reflect on the pandemic and what will follow. Firstly, governments have passed historic economic recovery packages to ensure that the private sector stays afloat and to avoid mass lay-offs during the lockdown period in 2020. The question is what can we expect in return? Secondly, the emerging discussion on the disruption caused to national economies should be thought into long-term solutions for sustainability including tax.

“Tax haven free” recovery packages

Poland and Denmark, followed by Italy, Belgium and France have attached an explicit conditionality to their COVID-19 state support that companies cannot be registered in tax havens.

In light of this clear conditionality, there has been a media storm in Denmark, when a journalistic investigation revealed that several companies that government support had an ownership structure that was associated with tax havens and with a consumer outcry on social media. This prompted one of the companies, a well-known bakery “Lagkagehuset”, to take out full-page advertisements in daily newspapers to counter the criticism and explain the company structure. The CEO also did a lengthy interview on the issue of the company’s ownership structure to a major daily newspaper. 

Two immediate takeaways can be drawn from this:

  1. It has revived the discussion about the usefulness of tax haven blacklists (see more on this by CBS professor Leonard Seabrooke in Danish).  Which countries should be on them, and what does it mean if you as a business (or individual) are associated with a tax-haven on such a list? One thing is clear, measures to push countries into greater cooperation will not in itself comprise a substitute for measures to make companies act responsibly.
  2. It has emphasized the importance of corporate governance including a reflected approach to responsible corporate tax practice. The fact that there are so-called tax havens out there warrants companies and individuals to decide how or if they want to be associated with these. If yes, companies must accept that they may be liable to critique and journalistic and even political inquiry into what that association means. It should come as no surprise that association with these jurisdictions may entail suspicion.

Tax havens are not the only concern in relation to companies’ environmental, social and governance (ESG) behavior in this pandemic. The financial times reported how NGOs and investors are challenging shareholder primacy as it leads to growing inequality. Corporate governance and ESG, including tax, is now more than ever one to watch for companies that wish to be part of a sustainable business community in the short-term and the long-term.

Opportunities in the long term

Recovery packages are short-term measures. However, in the long term,  the pandemic offers an opportunity that must not be missed in terms of taking a serious look at which direction our global society is heading.

While the pandemic, in theory, cannot tell the difference between the poor and the rich, it is clear that the existing inequality in our society is all made acutely visible during COVID-19. In the US more than 40 million have lost their jobs during the pandemic.  In Sierra Leone, there is allegedly just 1 available ventilator in the entire country (for a population of 7 million, where Denmark has more than 1000 ventilators for a population of 5.8 million).  As for the gendered impacts even for the better off, there are indications that women are less able to find time to prioritize research and publishing during the crisis than men are (). While big tech companies look to come out of this crisis more profitable and, possibly, powerful than ever.

These are just examples of how inequality is front and center in this crisis and how it offers an important opportunity to consider if the direction we are heading in is where we want to go.

With many countries having been in a complete]  lockdown and economic activity at a standstill, this presents a unique opportunity to truly rethink how well the existing economy has worked for our societies and planet. The city of Amsterdam in the Netherlands has seized the opportunity to embrace the concept of the doughnut economy and the OECD is arguing that it makes discussions about challenges of digitalization of the economy and a minimum level of tax for MNEs more pertinent.

Tax is the central tool for governments to raise revenue and engage in redistribution. However, it is much more than a technical tool in an administrative toolbox.

It is the modern social contract for individuals and businesses as highlighted by the discipline of fiscal sociology. Short term, long term, whichever way, you approach it tax should, and will, play a central role in the debate about where we want to go from here towards a more sustainable, and more equal, future.

It provides a key source of revenue to finance vital public services, it can act as an explicit redistributive tool central to fighting inequality, and if used wisely, it can incentivize the behavior of corporations and individuals including the transition to more sustainable practices. Some of these things will be discussed at CBS in June.

A timely workshop on corporate tax and inequality

At CBS we are hosting a timely interdisciplinary workshop as a collaboration between the department for Management, Society and Communication, CBS center for sustainability, and the Inequality platform on corporate tax and inequality. We are bringing together researchers from around the world to meet (virtually) and discuss different pieces of research emerging on this relationship. We have legal analysis, economic modelling, qualitative analysis of tax administration efforts, and sociological analysis of tax professionals and wider societal tendencies on the agenda.

Our keynote speaker Professor Reuven Avi-Yonah will give a (virtual) public lecture (SIGN UP HERE) on Thursday 25th of June 2020 at 14:15 CET. He will speak to the short, medium and long term revenue options in light of the pandemic including a chance for a Q & A. He is a renowned scholar and has published widely on international tax, history of the corporate form, and CSR and tax among other topics.

 The workshop concludes on June 26th 2020 with a (virtual) practitioner panel to discuss knowledge gaps (SIGN UP HERE) from the perspective of professionals of various disciplines. Bringing together professionals from media, NGOs, tax advisory services, tax administration and business. This is likely to be a lively debate with the aim of furthering the CBS tradition of engaging the private sector on what could be fruitful avenues for further research in this axis of relevance between tax and inequality.


About the author

Sara Jespersen is a PhD Fellow at Copenhagen Business School. Her research is on the emerging relationship between responsible business conduct and corporate tax planning of multinational enterprises. In a complex governance context, there are now signs of corporations’ self-regulation and the emergence of voluntary standards. Sara is interested in what this means for our understanding of corporations as political actors and the notion of political CSR.


Image by pickpik

I Am What I Pledge – The importance of value alignment and crowdfunder behavior

By Kristian Roed Nielsen

Together with my colleague Julia Binder we recently published a paper on the role of values in driving crowdfunding backer behavior. The study found that altruistically framed campaigns have a higher chance for funding as compared to campaigns that emphasize egoistic or environmental motives, but even more importantly, that message framing needs to be aligned with the personal values of the backers. As such, our study highlights important similarities between resource mobilization in social movements and in crowdfunding.

The growth of reward-based crowdfunding as an alternative source of innovative financing has recently triggered great enthusiasm for its potential to enable a greater diversity of entrepreneurs to access to important seed funds (Gerber and Hui, 2013; Sorenson et al., 2016). This enthusiasm is in part related to the fact that – as compared to other forms of innovation capital and indeed other models of crowdfunding, such as lending or equity-based – the consumer plays a central role as a financier of the reward-based innovation. Considering that consumers represent a different kind of investor (Assenova et al., 2016), they are also driven by a wider and distinct range of motivations as compared to traditional investors (Lehner, 2013).

Understanding this new kind of investor has thus been subject to increasing academic debates, especially regarding the success criteria of reward-based campaigns (Mollick, 2014).

However, empirical evidence to date has produced mixed results – while some studies suggest a social- or environmental value orientation of a given reward-based campaign to significantly increase its odds of receiving funding (Calic and Mosakowski, 2016; Lehner and Nicholls, 2014), other studies have found no such effect (Cholakova and Clarysse, 2015; Hörisch, 2015).

Thus, despite enthusiasm from a range of actors, it is unclear under which conditions reward-based crowdfunding campaigns are successful in receiving funding. In this respect, the role of message framing has received little interest, despite its potential for shedding light on the criteria for crowdfunding campaign success. Against this background, we sought to examine how founders’ framing of a reward-based crowdfunding message affect the mobilization of backers and what values are conveyed in successful crowdfunding efforts.

The study in a nutshell

The study draws on framing theory as utilized in the literature of social movement mobilization, which focuses on how messages attract audience attention and in turn plays a pivotal role in securing movement participation (Benford & Snow 2000). Considering that in reward-based crowdfunding entrepreneurs are equally concerned about mobilizing backers for their campaign, we investigate whether entrepreneurs’ framing affects backer’s attention and influences their interpretation and action towards the crowdfunding campaign.

Based on the theoretical literature on human values (Schwartz 1994), we operationalize these linguistic frames as egoistic, altruistic, and biospheric (Axelrod, 1994; Groot & Steg, 2008;  Stern, 2000). These three values respectively reflect considerations on “what is in it for me”, “what is in it for others”, and “what is in it for the environment” when purchasing a given product (de Groot and Steg, 2008). In order to observe causality between these three linguistic value frames and individual pledging behaviour the study employed an experiment which replicated an online crowdfunding platform to better resemble what individuals would see in the real world and thus providing us with what we hope are more external valid observations (Grégoire et al., 2019).

More specifically, we investigated how the framing of reward-based crowdfunding messages as either egoistic, altruistic, or biospheric affected the success of eight hypothetical projects seeking financing in return for the respective product. Especially this designing of a realistic experimental setting represented a huge hurdle, but also a necessary one.

We find that too often experiments lack the realism of what they are seeking to study which we believe is a real detriment to results they yield. We thus wanted to move outside not only the lab but also create a user experience that best captured what an actually crowdfunding platform looks like.

For researchers entering with minimal programming experience it was a steep, but really rewarding learning curve. If a professional programmer saw our work, they would likely have a meltdown over the messy coding, but it worked and inspired many new ideas. 

Fresh insights

The results provide fresh insights into an emerging debate relating to the potential of crowdfunding to support entrepreneurship.

Firstly, our findings show that while some consumers respond positively to campaigns emphasizing intrinsic benefits, an emphasis on such collective benefits cannot be seen as a silver bullet for crowdfunding success. Indeed, while we find that an emphasis on altruistic benefits leads to an overall higher willingness to support the campaign, we find no such effect in the case of products emphasizing the benefits for the environment, but rather that the attractiveness of a crowdfunding campaign is dependent on the alignment with the values of the respective target audience.

Secondly, when seeking to garner funding via a crowd, the importance of customer segmentation and a thorough understanding of these customers’ values and expectations remains the most relevant task before designing and launching the crowdfunding campaign.

Our results clearly show that the willingness to invest in a campaign largely depends on the alignment between backers’ values with the values transmitted in the campaign.

Finally, the findings provide implications for sustainable entrepreneurs, for whom crowdfunding has been emphasized to provide a relevant fundraising opportunity (Testa, Nielsen, et al. 2019).

On the one hand, the fact that crowdfunding is driven largely by consumers rather than professional investors does not in itself change consumer demands; demands which more often than not fail to correlate with sustainable behavior (Sheeran 2002; Webb & Sheeran 2006). While one may argue that the motivations of funders for pledging towards a campaign may be different from those of a professional investor, our results seem to confirm that consumers seek to satisfy their own values when deciding to invest in a crowdfunding campaign. On the other hand, this does not imply a lack of significant potential for sustainable entrepreneurs’ success in reward-based crowdfunding.

Considering the increasing concern for sustainability and because of our finding that value alignment has a particularly high potential in a crowdfunding context, sustainable campaigns focusing on a clearly delineated target group have a high likelihood to reach their aspired funding goal.


About the author

Kristian Roed Nielsen is Assistant Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research strives to examine what, if any, potential role the “crowd” could have in driving, financing and enabling sustainable entrepreneurship and innovation. Kristian’s Twitter: @RoedNielsen


References

Assenova, V., Best, J., Cagney, M., Ellenoff, D., Karas, K., Moon, J., Neiss, S., Suber, R., Sorenson, O., 2016. The Present and Future of Crowdfunding. Calif. Manage. Rev. 58, 125–135.

Axelrod, L., 1994. Balancing Personal Needs with Environmental Preservation: Identifying the Values that Guide Decisions in Ecological Dilemmas. J. Soc. Issues 50, 85–104. https://doi.org/10.1111/j.1540-4560.1994.tb02421.x

Benford, R.D. & Snow, D.A., 2000. Framing Processes and Social Movements: An Overview and Assessment. Annual Review of Sociology, 26, pp.611–639. Available at: http://www.jstor.org/stable/223459.

Calic, G., Mosakowski, E., 2016. Kicking Off Social Entrepreneurship: How A Sustainability Orientation Influences Crowdfunding Success. J. Manag. Stud. 53, 738–767. https://doi.org/10.1111/joms.12201

Cholakova, M., Clarysse, B., 2015. Does the Possibility to Make Equity Investments in Crowdfunding Projects Crowd Out Reward-based Investments? Entrep. Theory Pract. 39, 145–172.

de Groot, J.I.M., Steg, L., 2008. Value Orientations to Explain Beliefs Related to Environmental Significant Behavior: How to Measure Egoistic, Altruistic, and Biospheric Value Orientations. Environ. Behav. 40, 330–354. https://doi.org/10.1177/0013916506297831

Gerber, E.M., Hui, J., 2013. Crowdfunding : Motivations and Deterrents for Participation. ACM Trans. Comput. Interact. 20, 34–32. https://doi.org/http://dx.doi.org/10.1145/2530540

Grégoire, D.A., Binder, J.K., Rauch, A., 2019. Navigating the validity tradeoffs of entrepreneurship research experiments: A systematic review and best-practice suggestions. J. Bus. Ventur. 34, 284–310. https://doi.org/https://doi.org/10.1016/j.jbusvent.2018.10.002

Hörisch, J., 2015. Crowdfunding for environmental ventures: an empirical analysis of the influence of environmental orientation on the success of crowdfunding initiatives. J. Clean. Prod. 107, 636 – 645. https://doi.org/http://dx.doi.org/10.1016/j.jclepro.2015.05.046

Lehner, O.M., 2013. Crowdfunding social ventures: a model and research agenda. Ventur. Cap. 15, 289–311. https://doi.org/10.1080/13691066.2013.782624

Lehner, O.M., Nicholls, A., 2014. Social finance and crowdfunding for social enterprises: A public-private case study providing legitimacy and leverage. Ventur. Cap. 16, 271–286.

Mollick, E., 2014. The dynamics of crowdfunding: An exploratory study. J. Bus. Ventur. 29, 1–16. https://doi.org/http://dx.doi.org/10.1016/j.jbusvent.2013.06.005

Schwartz, S.H., 1994. Are There Universal Aspects in the Structure and Contents of Human Values? J. Soc. Issues 50, 19–45. https://doi.org/10.1111/j.1540-4560.1994.tb01196.x

Sheeran, P., 2002. Intention—Behavior Relations: A Conceptual and Empirical Review. European Review of Social Psychology, 12(1), pp.1–36. Available at: http://dx.doi.org/10.1080/14792772143000003.

Sorenson, O., Assenova, V., Li, G.-C., Boada, J., Fleming, L., 2016. Expand innovation finance via crowdfunding. Science (80-. ). 354, 1526 LP – 1528.

Stern, P.C., 2000. New Environmental Theories: Toward a Coherent Theory of Environmentally Significant Behavior. J. Soc. Issues 56, 407–424. https://doi.org/10.1111/0022-4537.00175

Testa, S. et al., 2019. The role of crowdfunding in moving towards a sustainable society. Technological Forecasting and Social Change, 141, pp.66–73. Available at: http://www.sciencedirect.com/science/article/pii/S004016251831953X.

Webb, T.L. & Sheeran, P., 2006. Does changing behavioral intentions engender behavior change? A meta-analysis of  the experimental evidence. Psychological bulletin, 132(2), pp.249–268


Photo by Ian Schneider on Unsplash

Supplier perspectives on social responsibility in global value chains

By Peter Lund-Thomsen

Worldwide there is now a search for new ideas, business models, and innovations that can help us in rebounding from the global impact of COVID-19 and bring our planet and world onto a more sustainable future trajectory. One of the areas where this is evident is sustainability in global value chains where we have seen a global disruption of world trade in ways that have affected not only global brands but also suppliers and workers around the world. Some observers argue that this will result in a global backlash against attempts at making global value chains, for instance, the global garments and textile value chains, more sustainable. I.e. that COVID-19 will make brands and suppliers sacrifice long-term sustainability considerations at the expense of short-term business survival.

In my understanding,however, what these recent events demonstrate is not so much the need for new innovations and “thinking out of the box” but rather considering how the current organization of global value chains and thinking around sustainability have overlooked the importance of “supplier perspectives” on what social responsibility actually means in these chains. Amongst many practitioners, especially in the Nordic countries, there has been a tendency to assume that global brands’ adopting corporate codes of conduct and sustainability standards, asking value chain partners (i.e. suppliers) to implement these, and then auditing for compliance as well as helping suppliers to build capacity to enforce these guidelines would be sufficient.

The case of Bangladesh illustrates why this approach is insufficient. First, many brands have cancelled their orders with Bangladeshi garment suppliers, leaving local factories at the verge of bankruptcy, and hundreds of thousands, if not millions of workers at risk, potentially without any income to support themselves and their families. Second, even with orders that have been completed, some brands have refused to honor their contracts and either not paid for the goods received, substantially delayed payments, or asked for discounts on present or future orders from suppliers.

Globally, there has been condemnation of these “unfair” trading practices by both suppliers themselves (particularly in Bangladesh but also highlighted via social media) and also international labor advocacy organizations.

And third, the level of outrage is so strong that the Bangladesh Garment Manufacturers and Exporters Association has allegedly been considering placing a ban on particular brands so that they may not source garments from Bangladesh in the future as they have largely failed to live up to their “buyer” responsibilities towards suppliers and workers in Bangladesh.

To me, a key lesson learned from these events is that global brands, business associations, labor advocacy organizations, NGOs, researchers and students can no longer simply “overlook” supplier perspectives on social responsibility in global value chains.

The only realistic way forward is to take account of the concerns of these suppliers if global value chains are to be more resilient in the long run.

Many of these supplier concerns are already well-documented but tend to be either ignored or discarded by “global North stakeholders” in their policies, practices or discourses more broadly – for instance, in how they conceive and talk of sustainability in sustainability conferences around the world.

Just to recap some of the main points that we have learned from studies of supplier perspectives on social responsibility:

a) The factory manager dilemma – e.g., factory managers and owners – for instance, in the global garment industry – have had been asked for continuous price declines by many of their buyers while the same brands have asked for increased levels of social compliance at the same time.

b) The same dilemma arises when factory managers are asked to provide living wages around the year by their buyers when demand is seasonal and price competition is fierce in the global garment industry. For most suppliers having workers sitting around idle for part of the year is not a viable business option.

c) In addition, there is a general unwillingness amongst most (but not all brands) to co-finance – for instance, 50% – of the necessary social upgrading of factories in countries such as Bangladesh. Hence, brands tend to push “social responsibility” onto their suppliers rather than co-investing in and jointly bearing the costs of these improvements themselves.

d) Profits earned from selling goods sold to end consumers in the global North remain highly unequally shared amongst the (ironically called) value chain partners – often with suppliers winding up with 10-20 percent of the value of final retail price.

e) In addition to this, global North (read: Scandinavian) stakeholders including brands, government representatives, NGOs, students, and others often perceive “sustainability” in value chains as mainly relating to environmental and (to a lesser degree) social responsibility in the value chain. Hence, the general talk often seems to be about how suppliers should make environmental and social investments without considering the need for addressing existing inequalities – i.e. unequal distribution of value in these chains – and the business aspects of running supplier operations. In fact, for many suppliers in countries such as India, Pakistan and Bangladesh, sustainability is first and foremost related to “economic” or “financial” sustainability. Only when suppliers are profit-making can they afford to invest in social and environmental improvements. This is not exactly rocket-science but a point that often seems to be completely overlooked by Scandinavian “sustainability” advocates.

f) Finally, what is sometimes considered “social responsibility in global value chains” in the global North might be narrowly defined as the payment of minimum wages, overtime payment, social insurance, and the implementation of occupational health and safety measures in supplier factories. Of course, I am all for supplier factories implementing these measures. However, I also sympathize with many suppliers, NGOs and other stakeholders in the global South that point to other aspects of social responsibility that may be more contextualized.

For instance, in South Asia, many studies have pointed to factory managers helping to finance the education/school fees of the children of some of their workers. Financing the weddings of young workers or the weddings of the sons/daughters of their workers is another sign of social responsibility amongst many factory owners in South Asia.

From a Scandinavian perspective, this may not be related to “social responsibility”.

However, in the sub-continent, where your wedding day is often considered the most important day in your life, and very important for your family’s wider social standing in society, employers’ financial support may be seen a very valid act of practicing “social responsibility”.

Providing tea to your workers may also be considered an act of “social responsibility”. Again – from a Scandinavian perspective – this may not be considered a big act of social responsibility. However, then again, is it really that difficult to understand? How many of us in Scandinavia do not value it when our own employers provide us with free tea or coffee? It gives us the opportunity to socialize with our colleagues or take a much needed break between different work tasks. Why should it be any different in countries such as India and Pakistan where tea drinking could almost be considered a national sport?

Moreover, some factory managers in South Asia allow especially young mothers or women with even slightly older children the option of either working part-time (when the kids are in school or someone else is at home to take care of them) or engaging in home-working so that they may look after their kids while engaging in for instance (embroidery) whenever there is a free moment. Of course, I do recognize that home-working is also often associated with receiving very low wages and not having any social insurance.

However, during COVID 19, even in the Scandinavian context, homeworking has become an absolutely essential part of keeping private companies and public institutions afloat crisis under such compelling circumstances. It has also involved many challenges for families with young children who had to engage in home-based work (typically computer-based) and taking care of their children simultaneously.

Yet if homeworking is indeed not only allowed but also encouraged by most employers in Scandinavia, why it is that brands in the global North sometimes impose an outright ban on their suppliers outsourcing particular work tasks to “home-based locations”?

No wonder that many factory owners and managers in the global South believe that global brands practice double standards when it comes to their social responsibility requirements (i.e. ‘do as I say but not as I do’).

In conclusion, there seems to a great need in Scandinavia for raising our own levels of awareness about the commercial challenges faced by suppliers and acknowledge the myriad ways in which “social responsibility” may be thought of and practiced – of course, without throwing out the baby with the bathwater. Compliance with core labor standards remains a key concern, but it is not the only way of conceiving of supplier responsibility in global value chains.


About the author

Peter Lund-Thomsen is Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research focuses on sustainable value chains, industrial clusters, and corporate social responsibility with a regional focus on South Asia.


More about Covid-19 pandemic on Business of Society blog:

Building A Better Planet: Toward a Sustainable Post-COVID-19 Society

Small, yet important – and still responsible. Reflections on SMEs and social responsibility in times of Covid-19

How the pandemic can reset cities and transform aspects of urban mobility

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark

How to make food systems more resilient: Try Behavioural Food Policies

Lobbying and the virus – three trends to take note of


Image by International Labour Organization ILO

The rise of social media bots – how do they work, and how can you spot them?

By Daniel Lundgaard

Bots and their impact on online conversations is rapidly becoming an important problem on social media. If we look at the conversation around the current Coronavirus pandemic, somewhere between 45% to 60% of the accounts on Twitter that promoted disinformation were identified as bots, in the anti-vaccine debate researchers have found that bots are used to “weaponize” online health communication and create discord, and in the climate change debate research suggests that about a quarter of all tweets are produced by bots.

These bots are used in a wide range of misinformation “strategies”. Based on findings from my own research and a review of current research on the topic, I have summarized what I perceive as the three main “strategies” where we know that bots have been used:

Amplifying certain opinions. The simplest strategy where bots have been used is in efforts to amplify a specific opinion, often by continuously re-tweeting the same tweet or link, or by only endorsing the shared posts of people with similar interests.

Flooding the discourse. Malicious actors often seek to increase confusion and challenge the current status quo e.g. the scientific consensus that climate change is man-made. In this strategy, bots are used to spread large volumes of information and start multiple conversations (often covering both sides of the debate), which makes it easier to question the current consensus. A similar tactic is as often seen in disinformation campaigns where large amounts of “fake news”-outlets create a new media ecosystem, and because of the increased volume of information, the voice of the validated outlets is “drowned”, which empowers the fake news outlets.

Linking issues to current tensions. Efforts to link debates to current tensions seek to polarize opinions and cause divide as seen within the vaccine debate where a debate was associated with current racial/ethnic divisions. Here bots are mainly used to either explicitly make the connection in their own tweets, or by commenting on content shared by others, suggesting the presence of a link to certain socioeconomic tensions.

With these strategies in mind identifying the users that in reality are bots seems like a crucial task. However, detecting and adequately handling these bots has proven to be a challenge for the major social networking sites such as Facebook and Twitter.

Nonetheless, after reviewing current tools made available for bot detection, current research on the topic and my own findings from an analysis of roughly 5 million tweets about climate change, I have identified a few tips that might help you to spot these bots – and potentially their impact on the conversation. For this list, I have left out bot-detection approaches that are based on reviewing patterns not normally visible to most users e.g. network features detection if the same group of users follow and re-tweet/like another group of users with similar language and message.

The user profile

Reviewing the user profile appears as one of the best ways for “normal” users to detect a bot. The most simple indicators could be a missing profile picture, however sophisticated bots might use stolen photos and here a quick “reverse image search” (right-clicking on the profile image and “search google for image”) might reveal something about the source of the image e.g. that it is taken from someone else. A generic (or poorly worded) profile description might also be an indicator, and in my own research I have found that reviewing the content of user profile descriptions is even better than reviewing the content of the tweets shared on a specific topic for predicting opinions.

Different or “stiff” language

The conversation on Twitter is often informal and people often use abbreviations or structure their sentences differently, which can be difficult to copy. As a result, bots might appear mechanical or rigid in its language – often returning to the same topic, share the same link over and over again, or returning to a topic that should have outlived the rather short life-cycle of some topics on Twitter.

Lack of humor

Granted, everyone misunderstands a joke sometimes and people can have trouble with understanding sarcasm. Because of this, understanding humor, especially sarcasm, also remains one of the major challenges for bots to both understand but also respond accordingly. This is particularly relevant on Twitter, where conversations may refer to shared understandings, inside jokes or memes used in a certain way within a community, which even sophisticated bots may have trouble understanding and adapting to.

Temporal behavior

Reviewing past activity, in particular with focus on patterns in temporal behavior might also be useful e.g. by spotting that a user seems to tweet at the same hour every day if it shares multiple tweets pr. Minute, or if the user immediately retweets or comments on other posts, which can be an indicator of an automated and pre-defined response.

It is important to acknowledge that not all bots are seeking to manipulate political conversations on social media. However, while some bots definitely are created for noble purposes, bots are increasingly becoming an important tool for various (potentially malicious) actors and their efforts to shape conversations on social media – especially Twitter. As a result, we, as a society needs to become better at detecting bots and limiting their power to shape the online debate, and I hope that by reading this blog I might have broadened your understanding of bots – and hopefully you have picked up a few tricks to spot potential bots appearing in your Twitter feed.


About the author

Daniel Lundgaard is a PhD Fellow at the Department of Management, Society and Communication at Copenhagen Business School. His research investigates how communication on social media (e.g. the use of emotions, certain forms of framing or linguistic features) shapes the ways we discuss and think about organizational and societal responsibilities.


Photo by ?? Claudio Schwarz | @purzlbaum on Unsplash

Building A Better Planet: Toward a Sustainable Post-COVID-19 Society

By Daniel C. Esty

Covid-19 has dominated policy thinking across the world for several months – highlighting our vulnerability to unexpected threats, the fundamental reality of global interdependence, the critical role of science and data, and the value of collaborative efforts in response to a common challenge. And when the short-term public health crisis abates, the middle-term focus will be on economic recovery. But we should think now about the longer term – and the need to build a sustainable society that steps up to another looming threat: the prospect of destabilizing climate change.  Thus, as we rebuild our economy, we must do so in a way that moves us toward a clean and renewable energy future as well as addressing other pressing sustainability issues including air and water pollution, waste and chemicals management, and our depletion of natural resources.

To help launch the conversation about the pathways to a sustainable future, I offer below 10 key elements to consider. These concepts build on the ideas laid out in the recently released book, A Better Planet: 40 Big Ideas for a Sustainable Future, that emerged from a multi-year research and policy initiative at Yale University, where I teach. For more information on the Yale Environmental Dialogue, please see the website.

1 ) End of externalities

A sustainable future requires that we commit to an end of externalities as the foundational principle for environmental policy.  This starting point would require that we implement the Polluter Pays Principle, which means that those who release air and water pollution or greenhouse gases would have to stop these harms or to pay for their pollution.  Likewise, any user of public natural resources – including water for irrigation, forests for timber, grasslands for grazing, or public lands for the extraction of oil, natural gas, or minerals – would be required to pay full price for the resources they take. 

To be clear, making companies pay for the harms they cause will expose some business models as fundamentally unsustainable and only profitable when externalities are not internalized.  These enterprises will have to remake their business strategies or go under.

2 ) Change in systems thinking

We must acknowledge that we live in a highly integrated world, as COVID-19 has so painfully made clear.  Complex human and ecological systems require moving beyond traditional siloes to systems thinking — and regulatory design that links energy, environmental, and economic policies.  More fundamentally, we must accept the fact that we will need to pursue multiple goals simultaneously and learn to do so in an integrated way that accepts the reality that our goals will sometimes be in tension — and thus need to be traded off and balanced.

3 ) Top-down targets & bottom-up implementation

We must recognize that policy frameworks and structures require both top-down targets and bottom-up implementation. This lesson has become plainly evident in the climate change context, where it is now clear that presidents and prime ministers do not control all the levers of society that must be pulled to deeply decarbonize our economy.

 To achieve a sustainable future, mayors, governors/premiers, and other subnational political leaders – who often control economic development, transportation systems, and other key points of policy leverage — must play a significant role in reducing greenhouse gas emissions and building a more resilient society.

Likewise, business leaders – who also make day-to-day choices that profoundly shape the prospect for moving society onto a sustainable trajectory – must also be included in this conversation.  Fortunately, both the 2015 Paris Climate Change Agreement and the UN Sustainable Development Goals (SDGs) expressly acknowledge the need for broader engagement of exactly this kind.  

4 ) New economic model

New policy tools must replace the 20th Century command-and-control regulatory model with economic incentives and other market mechanisms.  While the government mandates of the past have allowed us to dramatically reduce pollution levels compared to five decades ago, further progress depends on price signals and a commitment to making emitters pay for the harm they cause.

5 ) New roles & various actors

Environmental progress must recognize new roles for various critical actors.  Specifically, in decades past, the business world was seen as the source of pollution problems. But today, most corporate leaders recognize the need to be good environmental stewards so as to maintain their company’s social license to operate. They recognize that old notions about the mission of corporations being centered on shareholder primary and the maximization of profits has given way to a stakeholder model in which businesses have responsibilities not only to shareholders, but also to their customers, suppliers, employees, and the communities in which they operate. 

Individuals are also advancing sustainability in new and important ways that go well beyond their long-recognized role as voters. Specifically, individuals today can make a difference as green consumers who make choices every day about which products to buy and which companies are selling sustainable goods and services. Likewise, a growing set of sustainability-minded investors are tracking environmental, social, and governance (ESG) performance metrics to ensure that their portfolios align with their values – and they hold shares in companies that are showing the way toward deep decarbonization and sustainability more generally. 

And some impact investors are putting money directly into sustainability projects and enterprises with an expectation that their funds will make a difference in society as well as a financial return.

  Finally, all of us with a smartphone can serve as watchdogs — capturing and sharing evidence of environmental wrongdoing on social media.  We are also all positioned to offer comments and participate in public environmental debates in many places and ways that were not possible prior to the Internet era.  This expanded access should deepen public participation and improve the diversity of perspectives that get factored into policy decisions.

6 ) Sustainable markets

We need sustainable markets that incorporate new lessons from various emerging fields of science and other emerging academic disciplines. Industrial ecology, for instance, offers new methodologies for mapping the flows of energy and materials across the economy.  In this regard, as we rebuild business in the many sectors devastated by the Covid-19 pandemic, we should look sector-by-sector for opportunities to create closed loop production processes that generate zero waste.  Such a system would focus on water recapture and the reuse and recycling of other materials.

We might, in this spirit, shift away from plastic packaging that generates greenhouse gas emissions as it is produced and too often accumulates after use in the ocean – and move toward fiber-based materials that can be more easily recycled or composted.

7 ) New tools & Big Data

Policymakers have a set of new tools at their disposal that can be deployed in support of a sustainable future.  Big Data, in particular, has abundant applications that can help us to reduce environmental impacts – tracking emissions, identifying best practices in pollution control and natural resource management, and providing metrics that help us to identify policy leaders to emulate and laggards who should be spurred to do better.  And while 21st information and communications technologies have transformed how sports teams pick players, businesses market to their customers, and all of us make purchases, technological solutions have done rather little to reshape the environmental realm.  But recent advances in data analytics, genomics, artificial intelligence, and machine learning all show significant promise for having important environmental applications.

8 ) Ethical foundation

We must build an ethical foundation for 21st Century sustainability that captures the public’s evolving thinking about core values and fundamental principles. Most notably, the idea of environmental justice and concerns about equity and inequality make it clear that our policy programs must pay attention to who benefits from environmental commitments and who gets ignored.

Indeed, who pays for environmental inaction – including lead exposure from aging water pipes or asthma risk when urban air pollution is not abated – has become a fundamental question. 

As we seek to “build back better” after COVID-19, climate change equity issues need to be given a more prominent role – both the intergenerational burden that the build-up of greenhouse gases in the atmosphere threatens to leave for today’s young people and the reality that movement toward a clean energy future will dislocate some communities, industries, and demographic groups in ways that will require transition assistance.

9 ) New ways of communication

We need a new approach to environmental communications and a commitment to translate expert guidance and science to the public in a manner that makes sense to everyday citizens. Tony Leiserowitz and the Yale Program on Climate Change Communication have demonstrated, for example, that political leaders must learn to distill and effectively translate scientific concepts and results to the public.  And as Thomas Easley makes clear in his Better Planet essay “Hip Hop Sustainability,” we need new strategies that bring the climate change conversation to inner cities and other subsets of society in a way that engages those communities in their own language and on their own terms.

10 ) Innovation

Finally, a spirit of innovation must permeate the push toward a sustainable future.  To create an environmental policy framework that is lighter, faster, and more effective than our regulatory programs of the past, we must harness the entrepreneurial capacity and creativity that exists all across the world.  Innovation broadly-conceived has already brought us technology breakthroughs in wind, solar, tidal, wave, and fuel cell power. But we must seek innovation beyond the technology domain. We need to be equally committed to fresh thinking and new approaches to finance and investments in clean energy, government policies and incentives, public engagement strategies, and public-private partnerships. 

Such innovation can reduce the cost of creating a sustainable future and diminish the perceived tradeoff between environmental progress and economic prosperity.

Despite recent challenges, the promise of a more sustainable society seems ever closer, but still just over the horizon.  Progress thus depends on sustainability pioneers who are willing to run out front, innovate broadly, take on risks, accept failures (and redeploy resources quick when unsuccessful pathways are identified), and redouble their commitment to efforts that show promise.

This commentary builds on Dan Esty’s April 2020 virtual lecture at Copenhagen Business School and the University of Copenhagen.


About the author

Dan Esty is Hillhouse Professor of Environmental Law and Policy, Yale School of Forestry & Environmental Studies and Yale Law School


More about Covid-19 pandemic on Business of Society blog:

Small, yet important – and still responsible. Reflections on SMEs and social responsibility in times of Covid-19

How the pandemic can reset cities and transform aspects of urban mobility

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark

How to make food systems more resilient: Try Behavioural Food Policies

Lobbying and the virus – three trends to take note of


Image by Free images

Small, yet important – and still responsible. Reflections on SMEs and social responsibility in times of Covid-19

By Søren Jeppesen

One thing seems to be clear by now – that we are all challenged by the effects of the Covid-19 pandemic. This includes all enterprises, large as well as small firms. As states and individuals, also SMEs (Small and Medium-size Enterprises) need to figure out how to respond. SMEs constitute the vast majority of enterprises on the Globe, and their response to the current situation, including how they behave in terms of social responsibilities matter a lot. If jobs disappear, or wages are lowered and/or working conditions deteriorate, a large number of persons (employees) and families will be negatively affected. If environmental standards are lowered the nature and humans will be negatively affected.

The perception of what constitutes social responsibilities varies substantially across countries. As SMEs in different parts of the world face very different situations (see Spence et al. 2018), also in times of Covid-19, the responses will be very different. We already witness intense debates on what is the ‘appropriate way’ of reacting. Most SMEs have a less formalized way of operating compared to larger firms. While this is viewed as leading to being less socially responsible compared to large firms this type of organizing – not being so standardized – maybe be is an advantage in an unknown situation like the one that we are witnessing right now. Agility, creativity and ability to make a decision fast could be an advantage right now like the Danish small firms that have adjusted their production to include critical health products show.

However, the examples are probably the exceptions rather than the rule as only a smaller section of the SMEs typically can be characterized like this. The majority of the SMEs are operating in more traditional, standardized ways and have a more limited range of responses as things stand right now.

In our part of the world, governments have implemented numerous support schemes trying to assist the private sector, including SMEs, in various ways. The Danish SME has various public-funded support packages and a highly formalized labour market cushioned by a number of social benefit programs to factor into the considerations. Hence, we can insist that an important part of managing continues to be keeping an eye on working conditions and the environmental impact. In other parts of the world like the developing countries, governments have so far done less and given the much more informal nature of the economies, SMEs are much harder effected.

The Ugandan SME is faced with no economic assistance and a complete lockdown of the society leading to a dramatically reduced – if not totally halted – operation and turnover. In addition, no social benefits exist to assist employees who are losing their job. So, the overarching topic concerns the socio-economic dimensions of how many SMEs that survive while retaining a good number of the staff – or on the more pessimistic side – how many that go down leaving scores of people unemployed and without an income affecting individuals as well as tons of families.

What can we then expect in terms of social responsibilities in such a situation? Given that some developing country SMEs are characterized as having ‘family-like culture’, we would expect such enterprises to retain the employees (Tran and Jeppesen, 2016). Even though the SMEs retain the employees, owners and managers personally have to handle the insecurity that accompanies the situation as well as relating to the concerns among the employees.

The family-like type of organization could ensure that employees are kept and not fired. Still, we know that a number of SMEs pay little if any wages in times of limited production. Hence, having a job with no income does not make a difference right now.

Small enterprises in developing countries are also praised for their community engagement in taking up activities ensuring women (Langevang et al, 2015) or young people income. The localized response may assist in various ways of helping citizens in dire need. Religion and which church that you are a member of play a role. Some churches, as well as the wealthier members (and among these SME owners and managers), come forward to assist their congregation and the less well-off families in times of need. 

We need to wait for the answer to whether and to what extent Covid-19 will be marked by resilience and a protective and more caring (social) response by SMEs – or rather by the tough reality of downsizing and/or closing down with numerous dire consequences.


References

Langevang, T., Gough, K. V., Yankson, P. W., Owusu, G., & Osei, R. (2015). Bounded entrepreneurial vitality: The mixed embeddedness of female entrepreneurship. Economic Geography, 91(4), 449-473.

Spence, Laura J., Jedrzej George Frynas, Judy N. Muthuri, Jyoti Navaret, 2018. Research Handbook on Small Business Social Responsibility: Global Perspectives. Edward Elgar Publishing.

Tran, Angie Ngoc & Søren Jeppesen. 2016. SMEs in Their Own Right: The Views of Managers and Workers in Vietnamese Textiles, Garment, and Footwear Companies. Journal of Business Ethics, 137(3), 589-608


About the author

Søren Jeppesen is Associate Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research concerns the development of firms in developing countries. He focuses on SMEs, CSR and driving forces (or lack of same) for strategies of SMEs in developing countries in engaging in CSR (or not engaging).


More about coronavirus pandemic on Business of Society blog:

How the pandemic can reset cities and transform aspects of urban mobility

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark

How to make food systems more resilient: Try Behavioural Food Policies

Lobbying and the virus – three trends to take note of


Image by US Army Africa

On the Ground: What CSR and sustainability standards fail to address

By Hannah Elliott

In the fall of 2019, there was a flurry of news stories in the British media about political events in western Kenya which, according to one article, threatened the future of the nation’s beloved cup of tea. In Kericho, the heart of Kenya’s tea-growing country, the local community are reclaiming vast tracts of land obtained under British colonialism for the large-scale cultivation of tea. Faced with a land shortage that hinders possibilities for sustainable development, local activists are challenging the extensive land acquisitions that took place under colonial rule, many of which constitute the premises of multinational agri-business today. CSR initiatives and the sustainability standards that are increasingly ubiquitous in Kenya’s tea industry fail to address or acknowledge a sustainability issue that is of major concern to local communities on the ground: land.

During the early 20th century, while trying to create an export economy in eastern Africa, the British government identified the highlands of Kericho in Kenya’s fertile Rift Valley as a place of high agricultural potential and gave out land to European settlers. The area was identified as an ideal place for growing tea, a commodity that was already thriving elsewhere in the British Empire. With the entry of two major companies engaged in tea production in India and Sri Lanka, further land allocations were made, providing the premises for the expansive tea plantations that dominate Kericho’s landscape today.  

Colonial laws enabled these land allocations: the British government could acquire land and relocate the ‘natives’ who were occupying and cultivating it. The Kipsigis community living in the Kericho area lost large amounts of land, only to be compensated with smaller areas of less agriculturally conducive land in designated ‘native reserves’. Others remained in their home areas but were rendered ‘squatters’ required to work for settlers in return for their continued occupation.

Many today struggle to make a living from diminishing farms in the former native reserve areas as family land is subdivided among children, while others remain landless or forced to purchase land at high prices. Land shortage poses a direct challenge to sustainable livelihoods in Kericho.

These grievances are what the Kericho County Governor seeks to address. Identifying as a victim of historical land injustices himself whose ancestral land lies within the vast tea plantation owned by the multinational giant Unilever, he advocates for reparations that acknowledge the forceful acquisition of his community’s land. This implicates multinational tea companies directly. For the Governor and Kipsigis community activists campaigning for justice, these companies are operating on stolen property that rightfully belongs to the community.

Tea plantations employ large numbers of locals in roles that range from tea plucking to top management and offer opportunities and bursaries for adult and child education. While much of the British media coverage of Kericho’s land politics, including an article in The Economist, has envisaged Zimbabwe-like evictions of British companies in Kenya, the Kericho Governor made clear when I met with him earlier this year that it is not in anybody’s interests for the tea companies to hand over the land and leave.

Rather, following recommendations made by Kenya’s National Land Commission, the Governor asks that tea companies apply to the county government for new land leases, following which the land can be resurveyed.  Undeclared acreage, he argues, should then be reverted back to the county government. In addition, the Governor seeks to increase land rent so that the county government is more adequately remunerated for the land.

This, along with demanding mesne profits from multinationals for the use of the land since 1902, is intended to enable more equitable redistribution of the wealth generated from large-scale tea production.

One Kipsigis community activist whom I met envisaged a new model of business: a continuation of plantations’ management and operations, but with the local community, the ‘rightful landowners’, as the major shareholders. This is not to say that all of these proposals are wholly feasible or realistic for tea companies, but to envisage other ways of doing business whereby local communities and authorities are rendered more equal partners.

This goes beyond CSR initiatives which, while valued in Kericho, can be seen as a continuation of colonial paternalism rather than rethinking the very premises of companies’ local engagement. It also goes beyond the certified sustainability standards provided by organisations such as the Rainforest Alliance and Fair Trade that seek to ensure economic, environmental and social sustainability in the tea supply chain yet are generic, driven more by the demands of distant buyers in Europe and North America than those of local communities on the ground.

Undoubtedly, community land claims in Kericho are entangled in local politics. The Kericho Governor’s campaigns are part of a populist political strategy that has seen him win two terms in office. Furthermore, judging by Kenya’s postcolonial history, there is no guarantee that relinquished land or funds would be equitably rolled out to the community should he succeed. Another caveat relates to major challenges facing the tea business in recent years with regard to profitability: at the time of my fieldwork earlier this year, the price of tea hit an all-time low.

The coronavirus pandemic will surely further threaten the industry. In this context, local political challenges of the kind we see in Kericho might push companies to reconsider their operations entirely.  

However, this shouldn’t preclude reimagining the terms of companies’ engagement, not only in Kenya but across Britain’s former settler economies. If large-scale agri-business is to face up to the challenges of sustainability in the places it operates, it must acknowledge the historical grievances attached to the ground beneath it and engage with local communities beyond the confines of CSR and sustainability standards.    


About the Author

Hannah Elliott is a Postdoctoral Research Fellow at CBS’ Department of Management, Society and Communication. Her research on the SUSTEIN project critically examines the production of certified sustainable Kenyan tea.


Image by ©2010CIAT/NeilPalmer

The problem with CSR: why companies need to listen to their activist employees

By Luda Svystunova and Verena Girschik

The current pandemic has exposed blatant social injustices and inequalities around the world, prompting businesses to face their societal impact. Before the crisis, however, a rising wave of employee activism had already started to call into question the extent to which companies had managed to meet their moral obligations. Employees at Wayfair, Microsoft, Google, Twitter and Amazon have protested against their employers’ stance on issues ranging from climate change to migration, pushing them to deliver on public commitments or refusing to contribute to morally dubious projects, such as Amazon’s facial recognition software that had potential to contribute to racial discrimination.

As the crisis has provided ample opportunities to reflect on and reconsider the role of business in society, we believe that this is the time to learn from employee activism – and to learn to embrace it as a force for change.

The problem with CSR

Virtually all companies today pursue a CSR agenda, strengthened by the global agreement around Sustainable Development Goals (SDGs), the growing power of corporate sustainability rankings, standardization of sustainability reporting and the proliferation of consultancies who offer support to companies pursuing a shared value approach to social responsibility. Aligning business and societal value creation, such approaches promise win-win solutions in addressing social ills. Yet it is the very promise of win-win solutions that undermines critical engagement with companies’ roles in creating or reproducing social ills.

First, CSR has become the corporate worlds’ dominant paradigm for change that is positive and comfortable. If CSR managers want to avoid eyerolls, especially from top managers and shareholders, they need to speak the language of profit and present a measurable business case for addressing social ills. By enabling companies to do well by doing and looking good, however, CSR may also cultivate complacency. This does not mean that CSR has failed to encourage companies to embrace more responsible business conduct. But it is a potent substitute for engaging with the many uncomfortable social problems as to which companies have hitherto failed to do the right thing.

Second, the triumph of CSR is symptomatic of and reproduces social inequalities. CSR is driven by privileged employees and managers often based in the corporate headquarters – members of the organizational elites. The voices of others in the company, as well as the people affected by corporate activities, are seldomly included. Indeed, Kaplan (2020) suggests that the business case alienates employees and does not deliver on promises to stakeholders. Misguided CSR initiatives can actually make things worse for those they aim to help. By limiting attention to win-win solutions, CSR has failed to pay attention to those who lose.

How can employee activism help?

Activist employees are those employees that care about and actively promote social justice in their company. With this, we call upon companies to stop viewing employee activists as antagonists or nuisance and instead invite activism in order to face problems head on. Specifically, we suggest that companies should consider the following:

1 ) Accept activist employees rather than “handle” their dissent.

Activist employees bring to the front the less comfortable social problems that a company creates, reproduces, or in other ways is complicit in. Commonly, companies manage dissent by firing those employees who speak out against corporate misdeeds. Activist employees’ voices may be uncomfortable, but if fired, they will certainly still be heard – if not by management, then certainly by the public.

2 ) Listen to dissenting voices and engage with uncomfortable truths.

Employee activists can help by shedding light onto just such areas where businesses may have missed the mark. Representing social movements inside the company, they generate awareness of problems it may have missed or not taken seriously and even contribute to solutions. Most importantly, the break with the complacency of corporate CSR practice and drive the more radical change that is so badly needed.

3 ) Confront privilege and listen to employee activists

Companies should be mindful of who gets to have a say in the issues that matter. It is easy to overlook issues voiced by activists on the ground – across the operations and especially in distant local offices. Yet they are often the ones with a first-hand understanding of social ills as well as externalities produced by the company.   

4 ) Tackle social injustices within.

Not all employee activism is driven by personal values and compassion for others: alongside staff walkouts for greener business at Google and Amazon, Google’s temporary workers and Amazon’s warehouse employees fight for fair labour conditions. In tackling social ills, companies should never overlook the struggles of their own employees.

CSR is still needed, but we can do even better. What we are proposing is inconvenient, disturbing, and uncomfortable, but it’s time for companies to get things right.


Our critique of CSR is inspired by the following contributions:

de Bakker, F. G., Matten, D., Spence, L. J., & Wickert, C. (2020). The elephant in the room: The nascent research agenda on corporations, social responsibility, and capitalismBusiness & Society, in press.

Feix, A., & Philippe, D. (2020). Unpacking the narrative decontestation of CSR: Aspiration for change or defense of the status quo?Business & Society59(1), 129-174.

Kaplan, S. (2020). Beyond the business case for social responsibilityAcademy of Management Discoveries, 6(1), 1-4. 

Khan, F. R., Munir, K. A., & Willmott, H. (2007). A dark side of institutional entrepreneurship: Soccer balls, child labour and postcolonial impoverishmentOrganization studies28(7), 1055-1077.

Schneider, A. (2019). Bound to Fail? Exploring the Systemic Pathologies of CSR and Their Implications for CSR Research. Business & Society, in press.


About the Authors

Luda Svystunova is a Lecturer in International Management at the Institute for International Management, Loughborough University London. Luda’s research examines multinational firms’ interactions with their non-market context through corporate social responsibility and corporate political activity, particularly in non-Western settings. She is also interested in the role individuals within and outside companies play in these interactions. Luda’s Twitter: @LudaSV

Verena Girschik is Assistant Professor of CSR, Communication, and Organization at the Department of Management, Society and Communication, Copenhagen Business School. Verena’s research focuses on the responsibilities of companies in the contexts of complex societal problems and humanitarian crises. Interested in relations between companies, governments, NGOs, and other societal actors, her research explores how companies negotiate their roles and responsibilities, how they perform them, and to what consequences. Verena’s Twitter: @verenaCPH


Image by GeekWire Photo / Monica Nickelsburg

Lobbying and the virus – three trends to take note of

By Dieter Zinnbauer

Writing about anything in relation to Covid-19 is rather hopeless. Any attempt to describe current developments has a half-time of 30 minutes. Any attempt to speculate what lies ahead drowns in the flood of near infinite plausible trajectories. And any and every attempt usually ends up with the hammer and nail problem, resulting in the author pushing his favorite pre-existing policy to ask  as an essential ingredient in the crisis response, much as the whole world looks like nails when you hold the proverbial hammer in your hand.

Nevertheless here a foolish attempt to jot down some small observations of how the Covid situation is currently influencing how businesses lobby government, or in jargon corporate political activity. In a nutshell: there are indications that there is more, that it is more conventional and that integrity in lobbying is more in demand than ever.  In detail:

1) A lot to win and a lot loose means a lot to do or: “Everybody is upside down. All the clients are upside down” (US lobbyist)

Lobbying is typically understood as anti-cyclical as it tends to experience an uptick in economic downturns. Yet this time is a difference in scale and a difference in kind. Covid-19 is an essential threat to a vast array of industries and companies that until a few weeks ago looked very solid. At the same time, the scale of financial support and transformational depth of regulatory responses that are being considered and dispersed are absolutely unprecedented in the post WW2 era.

Existential stakes convert into a sharp increase in lobbying. Recent data shows that lobbying spending in the US has climbed to near-record levels already and the centrepiece of legislation, the Coronavirus Aid, Relief and Economic Security Act is the second most lobbied upon a piece of legislation.

There are new clients – that also fuel the lobbying boom – three quarters of lobbying filings in the US that mention COVID issues are by new principals. And there is a flourishing new service line out there helping companies shape new rule-writing and expedite approval for their anti-corona products. Many are desperate, everyone is out to get a piece of the cake and as even the most adept watchdogs have a hard time with tracking all proposed rule-changes and handouts it may also be a good time to slip in this long-coveted, yet unrelated regulatory tweak in one’s own favour that otherwise might have not withstood public scrutiny.

2) Forward to the basics tools, tactics and incumbents.

It seems likely and there are indications that corporate political activity is for the time being concentrating on tried and tested tools and relations. First, the Covid-19 response is the hour of the executive as the first phases of the policy response are firmly driven by the executive in most countries around the world. Emergency powers are being invoked, far-reaching policies are hastily cobbled together in small committee, and implemented qua executive orders. Ex-ante legislative deliberation is compressed, public consultations are limited and judicial reviews are only slowly kicking into gear.  All this means that lobbying is currently heavily focused pragmatically on very tangible outcomes and the executive branch of government as for example, a top German lobbyist has described in a recent interview.

Expected budget cuts and trimmed client accounts for public relation agencies in the first-affected Asia-Pacific also suggest that more sophisticated upstream strategies for framing and influencing public debates in the longer run are being put on the backburner and efforts are shifting towards core government relations work. Add to this that social distancing measures and going virtual makes it difficult to cultivate new relationships. As a result, existing, networks and long-time friends who may have walked through the revolving door between public office and private practice carry the day dealing substantive incumbency advantages to the already well-connected and established players both in terms of in-house lobbying departments and hired firms.

3) An incipient debate about the fundamentals close to home – and high stakes for integrity

Financial distress and zero-sum dynamics in what are ultimately finite support programs demand maximum resolve when making one’s case to the government. Many more interests than usually have come to the fore to compete for the pie and some of these competitors can be expected to act very opportunistically. All this puts enormous stress on integrity in lobbying. But this comes at a time when the integrity of the corporate political activity is perhaps more important than ever. 

Policy-makers enter into uncharted territory with many of their interventions and stabilization efforts. Peak uncertainty means they need accurate information on the situation of different interests and stakeholder groups and how they may be affected by different policy options. Policy-makers need more of this information more urgently than ever. Extreme fragility means that the consequences of mis-judgments are substantive.

All this highlights how important the honest, proportionate, evidence-supported articulation of interests and concerns to government is at this moment in time. In the eye of the public business appears to be largely failing in this area. Less than 40% of respondents in a very recent 11-country survey – the spring update to the 2020 Edelman Trust Barometer –  perceived business to be a reliable source of useful and accurate information during the pandemic, a number that dropped to even more staggering lows of 24% and 15%  in France and Japan respectively.

Yet, the relevance of credibly upholding integrity in lobbying goes even deeper. The specter of special interests hijacking the Covid response looms large as a tremendous PR nightmare. Such a storyline is ready to combine with the bitter aftertaste of the last financial crisis response that many perceived to be undermined by strong industry lobbying. The prospects of a special deal for special interests could thus further inflame the very anti-business sentiments that are already on the rise: in the same survey as referenced above respondents put business CEOs last when thinking which types of professions and leaders do a good job in meeting the demands the pandemic puts on them, while only 38% thought business did a good job in putting people before profits.

Pushing public opinion that is already at the edge further into the negative territory through reckless corporate political activity looks like a bad idea even from a narrow tactical perspective. This is because another fallout from Covid is an emerging public debate about the basic bargain between business and the public and the increasing readiness to consider options for a fairer settlement that until recently seemed to have difficult to find acceptance in the mainstream.

The 11-country Edelman survey again captures some of these sentiments: a remarkable 64% of people agreed with this statement:

“This pandemic has made me realize how big the gap in this country is between the rich and the working class, and that something must be done to more fairly distribute our country’s wealth and prosperity”

Massive public financial support is a great lever for updating the social licence to operate for the corporate world. This is not a theoretical possibility but has already become a reality. Widely discussed provisions to bar companies that engage in overly aggressive tax planning or pay out dividends in times of crisis from benefiting from post-Covid support is one example. So is the observation that a debate about the legitimacy of share buy-backs that despite its policy relevance was more or less confined to the fringe of experts and specialized advocates all of a sudden features prominently in the policy mainstream. It has even prompted the European Commission to require a ban on share buybacks as a central condition when government prop up companies by acquiring equity ownership.

This public limelight for a seemingly arcane issue is well deserved considering that for example the top airlines in the US that are currently clamoring for public support are estimated to have spent 96% of their free cash flow during the last decade on share buybacks and built no meaningful reserves to weather a major crisis, a strategy termed by a banker from a top firm as “a staple arrow in the quiver of companies… to optimize how they drive the most value for their shareholders”. From a corporate lobbying view not particularly productive narratives to feed any more.

Many, including this author, view this as a much needed and welcome conversation about how to refresh the principal compact between business and society in view of sharing the benefits and costs from business activity fairly and within planetary boundaries. Business will not do itself a favor when flexing its lobbying muscle too hard for special treatment at this point in time when the public is increasingly prepared to doubt and revisit the basic tenets of this compact.

Responsible corporate activity, transparent, well-governed and aligned with purpose, planetary boundaries and broader regards for all stakeholders is not a nice add on for good times. It is essential to protect the public trust in functioning institutions, functioning crisis response and a functioning societal bargain with business. This is not the time to call in special favours and push a narrow agenda. This is the time to do act as a responsible corporate citizen on all fronts and particularly when it comes to government engagement.

Now there it is:  my policy agenda framed as essential in Covid times. The whole world looks like nails when you have a hammer in the hand.  But in this instance, of course, it is for real.


About the author

Dieter Zinnbauer is a Marie-Skłodowska-Curie Fellow at CBS’ Department of Management, Society and Communication. His CBS research focuses on business as political actor in the context of big data, populism and “corporate purpose fatigue”.

Twitter: @Dzinnbauer

Essays: https://medium.com/@Dzinnbauer

Working papers:  https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1588618


More about coronavirus pandemic on Business of Society blog:

The Coronavirus Pandemic – and the Consequentiality of Metaphors

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic

A Green and Fair COVID-19 Recovery Plan

In Movement from Tanzania to Northern Italy to Denmark

How to make food systems more resilient: Try Behavioural Food Policies

Photo by Dieter Zinnbauer

The Coronavirus Pandemic – and the Consequentiality of Metaphors

By Dennis Schoeneborn

Language is a reef of dead metaphors (Guy Deutscher)

We are in the midst of an unfolding crisis that humanity is struggling to understand. To make sense of the unknown, humans tend to rely on metaphors, analogies, or other rhetorical figures. What do metaphors do? They allow for giving meaning to a (rather unknown) target domain by projecting and transferring insights from a (presumably better known) source domain.

For instance, in the public discourse about the current Coronavirus pandemic, the sensemaking process includes analogies within the same domain (e.g., Trump stating at the beginning of the pandemic: “It’s just like a regular flu”; Bolsonaro maintaining for a long time that it’s just a “little flu”) –  or metaphors that tap into the source domain of natural disasters (e.g., the “tsunami” metaphor used by various medical professionals) or of human warfare (e.g., Trump’s more recent framing of coronavirus to be an “invisible enemy”; Macron’s insistence that “we’re at war”).

World leaders, journalists, social media influencers, epidemiologists and other contributors to the public debate can be presumed to mobilize such metaphors not only to foster sensemaking but ultimately also to steer citizens’ behavior.

For all that we know, metaphors tend to “have profound influences on how we conceptualize and act with respect to important societal issues”.

(Thibodeau & Boroditsky, 2011, p. 1)

Accordingly, it is worthwhile studying how and to what extent the use of different metaphors can inspire, influence and “organize” individual and collective behavior.

As the work by Joep Cornelissen reminds us, the fruitfulness of a metaphor depends on (1) its aptness (i.e. whether a metaphor ‘fits’ and it’s meaningful) as well as (2) its heuristic value (i.e. the extent to which a metaphor offers new insights into an unfamiliar domain; see Cornelissen, 2004).

However, aptness and heuristic value tend to be in a trade-off relation: While close proximity between source and target domain can help strengthen the aptness of a metaphor, it tends to diminish the metaphor’s heuristic value, at the same time. The latter problem also occurs when the metaphorical connection between two domain becomes so well-established (e.g., the link between epidemics and warfare) that the metaphor loses its ability to lend new meaning to the target domain (i.e. a term’s metaphorical quality “dies” so-to-speak; e.g., the term World Wide Web, where hardly anybody today would think of spider webs). In contrast, metaphors can be kept vivid and alive via the power of dissimilarity: the greater the contextual distance between two domains, the better the chance of a metaphor to be insightful.

This may be one of the reasons why novel and unusual combinations of metaphors, such as Tomas Pueyo’s notion of “The Hammer and the Dance” (while being aptly chosen in that case, as well) may have better prospects to lend new meaning to the pandemic and thus inspire new and desirable modes of behavior.

Taken together, the current crisis situation is also a crisis of collective imagination and sensemaking. Hence, in these turbulent and worrisome times it is more important than ever that contributors to the public debate think twice before mobilizing metaphorical imaginations – and to consider not only their aptness, heuristic value, or “retweetability” but also their potential (and sometimes unintended) consequences for individual, collective, and organizational behavior. Ultimately, it is not only the “brute fact” (Searle) of the pandemic that can severely harm us – but also the meanings that are ascribed to it (e.g., via metaphors) and that can materialize in very concrete actions.

For instance, individuals and collectives are likely to act less careful if they believe the Coronavirus to be “just like a flu” – and more careful if they grasp the virus to have chameleon-like features that make it hard to detect (e.g. recent evidence that the virus can also surface in damages to the heart and brain).

To conclude, the current pandemic serves as painful evidence for the importance of theories that highlight the constitutive role of communication for phenomena of orga­nization and organizing. In other words, communication in forms of metaphors, narratives, or other rhetorical means, especially if voiced by opinion leaders, tends to be not just “cheap talk” but can be highly consequential (as also powerfully shown by recent studies on “Narrative Economics” by Nobel Prize winner Robert Shiller).


About the author

Dennis Schoeneborn is Professor of Organization, Communication, and CSR at Copenhagen Business School, and Visiting Professor of Organization Studies at Leuphana University of Lüneburg. He serves as head coordinator of the Standing Working Group “Organization as Communication” at the European Group of Organizational Studies (EGOS). He furthermore serves as Associate Editor of the journal Business and Society.


More about coronavirus pandemic:

Sustainable Development, Interrupted?

The Political Economy of the Olympics – Misconceptions about Sustainability

Supply Chain Responsibilities in a Global Pandemic


Illustration by Dan Page

Supply Chain Responsibilities in a Global Pandemic

By Jette Steen Knudsen, Erin Leitheiser, Shaidur Rahman & Jeremy Moon

What is the responsibility of Western retailers to the workers who make their garments as the coronavirus forces factories to shut down?

Shopping malls are closed, gatherings are banned, thousands of employees have been furloughed, and movement outside of one’s home is discouraged if not outright illegal.  This has meant bad news for apparel brands and retailers as nervous customers cease buying. In the U.S., for example, retail sales in March were down almost 9% compared to in February.  Those brands and retailers which have built their businesses on a fast fashion model – predicated on the continuous churn of high volumes of cheap clothes – face unprecedented challenges and questions about responsibilities in the face of the COVID-19 pandemic. 

Retailers have responded in different ways.  As they have had to shut down their stores many have stated that they will not pay rent. For example, German sportswear producer Adidas stated (March 26 200, Reuters) that

“Almost all over the world there is no normal business anymore. The shops are closed. Even a healthy company like Adidas cannot stand this for long”.

Adidas was one of a string of retailers in Germany that said they wouldn’t be paying their landlords while their stores are closed as part of efforts to stem the coronavirus spread. Adidas said it would need credit even after staff cut their working hours, executives waived part of their pay and the company stopped share buybacks. Adidas’ decision was met with an uproar in Germany eventually forcing the company to formally apologize and to report that it planned to suspend a planned 1 billion euro ($1.09 billion) share buyback in an effort conserve cash after closing its retail outlets in Europe and North America. Adidas also said it would pay rent.

In Denmark, Anders Holck Poulsen, the owner of the clothing company Bestseller and Denmark’s wealthiest man, also announced that the company would not pay rent for its stores. Bestseller (parent company for brands like Vera Moda, Jack & Jones, Pieces, and Name It, among others) later reversed the decision following a public outcry and the CEO went on national television to apologize. Bestseller subsequently laid off 750 employees and sought financial support from the government.  This decision was met sharp with sharp criticism because over the last five years Mr. Holck Poulsen has paid DKK 7.6 billion (more than $ 1 billion) in dividends to his private holding company Heartland.

Not all companies have responded this way. Patagonia, for example, has promised that all of its employees will continue to receive their regular pay during store closures.

However, with many large brands scaling back their social responsibility in the Western part of the world, what kind of responsibility can we reasonably expect from Western retailers in places such as Bangladesh?

Bangladesh is heavily dependent on apparel production. Apparel comprises more than 80% of the country’s total export revenue and the sector employs more than 4 million workers, most of them women.  However, in recent weeks many Western brands have cancelled their orders from Bangladesh, and it is estimated that more than 2 million workers have lost their jobs.  H&M is the largest buyer of garments from Bangladesh and has reluctantly agreed to take and pay for the shipments of goods already manufactured as well as those that are still being produced. Inditex, PVH and Marks and Spencer have also agreed to pay suppliers for orders that are already produced but not all companies have done so. Primark, for example, has cancelled orders, and virtually all buyers have pulled orders that have not yet gone into production.  At the end of March 2020 orders for more than $1,5 billion had been cancelled, and Bangladesh reported -19% year-on-year export volume for the month.

What is the responsibility of large brands like Bestseller or H&M for their supplier factories in Bangladesh? Western brands have a long tradition for stating their commitment to CSR in global supply chains, including elaborate Codes of Conduct for social and environmental performance in supplier factories. Bangladesh has staked its claim as the low-cost producer of garments, and its costs and production capacities cannot be easily matched elsewhere in the world. The model of fast fashion needs Bangladesh, and Bangladesh, in turn, needs fast fashion. 

Now that crisis reigns upon all of us in the form of a global health pandemic, it is the most vulnerable of workers who have been left in the lurch, be it the retails associates who stock shelves or the stitchers who sew together T-shirts.  As buyers cancel orders, few recognize the perilous position that these workers are left in. For those working on the factory floor in Bangladesh, more than 2 million have been furloughed, many without pay, despite a governmental scheme intended to address these issues.  The meagre wages of garment factory workers have not allowed for savings that could support them in such times, and the prospect of long-term closures – or at least, no orders to fill and therefore no paid work – means almost certain disaster for them and their families. 

Garment workers in Bangladesh have risen up in protest, stating that

“…we don’t have any choice.  We are starving.  If we stay at home, we may save ourselves from the virus.  But who will save us from starvation?”

(13 April 2020, The Guardian).

While some brands, like Primark, have set up charitable funding pools to help support workers, the money has yet to make it to their pockets, and the “charitable” framing of this funding on behalf of brands speaks volumes about what they see as their responsibilities.  Yet, when the crisis passes and shopping malls re-open, brands will again be reliant upon these workers to satisfy their demand for an endless supply of cheap garments. 

Given that cheap labor is a fundamental need for fast fashion companies to survive, shouldn’t brands likewise ensure the survival of those on which it depends? 


This is the first in a series of blogs which will further explore the responsibility of the Bangladesh government, factories, Western governments and civil society organizations for dealing with COVID-19 in places like Bangladesh.  


About the authors

Jette Steen Knudsen is Professor of Policy and International Business at the Fletcher School of Law and Diplomacy at Tufts University and holds the Shelby Collum Davis Chair in Sustainability.  She is also a Velux Fellow at Copenhagen Business School where she is part of the Regulation of International Supply Chains (RISC) project

Erin Leitheiser is an Assistant Professor at Copenhagen Business School and Project Manager of the Regulation of International Supply Chains (RISC) project

Shaidur Rahman is Professor of Sociology at BRAC University where he is part of the Regulation of International Supply Chains (RISC) project

Jeremy Moon is Professor of Sustainability Governance and Director of the Sustainability Centre at Copenhagen Business School.  He is the Project Coordinator of the Regulation of International Supply Chains (RISC) project.

Photo by ILO Asia-Pacific

Just announced: And the world’s worst company is …. Really?

Why naming a hardly known German company as the world’s most controversial company inadvertently makes a lot of sense

By Dieter Zinnbauer

Business bashing is a popular spectator sport in some quarters – sometimes justified, sometimes not. So there is certainly no shortage of strong contenders for the most controversial company contest. Who would be your pick for the 2019 shortlist? Perhaps one of the companies that led millions of people into opioid addiction? The biggest carbon dioxide emitter? Or someone from the big tech side that as many believe has ushered in a new, toxic era of surveillance capitalism?

Picking the unlucky winner is as difficult as it is subjective.  But as is always the case these days big data and AI are riding to the rescue. They are claimed to power an evidence-infused attempt by a boutique ESG consultancy to identify the most controversial company in the world. According to the inevitable marketing pitch, a secret-sauce algorithm churns through a proprietary database of millions of new and old media mentions for more than 140,00 companies to bring science to the art of naming and shaming and to reveal the 2019 most controversial company in the world.

And as just announced last week, the winner is:

Tuev Sued!

?

Tuev Sued?

If you are not a German car owner (the company is best known there for carrying out the obligatory and feared periodic car inspections) or an expert in technical certification issues you may have never come across this name before.

Tuev Sued is one of the big players in the global certification-of-everything business. Born as the Duev (“Dampfkesselueberwachsungsverein” – steam boiler inspection association) in 1800 to bring technical oversight to the issue of exploding steam boilers during the industrial revolution, the Tuev Sued (and its brother) Tuev Nord have grown into multinational enterprises that provide technical audits and certification services for an ever-growing number of products, processes and service across industries and across the world.

Arguably the main reason why Tue Sued was picked as the most controversial company (besides a weighing in favor of novel entries that guarantees sustainable newsworthiness to an annual ranking now in its 10th edition) is that it is implicated in the infamous 2019 Brumadinhu dam disaster in Brazil. A collapse of a dam erected by a mining company unleashed a toxic mudflow on the downstream communities that killed more than 250 people. Tuev Sued had carried out technical inspections of the dam and allegedly assessed it as safe. The case is still in court, no conclusive verdicts have been reached.

So is it fair to put the spotlight so fully on a comparatively small technical certification outfit, rather than say the big mining company that built and ran the dam?

Irrespective of what one thinks about the merits of this choice,  the case highlights what I would submit is one of the most fundamental and unresolved drivers of corporate irresponsibility: the persistent challenge to make all kinds of certification and assurance processes that are so essential to functioning markets and economies work as intended.

From the never-ending string of accounting and auditing scandals to the crucial role of rating agencies in the 2007+ financial crisis to emerging examples of greenwashing in the carbon market certification business, there as common thread: certification and assurance often fail to provide the independent, effective vetting that it is supposed to deliver.

Issues involved include:

  • the under-resourcing of the inspection process as neither principal nor agent have strong interests in overly strict and deep inspections,
  • pitching certification as loss leaders to open the door for upselling into other lucrative consulting services;
  • borderline rubberstamping of certifications to secure repeat business and avoid being viewed as difficult in the industry and thus putting off other potential clients.

Strengthening liability, setting more stringent standards for the standards watchdogs, tightening compliance measures and building public reputational pressure go some way to rework incentives towards more credible certifications.

But at the end of the day they are more ameliorative than tackling the root problem:

As long as certification services are selected by and directly paid for by the very clients that are meant to be certified, assured, rated or audited and as long as certification is strictly a for-profit business there are fundamental conflicts of interests at the root of these services that put their efficacy and independence at risk.

Ideas of how to rewire these markets and business models abound yet so far the problem of thin political markets seems to hold: both certifiers and certified have strong interests to preserve the status quo and formidable lobbying power to advocate for this, while the dull technical nature of the issues at stake and the dispersed group of beneficiaries from alternative solutions prevent a forceful, concerted push for better arrangements.

Yet there is hope that this fundamental conflict of interest issue will gain more prominence in the policy and public debates very soon. The emerging transformational push to de-carbonize businesses and economies relies in part heavily on carbon credits, carbon offsets and other green-impact instruments whose efficacy and the very reason for existence relies on proper certification and assurance.

 How to move beyond and away from issuer-directly-pays certification services will have to be an important part of the policy designs in the making.

Tuev Sued is a symptom of the problem – it is the systemic issue at the root of the case that justifies putting it into the spotlight – although it is unclear of the secret-sauce algorithm at work had this in mind when making the selection. 

Let’s hope that in twenty years’ time the idea of a rating agency, a dam examiner, a medical device inspector or a carbon credit certifier being selected by and paid directly by the people they are supposed to pass an independent judgment on appears as strange as the notion that a pharmaceutical company would be able to choose between different agencies to get its drugs approved and directly funds large parts of their budgets.


About the author

Dr. Dieter Zinnbauer is a Marie-Skłodowska-Curie Fellow at CBS’ Department of Management, Society and Communication. His CBS researches focus on business as political actor in the context of big data, populism and “corporate purpose fatigue”.

Twitter: @Dzinnbauer

Essays: https://medium.com/@Dzinnbauer

Working papers:  https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1588618

Photo by Icons8 Team on Unsplash

Responsible Tax in Multinational Enterprises – Why?

By Peter Koerver Schmidt

The tax practices of multinational enterprises (MNEs) attract massive interest in these years from the general media, policymakers as well as academia. This public interest is positive, as the subject is both interesting and important. At times, however, the debate can be polarized and rather futile.

Two quotes exemplify the wide spectrum of opinions quite well. On the one side of the spectrum, the more traditional opinion which in the words of NYU Professor David Rosenbloom can be expressed like this: “Taxes are a cost, like any other cost. There is nothing magical or special about taxes as a cost, except that they are subject to adjustment by government action.”[i] And on the other side of the spectrum, UK MP Margaret Hodge’s statement concerning Google’s tax planning set-up “We’re not accusing you of being illegal, we are accusing you of being immoral.”[ii]

Tax is and should be regulated by law

Currently, the zeitgeist strongly seems to favor the latter opinion, and it is often argued that MNEs face a moral or ethical obligation not to engage deliberately in strategic tax behavior solely designed to minimize tax payments. In other words, MNEs should act responsibly and refrain from aggressive tax planning.[iii]

Even though such statements are understandable and well intentioned, it is worth bearing in mind that taxation traditionally – and for good reasons – is an area densely regulated by law.

Generally speaking, the legal order (rule of law) creates stability and foreseeability and acts as an obstacle to power holders of society. This is also important within the area of taxation, as taxes are not voluntary and since taxation is a complex balancing act that needs to be carried out in a transparent democratic order. Moreover, equal and objective treatment of taxpayers presupposes a legal standard, as social/ethical norms are too vague to provide adequate guidance. Finally, yet importantly, procedural justice requires that taxpayers – including MNEs – have access to independent judicial review, in order to give the taxpayers a proper chance to explain themselves and to appeal.[iv]

Reputational risks and shareholders of flesh and bone

Does this mean that everything should just remain as it (perhaps) used to be?

In my opinion, the answer is no. Accordingly, policymakers should cooperate on a global and regional level (as they are already doing at the level of the OECD/G20 and the EU), in order to improve the current international tax regime and reduce the possibilities for applying aggressive tax planning strategies. Moreover, well-managed MNE’s should take account of the fact that the wider public expects them to act responsibly and to refrain from aggressive tax planning.

The reason why MNE’s should acknowledge the growing public distaste for aggressive tax planning strategies is in my view two fold, and does not rest on an inherent social/ethical obligation to so.

Instead, the first argument is based on the fact that responsible tax behavior by an MNE can mitigate a number of corporate risks and that corporate tax planning must be balanced against the potential costs of triggering reputational damage.[v] The second argument is that the management in MNEs should focus on maximizing shareholder welfare, not shareholder value.[vi]

In other words, it should be taken into account that shareholders at the end of the day are ordinary people of flesh and bone that are not only concerned about maximizing profits but also have social/ethical concerns. Accordingly, even though MNEs do not have an inherent social/ethical obligation to stay away from aggressive tax planning behavior there may anyway be good reasons to do so.

Currently, there are strong signs that MNEs have become more prone to critically re-consider their tax planning behavior. More and more MNE’s thus prepare and disclose tax policies/strategies that among other things define the framework for their tax planning behavior. In my view, this appetite for implementing policies on responsible tax is both sensible and laudable.


References

[i] H.D. Rosenbloom, Where’s the Pony? Reflections on the Making of International Tax Policy, 63 Bulletin for International Taxation 11, p. 535-542 (2009).

[ii] Public Accounts Committee Chairman Margaret Hodge. Quote from The Telegraph, November 2012: https://www.telegraph.co.uk/finance/personalfinance/tax/9673358/Starbucks-Amazon-and-Google-accused-of-being-immoral.html.

[iii] P. Schmidt & K. Buhmann, Taxation, General Anti-Avoidance Rules and Corporate Social Responsibility in Fair Taxation & Corporate Social Responsibility, p. 227-260 (K. Elgaard et al. eds., Ex Tuto 2019).

[iv] R.P. Österman, Perspectives on Corporate Taxation from a Sustainable Business Perspective in Challenges, in Managing Sustainable Business pp. 371-397 (S. Arvidsson ed., Springer 2018).

[v] A. van Eijsden, The Relationship between Corporate Responsibility and Tax: Unknown and Unloved, 22 EC Tax Review 1, p. 56-61 (2013). See also R. Knuutinen, Corporate Social Responsibility, Taxation and Aggressive Tax Planning, Nordic Tax Journal 1, p. 36-75 (2014).

[vi] O. Hart & L. Zingales, Companies Should Maximize Shareholder Welfare Not Market Value, Journal of Law, Finance, and Accounting 2, p, 247-274 (2017).


About the author

Peter Koerver Schmidt, PhD, is Professor with special responsibilities in tax law at Copenhagen Business School and Academic Advisor at CORIT Advisory. His research mainly focuses upon international (corporate) tax law, and it has been published in Danish, Nordic and international journals and anthologies. In addition, he has authored and co-authored a number of books, including a dissertation on Danish CFC legislation from an international and comparative perspective.

Photo by 401(K) 2012 available on Flickr.

AI: A new culprit in missing the sustainability mark?

Lara Anne Hale

Artificial intelligence (AI) is championed as being the future driver of business: everything from human resources to surgery is supposed to become perfectly effective. But what if AI actually becomes a culprit blocking the way forward for sustainability?

Bias in AI

An example, to get us started:

Bob and Joe are colleagues. They are work friends, and they share many of the same worldviews – as well as biases. They are jointly programming the algorithm for machine learning that will train an AI to behave as they expect it should. In a number of ways that are difficult to detangle: Bob and Joe’s Biases → Machine Learning → AI.

In a recent article in The New York Times, AI professionals explored how to push back against social bias, as it “can be reflected and amplified by artificial intelligence in dangerous ways, whether it be in deciding who gets a bank loan or who gets surveilled.” As Ola Russakovsky points out in the article, there are all kinds of bias in AI because it reflects the way our world already is.  I’m here to point to one of those different kinds of bias – more specifically, institutional bias.

AI for Sustainable Building

In my day-to-day research, I’m regularly confronted with one such institutional bias in the building industry: cost savings and energy efficiency are more important than human well being. This long standing bias persists, despite whole cities filled with buildings that are harmful to health, hardly last beyond 25 years, and still do not achieve the desired energy performance. In trying the avoid dealing with lovely but complicated human beings, the building industry gets in the way of sustainable building.

After all, it’s only human. Or is it? There is increasing pressure for AI to be integrated into systems for both building construction and facilities management, though both applications perpetuate the bias for economic and energy efficiencies. Not surprisingly, this is what AI is meant for: to do what we already do, but better. So how can we innovate AI that does something that we don’t already do – for example, to consider more comprehensive sustainability?

Urban Tech and Co-Innovation

Yet, society is not fixed, and there are inspiring efforts to continuously innovate our industrial systems by bringing together established businesses and startups for problem solving. One well known example of this is the BMW Startup Garage in Germany. Last year, we saw the advent of such a program for the built environment here in Copenhagen, called Urban Tech, which will run three cycles from 2019 through 2021.

In the process of working with the 2019 VELUX Group – Foobot team on innovating AI for better indoor air quality, I was surprised to find that same institutional bias reflected from Foobot. The implications were that instead of training the AI to respond to people, their health and their needs – as academic and industrial research have indicated is critical for sustainable building – they focused the AI on energy efficiency. But ultimately, I found this to be an exercise of optimism.

Co-innovation gave us the opportunity to unhatch hidden elements of AI bias and to work together to figure out the next steps forward for bringing digitization and sustainability together in the built environment.

Sustainability Training for AI

Although there are calls to remove AI bias and to set up regulatory mechanisms to control for it, I wonder if either of these are feasible (a pondering shared in this WIRED Magazine article). AI is, after all, what we make of it. Though we cannot do what is not feasible, we can ponder what is desirable. In line with the voluntary integration of sustainability into corporate reporting, as well as building standards, what if we integrated sustainability considerations into frameworks for training AI?

Well, an android can dream…

Join and discuss these and related AI topics at the Reshaping Work’s AI@Work Conference in Amsterdam 5-6 March 2020. Lara will be presenting her work on “Faster horses: Collaborative AI innovation between incumbents and startups.”


About the author

Lara Anne Hale, Ph.D., M.Sc., Assistant Professor, Industrial Postdoc Fellow with CBS and VELUX. Lara conducts transdisciplinary research on sustainability in the built environment, including aspects of digital transformations, circularity, user-centered design, and systems thinking. Her current project focuses on business model innovation for smart buildings in the BLOXHUB Science Forum ‘Smart Buildings & Cities’ research group, supported by the Danish Innovation Fund and Realdania.


Read more by the same author

The Academic Smarts in the Smart City

Researchers in BLOXHUB seeking to improve indoor climate

Can Your Green Building Rub Off On You?

Need an SDG Solution? Hack it.

If at first you don’t succeed, build, build again


Photo by Franck V. on Unsplash.

Helpful hypocrisy? The ‘ironic turn’ in corporate talk about sustainable development

By Sarah Glozer and Mette Morsing

Do you feel uneasy to think that companies use a humorous tone in their communications about grave challenges such as climate change, pollution and inequality? We suggest the notion of helpful hypocrisy to coin this new ironic turn in recent corporate communications.

Ironic campaigns

We have ourselves been intrigued by this new ‘ironic turn’ in corporate communications. Large international fashion brands such as Patagonia, Benetton and Diesel have recently challenged conventional informational approaches to marketing communication about sustainability, choosing instead to incorporate a humorous (or more precisely, an ironic) edge to their visual representations as they address issues of climate change.

Such campaigns are ironic because they bring a twist of message incongruity and ‘double talk’, where they show a world within which ambiguity, incongruity and contradictions are real and leaving it to consumers what to make of it. This stands in sharp contrast to conventional prescriptions in marketing communications where the idea of ‘one message’, or what we refer to as ‘single talk’, prevails with the purpose of targeting consumers effectively. In our recently published paper, we suggest the term ‘helpful hypocrisy’ as a way of coining the ironic turn.

On the one hand, these new ironic messages show consumers the dire consequences of pollution, climate change, flooding and deforestation (i.e. implications of consumption) and on the other hand, they simultaneously carry strong aesthetic appeals to enjoy life and consume more, comforting consumers that ‘life goes on’ and hedonistic lifestyles will continue. In new ‘twisting’ advertising campaigns, companies blend these two narratives in complex, ironic visualization.

Such double talk is often deemed hypocrisy and greenwashing in research as well as in practice. And while we agree with such assessment, our analysis shows that there is also something else going on.

Double talk

We point to how such double talk may also provoke critical reflection and surprise through displaying inconsistencies between ‘talk’ and ‘talk,’ and hereby engage its audiences as more than passive recipients. In a cosmopolitan context, where people like to think that they are able and capable of critically reflect on their own lives and make their own decisions, preaching and moralizing communications about ‘good behavior’ is becoming increasingly less effective.

Youth is particularly opposing being told what to do. And even in spite of the severe consequences of continued consumption, a certain ‘climate change fatigue’ has entered the market. Consumers know that they should buy less and more sustainable products, but they are resistant to messages that give them feelings of guilt and shame.

In such a world, we suggest, one way to gain traction is to engage audiences in ironic and humorous communications in which the receiver is him- and herself activated to interpret incongruous ambiguous messages.

Helpful hypocrisy

Analyzing Diesel’s Global Warming Ready campaign, we find how the technique of irony is particularly outspoken as beautiful people in beautiful clothes are inserted into out-of-place environments, juxtaposing them if you will, by the dire implications of climate change, in a way which makes the whole scenery appear absurd.

In our analysis, we develop an analytical model that positions irony and double talk vis a vis conventional marketing campaigns.

We point to how the blend of climate change and luxury consumption is an ambiguous affair, and we show how incongruity is present across four levels of Diesel’s use of irony: fantasy versus reality (framing), survival versus destruction (signifying), utopia versus dystopia (symbolizing) and political activism versus consumer society (ideologizing).

Without moralizing or telling consumers what to do, or even restraining from telling consumers how good the corporate sustainable activities are, Diesel exposes the ambiguities of society and sustainability by using humor.

Now, we are not fooling ourselves. Diesel is a company with an ambition of selling more products. And where satire is a technique that intends to improve humanity by critiquing its ‘follies and foibles’, companies are generally known to have less noble ambitions.

But we argue – with Swedish sociologist Nils Brunsson – that “hypocrisy appears to be exactly what we demand of modern organizations: if we expose organizations to conflicting demands and norms, and expect that they should respond to them, then we must also expect hypocrisy” (1993: 8-9).

We propose that irony may be considered a means of ‘helpful hypocrisy’ in which the public is exposed to the contradictions and vices of society with the purpose of changing people’s opinion and create betterment of society.


References

Brunsson, N. (1989). The Organization of Hypocrisy: Talk, Decisions and Actions in Organizations. Wiley.

Glozer, S. and Morsing, M. (2019). Helpful hypocrisy? Investigating ‘double-talk’ and irony in CSR marketing communications, Journal of Business Research


About the authors

Sarah Glozer is Associate Professor of Marketing and Society in the School of Management at the University of Bath, UK. She is also Deputy Director of the Centre for Business, Organisations and Society (CBOS). Her research focuses on corporate social responsibility (CSR) communication, digital marketing and ethical markets/consumption.

Mette Morsing is Professor and Mistra Chair of Sustainable Markets at Stockholm School of Economics (Sweden) and Professor of Corporate Social Responsibility at Copenhagen Business School (Denmark). Her research concerns how organizations govern and are governed in the context of sustainability. She is particularly interested in how communication, identity and image dynamics work in this regard.


The image is one of the eight images displayed in Glozer & Morsing (2019) from the Diesel Global Warming Ready campaign: New York City submerged in water

Fake news and the future of the truth

By Jan Michael Bauer

At least since the last U.S. elections in 2016, the issue of “fake news” is frequently debated in the public and the news. The strategic and targeted distribution of misinformation to undermine political opponents peaked in the conspiracy theory termed “Pizzagate”.

Originated from leaked emails, the story suggested that the former presidential candidate Hillary Clinton along with other high-level Democrats ran a child trafficking out of a pizzeria in Washington[1]. Despite these absurd claims and the lack of any credible evidence, the owner received multiple death threats and the restaurant was attacked with an assault rifle[2]. Luckily, nobody was injured.

The hunger for likes

Though admittingly an extreme case, this is only one example of many fake news stories shared on social media and often echoed among equal minded users. Even though multiple psychological studies emphasize the human tendency to believe information that supports prior beliefs, it remains astonishing that even the most outlandish fakes find their believers and are frequently shared. This phenomenon fueled by the hunger of many users for likes and reach of their posts, which seems to be extended with more extreme content.

These dynamics have given prominence to the recent focus on “fake news” but looking at the latest technological developments the future might even hold dire prospects.

Modern computer software, like Photoshop©, allows for realistic manipulations of images since many years. While some faked photos have famously traveled through the internet, I would argue that people have developed a healthy and critical attitude towards digital images as people can no longer trust their own eyes. Increasing processing power and novel algorithms start to enable trained users to not only alter photos, but also voice recordings and video material [3]. While not yet perfect, with enough training data these technologies are able to rearrange and even create new audio and video material that is hard to distinguish from the original.

Thinking a few years ahead, it is not hard to imagine that these methods become better and better, and fakes will ultimately be indistinguishable from real footage.

This will allow the creation of fake content about individuals using their own voice and presented by a realistic video of the person without their knowledge. While this will certainly trigger a cat and mouse game between people creating fake material and others trying to identify the fake through digital forensics, it will always be easier to create a fake than detecting one. Hence, one might hope that people develop a similar skepticism towards videos and voice recordings than most have towards images. In any case, the line between what is real and what is fake will inevitably become blurrier as technology increases.

Type 2 error

Currently, the discussion about fake news focuses on the spread of what is literally fake news, the spreading of information that is not true – like Pizzagate. Borrowing from the language and ideas of statistics, people believing the Pizzagate conspiracy make what is called a Type 1 error: they believe a story to be true, even though there is nothing to it.

I, however, would like to focus attention on the second type of error that has so far received less attention. A Type 2 error occurs if someone does not believe a story, even though it is actually true. In other words, declaring something fake news, even though it is real. There are a few recent cases that highlight this problem.

For instance, in 2015 a real video of the former Greek Minister of Finance Yanis Varoufakis surfaced where he showed “Germany the middle finger”. However, in the name of satire, a German comedian wrongly claimed to have created the video by showing a fake video of the Minister only raising a clenched fist and declared it to be the original before his team added the raised middle finger digitally [4]. This “Varoufake” controversy circulated the media until an official clarification stating that the video with a raised middle finger is actually real footage. Resolving the confusion took several days. A long time for the current speed of information on social media.

A more recent example stems from Prince Andrew involved in a sex scandal [5]. Confronted with the accusation of an inappropriate relationship with, at the time, underaged Virginia Giuffre, he claimed to not remember ever meeting her and responded to a photo showing him with his arms around her that there is no way to prove the authenticity of this image and suggested that it could have been faked.

Fakes affecting social media and public opinion

While fakes might ultimately be identified by experts in the famous cases or the court, it is unlikely that social media and public opinion will not be affected by this issue. The mere possibility of fake images, audio, or video evidence might undermine the credibility of real incriminating evidence and help perpetrators spread doubt about the authenticity of evidence against them.

In 2012, a shaky video surfaced where republican candidate Mitt Romney declared 47% of the nation as government-dependent and his job would not be to “worry about these people”. In 2016, a hot microphone recorded Donald Trump before leaving a bus bragging about sexual assault. In the latter case, Trump on numerous occasions suggested that the audio might be a fake,[6] creating doubt at least among some voters, and ultimately won the election.

An increase in such “Type 2 fake news” issues might be even more problematic than the currently discussed Type 1 problems.

If the public can no longer trust any of their senses to separate truth from fake due to technological progress, the democratic process is certainly in danger. And if at some point even experts struggle to clearly identify the authenticity of the evidence, the issue might even spread into our courts and the legal system.

When teaching my students about the different error types in statistics, the lecture generally concludes with the lesson that the probability of making either of the errors is connected. Being more skeptical reduces Type 1 errors but increases the probability of making the 2nd types.

Despite this link, it is ex ante not clear which errors cause more harm and we should be careful that our current emphasis on “fake news” focusing on type 1 error not inadvertently creates too much skepticism which will leave us with many more type 2 errors. “Pizzagate” is the former, climate change denial is the latter.


References

[1] https://www.nytimes.com/interactive/2016/12/10/business/media/pizzagate.html

[2] https://www.nytimes.com/2016/12/05/business/media/comet-ping-pong-pizza-shooting-fake-news-consequences.html?action=click&contentCollection=Business&region=Footer&module=WhatsNext&version=WhatsNext&contentID=WhatsNext&moduleDetail=undefined&pgtype=Multimedia

[3] https://www.youtube.com/watch?v=cQ54GDm1eL0

[4] https://www.euronews.com/2015/03/19/varoufake-when-satire-acts-as-media-watchdog

[5] https://www.mercurynews.com/2019/11/26/cal-forensics-expert-casts-doubt-on-prince-andrews-claim-sex-slave-photo-was-faked/

[6] https://observer.com/2018/09/trump-still-wants-you-to-think-the-access-hollywood-tape-is-fake/


About the author

Jan Bauer is Associate Professor at Copenhagen Business School and part of the Consumer & Behavioural Insights Group at CBS Sustainability. His research interests are in the fields of sustainability, consumer behavior and decision-making.


Last year, the Seminar on Fake News – Digital Transformation Platform took place at Copenhagen Business School. The organizers highlighted: The problem of Fake News and other problematic online content is one of our times’ most pressing challenges — it is widely believed to have played a major role in the election of Trump and the current situation with Brexit.

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When business is not as usual – why companies should engage with humanitarian crises

By Verena Girschik and Jasper Hotho

As evidenced in places such as Syria and Yemen, humanitarian crises are becoming ever more complex (OCHA, 2017a). In response, international and humanitarian organizations increasingly call upon the private sector to help alleviate human suffering. As we describe in our recent article (Hotho & Girschik, 2019), many companies have answered this call. In the past, the role of companies in humanitarian crises tended to be limited to financial or in-kind donations. Today, more and more companies seek a direct role in the delivery of humanitarian action, often through collaborative partnerships with humanitarian organizations. 

Why invest in business-humanitarian collaboration?

Companies that engage in humanitarian initiatives often do so for philanthropic reasons. However, these companies may fail to appreciate that engagement in humanitarian initiatives can also provide them with longer-term strategic advantages (OCHA 2017b). 

To begin with, business-humanitarian collaboration likely has reputational and motivational benefits. Contributions to humanitarian relief efforts send positive signals to external stakeholders, including customers and governments, as well as internal employees. 

However, companies may also benefit in more tangible ways.

First, engaging directly in the delivery of humanitarian assistance can provide firms with the opportunity to learn about new countries and markets. For example, MasterCard’s payment solutions for humanitarian crisis situations allow the company to contribute to a good cause while developing a more detailed understanding of under-explored areas that may at a later stage become potential markets.

In addition, humanitarian engagement provides opportunities for relationship building with international organizations, governments, and local communities. Such connections can enhance a firms’ competitiveness as they may unlock or facilitate interesting market opportunities down the line.

Humanitarian crisis contexts also provide companies with opportunities to develop new skills and competencies or strengthen existing ones. For example, by participating in the Logistics Emergency Team—a business alliance providing UN agencies with vital logistical support—companies such as A.P. Møller-Mærsk have the opportunity to push their logistical capabilities while providing life-saving support during complex emergencies.

Business-humanitarian partnerships must address three fundamental challenges

Notwithstanding the potential of business-humanitarian partnerships, the extreme conditions of humanitarian crises renders such collaboration especially complicated and risky. Humanitarian assistance is often delivered to vulnerable populations in politically complex and volatile contexts. As a result, partners face three fundamental challenges that they need to be prepared to address if they are to leverage the potential of their collaboration.

1.     Securing ethical engagement

The first challenge is to ensure that private-sector involvement is ethically sound and aligned with the humanitarian principles of humanity, impartiality, neutrality, and independence. Companies and their humanitarian partners need to uphold these principles in spite of commercial interests and practical constraints.

2.     Realizing effective engagement

Collaborations between humanitarian organizations and companies are complex to navigate. Partners need to find ways to build mutual understanding and trust and create a favorable climate for mutual problem-solving. In addition, both sides may need to adjust processes and operations in order to align capabilities and enable effective collaboration.

3.     Sustaining business-humanitarian partnerships

Companies and their humanitarian partners often struggle to demonstrate measurable benefits from their collaborations. Companies need to sustain internal support for such partnerships even when there is no immediate business case. In addition, humanitarian organizations need to engage companies in the right place at the right time; namely, where humanitarian needs are greatest.

Addressing these three challenges is neither quick nor easy. It is through strong mutual commitments and innovative responses that business-humanitarian partnerships can leverage their potential and deliver humanitarian assistance ethically, effectively, and sustainably.

References:

Hotho, J., & Girschik, V. (2019). Corporate engagement in humanitarian action: Concepts, challenges, and areas for international business researchcritical perspectives on international business15(2/3), 201-218.

OCHA (2017a). Annual Report 2017

OCHA (2017b). The Business Case: A Study of Private Sector Engagement in Humanitarian Action

About the authors

Verena Girschik is Assistant Professor of CSR, Communication, and Organization at the Department of Management, Society and Communication, Copenhagen Business School. Verena’s research focuses on the responsibilities of companies in the contexts of complex societal problems and humanitarian crises. Interested in relations between companies, governments, NGOs, and other societal actors, her research explores how companies negotiate their roles and responsibilities, how they perform them, and to what consequences. Verena’s Twitter: @verenaCPH)

Jasper Hotho is Associate Professor at the Department of International Economics, Government and Business at Copenhagen Business School, and Senior Editor for the top-tier academic journal Organization Studies. Jasper’s research focuses on the opportunities and challenges that arise from private-sector involvement in the delivery of humanitarian assistance.

Image by  Colourbox.dk

When is a banking scandal a corporate social responsibility scandal?

By Jeremy Moon

I arrived in Australia to discuss and research corporate social responsibility (CSR) with colleagues at RMIT University and the University of Melbourne to see the papers covered in … a banking scandal.

The Westpac Bank product ‘Litepay’, designed to enable customers to transfer small amounts of money overseas, is alleged to have enabled money-laundering on 23 million occasions. It is alleged that 12 customers used this service to transfer $500,000 to child exploitation criminals in the Philippines.

There is the usual background that senior management was aware of the failures but did nothing.  There is the usual foreground that the bank’s leadership made light of the problems, and was strangely slow to accept responsibility.  So far so depressingly familiar.

I also noticed Johannes Leak’s cartoon published in The Australian newspaper (27.XI.2019). OK, it is a caricature with the CSR consisting of activities that seem trivial and causes that, notwithstanding their social significance, are adjacent to the legality and ethics of Westpac’s main business!

But caricature is part of the cartoonist’s craft and it highlights the main message: the way that Westpac went about its business appeared untouched by the department ostensibly standing for its social responsibility. 

So what lies behind this contradiction? 

CSR professionals may well be educated, trained and experienced in other society-related issues.  But as the cartoon suggests they were unable to address some key social impacts of the bank’s business models.  This may be no accident.  It may well suit corporate leadership to have a CSR department to focus on ‘the worthy causes’ and to distract from the business of money-making.  So whilst the CSR staff engage in legitimation activities, the main CSR message (i.e. to serve societal good) is disconnected from conducting the core business. 

So we need to construe CSR as something more pervasive and robust such that it addresses the core business in all its complexity and technicality.  This may mean corporations re-thinking how their products are evaluated, who is around the table at strategy meetings, who leaders listen to, who they collaborate with, what sort of qualifications and capabilities are expected of senior managers and board members.

One positive

One positive in the Westpac story is that the triggers of social sanction operated.  Whistleblowers within Westpac (who advised the media), governmental leaders (who expressed grave disquiet and suspended Westpac from a public policy initiative), and major investors (who threatened exit), brought immense pressure on Westpac’s leadership for more proportionate responses. 

This is a belated success for the main message of CSR: that business needs to be responsible, and that failure here will be very costly. 

Sadly, it comes at a price that investors and customers may have to share. The bank needs to ensure that it has sufficient and appropriate CSR capacity to build the message into the practices of business as usual.


About the author

Jeremy Moon – Director of CBS Sustainability, professor of Sustainability Governance at Copenhagen Business School and BOS blog editor. Jeremy has written widely about the rise, context, dynamics and impact of CSR.  He is particularly interested in corporations’ political roles and in the regulation of CSR and corporate sustainability.

By the same author: Wonder Tech and the Institution of Gender

Cartoon’s author

Johannes Leak

How sustainable is ecotourism?

Written by Erin Leitheiser, this article is based on her previously written piece for the Centre for Business and Development Studies.

Tourism is a key driver of development, particularly in areas with rich environmental or cultural resources.  The United Nations declared 2017 as the year of Sustainable Tourism for Development, but how sustainable is ecotourism? 

Setting off on a once-in-a-lifetime adventure on safari in East Africa for our summer holidays, my husband and I wanted to be as sustainable as possible.  We carbon offset our flights, worked directly with locally owned and operated “eco-tour” providers, and engaged in both social and environmental eco-friendly activities. Yet, several moments throughout our trip made me question how eco-friendly and sustainable such travel really is or can be. 

To start, what is “ecotourism”?  The terms ecotourism, responsible travel, sustainable tourism, ethical tourism, green travel and more have arisen as of late to describe smaller-scale, lower-impact tourism that is qualitatively different from mass commercial tour operations.  The term “ecotourism” has many definitions, most of which embody the key notions of supporting and experiencing local environments, wildlife and communities and while minimizing negative impacts.  Activities may be environmental, like through small-scale tours of natural environments, or social or community-based – like our visit to a local women’s education and empowerment sewing collective in Rwanda.  Tourism represents a major and increasing share of GDP in many developing countries.  Indeed, such natural and cultural resources are increasingly being commodified and therefore used as justification for sustainability.  According to one popular eco-travel blog,

Elephants are worth 76 times more alive than dead. When you consider the revenue from wildlife photography tours, luxury safari camps, and other ecotourism offerings, a single Elephant is worth $1.3 million over the course of its lifetime!” 

But – how sustainable are such ventures?  While I have numerous examples from my two weeks of travels, anecdotes from each country I visited caused me to question how ecofriendly or sustainable these activities really are:

  • When nature disagrees with what is “eco-friendly”: chimpanzee tracking in Uganda (tourism=8% of GDP).  After purchasing the proper permits (which help fund conservation activities), tourists are paired with a well-trained guide to track habituated chimp groups in the forest and are allowed to spend “at most an hour” with them once they’re found.  Kibale Forest National Park states that “By going for chimpanzee tracking, you directly contribute to the conservation efforts.”  My group got lucky and found one group of chimps within about 15 minutes, including a few on the ground which our guide had us follow through the forest.  While I was happy to hang back and enjoy them at a distance, my guide – a fun but bossy, older sister type whom usually got her way – insisted that I get closer, at one point directing me ever closer a chimp lying on the ground.  So, closer I went, even while in my head I was thinking “I’m too close!”  In an instant, the chimp jumped up, clapped and yelled angrily, and picked up a large branch which he threw at me javelin-style!  I jumped back and he moved away.  I felt so conflicted, as this seemed to me a striking example of how nature (i.e. the chimp) didn’t agree with how “eco-friendly” the activity was. When I pushed back on other insistencies by our guide to get closer to the chimps, she rationalized that “If you don’t get close and get some good pictures, when you get home, you might not think it was worth it.” 

Photo by Erin Leitheiser

Seemingly, our chimp tracking experience had a strong undercurrent of value-for-money, realized via pictures.

  • Wild animals may not be so wild: safari in Tanzania (tourism=12% of GDP).  Departing a visitor’s center in Serengeti National Park in our safari vehicle, we – along with around two dozen other vehicles with tourists on safari – encountered a pride of lions out on a morning hunt.  Large 4×4 vehicles lined the roadside, yet the lions seemed completely unperturbed by our presence, assessing the vehicles as non-threatening and navigating deftly between them.  A couple of lions even used the vehicles (including mine) to hide between while they stalked their prey!   This was striking to me, calling into question how “wild” these wild animals really are if they’re so used to human activity and presence that they have grown to utilize such intrusions for their own ends.  Indeed, the vast numbers of vehicles in the parks and conservations areas seemed overwhelming at times, demonstrating clearly that the notions I had of “wild” animals and preserves as devoid of humans were romanticized at best or nearly inaccurate at worst.

Photo by Erin Leitheiser

  • Prioritizing tourists over locals: fast highways in Rwanda (tourism=15% of GDP).  The country of Rwanda was striking to me for its cleanliness, orderliness, and structure.  For example, the streets were clean (much cleaner than Copenhagen), motorbike taxis are safe and highly-regulated, the economy is booming, and the country has gradually begun to overcome its legacy of genocide to build a business-friendly, women-friendly, corruption-free future.  One of the key developments has been infrastructure, including building fast highways linking major tourist destinations.  While the speed at which we could travel was an undeniable benefit for us, I was constantly worried about the vast numbers of people (and in particular, children) walking, playing, and lounging by the roadside.  The multitude of fast-moving vehicles posed clear safety issues to locals.  Seemingly, the cultural and historical importance of roads in connecting communities and commerce had shaped both the orientation of villages (which stretched along the road, rather than deeper back or behind them) as well as how people interacted with them (as a place for playing, socializing, trading and the like).  While such infrastructure improvements undoubtedly help communities transport and receive goods, foster tourism and the like, the stark replacement seemingly upended community and local norms and practices. 

Sustainable tourism represents an important and apt opportunity to help contribute to sustainable and responsible development, particularly as opposed to antithetical activities popular throughout Africa such as trophy hunting (particularly “canned hunting”) and (irresponsible) mass tourism.  Yet, throughout my travels I was struck by how many compromises (in my view) were being made for sustainability, be it the through taming of wildlife, prioritization of economic development at the expense of local customs, or many other examples.  Others have expressed concerns too.  Harvard hosts an International Sustainable Tourism Initiative, the Global Sustainable Tourism Council has set criteria and performance indicators around sustainable tourism, and an organization called the Travel Foundation has arisen to help bridge tourism with “greater benefits for people and the environment”.

Eco-tourism is undoubtedly a more responsible and sustainable option that many other tourism choices.  But, let us not overly romanticize positive impacts of such travel, nor grow complacent over the trade-offs, compromises, and potentially negative impacts that it may have.

Is it a right policy to focus on SDGs during Economic Slowdown?

By Anirudh Agrawal and Ashish Tyagi

Economic problems of India were not addressed either in the 2019 electoral debates or in the recent annual budget. Markets are showing a deep imbalance between demand and supply, leading to a significant rise in loan defaults, banking crises and job losses.

MSME has not shown a tendency to grow or create jobs along expected lines despite a nationwide program of targeted lending. Indiscriminate lending in the past has increased Non-Performing Assets (NPAs) in the banking sector. The industry is still adjusting to the new GST regulations while the real estate sector has still not recovered from the demonetization shock. On top of all this, pollution is at an all-time high and climate change is manifesting itself in the form of droughts and floods in different parts of the country.

In such a slowdown, a knee-jerk policy reaction is to spur investment and growth through any means possible, including reversals on climate and Sustainable Development Goals (SDGs). Quite recently, the government allowed 100 percent FDI in the coal mining sector to spur a revival.

But in this article, we argue that a renewed focus on Sustainable Development Goals (SDGs) presents an opportunity to revive the economy, create a new wave of jobs and potentially increase the competitiveness of Indian economy vis-à-vis the SDG laggards. The discussion that follows is in the context of India but is equally relevant for the rest of the developing world.

NPA crisis and an opportunity towards SDG oriented portfolio

The main reason for a steep rise in credit default rate is that while industries expanded capacity over time, domestic and global demand has slowed down considerably, stranding the new assets. The lack of market demand causes firms to default on loans. This increases the stress on the banks, which consequently, stall the liberal credit lines to firms, further weakening the economy.

One of the significant factors causing the NPA crisis in India is the MSME loan portfolio. MSME is the backbone of any economy. In developing countries, MSME account for 90 percent of job creation and economic activities. Over time, through hard work, market and government support, these MSME entrepreneurs are able to grow, engage in employment creation, disruptive innovation and ultimately become unicorns, which are nascent businesses with high market valuation and growth potential.

>>>However, despite the important role in job creation and liberal credit lines, MSME entrepreneurs in developing countries generally remain poorly skilled, lack proper business support, access to markets and are many times bullied by bigger firms. In the end, a great deal of capital channelled to MSME is not converted into higher value. <<<

To transform the MSME sector, government and other business-sector actors must treat MSME as students who need to learn and adopt skills related to competitive management, sustainability, marketing and financial reporting so that competitiveness and sustainability become inherent within the firm. MSME entrepreneurs can aspire globally through exposure from government-sponsored programs to attend MSME events in Denmark (for their dairy and animal industry), Germany (manufacturing), Italy (leather and fashion). They can learn more about international market trends and technologies where the bottom lines are firmly grounded on SDG compliance.

Unlike bigger players which are slow, suffer from legacy issues; MSME is flexible enough to embed elements of sustainability and SDGs in their supply chains and value creation processes.

To survive and grow in a world with increasing climate change regulations, better cooperation is required between public institutions, banks and MSME entrepreneurs to work hard in sync, learn new practices and standards. Long-term growth requires MSME to make sustainability and SDG compliance inherent in the business plan, business model, management structure and type of service and product offered.

>>> Indian banks must actively focus on new industries creating products with lower environmental footprints. <<<

For example, instead of providing loans to typical plastic manufacturing SMEs, they must provide loans to entrepreneurs setting up green-materials factories, alternative plastic (biodegradable) factories, bio-diesel, or EV vehicle factories, which are environmentally efficient, follow international standards and are helping the nation achieve its Paris Agreement targets. The growth of competitive, innovative and greater SDG compliant MSME would make Indian economy stronger and mitigate job crises.

SDG focused Real-Estate Sector Regulation

Another cause of NPA crises in India is the rising real-estate inventory. Real estate sector was one of the largest employers during the 2004-2016 boom years of India (which is also true for most of the developing world). The assumption among investors during that period was that the real-estate will continue to grow and their investments will remain secure and ensure above-market returns. However, in the boom period, real-estate prices far exceeded their value, causing market failure in the current economic downturn.

But during economic downturns, it is relatively easier for politicians to make difficult decisions (as the public mandate is easier) and enforce innovative policies.

To address the issue of real estate inventory, the government must introduce regulations in the real estate market with quality controls, sustainability measures, green building codes, controls on the number of floors constructed, the green area within the apartment, restrictions on distance from the essential public services like a train station, police station, college, hospital, schools.

The regulations must forcefully move the industry towards significant sustainability goals (like those in Western Europe) with higher compliance on long-term sustainability, energy efficiency, and reliability. In addition to explicit sustainability actions like certification, greenified surroundings; firms and the government must focus on developing the real-estate sector, which is firmly embedded in a social, cultural and artistic milieu. Research has shown that housing where the communities have active social and cultural interaction tends to have higher value and lower crime.

Specific SDG driven controls would decrease the supply, increase the quality offered, and would significantly increase the value of the real-estate sector. If the buyers feel that their real-estate investments have greater value for a more extended period, the buyers and sellers will invest in the sale and purchase of the real estate, which would relieve the banks from possible NPA risks. The increased transactions in the real estate market would generate liquidity in the market that would further spurn growth. This suggestion on regulating the market stands in contrast to current appeals for liberalizing the real-estate sector. The liberalization of the real-sector has led to a rise in indiscriminate investment, increased half-built and abandoned sites which are causing a rise in water pollution, dust pollution and even dengue.

Pollution and Climate Change

Extreme climatic events and increased pollution are related to externalities that are threatening the sustainability of the Indian economy. The winter smog around the national capital Delhi significantly reduces the productivity of the city while putting residents under severe health risks. Lengthening of summer and unpredictability of monsoon is increasing water stress, as well as floods, which is putting households under stress and decreasing the overall national productivity.

To address these challenges, research-based and region-specific adaptation and mitigation investments will enable different regions to transform towards climate-resilient economic societies.

The government must invest in energy-efficient, global standard-compliant power plants to reduce smog around North India.

In addition, the government and private sector must invest significant capital in solar panel production, the infrastructure of EV automobiles, greener-sustainable materials, circular economy and responsible consumption. The green climate fund (GCF) has a specific mandate for adaptation finance for climate resilient agriculture and flood resilient infrastructure. The GCF is an interesting and evolving repository of knowledge which should help governments in designing and implementing climate mitigation and adaptation policies and investments.

Businesses around these emerging technologies are most likely to generate the next wave of job growth in the manufacturing sector.

In conclusion

Economic downturns are stressful times, but it is also said that “never let a crisis go to waste”. The downturns offer opportunities to re-write innovative policies as the public mandate is stronger for a change. India must use its current economic downturn as an opportunity to re-write public policies by incorporating elements of SDGs at each level of conception and decision and transform towards a greener, climate-sensitive and sustainable space. Sustainability at each level is the new competitive advantage and the emerging nations must capitalize it.

About the authors

Anirudh Agrawal is a doctoral fellow at CBS. His research interests are MSME finance, impact investing, social entrepreneurship and organizational 4.0. He is a chief strategy officer at Tvarit AI GmbH focusing on sustainable AI driven IT solutions and a visiting professor at Flame University India and formerly Assistant Professor at Jindal Global University.

Ashish Tyagi is currently a post-doctoral fellow and lecturer at Frankfurt School of Finance & Management. He completed his PhD from Penn State University. His research interests are environmental economics, climate change policies and sustainable transformation.

Photo by Sudha G Tilak

More CEOs Sacked For Ethical Failure Than For Poor Financial Performance

According to a recent study, for the first time more CEOs have been dismissed for ethical lapses than for poor financial performance (in 2018). What is the lesson? I think that we overvalue compliance and undervalue the effects of a corporate culture on sustainable business decisions…

By Andreas Rasche.

Just a few days ago, Strategy& (the consulting arm of PwC) released its annual CEO Success study, which analyzed CEO behavior in the world’s largest 2,500 companies (defined by market cap). From a sustainability and SDG perspective, some of the results are rather sobering, though not entirely surprising: for instance only 4.9% of all incoming CEOs were female.

However, the results discussing why CEOs are forced out of companies are interesting. For the first time since this survey analyzed the reasons for forced CEO departure (which is since 2007), more CEOs had to leave their job due to ethical lapses and misconduct (39%) than due to poor financial performance (35%) or conflicts with the Board (13%). Ethical lapses, here, includes all sort of misconduct, such as failed management around environmental disasters, fraud and bribery, insider trading, and also sexual indiscretions.

What is interesting is the trend. Even during the financial crisis in 2008, only 10% of CEOs were sacked for misconduct, as the Washington Post reports. So, what impacts the rise in CEO departures due to misconduct? I think some of it can be explained by changing general expectations vis-à-vis top executives and shifts in societal awareness regarding specific topics (e.g. think of the #MeToo movement). Increasingly, Boards adopt a zero-tolerance policy on misconduct, also because they know that regulators and investors are less forgiving.

However, there is another key lesson to take away from these results: well-developed compliance systems by themselves are not enough. Companies still focus too much on what they can steer and measure (i.e. compliance), while forgetting about what often is considered hard(er) to manage and measure (i.e. integrity). But, compliance is by definition reactive and it can quickly lead to moral mediocrity. Traditional compliance programs neglect that prevention and detection, two key pillars of any compliance system, only work when the mindset of people change with them.

Changing the minds of people cannot be easily pushed into some sort of management technique or concept. Putting emphasis on integrity means to learn to listen more carefully. Managers love to talk, few of them are good listeners. Those who learn to listen understand and appreciate the stories that circulate in organizations; stories that make up a good bit of what we commonly refer to as “corporate culture”.

CEOs may be better advised to carefully analyze which stories, jokes, anecdotes, and gossip make up the organizations they are leading. In the end, this tells them more about whether their job is at risk due to “ethical lapses” than solely focusing of the metrics produced by compliance systems…


About the author

Andreas Rasche is Professor of Business in Society at Copenhagen Business School and Director of CBS’s World-Class Research Environment Governing Responsible Business (GRB). He is Visiting Professor at the Stockholm School of Economics. Andreas can be reached at: ar.msc@cbs.dk and @RascheAndreas. More at his personal homepage.

By the same author


Image

Photo by Andrej Lišakov on Unsplash.

Thinking outside the box on corporate tax practice

By Sara Jespersen.

Multinational corporate tax payments – a persistent conundrum.

Corporate tax practice of multinational corporations (MNC) have been the topic of intense debate in the media and among policy makers in recent years. Most recently the news broke that Amazon would pay zero tax on their more than 11 billion profit in 2018. The OECD have coordinated a large project on the topic and involved countries around the world in discussing attempted solutions to the issue of “base erosion and profit shifting” which is the technical term for states finding it challenging to tax the profits of MNCs.

Not only policy makers and media have taken an interest in the topic. NGOs have played a large part in agenda setting and mobilizing citizens’ concern in the topic of MNCs tax payments. Last year an interesting book was published on the topic of “The “new” politics of Tax Justice” edited by Richard Eccleston and Ainsley Elbra.

However, the issue is far from resolved. A few weeks ago, at a seminar here at Copenhagen Business School renowned tax law scholar Rita De la Feria confirmed that when it comes to MNCs and the creation of economic value – we simply do not know where it actually takes place geographically. Which under the current rules and norms for international taxation makes it very difficult to ensure an appropriate taxation of MNCs corporate profit as this is closely linked to economic value creation. At the same time, research tells us that MNCs are increasing responsible for the global profits (see table F3 in the Appendix tables here). This is a challenge for policy makers, but highlights the relevance and importance of tax research.

Still much to gain from rethinking corporate tax as a social and institutional practice

Maybe we can learn something from rethinking the boundaries of the topic? Move it beyond a technical/legal debate about the formulas and boundaries of corporate accounting practices to identify economic value on paper. Lynne Oats already reconceived “tax as a social and institutional practice” building on the work done in the related field of accounting challenging its mere technical nature. Further interesting work in this vein can be mentioned the book “the new fiscal sociology” edited by Isaac William Martin highlighting the importance of context for the tax phenomenon. Much more is to be learned about notably the role of corporate taxation in relation to business in society, the fiscal contract between business and the state, and the institutions and social structures that embed the economic activities of MNCs. For example how the notion of corporate social responsibility relates to corporate tax practice.

A recent integrative review by Whait, Christ, Ortas and Burritt (2018) of the literature on CSR and tax aggressiveness find that little research approach the topic from a historical, theoretical or qualitative approach. Further very little research exist on the MNCs that do not consider themselves particularly “aggressive” in their tax affairs, but rather would perceive themselves as responsible. Fortunately, there appear to be developments in practice that indicate that we also have more material available to engage in this type of research.

Developments in practice

Just in the past year, three interesting developments are worth mentioning that express how corporations, the media and policy makers approach the topic of corporate tax practice from different angles:

In 2018 a grouping of MNCs developed and endorsed the B-team’s “Principles for responsible tax”. The B-team is “is a not-for-profit initiative formed by a global group of business leaders to catalyse a better way of doing business, for the wellbeing of people and the planet”. The founding and endorsing companies count just over ten at the moment, but with a call for further business to join the conversation and sign up to the principles. This appears as an example of multinational corporations expressing their willingness to appear more responsible and linking their tax practices to issue of ensuring stable and sustainable societies.

In Denmark, a survey of Danish top 100 companies’ performance on tax governance published for the second year released this month . Findings show only relatively small progress in the picture overall and more than half score zero points on the rating that this journal has developed for the purpose. The fact that the survey publishes the second year in a row is interesting in itself. It appears as a part of the increasing interest from a variety of stakeholders in the topic of corporate tax governance. It indicates a more mainstream interest in the topic from a corporate governance perspective. Corporate tax is traditionally viewed as a cost to be minimized. However, this survey and the demonstration that there is movement in the practice related to tax governance gives relevance to conceiving corporate tax as a social and institutional practice. Group Tax Directors are experiencing increased interest in their work and area of responsibility and this translates into new practices and ways of communicating corporate tax policy.

On the international front, the OECD public consultation on the topic of tax morale closed this month. What was particularly interesting from the OECD’s presentation of the topic at a conference in January this year is that they find that we know very little about business tax morale. How important it is in what situations. We know more about individuals’ tax morale. For example, that it appears to be higher in countries that tax more. Findings from OECD’s consultation will be interesting to follow. I for one will be looking out for how the OECD, as primarily a forum for policy makers, will make use of this input.

A promising research agenda:

Investigating the emerging relationship between corporate tax practice and CSR holds much potential for learning more about MNCs and their relation to society. It might not solve the conundrum of how to ensure their effective and fair taxation at first sight, but being open to conceiving corporate tax as a social and institutional practice might deliver valuable insights and move us towards a more sustainable relationship between business and society.


About the author

Sara Jespersen is a PhD fellow at Copenhagen Business School. Her research is on the emerging relationship between responsible business conduct and corporate tax planning of multinational enterprises. In a complex governance context there are now signs of corporations’ self-regulation and the emergence of voluntary standards. She is interested in what this means for our understanding of corporations as political actors and the notion of political CSR.

Articles by the same author


Photo

Photo by TJ Dragotta on Unsplash.

Conquer the Lock-In: How Food Companies can act on their Political Responsibility towards Children

By Levinia Scotti and Thomas Eichenberg.

The overconsumption of sugar, especially among children, and its long-term health risks re-gained public awareness with the introduction of the British soda tax in 2018. What can we learn for 2019?

Food and beverage manufacturers and retailers produce, advertise and sell their products to millions of people every day. We therefore consider them political actors (see for a similar argument, Whelan 2017) with a responsibility to respect the Human Rights of Children to a healthy diet (OHCHR 1999).

By using sugar as a proxy for the healthiness of children’s dietary patterns, we sought to learn more about the capabilities of food companies to act in favour of children’s long-term health. Children’s health does not only affect themselves and their families, but also implies important economic spill-over effects (e.g., Brownwell et al. 2009, Belli et al. 2005, Heckman 2006).

The Case

In order to better understand existing corporate efforts, we conducted a number of interviews with representatives of Danish and German retailers as well as international food and beverage manufactures. Additionally, we analysed their annual and sustainability reports of the last five years.

Glopan, 2016.

For our analysis, we assumed that individual food choices are contingent on the social and environmental factors that constitute the food system. Dietary patterns and food systems can thereby be seen as a two-way street (GloPan 2016) in as much as consumption choices are being shaped and shape (future) food system configurations. The innovation challenge in improving children’s dietary quality is thus systemic. (See also the Global Nutrition Report 2018 for more on malnutrition).

Corporate Challenge: ‘Sense-Making’, and the Quasi-Objectivity of Materiality

Across our data, our informants emphasized 15 distinctive patterns as ‘enablers of’ and ‘barriers to’ business efforts to effectively address children’s sugar consumption. These perceived enablers and barriers can, broadly speaking, be broken down into two ‘corporate mind-sets’ that crucially affect successes in reducing children’s sugar intake. The common pattern among organizational enablers went along the lines of “The organization itself can and must drive change!”, which we associate with a proactive corporate mindset. The reasoning of the perceived organizational barriers, however, tended to be more like “The organization must foremost account for external demands!”, which we describe as a reactive mindset.

Own illustration (1), 2018.

Drawing on the literature on sense-making (Weick 1995) in general, and the notion of “ethical blindness as the result of a sense-making process based on interactions between framing and context factors” (Palazzo et al. 2012: 328) in particular, we suggest that a mere concentration on the second, rather reactive mind-set, mirrors a perceived ‘lock-in’ within external pressures that can be conceived of as a sense-making process that risks to entail a blindness to the ethical dimension (Palazzo, et al. 2012: 324) of organizational priority-setting (i.e. values).

Example: Corporate materiality assessments are one area in which this blindness becomes performative. Although materiality may refer to different things, the outcome of a materiality assessment is often regarded as tangible. We tend to forget, however, that materiality is nothing absolute or objective. Rather, it is constructed on the basis of (often) taken-for-granted organizational processes and priorities. The design of a materiality assessment itself and the definition of materiality as such has thus an enormous influence on the interpretation of the outcomes (Eccles & Krzus 2014). The question that needs to receive more attention is: Which stakeholders’ interests and needs are ‘worthy’ of prioritization beyond their impact on pre-existing strategic targets?

At this point, the case of sugar reduction in children’s food can be transferred to other industries and future investments of resources. The bottom line is, values are performative.

What is valued, gets measured, gets done

Rather unsurprisingly, our findings suggest the following relationship: The success of corporate efforts to reduce children’s sugar consumption is contingent on whether or not child malnutrition is a corporate priority prior to the assessment of environmental influences.

That leads us to question the almost sacred status of the “outside-in” perspective, which has become somewhat of a gold-standard in corporate sustainability management.

Instead of conducting yet another stakeholder engagement workshop, it may actually be more enlightening to scrutinize from the ‘inside-out’ who decides what is (most) valuable to the organization.

This will require strong leadership among executive decision-makers since the implications of corporate strategies cannot be merely delegated to external stakeholders.

Own illustration (2), 2018.

Our research shows that a reactive approach risks to foster an organizational “lock-in” and thus tighten barriers to innovations that make a real difference for children’s diet and health. The challenge food and beverage manufacturers and retailers thus face is to avoid this ‘lock-in’ within the preferences, values and beliefs of their environment (such as ‘the persistent consumer demand for sugar products’). This, in turn, implies the need for original corporate values and a mission that is informed, but not determined by their environment, and inspires organizational decision-makers to proactively meet and anticipate social and environmental challenges.

Start with Values

The key-take away from our research is that the future evolution of internal processes within food and beverage retail and manufacturing industry need to be driven by an organizational (social) innovation mind-set (see, e.g. Osburg & Schmidpeter 2013), as well as internally recognized and lived values and priorities (see especially Breuer’s & Lüdeke-Freund’s work on ‘values-based’ innovation management).

Very concretely, a starting point for (more) proactively addressing Children’s Right to a healthy diet could be to ask:

  • How can we strategically contribute to a healthier food environment for children, considering the direct and indirect “touch points” we have with children?
  • How can we effectively drive the individual and organizational recognition of children’s nutritional health, within and beyond organizational risk management, as a material issue?
  • Are our global corporate knowledge management practices aligned with the goal of respecting and supporting Children’s Right to a healthy diet?
  • How can we initiate or contribute to collaborations with other stakeholders to reduce children’s sugar consumption

Active Corporate Support for the Children’s Rights and Business Principles

In light of our research, it became clear that against the background of the respect and support framework of the UN, it is not sufficient for corporations to interpret the “respect” for Children’s Rights in terms of ‘doing no harm’. The Children’s Rights and Business Principles define respect as “avoiding any infringement of the Human Rights of others, including children, and addressing any adverse Human Rights impact with which the business is involved” (CRBPs 2012: 5).
The aim of “doing no harm” is insufficient in so far as it implies the existence of a cause-effect relation, which corporations can directly steer. Children’s sugar consumption is, however, influenced by the overall configuration of their food environment. Therefore, there is no such direct cause-effect relation, rendering a mere commitment to do “no-harm” insufficient (see e.g., Schrempf 2014 on the social connection approach to corporate responsibility in the case of the food industry). Rather, food and beverage manufacturers and retailers need to actively support the Child Right to a healthy diet by anchoring positive contributions to social health at the core of their corporate values and operations.

On a more general level, our research demonstrates that an alignment of current food systems with public health objectives is to a large extent contingent on corporations’ capability to innovate and act upon corporate values that put the active support of healthy food systems at the centre of their business practice, i.e. their innovation, marketing and sales activities.

The Authors

Thomas is based in Copenhagen and graduated from CBS in 2018. He studied economics, business administration and philosophy. He enjoys addressing dilemmas and ambiguities of social, economic and business transformation processes. Feel free to connect with Thomas on Linkedin.

Levinia recently graduated from CBS with a MSc in Business Administration & Philosophy. She is passionate about identifying and driving innovative organisational strategies that effectively address the systemic nature of local and global sustainability challenges across value chains. Learn more about what Levinia is up to on Twitter and feel free to be in touch on Linkedin. 


References

Breuer, H. & Lüdeke-Freund, F. (2017): Values-based innovation management – Innovating by what we care about. London: Palgrave.

CRBPs (2012): ‘Children’s Rights and Business Principles’, Save the Children, UNGC & UNICEF. Accessible online.

Eccles, R. G. & Krzus, M. P. (2014): The Integrated Reporting Movement: Meaning, Momentum, Motives, and Materiality. ISBN: 978-1-118-64698-4.

GloPan (2016): ‘Food systems and diets: Facing the challenges of the 21st century’, London, UK.

HLPE (2014): ‘Food losses and waste in the context of sustainable food systems – A report by the High Level Panel of Experts on Food Security and Nutrition of the Committee on
World Food Security. Rome.

HLPE (2017): ‘Nutrition and Food Systems – A report by The High Level Panel of Experts on Food Security and Nutrition of the Committee on World Food Security, Rome.

OHCHR (1999): CESCR General Comment No. 12: The Right to Adequate Food (Art. 11) Adopted at the Twentieth Session of the Committee on Economic, Social and Cultural Rights, on 12 May 1999 (Contained in Document E/C.12/1999/5), accessible online.

Osburg, T. & Schmidpeter, R. (2013): Social Innovation –Solutions for a Sustainable Future’, Berlin: Springer.

Palazzo, G. et al. (2012): ‘Ethical Blindness‘, Journal of Bussines Ethics, 109: 323–338. DOI 10.1007/s10551-011-1130-4.

Schrempf, J. (2014): ‘A social connection approach to Corporate Responsibility: The Case of The Fast Food Industry and Obesity’, Business & Society, 53(2), 300–332.

Whelan, G. (2017): ‘Political CSR: The Corporation as Political Actor’, in: Rasche, A., Morsing, M., Moon, J. (eds): Corporate Social Responsibility – Strategy, Communication, Governance. Cambridge: Cambridge University Press.

Weick, K. E. (1995): Sensemaking in organizations. Thousand Oaks: Sage.


Photo by Food Photographer | Jennifer Pallian on Unsplash.

Sustainability’s Infrastructure

Ethnographies of the global value chain of certified tea (SUSTEIN)

By Hannah Elliott, Martin Skrydstrup and Matthew Archer.

Why SUSTEIN?

Currently, the world’s tea industry is on a race with time to source tea sustainably before 2020. But what is “sustainable tea” and how do we know if tea is sustainable or not? This project entitled SUSTEIN (SUStainable TEa INfrastructure) will focus on this question by way of looking at localized translations of transnational sustainability standards in Kenya, United Arab Emirates and corporate headquarters in Europe. We aim to advance our understanding of the global value chain of certified tea.

3 Research lines

The theoretical objective is to venture beyond the notion of global value chain by reinterpreting sustainable supply chain management through the concept of infrastructure, a notion anthropologists and other social scientists have deployed in recent years to emphasize the political and temporal aspects of networks such as transnational supply chains. We hope that this concept will allow us to better comprehend how sustainable certification schemes manifest in global value chains.
SUSTEIN consists of three sub projects, which each address a core question posed by the project:

  • How does certification shape agrarian production in the form of cultivation and factory processing, and vice versa? Who benefits from which sustainability standards? (Line A)
  • How does certification influence the valuation of tea, assessed in terms of taste, grade and price? How is the value of certification performed and capitalized? (Line B)
  • How do corporate professionals and independent auditors distinguish between “sustainable/unsustainable”? What lines of evidence are recognized? (Line C)

Each of these questions will be answered by the corresponding research line:

tea plantation
Tea plantage in Kericho; one of SUSTEIN’s field sites.

Research line A

explores agrarian questions, enquiring into the ways contemporary drives towards sustainability shape and are shaped by modes of tea production in Kenya. The research focuses on the institution of the tea plantation and its associated factories and outgrower farms, all key components of the infrastructure of sustainable tea. The tea plantation has been described as having a “dual character” (Besky 2008: 1); it has its roots in British colonialism while being contemporarily positioned in international markets for certified sustainable commodities. This research line enquires into what ‘sustainability’ comes to mean and materialise within this apparently contradictory setting. How do contemporary measures seeking to ensure sustainable tea production, such as certified standards, affect the way tea is produced in the context of the plantation? And to what extent do longer-standing modes of plantation production endure through the present, in turn shaping contemporary sustainability ideologies and practices? The research line addresses these questions through ethnographic inquiry. The researcher will spend time with the people working on tea plantations and in factories certified by different certification bodies and on the farms of outgrowers contracted to supply the companies owning plantations with supplementary sustainable tea. Through interviews and participant observation, the ethnographer will enquire into the social, political and ethical worlds surrounding sustainable tea production in contemporary Kenya.

Research line B

will follow through on the plantation and factory sites to the auction sites in Mombasa and Dubai. Ethnographic fieldwork will be conducted in the Jebel Ali Free Zone in Dubai with no tax regulations, no strict labor laws nor import/export duties, making it the perfect infrastructural hub to blend and pack tea according to corporate logic. Likely as an outcome of this, the Dubai Tea Trading Centre has since its establishment in 2005 risen to re-export 60% of the world’s tea production. These volumes are predominantly traded on virtual platforms.
In contrast, the Mombasa Tea Auction holds two weekly auctions under the auspices of the East African Tea Trade Association (EATTA), which conforms to national regulations (Tea Act of Kenya & Tea Board of Kenya). Recently, this auction site voted “against the mouse and for the hammer,” maintaining the tradition of the Dutch auction style vs. virtual trading. The ethnography for this research line will move between these two sites, following tea blenders who purchase in Mombasa vs. Dubai and investigating tea expertise and technologies as it pertains to the valuation of certified tea.

Research line C

builds on these ethnographies of production and exchange to try and understand the relationship between corporations and standards/certification regimes. There is a tension between these groups of actors whereby standards organizations such as the Rainforest Alliance and Fairtrade International need to appear independent in order for their certifications to remain credible while at the same time remaining sensitive to the financial obligations of for-profit corporations in order to promote “buy-in.”
This research line will draw on interviews with people working in these organizations and participant observation at sites where they interact, including industry conferences and trade fairs. These are the sites where sustainability is negotiated as both a concept and as a set of practices. With that in mind, interview questions will focus on, among other things, the extent to which specific agricultural and trading practices are integrated into broader definitions of sustainability and their manifestation in different certification regimes, the challenges of maintaining a critical distance between certifiers and corporations, and the way standards govern markets and, crucially, vice versa.

The grant

SUSTEIN is made possible by the Sapere Aude Starting Grant (meaning “dare to know”), awarded by the Danish Council for Independent Research (DFF). The Sapere Aude program “is aimed at younger, very talented researchers, who at the time of the application deadline and within the last eight years have obtained their PhD”. The Sapere Aude program targets “top researchers who intend to gather a group of researchers, in order to carry out a research project at a high, international level.”

Reference

Besky, S. (2008) ‘Can a plantation be fair? Paradoxes and possibilities in Fair Trade Darjeeling tea certification’. Anthropology of Work, XXIX: 1, pp. 1-9.


Hannah Elliott is a post-doc in the Department of Management, Society, and Communication at Copenhagen Business School, having recently finished her PhD at the University of Copenhagen. She is responsible for research line A.

Martin Skrydstrup is an associate professor in the Department of Management, Society, and Communication at Copenhagen Business School and is the principal investigator of SUSTEIN. He is also responsible for research line B.

Matthew Archer is an assistant professor in the Department of Management, Society, and Communication at Copenhagen Business School and is responsible for research line C. He recently completed his PhD in environmental studies at Yale University and is interested in corporate sustainability and sustainable finance.


Closing remarks

In a year we hope to update BOS readers about how far we are with answering our research questions. In the meantime, we invite you to swing by our offices at Dalgas Have for a cup of tea.
The SUSTEIN project runs from 1 July 2018 to 30 June 2020.
For further information about the project, please contact the principal investigator, Martin Skrydstrup, at msk.msc@cbs.dk.

The not-so-sharing economy

By Attila Marton

With the rise of Airbnb and Uber into the elite club of Silicon Valley superstar firms, the sharing economy has become an accepted business concept and social practice. Apart from the fact that sharing economy platforms (SEPs), such as Airbnb and Uber, are very savvy in playing labelling games (most of them have little to nothing to do with actual sharing), they are also very savvy in purposefully blurring established institutional boundaries and categories – most prominently, categories of employment and labour. By facilitating the “casual participation” of private individuals as users of their services, SEPs can gain significant advantages over well-established incumbents as they disrupt mature markets and labour structures as well as challenge long-held wisdoms of how to organize the creation and distribution of value.

It’s a thing now

The sharing economy is here to stay. Although, it is not yet clear whether the sharing economy will turn out to be as big a thing as the hype surrounding it suggests. Just to give some indicative numbers; The Economist estimates that the consumer peer-to-peer rental market is worth $26 billion, McKinsey predicts that the sharing economy will rise to $335 billion in revenues by 2025. In Denmark, 10% of the population has participated in the sharing economy in some form, while the Danish government announced a sharing economy strategy. At least it is safe to say that the hype is real and so are the expectations for high returns on the investments made into sharing economy platforms.

Something new, something old

The sharing economy, in its contemporary digitally platformed version, is the result of the confluence of three developments:

  • The rise of access-over-ownership as consumers are increasingly okay with paying for services and servitised products rather than to buy stuff. Streaming services, such as Netflix and Spotify, are telling examples. When we say access-based consumption or on-demand economy, we typically refer to this development.
  • The rise of peer-to-peer networks, which allow for direct inter- and transactions between peers coordinated by trust and reputation mechanisms. Think eBay and YouTube – typical examples of what we sometimes call the peer-to-peer economy or collaborative economy.
  • Allocating idle resources in order to tap into privately owned resources (assets and labour) and to promote more economical and sustainable use of resources as a result. Examples are IKEA’s second-hand campaign or renting out idle storage space via sharemystorage.com. Terms such as collaborative consumption and circular economy typically refer to this notion.

None of these developments is, of course, new nor exclusive to the sharing economy. Clans have been sharing food and tools since the dawn of humanity. Donating blood peer-to-peer has been around for at least half a century and the allocation of idle resources in brick-and-mortar second-hand shops even longer. The same applies to digital varieties of these practices; sharing files or selling/buying peer-to-peer online have been around since the 1990s (eBay was founded in 1995, Napster in 1999, Wikipedia in 2001). What is new is how these developments come together under specific technological, economic and cultural circumstances.

Mature technologies of automation enable private individuals to casually participate in economic activities as they self-service on dedicated platforms, which run automated matchmaking algorithms. Network effects attract larger groups of participants, increasing the economic value of those platforms (and of the corporations owning them). Thus, the coordination of casual participants has become a highly profitable business model. Culturally, these developments have become socially acceptable and appropriate as the new narrative of the Web 2.0 propagates “sharing is caring” and a general fascination with technological wizardry.

Four generic types of sharing economy platforms

An important outcome of above developments is that established institutional categories are becoming blurred, and static boundaries are becoming fluid. SEPs purposefully utilize these fluid boundaries to their advantage – be it between firms and markets (are Uber drivers employees or self-employed?), between internal and external resources (Airbnb hosts bring their own assets and have all the risks), and between private and business spheres (participants monetize and commodify their private life into assets), to name but only the most important examples. In our research (with Ioanna Constantiou, Dept. of Digitalization, CBS, and Virpi Tuunainen, Dept. of Information and Service Economy, Aalto University), we found that successful SEPs are very good at exploiting these boundary fluidity for their purposes. We identified four generic types we call the Franchiser, Chaperone, Principal, and Gardener.

  • The Franchiser aims for tight control over the platform participants and high rivalry among the service providers. The prototypical example is Uber, exploiting boundary fluidity by treating its drivers like employees while making them compete for fares dictated by Uber’s algorithm.
  • The Chaperone aims for loose control over the participants and high rivalry among the service providers. This is, of course, the Airbnb model; Airbnb exploits boundary fluidity by treating its participants like community members expected to follow norms and values while making the hosts compete like micro-entrepreneurs, who set their own prices based on Airbnb’s recommendation.
  • The Principal aims for tight control over the participants and low rivalry among the service providers. For instance, Handy (a per-task labour platform) treats its service providers like employees by making them sign contracts while the service providers participate in tenders based on standardized prices dictated by Handy.
  • Finally, the Gardener aims for loose control over the participants and low rivalry among the service providers. For instance, Couchsurfing (facilitating short-term, free-of-charge accommodation) leaves it to the participants to coordinate their accommodation while eliminating rivalry among the hosts by not allowing them to charge money.

Not so obvious implications

What each of these four types have in common is that they all rely on the casual participation of their user base; that is, their users typically operate on smaller scale, use their personal resources, and are less experienced than traditional service providers and professionals (not only in terms of delivering services but also protecting oneself against exploitative business practices).[1] Combined with digitalisation, such casualness provides unprecedented sources for creating value and disguises large portions of the labour of the participants.

It is the degree to which this hidden labour has become the core of the business models of Uber, Airbnb, Handy, and Couchsurfing, that is really new.

To name just two examples. By means of the app and data-driven algorithms, Uber obviously replaces taxi dispatchers. Not so obvious, however, is the hidden labour provided by the Uber riders who, by scoring their rides, control the service quality. This used to be the purview of employed and paid middle managers. Likewise, Airbnb does not only profit from on-boarding private individuals as hosts (instead of hiring professional concierges) but also from the marketing those hosts provide not just for themselves but for Airbnb, the corporation – hidden labour, which would have traditionally required to pay marketing specialists.

It is a not-so-sharing economy we are dealing with. In fact, the sharing economy is the quintessential expression of a new logic of capital accumulation in the digital economy, where large portions of labour are disguised as casual (or even pleasurable) participation in the name of self-servicing and sharing. These forms of hidden labour are not unintended consequences; they are essential parts of the platform business model, as they sustain the digital systems and algorithmic operations of those platforms in order to make “sharing” not only economically viable but, above all, profitable. As a result, the historically and culturally important institution of sharing (in the true sense of the word) is thinned out and replaced by the logic of the platform economy, the micro-entrepreneurial ethos of monetizing every aspect of one’s “everydayness”, and the precarity of depending on demand.


Attila Marton is Associate Professor at the Department of Digitalization at Copenhagen Business School. He  focuses the interplay between information management and digital memory studies and the question how we will remember and forget the past in the future.His research can also be found on Academia and ResearchGate.

Academic Reference

[1] See Katz, V. 2015. “Regulating the sharing economy,” Berkeley Technology Law Journal (30:385).

Photo by Fancycrave on Unsplash

 

Consider also our post from last week, dealing with the topic of sharing.

Big fuss about a big policy plan – and why this matters for corporate social responsibility: the Chinese social credit system

By Dieter Zinnbauer & Hans Krause Hansen.

Few statist policy blueprints on matters pretty technical have captured our collective imagination as has the Chinese Social Credit System (SCS). Announced by China’s State Council on June 14, 2014, and building on experimentation with related mechanisms since the early 2000s, it sets out a hugely ambitious effort, officially described to instil societal trust, integrity and cohesion in a highly complex society. To get there it seeks to combine cutting-edge technology and vast amounts of data to create incredibly granular behavioural profiles of both companies and individuals. Good and bad behaviours are meant to be recorded in and through elaborate rating systems and blacklists, and made public on digital platforms. The expectation is that punishments and rewards will deter deviance and incentivise good conduct in close to any sphere of life.

With the West in the mirror

After years of relative in-attention, the SCS has loudly burst onto the Western media landscape. Here, it is typically described in Orwellian terms as a totalitarian system of surveillance and control. On closer inspection, the SCS is in fact embryonic, fragmentary and faced with enormous implementation challenges.

But the scale, scope and level of invasiveness associated with the data collection effort currently emerging in China should not look so shockingly unprecedented to Western publics once they begin to scrutinize their own backyards. Take the use of social media in the policing of protests as an example. Here the UK government engages in the analysis of big data to predict, pre-empt and respond in real time to a range of issues, including public dissent. Take information on someone’s physical whereabouts as another example. As it turns out the exact location of cell phone owners in 95% of the US is being tracked with the help of all major carriers in close to real time (ok, with a 15 seconds delay) and related data is being available to nudge people’s behaviour for a wide variety of purposes, e.g. by sending them last-minute campaign pitches when they wait in line outside a particular polling station or anti-abortion messages when they are found to linger outside health clinics that carry out these procedures or by sending political messages when they wait in line outside a particular polling station.

Or take the most popular new media companies. They are collecting extremely granular dockets of what their users do, say and who they socialise with on their own platforms. But less in the spotlight they also track users and non-users alike across millions of other websites and across the bulk of the most popular mobile applications, recording anything from detailed surfing behaviour down to the modes of movement – is the user currently cycling or on the train? What’s more, they increasingly merge theses profiles with billions of data points collected by other parties. One leading new media company claims to have access to information on 70% of all credit card purchases and thus approximating a rather totalitarian 360 degree, 24/7 view of user conduct, all the way to – no kidding – the barometric pressure of the users’ environment.

Public and private entanglements

A special matter of concern in the West relating to SCS is its fusion of socialist government and private sector capabilities, technical affordances and interests that make such a system feasible in the first place.

However, long gone in the West are the times when governments were the main purveyors and guardians of data about their citizens.  Even the holy grail of state information prowess, the census is not immune to private sector resources and influences. The UK government for example is exploring ways to make its census more cost-effective with the help of other big data sources and acknowledges that this will also have to include privately-held ones.

And there is also a proximity of big tech and political actors on a much more fundamental level. Tech companies evolved into some of  the most vocal and most prolific donors and lobbyists on the political scene. An entirely legitimate democratic engagement, but it raises questions about outsize influence given the scale of these efforts. Yet, much more unnerving, the leading social media and tech companies in the US   seconded staff as pro-bono experts to become part of the support teams of most presidential candidates in the run up to the 2016 presidential elections, giving them unique insights and connections into the affairs of some of the leading politicians in the country.

Subtle social sorting and weak institutional safeguards

A factor that explains the extraordinary attention that the SCS has received might pertain to the breadth of sanctions and consequences that these early uses have already resulted in. Bad social credit makes it more difficult for Chinese citizens to travel, find a home or get a job.  Unfortunately, this is nothing new and happens all over the world.  Under the label of risk- management citizens whose criminal record or financial credit history contains some irregularities have long been subjected to inferior treatment when renting a home, looking for a job or seeking insurance.

In principle, the protection of individual rights and limits on state over-reach and surveillance in most western countries relies on a host of elaborate institutional safeguards, checks and balances. While some of the egregious examples referenced above have actually been remedied when they were exposed, thus attesting to some degree of efficacy of legal and broader societal protections, other incidences have not been resolved and are somehow even seen as acceptable.

So shifting some of the attention and moral outrage that is being directed towards the Chinese SCS back to the home turf, and to investigate what troubling data practices and regulatory gaps that are germinating over here is more than warranted. In the wake of the Facebook and Cambridge Analytica scandals this has begun to happen and more commentators are noting the troublesome parallels between Chinese SCS and emergent data surveillance and discrimination issues in the West.

Enter the urgent business of business

And this is where business and its social responsibility comes in. Because one of the fundamental differences between the SCS and many issues in the West is that the disciplinary power, control functions and discriminatory implications of big data-driven social scoring are not primarily organised and instrumentalised through government, but deployed by the private sector and working their way into everyday lives.

Egged on by a growing populist Tech-lash, a whirlwind of new regulatory efforts and undoubtedly also in many cases by a deeper sense for doing no harm, the new tech companies have begun to take note, moving from denial to a gradual re-examination of some of their working principles, practices and normative anchoring.

Yet, the proof is still in the pudding whether this is a substantive change of minds and hearts. The Performance of the new tech sector on some standard measures of corporate integrity and transparency is still mediocre and lagging many other established industries.

The ways to a much more comprehensive, proactive and transformational integration of corporate social responsibilities into the strategy and practice of tech will have to coalesce around a broad band of issues, ranging from responsible stewardship of data, platform power and emergent artificial intelligence capabilities to bread and butter CSR issues such as responsible corporate political activity and supply chain and subsidiary integrity.

Think tanks and tech activists are putting forward a sprawling pool of ideas and initiatives from data collaboratives or privacy by design standards to high-profile research endeavours into artificial intelligence ethics. Meanwhile  European regulators are putting into force trailblazing rules as we write this column.

But a big tech embrace of a substantive and comprehensive notion of corporate social responsibility is urgently required to stave off the threat of an even more populist, illiberal, unequal, misogynistic and fragile future in which the tech industry is more part of the problem than a solution to it.


Dieter Zinnbauer is Governing Responsible Business Research Fellow at Copenhagen Business School in the Department of Management, Society and Communication.

Hans Krause Hansen is Professor at the Department of Management, Society and Communication at Copenhagen Business School. He teaches and researches about various aspects of public and private governance, including corruption, anti-corruption and transparency regimes in the global North and South.

 

Pic by Alias, Flickr.

‘Just Sustainabilities’ in a World of Global Value Chains

By Stefano Ponte.

What if we used our size and resources to make this country and this earth an even better place for all of us: customers, Associates, our children, and generations unborn? What if the very things that many people criticize us for—our size and reach—became a trusted friend? 

Excerpt from ‘Leadership in the 21st Century’, speech by Lee Scott, then CEO of Walmart, Bentonville, Arkansas, 24 October 2005 (as in Humes 2011: 102)

Whenever we engage in consumption or production patterns which take more than we need, we are engaging in violence.

Vandana Shiva, Earth Democracy: Justice, Sustainability, and Peace (2016: 102)

A New Era

Human activity is having major impact on the earth and its biosphere, to the point that geologists have now defined a new era – the Anthropocene – to reflect this phenomenon. For some, this is a period that started in the late 18th century with a marked increase in fossil fuel use, and that has accelerated dramatically since the middle of the 19th century. During this time, human action has overshadowed nature’s work in influencing the ecology of the Earth. Global sustainability crises, such as climate change, the acidification of oceans, and the ‘sixth great extinction’ of planetary life characterize this period of great turbulence in the relation between humanity and nature.

Others question the focus on humanity as an undifferentiated whole in the term ‘Anthropocene’, and propose a different term to explain the same result: Capitalocene, ‘the era of capitalism as a world-ecology of power, capital and nature’ (Moore 2016: 6). This term shifts focus away from the putative duality of human-nature relations and towards capitalism as a way of organizing nature. From a Capitalocene perspective, major changes in the world-ecology started taking place already in the mid-15th century – with a progressive transition from control of land as a way to appropriate surplus value, to control of land as a way of increasing labour productivity for commodity production. In other words, it is not enough to simply examine what capitalism does to nature and how humanity can solve global sustainability challenges through innovation in technology and business models. We need to conceptualize power, value and nature as thinkable only in relation to each other.

Sustainability Management

In addition to cost, flexibility and speed, sustainability management has become another key element of contemporary capitalism. The practices that corporations enact to address sustainability issues are also (re)shaping the existing spatial, organizational and technological fixes that are needed to ensure continuous capital accumulation.  Geographically, production is moving to locations that can meet basic sustainability specifications in large volumes and at low cost; organizationally, multi-stakeholder initiatives on sustainability have come to play a key role in global value chain (GVC) functioning; labour conditions among suppliers are under pressure from the need to meet increasing environmental sustainability demands from lead firms; and the need to verify sustainability compliance has led to the adoption of new technologies of measurement, verification, and trust.

The ‘business case’ for sustainability has been by and large solved – lead firms do not only extract sustainability value from suppliers, but also benefit from internal cost savings, supplier squeezing, reputation enhancement and improved market capitalization. As the value of goods increasingly depends on their intangible properties (including those related to sustainability) than on their functional or economic value, sustainability management becomes a central function of corporate strategy – filtering through organization, marketing, operations and logistics. Lead firms in GVCs are leveraging sustainability to extract more information from suppliers, strengthen power relations to their advantage, and find new venues of value creation and capture.

The business of sustainability is not sufficient as a global solution to pressing climate change and other environmental problems. It is doing enough for corporations seeking to acquire legitimacy and governance authority. This legitimacy is further enhanced through partnerships with governments and civil society groups. Some of this engagement is used strategically to provide ‘soft’ solutions to sustainability concerns and to avoid more stringent regulation. While the business of sustainability is leading to some environmental improvements in some places, and better use of resources in relative terms in some industries, the overall pressure on global resources is increasing. The unit-level environmental impact of production, processing, trade and retail is improving. But constantly growing consumption, both in the global North and in the global South, means that in the aggregate environmental sustainability suffers.

What To Do

Public actors at all jurisdictional levels need to put in place orchestration strategies that improve the actual achievement of sustainability goals, and activists and civil society groups should identify and leverage pressure to strengthen the effectiveness of orchestration. But these strategies have to be informed by the realities of the daily practices, power relations and governance structures of a world economy that is organized in global value chains. Orchestration is more likely to succeed when a combination of directive and facilitative instruments is used; when sustainability issues have high visibility in a global value chains; when the interests of private and public sectors are aligned, and when orchestrators are aware of the kinds of power that underpin the governance of value chains and act to reshape these power configurations accordingly.

A path towards ‘just sustainabilities’ means addressing inequality – since it drives competitive consumption and leads to lower levels of trust in societies, which makes public action more difficult; it entails focusing on improving quality of life and wellbeing, rather than growth; it demands a community economy and more public consumption; it involves meeting the needs of both current and future generations and at the same time reimagining these ‘needs’; it demands a paradigm of ‘sufficiency’, rather than maximization of consumption; it recognizes that overconsumption and environmental degradation impacts on many people’s right to enjoy a decent quality of life; and it requires a different kind of ‘green entrepreneurial state’, which also caters to these needs. Just sustainabilities necessitate building a social foundation for an inclusive and stable economic system that operates within our environmental planetary boundaries; and it demands business to behave responsibly (within its organizational boundaries and along value chains) to maintain its social license to operate.

This text is based on excerpts of Stefano Ponte’s forthcoming book Green Capital, Brown Environments: Business and Sustainability in a World of Global Value Chains, Zed Books: London. The book is based on 20 years of research on sustainability and global value chains, and builds from empirical work on several agro-food value chains (wine, coffee, biofuels) and capital-intensive industries (shipping and aviation).

Stefano Ponte is Professor of International Political Economy in the Department of Business and Politics, Copenhagen Business School and the former academic co-director of the Sustainability Platform at CBS. Twitter: @AfricaBusPol


Selected books for further reading on this topic:

Agyeman, J. 2013. Introducing just sustainabilities: Policy, planning, and practice. Zed Books.

Dauvergne, P. 2016. Environmentalism of the Rich. MIT Press.

Humes, E. 2011. Force of nature: The unlikely story of Wal-Mart’s green revolution. HarperBusiness New York.

Jackson, T. 2009. Prosperity without growth: Economics for a finite planet. Routledge.

Moore, J. 2016. Anthropocene or Capitalocene? Nature, history, and the crisis of capitalism. PM Press.

Shiva, V. 2016. Earth democracy: Justice, sustainability and peace. Zed Books.

 

Pic by Marufish, Flickr.

Droned

by Glen Whelan.

A Military Heritage

A drone is an unmanned aircraft. Long used to refer to male honeybees – whose main function is to fertilize a receptive queen bee (and then die a seemingly horrific death) the word was first used to refer to remote-controlled aircraft by the US Navy back in the 1930s. The word was chosen as a homage to ‘the Queen Bee’, a remote-control aircraft that the Royal Navy demonstrated to the US Navy, and that inspired the US Navy to develop similar aircraft.

In the 1990s, the word drone was being used as a verb to describe the act of turning a piloted aircraft into an unpiloted one.[i] And by 2009, the word drone was being used to describe the act of remotely killing someone. As Fattima Bhutto wrote in 2009:

“Droned” is a verb we use now in Pakistan. It turns out, interestingly enough, that those US predator drones that have been killing Pakistani citizens almost weekly have been taking off from and landing within our own country. Secret airbases in Balochistan – what did we ever do before Google Earth? [ii]

Various Civilian Uses

With the development of consumer market autonomous drones[iii] that can be told to follow yourself or another person, it seems that the word ‘droned’, or ‘droning’, is soon to be used more regularly. Rather than just being used to describe acts of murder (or defense), however, it seems it will be used to refer to the act of being filmed or recorded by (autonomous) flying devices more generally.

Such filming will clearly be a good thing for legitimate film-making. And there are possibilities for autonomous drones to be used to improve accountability: as a form of sousveillance in response to surveillance by the powerful. But drones have other uses as well. Indeed, there are already numerous cases of drones being used for stalking around the world. Late last year for example, it was reported that:

“A group of women living in a rural setting near Port Lincoln on South Australia’s Eyre Peninsula have been woken at night by a drone looking into their home…. One of the women, who like the rest of the group did not want to be identified, was asleep and alone at home on her relatively remote hobby farm. She was woken by a bang on her bedroom window and when she looked out into the darkness was confronted by a camera attached to a drone, hovering within centimetres of her window”.

Technologically Changing Society

Whilst such reports are alarming, Nick Bilton[iv] has used a personal anecdote to suggest that the negatives of being droned could be overstated. As he writes:

“I was sitting in my home office, working on this very column about neighbours getting into arguments over drones, when I heard a strange buzzing sound outside. I looked up and hovering 20 feet (around 6 metres) from my window was a black drone with a beady-eyed camera pointed at me.

At first, I was upset and felt spied upon. But the more I thought about it, the more I came to the opposite conclusion. Maybe it’s because I’ve become inured to the reality of being monitored 24/7, whether it’s through surveillance cameras or Internet browsers. I see little difference between a drone hovering near my window, and someone standing across the street with a pair of binoculars. Both can peer into my office.”

Whether or not the majority of people would agree, or disagree, with Bilton’s sentiment, is well beyond the present piece. But what should be noted with regard to it, is that he seems to be correct to emphasize that droning will have a material impact on what we deem (un)acceptable. Thus, as more and more people get droned – and as the capacity to make more sophisticated autonomous drones gathers pace – we should expect social norms and practices regarding privacy and personal (air) space to change as well.


Glen Whelan teaches at McGill, is a Visiting Scholar at York University’s Schulich School of Business, and the social media editor for the Journal of Business Ethics. He was GRB Fellow at CBS in 2016/2017.  His research focuses on the moral and political influence of corporations, and high-tech corporations in particular. He is on twitter @grwhelan.

Links

[i] Zimmmer, B. 2013. The flight of ‘drone’ from bees to planes. The Wall Street Journal, July 26. https://www.wsj.com/articles/SB10001424127887324110404578625803736954968

[ii] Bhutto, F. 2009. Missing you already. New Statesman, March 12. https://www.newstatesman.com/asia/2009/03/pakistan-war-government-terror

[iii] https://www.skydio.com

[iv] Bilton, N. 2016. When your neighbor’s drone pays an unwelome visit. The New York Times, January 27. https://www.nytimes.com/2016/01/28/style/neighbors-drones-invade-privacy.html

Pic by Cambodia, P.I. Networt, Flickr. No changes made.

Why it Doesn’t Matter that Facers are Annoying

By Jacob Schjødt.

You are walking down a high-traffic street in Copenhagen minding your own business. You’re thinking about the new pair of pants you’re about to buy. But then. About 30 meters ahead. You see something that immediately provokes a feeling of mild anxiety. You decide to take a detour, and walk to the very edge of the street. But it’s too late. You have already been spotted. A friendly looking young man with long hair, piercings and a big smile calls at you. ‘Is it me, he’s calling at?’ you ask yourself – hoping the answer to be ‘no’. But it is you. You have been caught. By a Facer.

What is a Facer?
In the most general sense, a Facer is a professional salesperson who sales products, services or memberships face-to-face. Facers are usually found on high-traffic shopping streets in large cities. Facers can take many forms and promote various causes, ranging from Scientology to insurance and memberships to charities. In this blog, I will only consider the latter, as you know them from Unicef, Amnesty, Care etc.

Why Facers are annoying
Usually when people talk about facers, they readily settle on the apparent fact that Facers are rather, if not very, annoying. And, in general, I agree with these people: Facers are annoying. They force you out of your comfort zone, they completely ignore your interests, and they ask you to consider something that is not at all related to your life. Facers force you into a situation in which you have to choose between two negative outcomes: 1) feel bad about not helping someone in need or 2) give away money that you had other plans with. Also, facers are fake. Facers pretend to like you, just to get your money. This creates an unfamiliar and unpleasant encounter in which it’s easy to feel that you have to be rude to maintain a sense of control. And the list goes on…

And Why it Doesn’t Matter That They Are
The situation is clear. Facers are super annoying. But to jump from this fact of reality to the conclusion, that one should not support their cause – or that it’s fine to talk ill of them – is a school book example of an ad hominem argument. Contrary to many other cases of ad hominem thinking, however, we can actually justify Facer’s annoying behaviour (assuming that we sympathize with the charity they are promoting).

A decent facer can sign up 3 new members on a 6 hour shift, and these member will donate around 75-150 DKK per month. A charity membership lasts about 1.5 years on average (an estimate), and a Facer makes around 120DKK per shift (depending on their salary model). If a Facer works 2 times per week, he/she will then make around 60.000 DKK in a year, and earn the charity well above 400.000 DKK. If you thought being annoying could save lives, wouldn’t you be annoying?

Beware of the Facer Fallacy
Our tendency to found moral arguments on unpleasant feelings is one of the most heavily supported claims in moral psychology (Haidt, 2001; 2012, Haidt et al., 2000; Greene, 2001; 2009; 2014). I think that Facer-bashing is a solid example thereof. I think that we too readily succumb to a ‘if the messenger is annoying, he cannot be on to something’, fallacy when it comes to Facers, and that we should make an effort to develop a more positive attitude towards these people and their work.

References

  • Haidt, J. (2001). The emotional dog and its rational tail: A social intuitionist approach to moral judgment. Psychological Review, 108(4), 814–834. https://doi.org/10.1037//0033-295X.108.4.814

  • Haidt, J. (2012). The righteous mind. Why Good People Are Divided by Politics and Religion …, (January), 1–508. https://doi.org/10.1017/CBO9781107415324.004

  • Haidt, J., Bjorklund, F., & Murphy, S. (2000). Moral dumbfounding: When intuiton finds no reason. Working Paper. https://doi.org/10.1017/CBO9781107415324.004

  • Greene, J. (2014). Moral Tribes. Emotion, Reason and the Gap Between Us and Them, 300. https://doi.org/10.1017/CBO9781107415324.004

  • Greene, J. D., Sommerville, R. B., Nystrom, L. E., Darley, J. M., & Cohen, J. D. (2001). An fMRI investigation of emotional engagement in moral judgment. Science, 293(5537), 2105–2108. https://doi.org/10.1126/science.1062872

  • Greene, J. D. (2009). Dual-process morality and the personal/impersonal distinction: A reply to McGuire, Langdon, Coltheart, and Mackenzie. Journal of Experimental Social Psychology, 45(3), 581–584. https://doi.org/10.1016/j.jesp.2009.01.003

Jacob Schjødt is a Master student of Business Administration and Philosophy at CBS and Student assistant at CBS PRME. He has been responsible for organising the first Students for the Global Goals Festival at CBS on April 11, 2018. Follow CBS PRME on Facebook and Twitter for the latest updates.

Pic by Daniel Lombraña González, Unsplash. Edited by BOS.

The Ethical Blindness of Corporate Sustainability

By Andreas Rasche.

Corporate sustainability (and related concepts like ESG and materiality) have been reduced to discussions around financial value. This makes these concepts “ethically blind”. We are in need of a resurgence of business ethics, otherwise the endless discussions of the “business case” for sustainability will turn out to be the error at the heart of true leadership for sustainable business practices.

My LinkedIn and Facebook feeds are filled with great stories about how well corporate sustainability aligns with financial measures (be it revenue, profit or another metric). Sustainability practitioners seem to love these research findings. No one can blame them. They are the ones who need to “sell” sustainability efforts to top management, and having evidence that sustainability aligns well with financial goals makes this task a lot easier. I do not necessarily doubt these findings, although any researcher will tell you that results always depend on how a study is built, and also that correlation and causation are often confused in these studies.

What I am concerned about is that research findings are turned into normative prescriptions without much reflection: just because some research finds that corporate sustainability efforts support the financial bottom line of a company, we should not conclude that these efforts should only be undertaken whenever they support the financial bottom line. Corporate sustainability is most urgently needed whenever it does not support the financial bottom line. In those situations, the decision for sustainability is a tough one; it requires courage and, in many cases, ethical reflection.

Future thinking, writing, and speaking about corporate sustainability needs to much better balance the financial gains and the moral dilemmas attached to relevant issues. Otherwise, we risk to become ethically blind. Such blindness is often referred to as the “inability of a decision maker to see the ethical dimension of a decision at stake.” (Palazzo et al., 2012: 325) Practitioners’ and academics’ obsessions with the business case has clearly diminished our ability to turn a problem/issue into a case for moral reflection and imagination.

A good example are materiality assessments. These assessments rank ESG issues according to their influence on a firm’s strategy (incl. financial bottom line) and the interest of the firm’s stakeholders in these issues. The moral need to address an issue, because it is the right thing to do, falls off the agenda. Corporate sustainability becomes a pick and choose exercise, which corporations often frame in whatever way they please.

The field, which we nowadays refer to as corporate sustainability (incl. ESG and materiality etc.), started out with discussions around the moral responsibility of businessmen. Back then the focus was, among other things, on how moral dilemmas can be resolved. I am not saying these are the good old times. But it is clear that the discourse has not only changed label (from ethics to responsibility to sustainability), but also that this very discourse has been hijacked by the belief that corporate sustainability is only a worthwhile endeavour whenever it creates financial value for a company.

All of this is not to say that corporations should not financially profit from their corporate sustainability efforts. It is also not to say that managerial tools like materiality assessment are completely useless – they can be of great help. However, it is to say that we cannot and should not reduce discussions around sustainability to a single dimension: be it the financial one, the moral one, or any other one. Corporate sustainability issues are by design multi-faceted, and so must be our thinking about them.

Former CEO of General Electric, Jack Welch, once famously declared:

On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy …your main constituencies are employees, your customers and your products” (quoted in Moon, 2014, p. 106)

We should extend this argument to the business case for sustainability. The idea of a business case itself is a stupid one; such a case should never be the sole motivation of engaging in corporate sustainability, although it can be an outcome of such engagement.

I prefer morally informed decisions. But it is getting harder to convince practitioners and academics that there is more to corporate sustainability than the financial bottom line. Having a business case for corporate sustainability should never be a precondition for addressing an issue or a problem. Otherwise, we move towards moral mediocrity…


Andreas Rasche is Professor of Business in Society at Copenhagen Business School and Director of CBS’s World-Class Research Environment “Governing Responsible Business”. He is also Visiting Professor at the Stockholm School of Economics. Andreas can be reached at: ar.msc@cbs.dk and @RascheAndreas. More at: http://www.arasche.com

Sources:
Moon, J. (2014). Corporate Social Responsibility: A Very Short Introduction. Oxford et al.: Oxford University Press.
Palazzo, G., Krings, F., & Hoffrage, U. (2012). Ethical Blindness. Journal of Business Ethics, 109(3), 323–338.

Pic by Caleb Jones, Unsplash.

Banking on the Future – Driving Responsibility and Sustainability in the Financial Sector

By Lavinia Iosif-Lazar.

While the world seems to have moved on from the last financial crisis, one can only wonder if banks and financial institutions have learnt something from it that could steer them away from repeating the experience. From the educational side, we also have to consider whether business schools are able to instill in their graduates the values and norms to navigate financial institutions into clearer waters.

100 Years CBS – Time to Rethink Finance
During a CBS conference in the late months of 2017, academics and practitioners within the finance and banking industries alike had come together to think and “rethink the financial sector”. The purpose of the event was to bring to light the issues and opportunities of responsibility and sustainability within the financial sector, and create an agenda for future research and teaching in business schools, like CBS.

Over the course of the event, the ambition was to develop a dialogue with stakeholders from the banking and finance industry and to challenge the current attitude towards banking and its future with “responsibility” being the word of the day. The hope was that this dialogue would ignite new ideas and develop an agenda for future research and teaching in business schools towards 2117.

During the three tracks focusing on society, business models and the individual, with responsible banking being the overarching theme, participants heard speakers address issues spanning from the role Fintech and disruptive technologies like blockchain and cryptocurrencies play in industry innovation to different religious perspectives on banking and finance.

To Rethink Finance, we need to Rethink Education
When it comes to financial education, the focus was set on bringing it in sync with the new developments and real life challenges, while at the same time stressing the need for a business model based on valuation and normative principles. In crisis situations, the clear-cut modelling learnt in school no longer represents the norm. Education plays a major role in securing that the new generations of graduates have the capabilities needed to identify and understand people and their needs, rethink and modernize local banking and be attuned to the technological developments that can pave the way to a more responsible banking sector  – centered on people instead of money.


Lavinia is project coordinator at CBS PRME. You can visit the PRME Office at Dalgas Have 15, Room 2C.007  & follow CBS PRME on Twitter, Instagram and Facebook.

Pic by Markus Leo (Unsplash), edited by BOS.

Is CSR Effectively Altruistic?

By Lot Elshuis.

CSR is the part of a company that focusses on doing good. Interestingly enough, business is all about impact and effectiveness when it comes to the core of the business, but when strategies of doing good are developed and implemented there is often more concern for what sounds good than for the effectiveness and impact of their actions on recipients. Why is the rigor applied to core business activities often not applied to CSR-strategies as well?

Effective Altruism: Maximize impact, not feel-good moments
Effective Altruism takes exactly this approach. Kick-started by philosopher Peter Singer, Effective Altruism is a community that wants to change how ‘doing-good’ is often approached. First of all, Effective Altruism emphasizes that most people in developed countries, and especially those belonging to the richest 10% of the world population, have an outstanding opportunity to do good. We have won the lottery! Therefore we have the beautiful chance to add value to the lives of others.

Second of all, if we indeed want to take the opportunity to do good, we can do the most good by focusing on maximizing positive impact through applying scientific evidence and reason, instead of only looking at what sounds and feels good. Without thinking carefully about how exactly to do good, there is a risk of wasting important resources on things that do not work. Even worse is having the idea of doing good, while actually causing harm.

The Case of Play-Pumps International
Let me give an often-used example. Many developing-world communities are provided with water through hand-pumps. The social enterprise Play-Pumps International had the idea to replace these hand-pumps by merry-go-rounds, which would pump up water while children played on them. It seemed to be the ideal win-win situation. The enterprise received a grant from the US Government, a World Bank Development Marketplace award, and (it can’t get much better) a visit and sponsorship from rapper Jay-Z. However, sadly enough, the Play-Pumps didn’t have the positive impact that everyone assumed it had. One of the main problems was that the pumps needed constant force to obtain the water, which, obviously, made the kids tired. This often compelled the women of the communities to struggle to push the pumps. Moreover, the Play-Pumps were several times the cost of a hand-pump, which were able to pump more water an hour as well. (see Doing Good Better by William MacAskill for a more elaborate description of the case)

Rule of Thumb: Importance, Neglectedness, Tractability
Although Effective Altruism is focused on the individual who is willing to do good, we could apply the same to corporations who pursue CSR or social entrepreneurial strategies. Especially because effective altruists often focus on the cost-effectiveness of a cause or approach. This line of thought shouldn’t be unworldly to corporations, since cost-effective rationalizations are applied on a regular basis. An often-used rule of thumb by Effective Altruism for evaluating causes or approaches is assessing the following criteria:

  • Importance: What is the scale of the problem; how many people are affected and how deeply?
  • Neglectedness: Is there still enough opportunity to do good, or are a lot of other people already working on improvement in this field?
  • Tractability: Is there something practical you can do, with the possibility of succeeding?

By applying these criteria and looking for evidence through research, companies are likely to have a more profound impact on the area in which they want to do good.

Responsibility – but where?
As the name says, CSR is about responsibilities. Therefore, we might wonder whether companies who apply CSR actually have the responsibility to do the most good they can (with the same amount of time and money). Can we argue for saving lives in the poorest countries instead of improving the labor conditions of the workers in one’s own supply chain? While the former has a bigger impact, the latter might, to a greater extend, be in line with the more obvious responsibilities of the particular company. This is an interesting discussion, but unfortunately outside the scope of this post to deal with.

However, a lot of multinational organizations are already involved in causes that do not directly relate to their own supply chain. Google is for example awarding $1 billion in grants and contributes 1 million employee volunteer hours ‘to create more opportunity for everyone’. More specifically, H&M announced in a press release in September that they are donating $200,000 to Save the Children for “South Asia’s worst flooding in years”. From an effective altruist perspective, it would be rational to figure out, what the scale of this cause is at the moment, if there aren’t already a lot of other donors involved in this particular disaster relief in South Asia, and whether Save the Children can actually do something successfully about the situation of those affected by the floods. Accordingly, this could be compared to the measured impact of other causes to conclude where H&M’s, or Google’s, resources would be most valuable.

Impact before Marketing!
We all know that CSR is more often than not linked to marketing strategies. There is a high chance that H&M chose to donate to South Asia’s flooding because more potential consumers will be affected since they probably have heard about the flooding recently and were emotionally moved. However, this doesn’t have to pose a problem, because Effective Altruism is not per se about ‘selflessness’, although often used as definition for altruism. It is totally fine to feel good about doing good. In fact, it would be wonderful if everyone felt better by doing good, because then it is likely that more people will actually do good. Therefore, it would be all the more impactful if organizations started to market the impact of their causes, rather than doing and marketing what feels good. With that, consumers could support companies that do good effectively, instead of companies that scream the loudest without having a real positive impact on important cause areas.


Lot Elshuis is a MSc Candidate in Business Administration and Philosophy at Copenhagen Business School. With a background in philosophy, her research interest is focused on discussions about the role and responsibility of business in society and the ethical dilemmas that these discussions entails. You can contact her on LinkedIn.

Pic by Diego PH, unsplash.

 

Where is the Space for Ethics in Rule Governed Organizations?

By Anna Kirkebæk Gosovic.

Imagine that you work in an organization where your choices, your knowledge and your thoroughness in your work could potentially impact the lives and health of people; for the better, yes, but also for the worse, if you make a mistake. Imagine then, that at any moment, someone could come and go through all your work, ask for all the details of your choices and demand proof that you made the right decision according to all the rules that you need to know. And then imagine that large investments are at stake and that the failure or success of these investments depend, partly, on the thoroughness of your work.

Strict rules and procedures
This is the reality that many employees in pharmaceutical companies operate in. Many organizations today are governed by policies and procedures to make things run smoothly but some organizations are – to a larger extent – characterized by strict monitoring and reporting procedures, high preoccupation with failure and commitment to organizational resilience. Weick and Sutcliffe name such organizations “High Reliability Organizations” (HRO) (Weick & Sutcliffe, 2007). HROs are organizations working in fields where mistakes can have severe consequences and which, as a result of this, have strict procedures for ensuring compliance with processes and policies.

Studying HROs, scholars have focused on organizations such as air craft carriers (Weick & Roberts, 1993), nuclear power plants (Schulman, 1993), hospitals (Chassin & Loeb, 2013) and military units (Bierly & Spender, 1995; Demchak, 1996); all of which operate in environments rich with potential for error but where the consequences of such are too severe to allow them to happen (Cf. Weick, Sutcliffe, & Obstfeld, 1999, p. 32).

With their close attention to monitoring, following procedures and regimes for registering data, actions and decisions, pharmaceutical companies can be defined as HROs.

Is following the rules enough?
Organizations preoccupied with reliability may spend more time and effort organizing for controlled information processing, mindful attention and action than other organizations. Weick and Roberts call this “mindful organizing” (Weick & Roberts, 1993, p. 357). But with such elaborate legislative frameworks in place as in the pharmaceutical industry, how do employees experience their room for maneuvering and for acting ethically? And how do staff and managers perceive the ethical dilemmas they meet? Is it enough to have followed the rules? And what happens in situations when there is a wider space for interpretation of such rules? How does moral reasoning take place at the intersection between legislative frameworks, financial considerations, scientific possibilities and human lives? And what domain outweighs the others at which points in time?

These are the questions that I hope to answer by studying within – and in partnership with – a pharmaceutical company. The project only started in January, so if you are interested in the answers to this, be patient, and stay tuned!


Anna Kirkebæk Gosovic is a PhD student at the Department for Management, Society and Communication at Copenhagen Business School. She is working on business ethics within a multinational pharmaceutical corporation.

Pic by G. Crescoli, Unsplash.

 

Corporate Criminal Liability in Germany – An Idea Whose Time Has Come

By Andreas Rasche.

Siemens, Volkswagen, Deutsche Bank … and now Airbus. What is wrong with German companies? It seems that German firms are disproportionally exposed to corporate irresponsibility. Of course, this is more of a subjective assessment than a statistical fact, and to be fair Airbus SE is a European company. Corporate irresponsibility appears in all jurisdictions, for all sorts of companies, and for a number of different reasons. My argument here is that Germany still has a legal infrastructure that makes prosecution of corporate criminal acts more difficult than in other countries.

It may come as a surprise, but Germany has, so far, not enacted an explicit corporate criminal law. While other countries have passed strict legislation to fight corporate criminality (e.g., the FCPA in the US or also the UK Bribery Act 2010), German legislation stands out in a number of ways. Unlike in other countries, you need to overcome a number of hurdles to sue corporations directly for criminal conduct. Existing legal provisions regarding corporate criminal liability are mostly found in §30 of the German Ordungswidrigkeitengesetz (OWiG). This law stipulates that corporations can be held legally accountable if someone representing the company has committed a criminal offense.

The Current Legal Situation in Germany
This legal framework puts Germany in a special role, as many other (developed) nations do not require prosecutors to prove individual guilt. As we know from CSR-related studies, corporate misconduct is usually diffused in organizations and it is often difficult to single out individuals as drivers of misconduct. Even if individuals can be singled out, it is still necessary to prove – beyond doubt – that this person was responsible for the criminal conduct on behalf of the corporation. The discussions around who was responsible for Volkswagen’s Dieselgate are a case in point. This leads to an interesting situation: While a rather high number of corporate crimes come to the attention of German public prosecutors (around 63.000 cases in 2014), few of these cases go to court, and in even fewer cases legal fines are imposed. The reason for this situation is mostly related to the fact that public prosecutors need to prove individual guilt rather than corporate guilt.

Of course, German companies are aware of the legal situation and this provides negative incentives. The current legal infrastructure may not directly motivate misconduct, but it is likely that it favors ‘lax behavior’ and unreflective actions.

Enact a Corporate Criminal Code
My plea here is simple: Germany has to enact and enforce an explicit corporate criminal code as soon as possible. The current legal instrument – the OWiG – is neither timely nor sufficient to fight corporate crimes like corruption. Actually, looking into the legal provisions reminds me a little of Milton Friedman’s famous saying that only individual actors – i.e. people with flesh and blood or ‘natural persons’ in legal lingo – can have responsibilities, and that corporate actors cannot have responsibilities because they are just a collection of individuals. We know that such an argumentation only works in the ideal world of economists (and even there its explanatory power is very limited). Any organization theorist would agree that corporations are collective actors; they possess shared norms, values and belief systems and hence there is agency beyond the individual. This is why we cannot and should not make the identification of individual guilt a precondition for corporate criminal liability.

In 2013, Thomas Kutschaty, then Minister of Justice of North Rhine Westphalia, presented a first draft for a German corporate criminal code (the so-called Verbandsstrafgesetzbuch). Ever since not much, if anything, has happened. The defense line of hardnosed corporate lobbyists is clear: under German law criminal liability is related to a fault on the side of the offender (the so-called Schuldprinzip) and hence fault cannot exist for a corporate entity itself, at least not as long as individual misconduct under the name of the company is proven. It is time to rethink the basic condition underlying such an argumentation: the legal principle and ancient rule societas delinquere non potest – responsibility belongs to individuals – may really be antique and outdated.

It is not necessary to simply transfer the legal liability of a natural person to a corporation, which probably would be very controversial. Fault can also be based on, for instance, a legal person’s internal organization or aggressive corporate cultures (as several cases of misconduct have shown). The bottom line? – Crimes are not always committed by men…


Andreas Rasche is Professor of Business and Society at Copenhagen Business School and Visiting Professor at the Stockholm Schools of Economics. More at www.arasche.com and @RascheAndreas.

Pic by zolnierek, Fotolia.

Really Fake

By Glen Whelan.

  • With generative technologies on their way to maturity, ‘Fake News’ may soon reach a whole new level of ‘realness’
  • No less than the authenticity and credibility of video and audio footage is at stake
  • Verified identities might help, but come with their own problems

Approximate reading time: 2-3 minutes

 As little as five years ago the idea of ‘fake news’ referred to satires like The Daily Show or The Colbert Report. Now, fake news refers to phenomena that are ‘really fake’: i.e., news or events that are fabricated to appear real. Recent examples include those that place a target or puppet – such as Obama or Françoise Madeline Hardy – under the control of a puppeteer who directs the puppet’s facial expressions, speech, and so on.

Technically faking reality
Whilst we have long been told not to believe everything we see or read, and whilst photoshop and fashion and hip-hop and auto-tune have gone hand in hand for a while now, current developments look like a step change. One key technology behind these changes is Generative Adversarial Networks (GANs). A sub-field of deep learning (which Facebook, Google, and Microsoft all have a major interest in), GANs work by pitting two algorithmic models – a generative model and an adversary – against each other.

The generative model can be thought of as analogous to a team of counterfeiters, trying to produce fake currency and use it without detection, while the discriminative model is analogous to the police, trying to detect the counterfeit currency. Competition in this game drives both teams to improve their methods until the counterfeits are indistinguishable from the genuine articles. (Goodfellow et al., 2014: 1)

Although currently limited, machine learning expert Ian Goodfellow – who has a PhD from the University of Montréal, but now works for Google Brain – suggests that “the generation of YouTube fakes that are very plausible may be possible within three years”. Where all this is heading gives rise to two concerns.

Was it you?
The first concern is that our ability to distinguish between the fake and the real regarding other people is undermined. Once generative technologies hit a certain level of advancement, it will be prima facie impossible to tell whether or not a given piece of audio or video is a fake generated by a puppeteer, or a true piece of documented experience. When one realizes that this does not just apply to the powerful and famous, but to our partners, children and friends as well, the full extent of the problem becomes clear.

The second and related concern is that generative technologies might increase the likelihood of people raising doubts as to whether or not documented footage or recordings, of themselves, are true. A person filmed engaging in something embarrassing, unsavory, or outright criminal, could suggest that the footage in question is a fake generation, and not a real documentation of any actual event.  Whereas the first concern relates to the ability to identify truths about other people, the second concern relates to people potentially escaping, or avoiding the consequences of, truths about themselves.

To be or not to be (verified)
In light of such, an increased push towards verification should be expected. Verified identities are already central to platforms such as Facebook, AirBnB and Twitter, and Amnesty International is involved in creating verification processes for ‘citizen media’ images or video that are relevant to human rights considerations.

In and of itself, this seems a good thing. But the fact that verification processes need to be organizationally controlled suggests prudence is warranted. It is not, for example, difficult to imagine one of the current tech giants coming to monopolize the world of verified interactions in both our private and public lives. As the threat of fake realities become ever present, then, we should remind ourselves that an increasingly verified existence would likely come with its own, all-encompassing, problems.


Glen Whelan teaches at McGill, is a GRB Fellow at CBS, a Visiting Scholar at York University’s Schulich School of Business, and the social media editor for the Journal of Business Ethics. His research focuses on the moral and political influence of corporations, and high-tech corporations in particular. He is on twitter @grwhelan.

Pic by EtiAmmos, Fotolia.

Universities – Front Runners or Falling Behind The Green Transition?

By Louise Kofod Thomsen.

Universities are knowledge generators, facilitators of innovation and play a key role in shaping the mindsets and developing the skills of our future leaders.
Universities bear a tremendous responsibility for not just talking the talk, but also for walking the walk on social responsibility. However, when visiting a university campus, it is not always commonplace that we find universities in the forefront when it comes to acting sustainably and responsibly.

Universities proudly take on the role of advisors in setting universal guidelines for how others should act, but how good are they when it comes to implementing sustainability initiatives on their own campuses? The CBS campus is a wonderful place to take a stroll around, especially on a hot summer day, where you will be greeted by the sight of the students sitting on the grass and enjoying the green areas. You will quickly discover that CBS is a real Copenhagen campus with bikes as far as the eye can see. However, as with many universities, the CBS campus has a long journey ahead when it comes to implementing sustainability initiatives and decreasing CO2 emissions.

The pressure is on
Every third year, the Minister for Education and Science negotiates the new university development contracts, setting the goals for all Danish universities’ future development. The contracts contain self-defined targets by the individual institutions, reflecting their own strategic priorities as well as obligatory targets based on societal needs as defined by the Minister for Education and Science. However, until now, these contracts have mentioned no legal obligation for universities to implement sustainability initiatives on campus. Universities’ lack of focus on sustainability initiatives on campus is somewhat surprising. You would think that there should be considerable pressure on universities to show a higher degree of engagement on campus regarding sustainable development considering the growing concern and initiatives globally.

The dominating theme at Rio+20 was how to achieve environmental and social sustainable development globally. The green transition is also a leading theme for the Danish government with its ambition of having Denmark ranked as the top country worldwide for green initiatives. The green transition is reinforced not least by the recent adoption of the EU Action Plan for Circular Economy. In 2015, the world adopted the 17 Sustainable Development Goals aiming to engage governments, the public sector, civil society and universities to bring about global sustainable development and in November 2016, the Paris Agreement entered into force with 158 ratifying parties working towards the goal of staying below 2 degrees.

There is no doubt that there is a growing demand for better standards for sustainability and resource efficiency. Yet, if we are to achieve the highly ambitious global targets, we need drastic changes and stronger commitments by key actors. Considering universities’ crucial societal role in educating the generations, you might wonder what keeps universities from taking up this challenge?

CBS Goes Green – or did it?
In 2012, an initiative known as the “CBS Goes Green” was launched to, among other things, allow for waste sorting for the students at Solbjerg Plads. Today, 5 years on, waste sorting has still not been implemented at Solbjerg Plads or any other of CBS’ main buildings. This is generally explained to be due to “a lack of interest by the students”. Another explanation has been prior lack of waste sorting systems in the municipality of Frederiksberg. However, today Frederiksberg has a well-functioning system including clear guidelines as well as consultation services for correct waste sorting. With no clear strategy for handling waste (such as plastic, bio and metal) within the various CBS departments, it appears that sorting waste is difficult not only for students, but for staff and faculty as well. Despite often good intentions, the systems for sorting waste are generally lacking.

You might wonder why sorting your apple core from your paper trash is such a challenge when most do it at home. It seems as if the challenge lies within some rather old, out-of-date structures and a “this is how we have always done it” approach. Despite the fact that sustainability is a growing priority for universities all over the world placing a strong focus on teaching and research in this area, not many universities commit to integrate operational sustainability on campus.

Universities as test centers for sustainable initiatives
Universities are in many ways a powerful platform and a crucial component for achieving sustainable development across the globe, but also very importantly, locally, on campus. Universities have a responsibility as role models to lead the way and show students how to act responsibly. There are also long-term economic incentives for taking on the challenge.

In 2008, Copenhagen University adopted its first Green Campus targets and has since saved DKK 35 million on energy. The University of British Colombia is treating their campus as a living lab for students to work with behavior and innovation to develop sustainable solutions for the campus. They have launched The SEEDS Sustainability Program with the aim of advancing campus sustainability by creating partnerships between students, operational staff, and faculty on innovative and impactful research projects to be implemented on campus.

CBS has just launched a similar initiative, The Sustainable Living Lab, a project that opens up campus data for students, researchers etc. to use the campus to implement, test, research and teach sustainability with the CBS campus as the focal point (campus as a living lab). The Sustainable Living Lab project engages student organizations to create a better and greener campus, but we need CBS staff, faculty and management to contribute directly to projects like this if we want to transform CBS into a more sustainable university. However, we do see small steps towards a sustainable movement internally at CBS, with the recent establishment of the Sustainable Infrastructure Taskforce at the Department of Management, Society and Communication. Among others, the taskforce has set out to implement waste sorting using the department as a pilot project and in time use this knowledge for similar initiatives around campus.

Reflecting on CBS’ role as a business university with significant social science expertise, the unique focus of the CBS approach is its emphasis on business and societal dimensions that we can make use of for a sustainable campus redevelopment. There is a tremendous opportunity for universities to play a key role in this sustainable transition in terms of research, economical benefits and branding of universities as green contributors just to mention a few.

I believe, it is time we started redefining the role of universities in the sustainable transition and engaging students and staff alike in the journey towards creating a green campus.


Louise Thomsen is Project Manager for CBS PRME and the VELUX Chair in Corporate Sustainability at the Department of Management, Society and Communication, CBS. Her areas of interest are sustainable consumption, innovation, student engagement, education and partnerships for sustainable development. Follow her on LinkedIn and Twitter

Pic by Bjarke MacCarthy.

CBS new Knowledge Partner of the OECD

By Karin Buhmann.

In early 2017 CBS accepted an invitation from the Organisation of Economic Collaboration and Development (OECD) to become an OECD Knowledge Partner. As an OECD Knowledge Partner, CBS joins a small group of prestigious universities – including the University of Geneva, the University of Sydney, London School of Economics and SciencesPo (Institut d’études politiques de Paris) – that are invited to share and discuss research based knowledge with the OECD, thus enhancing its ability to deliver on regional and global challenges related to economic collaboration and development. For 2017 CBS was invited to participate in two key ways: scholarly interaction at the annual political OECD Global Forum, and contributing an article to the OECD Yearbook. Both were connected to the topic at this year’s Global Forum: Bridging Divides, with particular focus on inclusive growth, digitalization, and trust.

Three CBS professors (Karin Buhmann (MSC), Kim Andersen (DIG), and Christian Asmussen (SMG) and the CBS Vice-President for International Affairs (Dorte Salskov-Iversen, who is also Head of Department of MSC) participated in the OECD Global Forum, which took place at the OECD Headquarters in Paris on 6-8 June 2017. Presenting and moderating at an ‘Idea Factory’, Professor Kim Andersen shared views on artificial intelligence. Professors Christian Geisler Rasmussen and Karin Buhmann interacted with OECD experts on issues of Inclusive Growth and the Location Choices of Multinational Firms (Geisler Rasmussen) and The role and challenges of OECD’s Guidelines for Multinational Enterprises for building trust through Responsible Business Conduct in a context of global competition (Buhmann).

With permission from the OECD, the CBS contribution to OECD’s 2017 Yearbook  is reproduced in the following.

Responsible Business Conduct and Competition: OECD’s Guidelines for Multinational Enterprises and responsible supply chain management

By Karin Buhmann, Copenhagen Business School

Surprised looks with colleagues or students are commonplace when I observe that the OECD plays an important part for the promotion of responsible business conduct (RBC), not just in OECD countries but globally. RBC is OECD ‘speak’ for corporate social responsibility, corporate sustainability and other terms indicating an expectation that businesses take responsibility for their impact on society. The OECD’s key normative instrument for RBC, the Guidelines for Multinational Enterprises, and the remedy institution that adhering states commit to establishing, the National Contact Points (NCPs), are relevant to help offset some of the social cost that competition causes to employees and communities. The Guidelines provide norms of conduct for MNEs and for how they should act to avoid harmful impact caused by their supply chains. Revised several times since first adopted in 1976, the Guidelines provide normative standards in regard to human rights, labour/employment and industrial relations, environment, bribery, consumer concerns, science and technology, competition and technology. The Guidelines also apply to institutional investors, including minority shareholders.[1] Jurisprudence (‘case law’) emerging through complaints (‘specific instances’) handled by NCPs elaborates the practical implications of the Guidelines for companies and investors, within and beyond the sector and country concerned by each case. Like the Guidelines have extraterritorial reach beyond MNE home states, NCPs may also deal with business conduct arising in non-OECD states or other states having acceded to the Guidelines (provided a connection to that state).

A case[2] that was recently handled by the Danish NCP highlights the pertinence of OECD’s Guidelines at a time when SMEs too have transnational operations, as well as of the evolving guidance developed by NCPs. The case concerned a Danish textile company that sourced from a supplier in the Rana Plaza building at the time of its collapse in 2013.

The Guidelines are recommendations from governments to companies operating in or out of states (whether or not OECD-Members) adhering to the Guidelines. With the 2011 revision, the Guidelines adopted the risk-based due diligence approach.[3] This is a process for companies to identify, prevent, mitigate and account for their impact on society. Whereas corporate legal or financial liability due diligence aims at protecting the company against harm, risk-based due diligence is about protecting society against harm caused by the company or its business relations. Of course, if done well it also protects the company against liability or reputational harm.

The case on the Danish textile company concerned the adequacy of the company’s due diligence to prevent harm directly linked to its operations by a business relationship. The NCP found that the company did not apply processes for due diligence in compliance with OECD’s MNE Guidelines. In particular, the company failed to make demands that its supplier ensure employees’ human and labour rights, including through adequate steps to ensure occupational health and safety. As to whether the company had acted consistent with what it argued to be buyer practice in regard to building inspection, the NCP observed that practice by itself may be indicative, but not conclusive regarding the scope of risk-based due diligence. In other words, a company must think and act for itself in regard to demands on suppliers to take ap­propriate measures to ensure health and safety in the workplace. Thus, the NCP statement elaborates on the practical implications of the Guidelines and due diligence for companies in the textile and other sectors for the future, in regards to building safety and supply chain management.

The collapse of the Rana Plaza building was a wake-up call in many OECD countries concerning the human and social cost that can be the price for the quest for economic gain that drives much competition. Global companies have long taken advantage of wage differentials and weak regulation to keep costs low.[4] Concerns with labour and human rights have been strong if too often ineffective drivers for corporate change and the conditions for competition.[5] The textile sector is not unique in competition causing adverse social or environmental impacts. Agri-industry and mining are among sectors in which adverse social and environmental impacts of business activity are regularly reported. Enhanced knowledge of OECDs MNE Guidelines may contribute to promoting RBC in such transnational economic activities.

 

[1] OECD (2014) Scope and application of ‘Business Relationships’ in the financial sector under OECD’s Guidelines for Multinational Enterprises, Paris: OECD Global Forum on Responsible Business Conduct.

[2] Final Statement on Specific Instance notified by Clean Clothes Campaign Denmark and Active Consumers regarding the activities of PWT Group.

[3] The term was adopted from the United Nations Guiding Principles on Business and Human Rights (UNGPs), United Nations Human Rights Council (2011) UN Doc. A/HRC/17/31.

[4] Krugman P, Obstfeld M, and Melitz M (2014). International Economics: Theory and Policy, Global Edition. 10th ed. Online: Pearson.

[5] Ruggie J (2013) Just Business – Multinational Corporations and Human Rights. Boston: W.W. Norton.


Karin Buhmann is professor at Copenhagen Business School (CBS) where she is charged with special responsibilities for Business & Human Rights, and a part-time member of the Danish National Contact Point (NCP) under OECD’s Guidelines for Multinational Enterprises. Her academic background is in international human rights law.

Pic by Solidarity Center, edited by BOS.

How Businesses Can Profit with Purpose

By Robert Strand.

Money helps us meet our basic needs, but what about our need for meaning? Businesses will profit — not just financially — by finding their souls.

How do you motivate someone to work? For many the response is quite simple: money. Want more work? Pay more money. Economists have long instructed us that human beings are rational self-interest maximizers motivated solely by the dollar.

The discipline of economics has historically dominated business schools and management research and, it follows, that the fundamental assumption of self-interest maximization is applied to companies. As the economist Milton Friedman famously wrote “the social responsibility of business is to increase its profits.”

A more powerful motivator
However, the view that money is the way to motivate someone to work is only half correct. And it is half terribly, terribly wrong. The research is in and it is clear: For knowledge workers, one must pay enough money to take the issue of money off the table. But beyond that, money is a terrible motivator.

In fact, money can be a demotivator as incentive plans often end up encouraging employees to think more about money than the work. Instead, purpose is increasingly recognized as the greatest motivator for employees and organizing force.

Purpose grows in importance with new generations of employees who are increasingly demanding that the organizations at which they spend their precious time connect to something much bigger. Great thinkers like Daniel Pink and my Berkeley-Haas colleague Barry Schwartz have much to say in support of this.

Can a business self-actualize?
Themes like social inclusion and climate change represent opportunities for companies to connect their employees with purpose. We recently held an event to explore how companies like Adobe and Microsoft are innovating their hiring practices to make it more possible for individuals from underrepresented populations to fulfill their potentials at their firms and, ultimately, encourage greater social inclusion.

For many large, established companies, connecting employees with a sense of purpose is remarkably challenging. This is where a corporate social responsibility (CSR) or sustainability group can serve an important role. CSR and sustainability groups can identify material issues for that company, such as encouraging social inclusion or battling climate change, and bring these issues into the company. Profits are a bit to the company like oxygen is to the body: Necessary for survival but a pretty lousy thing to live for. Companies that connect their employees to a greater sense of purpose are those that will foster healthier organizations and ultimately realize greater profits.

This article was first published in the San Francisco Chronicle Late Edition, 28 June 2017.


Robert Strand is Sustainability Professor and Executive Director at Berkeley-Haas Center for Responsible Business. Follow him on Twitter @robertgstrand

Pic by Hamza Butt.

When diversity is everyone’s business

By Jannick Friis Christensen.

In April, CBS celebrated not only its centenary but also how diverse the business school has become over the years on Diversity Day 2017. If unconscious bias—along with stereotypes and prejudice—is what undermines diversity efforts in organisations, then, what difference can such a (diversity) day make? We took an experimental research approach to organising CBS Diversity Day to find out.

The purpose of CBS Diversity Day is to put a strong focus on diversity and inclusion both internally in our own organisation and in educating future business leaders. One way of supporting this double purpose is to organise events that introduce the concepts of diversity and inclusion to the 22,000 students at CBS as well as to our researchers and administrative staff. In particular, we do this on Diversity Day.

How to approach organisational diversity?

In previous years, focus has been on putting to the forefront best practices in companies that manage to use their core competencies in creating an organisation, which is sustainable both financially and socially – in other words the good business case. We believe that CBS should be perceived as an organisation committed to promoting diversity and inclusion.

We would like to acquaint the CBS community with the diversity represented by the people—for example ability/disability, sexual orientation, gender, ethnicity, religion, and nationality—who study and work at CBS and how their experiences may differ as a result of those differences. In doing so, emphasis this year was on the practical implications of how to approach organisational diversity in a way meaningful to all parties involved, including those aforementioned groups typically casted as being diverse. It was therefore not a question of defining what diversity is or if it ‘pays off’ but rather to explore how diversity issues may inspire different practices for alternative and more inclusive organising.

Researching diversity requires diverse approaches

The idea was to challenge any ‘conventional’ knowledge diversity and inclusion and we were interested in measuring the overall potential effect(s) of Diversity Day, that is, the combination of events that included logical-rational as well as emotional and action- and solution-oriented presentations. All presentations were live-streamed and recorded and can be watched via this link.

A citizen science approach was adopted prior to Diversity Day to allow the student population at Copenhagen Business School to identity the problem that will be turned into our research issue. This was done by having a random sample of students fill in a questionnaire about the diversity issues of ethnicity and religion in Denmark. This part of the study is expected to show to what degree students hold explicit bias towards ethnic and religious minorities.

To measure implicit bias and the potential impact of Diversity Day we designed clicker tests that were conducted before and after each scheduled event. We expect the results from these tests to show a reduction in latency as the day progressed, since the respondents ought to spend less time becoming consciously aware of own unconscious biases due to a heightened awareness level prompted by the critically reflexive focus on various diversity issues. The results will, however, not be able to say anything about whether this change (if any) will last or whether it I will lead to changes in behaviour – only that a momentary bias reduction can be achieved.

The final part of the project consists of focus group interviews to get an in-depth understanding of participants’ own perceptions of and experiences with Diversity Day as well as to follow up on the questionnaires and clicker tests. Due to the experimental research design we need elaborations on the various aspects from the participants’ perspectives. The interviews take place in weeks 25 and 26 so if you attended CBS Diversity Day 2017 on 27 April we would like to hear from you. Sign up via this link by adding your name + email and select the dates/timeslots that fit your calendar. The interviews will take approximately 1-1½ hours and the questions will be open-ended for you to reflect on what you got out of Diversity Day. We aim for including five to seven people in each focus group and the interviews will be anonymized.

The next big diversity event is on 19 August 2017 where CBS for the first time joins the Copenhagen Pride Parade from Frederiksberg Town Hall at 13:00. Check cbs.dk for updates.


About Diversity Day

CBS Diversity Day 2017 was co-organised by Jannick Friis Christensen and Associate Professor Sara Louise Muhr (Dept. of Organization). The specific research project discussed in this blog post is conducted in collaboration with Associate Professor Ana Maria Munar (Dept. of International Economics and Management) and Postdoc Kristian Møller Moltke Martiny (University of Copenhagen).


Jannick Friis Christensen is PhD Fellow at the Department of Organization. His research project seeks to develop new methods for intervening diversity by bridging critical performativity theory with organisational practice and managerial discourse. It explores—ethnographically—the norms of diversity practices in contemporary organisations, granting insights into how perceptions of diversity are constructed discursively, and how they govern people’s conduct. And it challenges existing practices and render them productive through continuous critical reflection on the underlying norms. You can find Jannick on LinkedIn, Instragram, Twitter and Facebook.

Pic by Lise Søstrøm (MSC)

The “sandwich trick”: How ethically questionable practices get normalized

By Dennis Schoeneborn & Fabian Homberg.

At some resort hotels in Las Vegas, it is an established practice that guests at check-in hand-over to the receptionist a ‘$20 sandwich” (i.e. a banknote slipped between credit card and ID) in order to attain a room upgrade. Such benefits can include luxurious suites, top floor rooms with views, etc. In a recent study, Dennis Schoeneborn (Copenhagen Business School) and Fabian Homberg (Southampton Business School) have examined this ethically questionable practice that can be seen either as a “tip” or rather as a “bribe”, since it is paid before any services are received and with a clear expectation of reciprocity. Their study has been accepted for publication and is forthcoming at the Journal of Business Ethics.

In their article, the two researchers present findings from analyzing users self-reports on the website Frontdesktip.com that includes numerous stories of “succeeding” or “failing” when “playing the sandwich trick”. To give one example – one guest named “J.”, staying at the Bally’s Hotel, reports: The receptionist “asked for my driver’s license and credit card. I slid the $20 sandwich over, and before releasing the sandwich I asked ‘Are there any complimentary upgrades available?’ He immediately knew what I was talking about. He nodded his head, placed my sandwich under the counter on the keyboard and began typing away. Within a few moments, […] [w]e were upgraded to a King JR Suite in the North Tower. Well worth the $20.”

By studying self-reports of playing the “$20 sandwich trick”, the researchers found that this ethically questionable practice “worked” especially when hotel guests engaged in informal interactions that allowed to avoid the social stigma of bribery, for instance, by making small talk with the receptionist or claiming to be celebrating a “special occasion” (e.g., a birthday or anniversary). Based on these findings, the study makes an important contribution to existing understandings of how typified social interactions can stabilize and “normalize” petty forms of corruption or other ethically questionable practices.

You can find the full article here: Schoeneborn, D., & Homberg, F. (forthcoming). Goffman’s Return to Las Vegas: Studying Corruption as Social Interaction. Journal of Business Ethics.


Dennis Schoeneborn is a Professor (MSO) of Organization, Communication, and CSR at Copenhagen Business School (Denmark).  Fabian Homberg is an Associate Professor of Human Resources and Organizational Behavior at Southampton Business School (UK).

Pic by Max Pixel

What if unethical behavior is just matter out of place?

By Anna Kirkebæk Gosovic.

It’s always puzzled me why it is that we might share words and concepts but that the meaning we fill into these concepts is very different. Kinda like a hotdog. Danish hot dog makers enjoy to fill it with important hotdog defining ingredients such as remoulade, mustard and pickles, whereas rumor has it that Swedish hot dog makers put a shrimp-mayo substance (the horror) on their hot dogs, and American ones don’t even put ketchup (seriously, just a bread and a sausage?).

Anyways, the point is that Danes, Swedes and Americans all call it a hotdog, although they don’t agree on what it actually consists of, what is right (onions and pickles of course) and what is wrong (shrimp-mayo, obviously). Banal observation, perhaps, but don’t worry – there is a point (also, you have to bear with me, as I’m a brand new PhD student and not yet as clever as the other bloggers).

Schooled as an anthropologist, I recently started my PhD study on how to ensure ethical standards within a multinational pharmaceutical corporation. As a point of departure, and trying to map out how corporations deal with this challenge, I started consulting the literature on business ethics in cross-cultural contexts.

As I read along, I realized that scholars (and companies) actually seem rather sensitive to cultural differences, and that local responsiveness to cultural norms and practices is considered beneficial and even necessary in many aspects of business operations. However, at the same time, within the field of business ethics, what may be otherwise recognized as cultural differences to be respected and responded to, seems here to somehow transform into unethical behavior not to be tolerated.

Take for example the reciprocal systems of dinner invitations, gift giving and thorough social interaction that comprise an inherent part of establishing relationships in parts of South East Asia. This can be interpreted as a cultural practice of creating good business relations. However, in a business ethics context, most (Western) ethical standards do not allow for e.g. gifts or expensive dinners to enter business relations. In these contexts, they do not keep their cultural label as gifts form the context in which they originate. Rather, they get a new cultural label from the context www.buy-trusted-tablets.com of Western ethics as something resembling corruption.

So – how can gifts (which for most of us has positive connotations) suddenly become corruption (which for most of us has negative connotations) when entering a business relation governed by Western principles for right or wrong? The answer might lie with an anthropological classic on purity and danger.
In her famous work on dirt, anthropologist Mary Douglas argues that notions of dirt express symbolic systems within a culture. Efforts to get rid of dirt, she writes, are not governed by an anxiety to escape disease. Rather, we are reordering our environment, making it conform to an idea that we share within our culture of what is dirty and what is not.

In my early years as an anthropology student, one lecturer explained Douglas’ theory like food on the shirt. In my opinion, an amazingly pedagogical way of explaining a basic anthropological theory which I will attempt to repeat:

It’s really rather simple. It’s about food and dirt. Perhaps the aforementioned hotdog should reenter the scene here. The Danish one with all the sauces, of course. While this hotdog is in your hand, it’s food. It’s a mouth watering hotdog just waiting to be eaten. But when you drop some of it (and believe me, you will) onto your shirt, it is no longer food. It’s dirt. Thus, the entire nature of a thing or a concept can change completely according to the context in which it is located and our culturally embedded understandings of that context’s rights and wrongs (hotdog in hand = good, hotdog on shirt = bad).

Douglas introduces the concept of matter out of place, which is a conceptualization of the ways in which we interpret the things we are exposed to and the understanding of where they belong. The hotdog belongs in your hand and not on your shirt. Therefore, when the matter of the hotdog is on your shirt, it transforms its qualities from being a hotdog to being dirt. It’s matter out of place.

Tongue in the anthropological cheek, I find it interesting to ask the business ethics community: What if the same goes for business ethics? What if all the things we consider unethical are merely not conforming to an idea we share within our culture of what is right and what is wrong? What I the logic governing the notion of say, e.g. bribery is similar to the notion of food and dirt: gifts in a local cultural system = good, gifts in a business relation = bad?

And if we try to conceptualize business ethics in this way – what does that do to our understanding of unethical practice? Would that be a move towards moral relativism? Or merely an attempt open up for a more nuanced approach to business ethics where we can also explore the ethical actions that companies take which do not conform to our (Western) understandings of rights and wrongs? Would that dilute the ethical principles of corporations? Or would it break a Western ethical hegemony? Is unethical behavior really just matter out of place? And lastly, is such an approach even manageable for corporations on a practical level?

I don’t know. But I will surely think about it some more.


Anna Kirkebæk Gosovic is PhD student at the Department for Management, Society and Communication at Copenhagen Business School. She is working on how to ensure ethical standards within a multinational pharmaceutical corporation.
Pic by Pixabay

Are you choosing what you really want?

By Jan Michael Bauer.

The value of individual freedom is rarely disputed within the Western society. However, more freedom is usually accompanied with making more choices, which might not be beneficial to everyone. For instance, the act of choosing itself can be burdensome, particularly when choices are complex and we face a large number of options. More importantly, can we trust that our own decisions are a true reflection of what we really want, if we accept the reality of our cognitive limitations and a manipulative environment?

Our economic system and democracy are both based on the principle that people know what is best for them and their decisions speak through their purchases in stores and their votes at the ballot box. This principle is also at the core of the neo-classical economic model that dominated the field over most of the 20th century. The underlying assumption is that people’s actions within the market place are the result of a well-considered reflection about the best use of limited resources to maximize their own well-being.

Even though this assumption sounds intuitive, it should be no news to most people that we not always act in our own best interest. Too familiar is the feeling of regret about drinking a glass too much on the night before, eating that second piece of chocolate cake or procrastinating instead of getting started with something unpleasant but important. This reality about human decision-making has entered the field of economics over the last decades, acknowledging that people are neither all-knowing nor perfect calculators and that their decisions are influenced by their feelings, worries and believes that not always accurately reflect objective realities.

Predictably irrational

It is now well-established in economics that people sometimes behave in a seemingly irrational way and that these deviations from the rational choice are systematic and therefore predictable. For instance, people are more likely to pay a bill on time if they fear a late fee, rather than the prospect of an early payer discount of similar monetary value. A simple change in the wording of two mathematically similar choices does influence our decisions. Such biases can often be explained by the so-called dual process theory and attributed to people’s limited cognitive resources resulting in an inability of carefully evaluating each of our decisions in daily life.

Most people are unaware that their choices are subject to such systematic irrationalities, but given the sound scientific evidence, we can be quite certain that people are often myopic, overconfident, or loss avers – just to name a few from a much longer list. Even when confronted with these scientific insights, it is not easy to accept that we have such biases which deem us irrational. This is however important as these biases are not only in the way of our long-term well-being, but make us susceptible to manipulation. If the way a choice is presented to us affects our decision, the person deciding the way of presentation (sometimes named choice architect) has the ability to influence our choice.

Phishing for Phools

If we accept that people are susceptible to influence, tend to make bad decisions under stress, and can be fooled, we might not be surprised that some people aim to exploit those weaknesses to make profits. A notion highlighted by “Phishing for Phools”, a recent book by Nobel Prize-winning Economists George Akerlof and Robert Shiller. They argue that the free market, despite all its contribution to today’s prosperity, is a place for profit oriented individuals to fish for fools and where those prevail who capitalize best on exploiting human weaknesses. Food choices are an excellent example where companies try to seduce us with their tempting products and benefit from our failure to stick to a healthier diet. Fishing in the political landscape might not be much different from the market place. With the additional help of technology, marketers and campaign managers can make increasingly use of behavioural insights to promote their product or candidate.

What can be done?

Therefore, it is essential that people obtain a deeper understanding of their own psychological weaknesses and receive guidance how and when we are most likely to be manipulable. Even though it is impossible to be constantly aware of all the hooks surrounding us, education about our cognitive biases might help avoiding at least some of them in the market place (e.g. by reading Dan Ariely’s work).

Additionally, about 180 governments worldwide, the European Union and many international organizations enrich regulation with behaviour insights by acknowledging the multiple caveats of human decision-making. Behaviorally informed policy aims to create a choice architecture where people naturally gravitate towards decisions most likely in their own long-term interest. Working as a counterforce against commercial influence, regulation can also help consumers to make informed decisions by mandating the disclosure of important information presented in a simple and meaningful way.

Designing such policies, however, requires a detailed understanding of the relevant processes involved into human decision-making. As part of the EU research project Nudge-it, we aim to increase the knowledge specifically about food choice, which might translate into novel policy tools and help tackling the obesity epidemic.


Jan is assistant professor at the CBS Department of Management, Society and Communication. His main research interests are in the fields of health economics and consumer behaviour. As part of the Nudge-it Project, he currently focuses on decision-making and fostering healthier food choices.

Pic by Windell Oskay, Flickr

Business integrity, ideas and developments in the ASEAN way

By Luisa Murphy.

As a former employee of the United States Department of Justice Antitrust Division, I worked on corruption cases involving companies accused of both collusion and bribery. However, when these cases crossed borders, enforcement of US laws became particularly challenging. It also raised questions about the relevance of US Federal laws in regions of the globe such as Asia where different ‘national business systems’ (Witt & Redding, 2014) prevail. Today, through my PhD studies on the institutionalization of CSR, I find myself considering some of these same questions informed from the vantage point of the Association of Southeast Asian Nations (ASEAN).

Corruption in ASEAN

As with other areas, the ASEAN region has not been immune to the effects of corruption involving national, regional and transnational actors. One need look no further than the recent UK Rolls-Royce bribery scandal (which was settled for £671m) and moreover, implicated Thai Airways for taking bribes. The front page scandal involving the discovery of $1 billion dollars in Malaysian Prime Minister Najib Razak’s personal bank accounts which was allegedly taken from the state investment fund 1MDB has also directed attention to the region.

Thus, it is no secret then that the ASEAN region, in common with others around the globe, suffers from corruption issues and that this presents a major challenge to its socio-economic development. For instance, in 2015, Transparency International reported that ‘rampant corruption across the region threatens to derail plans for economic integration’ (Transparency International, 2015), while 7 out of 10 countries in ASEAN ranked 40 or under (100 is a perfect score) in Transparency International’s 2016 Corruption Perceptions Index. As a result, international, regional and national organizations have rallied together to confront these issues. And although the region still may be experimenting with different approaches, there appear to be a few distinctive ASEAN strategies which are taking hold and may very well, provide informative lessons for the future. A recent conference in Singapore organized by the ASEAN CSR network (a regional hub and leader on CSR issues which connects international, regional and national networks), brought a few takeaways to the forefront.

Triggering business integrity

Elements of hard law may be an important tool in inducing adherence to international soft-law frameworks such as the United Nations Global Compact (UNGC)’s 10th principle on Anti-Corruption, Goal 16.5 of the 2030 Agenda for Sustainable Development and the ISO37001 anti-bribery management system among others. For instance, one company executive who participated in the Singapore conference captured the applicability of hard law enforcement approaches in relation to other CSR issues e.g. health and safety standards, by noting that workers in one country in the region didn’t take compliance seriously until they were fired for not wearing safety hats. This resulted in ‘triggering’ compliance with health and safety standards thereafter. In the case of Singapore, prohibitions such as littering in public places, jaywalking or chewing gum on the street have been particularly effective in engendering behaviors which need not be enforced in the long-run. Thus, an approach which utilizes elements of hard law in conjunction with binding international frameworks such as United Nations Convention against Corruption and the UK Bribery Act as well as regional frameworks (e.g. ASEAN 2020) may be an effective means to trigger adherence to soft law frameworks in the future.

Culture as an opportunity and not an excuse   

Corruption is not necessarily an ASEAN region cultural problem per se and certainly many positive aspects of the regional culture can be harnessed to fight corruption. While gift giving in the form of bribes may have previously been (or in some cases currently) is a ‘cultural norm’, it can also be argued that many companies operate with a spirit of business integrity. Although, it would be naive to say that the ethos of business integrity is inherent in every company, behavior and culture are different, and issues of corruption may be related to governance issues or other factors rather than ‘culture´ itself. Notwithstanding this, cultural norms such as the fear of ‘losing face’ have reportedly been successfully employed in efforts to pressure CEOs into implementing anti-corruption initiatives. The Thai Collective Action Coalition (CAC) is one such example of a private-sector initiative which has been particularly successful in combating corruption in Thailand, perhaps because it reportedly operates with a mindset which utilizes international frameworks such as Transparency International’s UK (TI-UK) Adequate Procedures Checklist while tapping into ASEAN cultural norms of e.g. ‘losing face’ to ensure that Thai CEOs join the initiative. Therefore, energies in the future might focus on norms which are counter to corruption rather than daunting conceptualizations of assumed ‘cultures’ of corruption.

Youth and SMEs as engines of business integrity

Finally, approaches to combating corruption are increasingly focusing on youth and SMEs and using them as indicators for progress on the issue. In the ASEAN context, this has meant mobilizing and providing resources which can contribute to business integrity among the youth population and also small and medium- sized enterprises (SMEs). While this may seem like a ‘no brainer,’ ASEAN countries and international organizations are still clarifying their approaches. For instance, whether there will be enough ‘trickle-down’ from top-down approaches which deliver e.g. training via multinational corporations (MNCs) or whether a bottom-up approach is necessary is still being debated. Moreover, while the youth of many ASEAN countries have good intentions, they are often derailed due to economic or familial concerns. For instance, a 2014 Transparency International report indicated that while honesty is more important than wealth to 94% of the youth in Vietnam, 41% are “willing to lie for the sake of family income or loyalty to family.’ (Transparency International, 2014). Despite these figures, we should remain optimistic given the integration of youth into CSR activities and the overall focus on reaching SMEs in the region (topics for another blog).

In conclusion, only time will tell how ASEAN triggers business integrity, uses culture as an opportunity and mobilizes youth and SMEs in the battle against corruption. I, for one, see promise in these developments and ideas which might just become part of the ASEAN way.


Luisa Murphy is PhD Fellow at Copenhagen Business School and supported by the VELUX Endowed Chair in Corporate Sustainability. Her research examines the governance of corporate social responsibility. She brings a human rights and business background from the University of Oxford and legal experience from the Antitrust Division of the United States Department of Justice.

Pic by  Transparency International Indonesia

How is Ayn Rand still a thing? From ridicule to serious concern

By Steen Vallentin.

A recent article in The Washington Post informs us that Donald Trump is affectionate about the works of Ayn Rand (1905-1982), often referred to as the ‘high priestess of selfishness’. He shares this affection with several of his members of cabinet. These include Rex Tillerson, Secretary of State, Andy Puzder, Secretary of Labor, and Mike Pompeo, Director of the CIA. The speaker of the House, Paul Ryan, has also been an outspoken supporter of Rand, although he has recently distanced himself from her philosophy, citing its atheism as a fundamental concern (Rand famously viewed altruism as an evil form of self-sacrifice, and thus spoke against Christian values of giving and regard for others).

Trump has said that he identifies with Howard Roark, the main protagonist of Rand’s The Fountainhead, while Tillerson has listed Atlas Shrugged, Rand’s magnum opus, as his favorite book. The Fountainhead was made into a Hollywood movie in 1949, starring Gary Cooper as Roark, and this can of course lead one to speculate whether the president actually read the book or ‘just saw the movie’. This brand of speculation would, however, be typical of a tendency to ridicule rather than take Rand’s philosophy, its continued popularity and the influence it continues to have on the rich and the powerful seriously.

To name but a few examples of the ridicule: In 2009, the animated TV show The Simpsons had Lisa Simpson comment to her mother about The Fountainhead: “isn’t that the bible of right-wing losers?” In 2012, president Obama commented that Rand’s work is something that is picked up by teenagers that are “feeling mistunderstood”, and Last Week Tonight with John Oliver in 2014 dedicated a dismissive installment of “How is this still a thing?” to Rand’s work.

In popular treatments of her philosophy and the cult of personality that surrounded her, notions of ‘selfishness’, ‘greed’ and ‘objectivism’ are thrown around, but rarely with much argumentative depth. In scholarly circles, her work is often rejected as overly politicized ‘bad philosophy’, full of logical fallacies (and false distinctions), failing to constitute a coherent and closed system of thought (in spite of such pretense), and thus not deserving of more serious engagement. The literary form she uses in her major philosophical works also does not count in her favor among scholars. It can easily be dismissed as philosophical pulp fiction.

What I want to question here, however, is whether or how Rand’s work is deserving of more serious critical attention and treatment by those who are opposed to it. The idea is not to offer support or claim neutrality, but to lay bare the arguments presented in order to better understand and challenge their continued allure. In other words, Rand’s thinking continues to be an ideological force to be reckoned with, and we need to understand why and how it influences people, not least those in power.

Importantly, following Boltanski & Chiapello, the term ‘ideology’ should not be construed in the reductionist sense often suggested by Marxist uses, e.g., as a moralizing discourse intended to conceal material interests and constantly contradicted by practice, but rather as shared beliefs that are bound up with actions and hence anchored in reality. In other words, ideology must be considered as a practical concern with real effects (however loosely coupled with ideological precepts), not just as a mask veiling reality, a mode of deception or a sham.

Admittedly, Rand’s thinking is a hostile world to enter for non-believers. There are a number of reasons for this (apart from the endurance required to get through the 1100+ dogma-soaked pages of Atlas Shrugged). Objectivism is a closed philosophy, related to her mind’s work and reflecting her ideal world, a world that is often far removed from most people’s experience of the modern world. In spite of strong objectivist claims regarding Man’s mind and its relation to reality, her loyal followers often tend to ignore the obvious and to misrepresent reality when defending objectivist dogma. Objectivism is often associated with extreme/far-right political views, self-consciously flying in the face of political correctness and common morality and peddling the same sort of dystopian and polarizing view of the deterioration of American society that Trump campaigned on. However, the real ‘truth’ of Rand’s philosophy is to be found in her work, not in how various minions choose to carry her torch.

In Atlas Shrugged (1957), she creates a world in which industrialists, i.e., the prime movers, the makers, the traders, constitute a morally superior class of people. Opposed to these are the second handers, the takers, the looters, moochers, rotters of society. The industrialists represent everything that is good and capitalism everything that is proper in this world, but successful business people and proper market principles are persecuted by forces of envy and mediocrity operating under the flag of social responsibility. In Rand’s world, social responsibility is nothing but a battle cry for politically correct, collectivist-egalitarian and ultimately totalitarian schemes that are meant to keep great business people down by means of government interference and regulation. It is the way of the loser, who cannot make it in a man’s game of real market competition and who cannot cope with the innovative brilliance of the chosen few. Social responsibility and social welfare and progress are promoted by morally corrupt, hateful and obviously inferior people, whose actions are bereft of proper reason and any meaningful relation to reality.

In her depiction of an America that is falling apart due to lack of reason and totalitarianism, (and which in many ways more resembles her native Russia), Rand provides scathing critiques of the corrupted – and corrupting – forces of politics, government bureaucracy, science and media, the tyranny of public opinion and the lack of reason among the common people. Opposed to all this rot stands capitalism. To Rand, and her followers, capitalism pure and unadulterated is the solution to all imaginable ills of society. She offers a philosophy according to which selfishness and greed are virtues and nobody should ever feel ashamed about being successful.

We do not have to accept the claims of Rand’s philosophy or to sympathize with its underlying ideology to acknowledge that her dystopian world view has some resonance in regard to emla what we are living through right now. Besides, there is the matter of the continued influence of her thinking on the rich and the powerful. Atlas Shrugged portrays business people (the right kind) as innocent and by and large powerless victims of persecution and scapegoating perpetrated by a list of shameful characters ranging from government bureaucrats to spouses and family members. For one of the more extreme expressions of this message we can turn to a 1962 lecture where she asserted that: “In Soviet Russia, the scapegoat was the bourgeoisie; in Nazi Germany it was the Jewish people; in America, it is the businessman” (quoted in Weiss, p. 53).

It is interesting how this perplexing narrative of persecution apparently continues to inspire extremely rich and successful people (the 1%) – in spite of all their success and all their well-documented power, and the fact that the societal view of business people and business as an institution has changed dramatically since Rand wrote her book.

In sum, Rand’s thinking is probably more a part of the problem than the solution to many of the crises we are facing, but it nevertheless call for more serious engagement – even by those radically opposed to her extreme view of the virtues of capitalism and everything that stands in its way. As the saying goes: keep your enemies closer …


Steen Vallentin is Director of the CBS Centre for Corporate Social Responsibility (cbsCSR) and Associate Professor in the Department of Management, Society and Communication at Copenhagen Business School.

Pic of Rand by David Seaton, edited by BOS.

The Task At Hand: Facing a Trump America

The following post by American CBS MBA student Wynne Lewis is an accompanying piece she wrote recently for the Financial Times’ MBA Blog.

Titled “Case for responsible business post Trump and Brexit shocks“, Wynne spoke to the shocks of the recent inauguration of Mr. Trump in the U.S. and the vote for Brexit in the UK. She argues that these events are creating many setbacks to the strides we have taken recently in favour of human rights and combating climate change. But they are also catalysts for positive change for the individuals who are fired up and ready to go stand up for what matters most – for example by contributing to a more sustainable economy by founding your own venture.

Read the full post on the FT MBA Blog.

In her latest piece on the CBS MBA blog, she now offers a little bit of inspiration to get you started with making a change.


By Wynne Lewis.

As Eleanor Roosevelt once said,

“You gain strength, courage, and confidence by every experience in which you really stop to look fear in the face. You must do the thing you think you cannot do.”

We fear regression, but there is much we can do.

I spoke with my classmates (representative of countries from all around the world), my professors, and visiting speakers and here is a little bit of inspiration to get you started.

For Employers / Employees:

  • Recognise the power of business. Do not be ignorant to your own influence. There is no such thing as an a-political corporation in the polarised climate under which we are operating today. Every decision must be intentional.
  • Create meaningful working class jobs. If your consumers are voting pro-nationalism, are they willing to pay a higher price for locally sourced products? Can you source your products or raw materials locally? Can you conduct market research to prove your case to investors? There may even be a risk management case to make for keeping the supply chain close for better transparency.
  • Treat your employees with respect and invest in their development. Look at the most recently hired/promoted people at your company. Are they a diverse group? Are you promoting from within? If not, chances are good that some of your talent is falling through the cracks or not being developed. It may not be intentional, but you can become aware of it and take strides to be sure you are capitalizing on your best resource – your employees.
  • If you have employees who may feel marginalised or unsafe in the current social climate sparked by the election, reach out and check-in with them. Do they feel safe in their commute to work? (This has been very relevant for many of my friends living in New York, so it is worth asking.) Is there anything you can do to help? Has the office climate changed at all for them? It is important that they are able to focus on doing a good job without feeling marginalised or harassed at work. Keep tabs on this. If handled with care, you will foster the establishment of a strong working environment and retain your talented minority (women included) workers.
  • Look for business opportunities. What was the change you were hoping for? Is there a gap in products/services today and the products/services we need to achieve that change? Your next great venture may just be hidden in the void.

You will know best how these things must ultimately align with a clear business case appropriate for your company, but it is important to point out those business practices that shape our countries, our politics, and ultimately our societies.

For Investors:

  • Divest from energy companies who are not investing in the future. Oil is booming right now with the recent elections, but the future will hold a diverse portfolio of energy sources. Companies who are only focused on fossil fuels are resisting innovation.
  • Be an active voter in the companies you invest in. If you hold stocks in companies that are doing things that you do not support – underpaying workers, polluting, vocalising racist sentiment – use your voice as a shareholder to change things. Be active and let them know that as an owner you do not support the way they are operating the business. Chances are high, you are not alone. Get other investors involved.
  • Invest in companies that are good for people, planet, and profit. There are many resources for those interested in impact investing. Read up and put your money where your values are.

On the personal side: invest in values you care about. Whatever they are, donate your time or money to the things that matter most. Create the world you want to live in and that you want your children to live in. Consider it a long-term investment.

The most important thing ultimately is to do something. So get out there, and be active.

Have some great ideas? Please add a comment below.


Based in New York, Wynne is currently enrolled as an MBA student at Copenhagen Business School. She was attracted to the Copenhagen MBA for its strong focus on Responsible Management and the promise of a global classroom. Post-MBA, she is toying with the idea of starting her own venture. She is a blogger for the Financial Times MBA blog, where she hopes to tell the story of what really powers her passion for Responsible Management on the far-reaching global business platform that is the Financial Times.

Pic by Pexels

Digitally Dominant Corporations

By Glen Whelan.

On Friday the 26th of January, Denmark’s foreign minister Anders Samuelsen announced that Denmark is to appoint the world’s first ‘digital ambassador’. In an interview with Politiken, and as reported by The Local, Samuelsen explained the decision by noting that digitally dominant “companies like Google, Apple and Microsoft ‘affect Denmark just as much as entire countries… These companies have become a type of new nation… and we need to confront that’”. Whilst Samuelsen was careful to note that Denmark “‘will of course maintain our old way of thinking in which we foster our relationships with other countries’”, he emphasized that “‘we simply need to have closer ties to some of the companies that affect us’”.

A Contentious Trend

Whilst Denmark appears to be the first country to so formalize relations with digitally dominant corporations, the conceiving of corporations as being state like is not particularly new. In 2016, for example, Foreign Policy magazine named Google as its ‘Diplomat of the Year’ due to its “digital diplomacy” and its “empowering citizens globally”. And approximately ten years prior to this, there was a spate of works suggesting that multinational corporations were beginning to take on increasingly state like responsibilities for individual citizenship rights, and that it was multinational corporations that were the new Leviathans of our time.

This trend to conceive of states and corporations as being on something like an equal footing, however, has often been criticized. Forbes contributor Emma Woollacott, or example, chastised Samuelsen for implying that if an organization amasses enough money, then it can “get a government to give… [it] not only special attention but a unique political status”. She thus suggested that whilst “appointing a senior official tasked with negotiating with tech companies makes a lot of sense, equating those companies with nations sets a rather worrying precedent”. In echoing what is now the decade old claim that corporations would likely seek protection “against arbitrary interference and expropriation by governments” for taking on ‘governmental’ responsibilities, Woollacott worries that equating corporations with governments will simply increase the power the former have over the latter.

A Symbolic Turn

In contrast to such normative concerns, Copenhagen University’s Martin Marcussen suggests that the Danish government’s planned appointment of the world’s first digital ambassador will be little more than symbolic. According to his understanding of the Foreign Ministry, “the ambassador will get an office, practically consisting solely of that individual. He or she will… be able to travel around, but it’s just one person, so one can’t expect too much’”.

In and of itself, this statement is difficult to argue with. Nevertheless, it risks obscuring the digital ambassador announcement’s important, albeit largely implicit, suggestion, that it is not corporate power in general that we need to be wary of, but the power of high-tech digital corporations in particular. The first point to take away from recent developments, then, is that the Danish government’s recognition that digitally dominant corporations have a significant impact on the life of Danish (and other) citizens is well founded.

The second and more important point to take away, however, is that we risk misunderstanding the uniqueness of such impacts by trying to conceive of digitally dominant corporations as governments, or by conceiving of their unique political status as arising once governments recognize them as ‘equals’. Indeed, the unique political importance of such digitally dominant corporations is clearly diminished by such an equating.

In other words, when we equate digitally dominant corporations with governments, it tends to take attention away from the fundamental, multitudinous, and technologically informed, ways, in which they (indirectly) shape what we consume, discover, experience, forget, and remember, on a daily basis. If Denmark’s digital ambassador announcement helps us recognize as such, then it will prove to be a very good thing.


Glen Whelan is Governing Responsible Business Fellow at Copenhagen Business School and Social Media Editor for the Journal of Business Ethics. He’s on twitter @grwhelan and @jbusinessethics.

Pic by cea +, Flickr, edited by BOS

Trumpism: On the road to state capture?

By Hans Krause Hansen

The inauguration of Donald Trump as President of the U.S. has caused widespread concern. On the long list of worries is Trump’s approach to corruption. With his business empire including hundreds of legal entities across the world, conflicts of interests will pile up.

Corruption is about office holders’ misuse of public office for private or organizational gain, and it has a wide reach. Grand corruption involves the collusion of networks of economic and political elites across national borders. Powerful corporate actors make business deals with political and administrative leaders at various levels, if not directly, then through intermediaries. While always difficult to document due to the secrecy of the deals, we only need to recall the Oil-For-Food and Siemens scandals to confirm that such things indeed take place on a massive scale.

Historically the U.S has suffered from various forms of grand corruption, like any other country. But U.S. governments have also come to play an important role in attempts to curb it. The country pioneered the prohibition of corporate bribery of foreign public officials, and many countries have followed suit. U.S engagement in anti-corruption, and anti-corruption itself, has been subject to controversies. But there is growing acknowledgement across the world of the damaging effects of corruption on economic affairs and trust in political and administrative institutions. Human rights, security and the environment are all affected negatively by corruption.

What are the policies to expect from Trump and his new administration on these matters? Of course we don’t know yet, but there are certainly issues to keep an eye on in time to come.

Conflicts of Interest

During the electoral campaign and as president–elect, Trump waged a war against corruption. Framed in the now well-known Trumpian elite vs. people metaphoric, its primary target was the Washington establishment.

But there are good reasons why Trump better begin to clean up his own house. Just before inauguration Trump explained his plan for how to separate his business empire from the work to be undertaken from the Oval Office. His decision not to create a blind trust for his assets, as well as the appointment of his closest relatives to run the Trump Organization instead of an independent board have been met with widespread suspicion Even from those who speculate it’s unfair that entrepreneurs involved in public life can ultimately be required to liquidate their business have lamented the absence of arms length.

So too has the general lack of transparency in Trump’s tax returns. Two days after his inauguration, WikiLeaks tweeted that “Trump’s breach of promise over the release of his tax returns is even more gratuitous than Clinton concealing her Goldman Sachs transcripts.” The organization has called for someone to blow the whistle.

Walter M. Shaub, Director of the U.S. Office of Government Ethics has stated that Trump’s plan for avoiding conflicts of interest “does not comport with the tradition of our Presidents over the past 40 years.” Since the Watergate scandal, maintaining business while in office has been seen as ethically irresponsible and against the law. Moreover, it sets a very bad example: “The signal a President sends set the tone for ethics across the executive branch. Tone from the top matters.”

Following his statements, Shaub was called to testify before lawmakers in the House of Representatives, a step seen by many as a threat to his office.

The Emoluments Clause

With his family running the business empire, the President will of course be able to interfere directly in it. But he can also come under unduly influence of foreign powers, some of whom may already be enmeshed in it.

But the U.S. Constitution, as well as federal statutes that address nepotism, bribery and so on, forbid office holders to accept presents and other services from foreign powers. Legal scholars have discussed why and how in a recent study of the so-called Emoluments Clause of the U.S. Constitution. While many transactions between the Trump empire and foreign powers will probably not involve “actual impropriety”, it is “a virtual certainty that many would create the risk of divided or blurred loyalties that the Clause was enacted to prohibit.” In a situation “when there is overwhelming evidence that a foreign power has indeed meddled in our political system, adherence to the strict prohibition on foreign government presents and emoluments ‘of any kind whatever’ is even more important for our national security and independence.”

State capture

So the fear is not only that Trump’s business liabilities may affect how he deals with the banks to whom he owes hundreds of millions of dollars in debts, but also how he will approach foreign countries that become business partners or seek special favors. Worst case, Trump’s presidency may lapse into state capture, a term referring to the systemic corruption of business and politics relations. Individuals, organizations and interest groups, domestic or foreign, can come to have disproportionate influence over policies and regulations emanating from the Oval Office and the administration.

Tools for state capture include the buying of laws and decrees, illicit or disproportionate contributions to political parties and groups, manipulation with electoral processes, illegitimate lobbying and revolving door commitments, and not least, through friendship, family ties and intertwined ownership of economic assets. State capture has many facets. It is often related to the illicit financial flows characterizing particular industrial sectors with profound economic and political power asymmetries. Some sectors are high risk, such as the extractive industries.

State capture and its associated processes of favoritism, bribery and blackmailing will need much more attention in the future. Especially the recent mobilization of digital technologies, hacktivism and cyber wars in the election of Trump draw attention to the increasing sophistication of the tools being used. The unknowns of Trump’s business ties to geopolitical adversaries and allies across the globe, together with the skillful use of digital technologies to manipulate global publics, will hopefully prompt investigative journalists and researchers to scrutinize what is going on and what to do.

Adiós FCPA?

A final set of speculations focuses on Trump’s stance towards the U.S. Foreign Corrupt Practices Act (FCPA), a legal cornerstone in the history of international anti-corruption. The FCPA was signed into law in 1977 after the Watergate scandal. It has extraterritorial reach and prohibits U.S. corporations from bribing officials of foreign governments in order to obtain business. The FCPA has inspired legal initiatives elsewhere, including the recent U.K. Bribery Act and important international anti-corruption conventions under the auspices of the OECD and UN, amongst others. Anti-corruption efforts by the World Bank and the International Monetary Fund all echo various aspects of the pioneering FCPA, all of which tie into the much broader work of the world’s leading civil society organization on anti-corruption, Transparency International.

Since 2004, U.S Authorities have scaled up FCPA enforcement, targeting U.S companies and foreign companies. The FCPA is one of the key reference points for the increasing development and implementation of corporate compliance programs in multinational companies worldwide.

But will this continue? In 2012 Trump stated that the FCPA is “horrible law and it should be changed”, and also that it puts U.S. companies at a “huge disadvantage.” That fits with Trump’s preferences for U.S companies winning and his disdain for moral niceties.

However, let’s all take a deep breath when it comes to FCPA enforcement in the Trump Administration, as writes the FCPA Professor, a website that deals extensively with legal issues relating to corruption, anti-corruption and other interesting matters. The fate of the FCPA will depend on the more precise composition of the agencies responsible for the FCPA, bureaucratic inertia and a lot of other priorities. The FCPA Professor further notes there are probably “too many people making lots of money based on the current FCPA enforcement environment for FCPA enforcement to experience a sudden dramatic change.” Anti-corruption has become an industry, a profession, with lawyers, accountants, compliance officers and CSR consultancies making a living by providing expertise. No wonder that corruption has come to be seen as a risk to be managed, even by corporations themselves.

In conclusion, there are many reasons to be worried about what comes next from Trump in matters relating to corruption and anti-corruption. We are indeed in a phase of massive uncertainty and confusion, with unpredictability reigning, also in this area. Notable exceptions in the business of prophecy certainly do come around now and then, but not always for the good.


Hans Krause Hansen is Professor at the Department of Management, Society and Communication, Copenhagen Business School. He teaches and researches about various aspects of public and private governance, including corruption, anti-corruption and transparency regimes in the global North and South.

Pic by Chris Potter, Flickr

Towards More Humanly Sustainable Workplaces

By Dr. Blagoy Blagoev.

There are more and more prominent voices calling for management research and practice to focus on the ‘grand challenges’ faced by society. Undoubtedly, one of those grand challenges most talked about is sustainability. Usually, sustainability is thought about in ecological terms. Indeed, a plethora of well-known issues exist at the interface between business and the natural environment, such as CO2 emissions or water pollution to name but a few. Increasingly, corporations are faced with pressing social demands to manage and organize in sustainable ways in order to prevent such problems from happening in the first place. Yet, another, much less talked about dimension is the human side of sustainability.

Breaking the extra-long hours regime in management consulting

The human side of business sustainability refers us to the problems at the interface between organizations and people, in particular, to the potentially harmful impact certain management practices can have on employees and their families. One, especially harmful development in many workplaces concerns the proliferation of extra-long hours regimes among highly qualified professional and knowledge workers. Many such workers seemingly voluntarily accept to work between 60 and 120 hours a week, remain connected to work through smartphones and laptops, and continue to do so even after experiencing severe work-induced bodily breakdowns. Such ‘extreme’ working time regimes have been shown to be detrimental to both individuals and their organizations: they harm employees’ health, productivity and creativity; reproduce gender inequality; and generate higher employee turnover rates and increasing cost for attracting and retaining highly qualified personnel. In short, in the long term, they create an unsustainable workplace environment. Yet, despite such well-known drawbacks, little progress has been made with dismantling extra-long hours regimes and building more humanly sustainable workplaces. Most work-life balance and family friendliness initiatives do not work.

Extra-long hours regimes persist. Why so?

In my doctoral dissertation, I studied the genesis and historical evolution of an extra-long working hours regime at an elite management consulting firm in Germany in order to answer this question. My empirical investigation demonstrated the historical contingency of the extra-long hours regime: Rather than being pre-given, it only emerged out of a strategic shift at the firm that occurred in the late 1980s. I discovered that the main reason underlying the persistence of long working hours at this firm could be found within the distinct self-reinforcing dynamics triggered by this shift. Over time, these dynamics had constituted and continued to maintain an ecology of complementary and mutually reinforcing management practices, business strategies and cultural norms that were all adjusted to and reinforced the extra-long hours regime. The dynamic spread throughout the entire organization and even beyond: It entangled the consulting firm’s clients too.

The way forward: re-thinking the „work-life balance“ approach

The results of my research imply that the dominant ‘work-life balance’ approach of dealing with such problems of human sustainability needs to be fundamentally reconsidered in at least two ways.

First, building humanly sustainable workplaces is a matter of radical and strategic rather than incremental and operative change. At least in the case of consulting firms, the extra-long working hours pattern cannot be isolated from the plethora of organizational practices, cultural norms and the overarching strategy that have historically co-evolved with it. Simply providing work-life initiatives, such as part-time work of flexible working hours, without attempting to change the entire organizational ecology intertwined with reproducing the extra-long hours regime is not likely to achieve much success. Understanding and breaking the logic of the dynamics that maintain this ecology is crucial for change initiatives to succeed.

Second, and related, we need to widen the traditional focus on internal organizational change. In my research, the dynamics in question went beyond the boundaries of the single firm and entangled client organizations as well. This implies that changing the extra-long working hours regime would also require shifts in the interaction pattern between professional service providers and their clients and the various expectations that structure these interactions.

Key is to change the reproducing dynamics of unsustainable workplaces

Dismantling persistent regimes of extra-long working hours remains one of the key challenges for building humanly sustainable workplaces. Whereas previous research has focuses on criticizing such regimes and suggesting alternatives, we are only now beginning to understand the actual mechanisms that are at work to maintain extra-long working hours. The emergent research findings clearly demonstrate that human sustainability cannot be achieved by providing work-life benefits to compensate for an otherwise humanly unsustainable workplace environment. Rather, the key lies in changing the entire web of interdependent organizational practices, norms and strategies and the dynamics that reproduce such workplace environments.


Blagoy is a post-doctoral scholar at the Department of Management, Freie Universität Berlin, Germany and research fellow at  the Governing Responsible Business Research Environment at Copenhagen Business School, Denmark. In his doctoral thesis, he employed a path-dependence lens to study the mechanisms underlying the persistence of excessive working hours regimes in management consulting firms. His research focuses on overwork in professional service firms, organizational change and persistence, and time and temporality in organizations.

Pic by Quinn Dombrowski, Flickr

The F-Word in Denmark

By Lauren McCarthy.

The proposed subtitle for this blog was ‘Why is it more acceptable to say ‘f**k’ in the classroom than ‘feminist?’’ but I thought it might be a bit too strong for most of your inboxes! But indeed, after some time working here in Copenhagen as an assistant professor, and living as a self-professed feminist, it is a question that has continued to perplex me.

No, the swearing doesn’t bother me, although many non-Danes find the embrace of swearing in the classroom, at work, on the radio and in adverts either hilarious, or offensive (by way of glorious coincidence, see the striking poster from Kvindemuseet (The Women’s Museum). Rather, I have on various occasions been told that using the other ‘f-word’, feminism, is taboo. Especially in the classroom. What’s interesting is that a warning over dropping the f-bomb in front of students usually comes from older friends and colleagues, both men and women. Don’t get me wrong, I’m not walking into a lecture theatre ranting about women’s rights, when what is scheduled is a session on corporate governance. But I AM researching and teaching about corporate social responsibility and sustainability, both topics that are inherently gendered and political. Sometimes it makes sense to mention the dreaded F-word in those contexts. And I think the fear of feminism as something we might talk about in business education comes from two places: a misunderstanding of what feminism is; and perhaps complacency about its need in modern Denmark.

Everyday Feminism

The word ‘feminism’ often provokes expressions of mild horror. It conjures up grainy photos from the 1970s of women, living au natural in communes, ‘hating men’ (as one of my students put it). Others have suggested that being feminist involves rejecting high-heels, or make-up, or the desire to be a mother. When you put all that together (witchy, bra-less, slightly-wild single woman in a homemade dress?) I’ve no wonder my sessions on feminist theory might sound alarming!

For many people worldwide, this stereotype persists. Yet if we tone-down this characterisation, at it’s most basic, feminism is the fight for human beings to live their lives without their gender or sex hindering them from achieving what they wish to. This fight is hundreds of years old. Feminism is political, economic and social. It involves governments, international organisations, businesses, NGOs, and most crucially ‘normal’ people going about their everyday business: calling out that off-colour joke at lunch; tweeting about overly sexualised advertising; writing about online abuse or raising their children unconfined to gender roles. And yes, all whilst wearing make-up, or getting married, or being a feminist man- if one chooses to.

A feminist utopia?

So that’s my take on feminism. Perhaps my surprise at the rejection of feminism was because I assumed that in one of the world’s most gender equitable countries everyone would be a feminist. But perhaps because Denmark is perceived in this way, the need for feminism appears to be over. Unfortunately this doesn’t quite seem to be the case.

Last week Denmark fell another four places down the World Economic Forum’s Global Gender Gapratings, from 14th to 19th place. Sweden, Finland, Norway and Iceland take the top four places, but their Nordic neighbour Denmark continues to lag behind. In 2014 an EU survey revealed that Denmark has amongst the highest prevalence of domestic violence within the EU. Yet these surveys reveal only part of the story. The fantastic Everyday Sexism Denmark post testimonies from women experiencing (you guessed it) everyday sexism, often in their workplace or school. All of this suggests that whilst on paper things often look good for women (for example, in excellent parental leave policies, and a growing number of women in senior roles), the reality is that men and women are often held to differing standards, and that this become so normalised, so ingrained, that we might assume everything is fine. Activists such as Emma Holten are pointing out that things aren’t equal, or equitable, and that perhaps Denmark has become disillusioned in this regard: “Our idea that everything is great and fine in terms of human rights and respectful discourse is actively combating our ability to progress in these areas.”

The feminist future

Emma Holten is symbolic of young Danish feminists using their own experiences, often with wit and humour, to reignite a conversation about gender equality. Slowly there’s been a resurgence in feminism in the last few years (albeit a lot slower than in the UK and USA), facilitated by social media. Facebook pages and Twitter accounts such as Everyday SexismOverheard Sexism in DenmarkYoung Feministsand others collect thousands of likes, post and shares. I’m happy to report that closer to home Copenhagen Business School now has a feminist society enthusiastically run by students. Online lives spill into our offline lives, and within my classroom there is a genuine interest in discussing the role of feminism today- in politics, in the media and in business.

Feminist responsible business education

Some might argue we need a new term for the fight for gender equality, or that feminism excludes other, equally important social injustices. But the F-Word isn’t going away, it’s getting louder. Feminist theory offers lenses into understanding how social change happens, and continues to happen. The history of feminist activism demonstrates the politics of the everyday. And feminism is a living, breathing phenomenon that is being adopted once again- by people as diverse as Beyonce, Ban Ki Moon and Muhtar Kent (CEO of Coca-Cola). What does it mean when these people use the word? What does it mean for business? For feminism? If we’re going to teach and research how we might lead, manage and create responsible businesses, let’s throw out the stereotypes and explore modern feminism in 2016.


Lauren McCarthy is Assistant Professor of Sustainability and Governance in the Centre for Corporate Social Responsibility, Copenhagen Business School. She researches and teaches about gender and CSR in organisations and their global value chains. She is currently exploring online feminist activism in the UK. You can follow her updates @genderCSR .

Pic by kvindemuseet.

On CSR in ship recycling and textile sector supply chain management

By Karin Buhmann.

Dansk version nedenfor/Danish version below

Over the past weeks, news has emerged that Maersk, the world’s largest shipping company, which is based in Denmark, is having some of its container ships scrapped (cut up for materials to be recycled) under sub-standard conditions at beaches in India and Bangladesh. While Danish media have paid considerable attention to this and investors are asking critical questions of Maersk’s alignment between its CSR policies and practices, much less attention was paid to a case of severe critique of a Danish textile company that sourced from a supplier in the Rana Plaza building around the time of the building’s collapse.

What do these two cases have in common? More than one might expect, judging from the way they have been treated by media and business association statements. This applies with regard to business practices as well as research. But whereas one company’s understanding of due diligence appears very weak, the other displays a due diligence understanding that holds bigger promise for the longer term.

Company challenges in relation to risk-based due diligence

Both cases concern businesses’ exercise of risk-based due diligence. This is a process for businesses to avoid causing social or environmental harm. According to OECD’s Guidelines for Multinational Enterprises, enterprises should carry out due diligence to identify, prevent and mitigate actual and potential adverse impacts on human rights, industrial issues including labour standards, the environment etc. Enterprises should also carry out due diligence in relation to their suppliers and other business relations, to seek to prevent or mitigate adverse impact that is directly linked to their operations, products or services. This applies to yards scrapping ships as well as factories sewing clothing to be sold in stores in Denmark or elsewhere.

The Maersk case is an example of company that has problems walking its own CSR talk. But it is also an example of a company that has paid attention to the risks caused by its decision to scrap ships in India and taken certain steps to prevent such damage from occurring, suggesting due diligence has been exercised to a certain extent. However, the information that has emerged in recent weeks suggests that the due diligence process has not been adequately carried through from beginning to end of the activity in question. The textile case concerns a company that did not adequately carry out core due diligence elements in regard to its supplier in Bangladesh, where the prevalence of severe building safety issues was well-known already prior to the Rana Plaza collapse.

NCP: severe critique of Danish textile producer sourcing from Rana Plaza 

On October 17, 2016, the Danish National Contact Point (NCP) under OECD’s Guidelines issued a statement following a complaint concerning the practices of a Danish textile company in relation to, amongst others, occupational health and safety standards at the supplier in Rana Plaza. The NCP statement severely criticized the due diligence processes of the Danish company. Amongst others, the statement noted that the company neglected to make adequate requirements of the supplier in relation to a CSR policy; neglected to require the supplier to perform self-evaluation; and neglected to monitor and follow up on such self-evaluations.

This is the first time not only in Denmark but internationally that a public institution with expertise in CSR states specific critique of the due diligence processes of a company supplying from Rana Plaza. In view of the large number of casualties resulting from the collapse on 24 April 2013 and the subsequent attention that the tragedy has generated with media and consumers, one wonders why the critique of the Danish company has received such limited attention.

Press releases from business associations and the organization that lodged the complaint have highlighted the fact that the NCP did not pronounce the company accountable for the collapse (in some cases mistakenly communicated as ‘liability’ rather than accountability). Notwithstanding that the NCP’s powers do not enable it to attribute legal liability and the fact that the NCP made its assessment on the basis of documentation that it has been presented with or was able to investigate, that part of the statement has been allowed to dominate. The critique and the lessons on the importance of due diligence that the statement holds for Danish (and other) companies has received much less attention. Apart from the critique of the specific company, the NCP statement also underscores that it follows from OECD’s Guidelines that companies should require suppliers to protect their employees’ occupational health and safety, and that this responsibility today includes risk assessment in relation to building safety and integrity. From a research perspective it is surprising that business associations, despite differences in the way they have covered the issue, have not make more of an effort to explain the significance to their members.

Complexity and context

Ensuring responsible business conduct in chains of business relations is often complex. Turning talk (or policies) into walk (or practice) is frequently challenging in view of the conditions in some of the countries from which Danish companies supply textiles, or where ships are scrapped. Poverty and local socio-economic conditions lead to employees accepting salaries and working condition far below international standards. Unfortunately, these problems are rarely solved overnight. Implementing norms for occupational health and safety does not just require the relevant rules to be in place, but also that they are communicated and explained to employees and managers, and that qualified training and monitoring takes place. Changing dangerous working methods or buildings requires not just investment, but also time and attention. And as in other fields, perfection requires practice.

Outlook

Maersk has a CSR problem because its ship scrapping practices are not in accordance with the company’s own standards. Yet, Maersk has also demonstrated awareness of risks. When Maersk decided to have ships scrapped at the Alang beach in India, it was also decided to take on three employees to monitor the observance of Maersk’s standards. This suggests a degree of due diligence.  However, due diligence is a continuous process. The Alang-case demonstrates that having employees in place to monitor observance of standards is not sufficient, if this is not followed by processes to ensure that the monitoring identifies the problems it is intended to find. The related case of ships previously owned by Maersk now being scrapped on beaches in Bangladesh demonstrates the significance of also incorporating risk-based due diligence in relation to economic stipulations incorporated into contracts.  However, the Maersk case also offers an example of a company that is working on practicing to walk its talk. The commitment to improve and to internal learning expressed by Maersk in follow-up to the media reports and investor critique raises more hope for the implementation of due diligence than does the reception of the critique of the textile company.


Om samfundsansvar i skibsophugning, tekstilsektoren, og om at tage ansvar alvorligt og øve sig

I ugen med efterårsferien meldte investorer sig med spørgsmål om ophugningen af udtjente Mærsk-skibe på strande i Indien og Bangladesh, og mediernes interesse for sagen fortsatte. Derimod fik en alvorlig kritik, som er blevet udtalt over en dansk tekstilvirksomhed, der fik syet tøj hos en leverandør i Rana Plaza bygningen omkring tidspunktet for bygningens sammenstyrtning i 2013, ganske begrænset opmærksomhed i pressen.

Hvad har de to sager til fælles? Mere end man skulle tro fra den måde, de er blevet behandlet i medier og meddelelser fra erhvervsorganisationer. Det gælder både praktisk og forskningsmæssigt.

Begge sager handler om virksomheders risikobaserede due diligence (på dansk somme tider oversat ’nødvendig omhu’, som ikke skal forveksles med ’rettidig omhu’). Risikobaseret due diligence er en proces til at sikre, at en virksomhed undgår at forvolde skader på mennesker og miljø. Ifølge OECDs retningslinjer for multinationale virksomheder, som Danmark har tiltrådt, skal virksomheder udføre risikobaseret due diligence for at undgå og modvirke skade på miljø, menneskerettigheder, arbejdstagerrettigheder mv. Virksomheder skal også udøve due diligence i forhold til deres leverandører og andre forretningsforbindelser. Det gælder både værfter, der hugger skibe op, og systuer, der laver tøj til danske herretøjsbutikker.

Mærsk-sagen viser en virksomhed, som har haft problemer med et leve op til sine egne standarder og politikker om CSR. Men det viser også en virksomhed, som har været opmærksom på sin mulige skadesrisiko og taget skridt til at modvirke det. Det er udtryk for due diligence. De oplysninger, som er kommet frem de seneste uger tyder på, at virksomhedens due diligence ikke har været ført tilstrækkeligt igennem. Mere om det senere. Tekstilsagen handler om en virksomhed, som ikke løftede en række centrale elementer i due diligence i forhold til sin leverandør i Bangladesh, hvor det allerede inden Rana Plaza styrtede sammen var kendt, at der var alvorlige problemer med bygningssikkerhed og ansattes arbejdsforhold.

Det danske nationale kontaktpunkt for OECDs retningslinjer for multinationale virksomheder offentliggjorde mandag i uge 42 en udtalelse på baggrund af en klage over en dansk producent af herretøjs håndtering af bl.a. sundheds og sikkerhed på arbejdspladsen hos virksomhedens leverandør i Rana Plaza. Kontaktpunktet (som på dansk kaldes Mæglings- og Klageinstitutionen for Ansvarlig Virksomhedsadfærd eller bare MKI) udtalte alvorlig kritik af den danske virksomheds processer for risiko-baseret due diligence. Det blev bl.a. kritiseret, at virksomheden ikke i tilstrækkelig grad stillede krav til leverandøren i form af en CSR-politik; og ikke i tilstrækkelig grad anmodede leverandøren om selvevaluering og gennemgik selvevalueringer med henblik på at fastslå, hvad der skulle kontrolleres og følges op på.

Det er ikke bare i dansk sammenhæng men også internationalt første gang, at en offentlig autoritet med ekspertise inden for CSR-feltet udtaler konkret kritik af en virksomhed, der fik produceret på Rana Plaza. I betragtning af det store antal mennesker, der omkom eller kom til skade, da bygningen styrtede sammen den 24. april 2013 og i betragtning af den interesse, som Rana Plaza-tragedien har haft blandt medier og forbrugere kan det undre, at kritikken af den danske virksomheds due diligence fik så lidt opmærksomhed.

Pressemeddelelser fra erhvervsorganisationer og den organisation, der indgav klagen, har i stedet fremhævet, at kontaktpunktet ikke fandt virksomheden ansvarlig for sammenstyrtningen. Uden skelen til, at kontaktpunktet ikke har kompetence til at pålægge juridisk ansvar og kun har forholdt sig til de oplysninger, det har fået dokumenteret eller haft mulighed for at undersøge ift hvad en kontrol kunne have vist, har denne del af udtalelsen fået lov at dominere. Det, som danske virksomheder bør skrive sig bag øret om krav om due diligence, har fået meget mindre opmærksomhed. Udover den alvorlige kritik af tekstilvirksomheden fastslår udtalelsen også, at virksomheder for at leve op til principperne i OECD’s retningslinjer bl.a. skal stille krav til leverandører til at sikre sundhed og sikkerhed på arbejdspladserne. Denne forpligtelse omfatter i dag også risikoafdækning af bygningskonstruktioners sikkerhed. Selv om der er forskelle i dækningen fra forskellige organisationer, er det fra en forskningsmæssig CSR-betragtning tankevækkende, at erhvervslivets organisationer ikke i højere grad har grebet muligheden for at forklare deres medlemmer, hvor vigtigt dette er.
Ansvarlig virksomhedsadfærd i kæden af en virksomheds forretningsforbindelser er ofte komplekst. Der kan være langt fra idealer og politikker til den praktiske virkelighed, der gælder i lande, hvor danske virksomheder får produceret tekstiler, eller hvor skibe ophugges. Fattigdom og lokale samfundsøkonomiske forhold er ofte årsagen til, at mennesker sælger deres arbejdskraft for løn og arbejdsbetingelser, der ligger langt fra internationale standarder. Problemerne kan desværre sjældent løses fra den ene dag til den anden. At gennemføre normer for sundhed og sikkerhed på arbejdspladsen kræver ikke bare, at regler findes, men også at de formidles til de ansatte og deres ledere, og at der foregår en solid oplæring og kontrol. At ændre farlige arbejdsmetoder eller bygninger kræver ikke bare investeringer, men også tid og opmærksomhed. Og som ved andre vanskelige opgaver kræver perfektion øvelse.

Mærsk har et problem med manglende overensstemmelse mellem sine egne standarder og deres gennemførelse. Men Mærsk har også vist, at man er er opmærksom på at udvise due diligence. Da Mærsk besluttede at få skibe ophugget på Alang-stranden i Indien, besluttede man samtidig at ansætte folk til at kontrollere, at Mærsks standarder blev overholdt. Det er udtryk for due diligence. Men risikobaseret due diligence er en løbende proces. Alang-sagen viser, at det ikke er nok at placere kontrollører, hvis man ikke også har processer for at checke, at kontrollerne fanger de problemer, som de skal. Sagen om ophugning af tidligere Mærsk-skibe på strande i Bangladesh viser, at due diligence også bør gennemsyre en virksomheds økonomiske betingelser, der indgår i kontrakter. Men Mærsk-sagen viser også en virksomhed, som kan siges at være i gang med at øve sig. Den vilje til forbedring og intern læring, som Mærsk har givet udtryk for, giver grund til større håb for gennemførelse af risikobaseret due diligence end den, som tekstilsagen er blevet modtaget med.

Karin Buhmann har fornylig været på TV2 for at diskutere Mærsks kontroversielle skrot politik og CSR.


Karin Buhmann is Professor (mso) in Business & Human Rights at the Department of Intercultural Communication and Management at Copenhagen Business School.

pic by by Mike Hettwer,  National Geographic

The Responsibility to Disrupt?

By Glen Whelan.

Project Breakthrough: A New Initiative from the United Nations Global Compact

Through its Global Compact, John Ruggie’s special representative work on human rights and multinational corporations, and a whole host of other initiatives, the United Nations (UN) has long been a leader in corporate responsibility and sustainability matters. With the relatively new Project Breakthrough, it appears that the Global Compact in particular, is looking to maintain the UN’s leading role, and leverage its prominent position, in business and society relations. A collaboration with the ‘market catalyst’ Volans – whose co-founder and Chief Pollinator (no kidding) is John Elkington (a champion of triple bottom line thinking in prior times) – Project Breakthrough seeks to translate the United Nation’s “new 2030 Sustainable Development Goals into business action” by challenging and stretching “prevailing business mindsets into new opportunity spaces”.

Project Breakthrough has three specific areas of focus.

  1. It seeks to foster “exponential mindsets” by asking: “what does the future look like and what can leaders in all spheres learn from the ‘anything-is-possible’ approach that is common among successful innovators?”
  2. It emphasizes the importance of “disruptive technologies” such as artificial intelligence and synthetic biology, by asking: how can they “transform what’s possible in terms of sustainable performance and longer-term system change?” and
  3. It looks towards “tomorrow’s business models” by asking: how “new disruptive technologies” can enable “more sustainable, collaborative and circular business models?

Project Breakthrough’s Techno-Utopian Context

For those who know of Google’s current Director of Engineering Ray Kurzweil – and his sidekick Peter Diamandis, who, further to his very pronounced self-promotion skills, co-founded Singularity University with Kurzweil around 2007 – the basic ideas of Project Breakthrough will be familiar. They can also be readily lampooned, as Seth Rogen is reportedly soon to do. Whilst some might find such commentary cynical, the Global Compact’s willingness to embrace techno-utopian ideas that broadly align with those of “Trump delegate, Facebook board member, billionaire PayPal cofounder” and Singularity University supporter, Peter Thiel, does raise questions as to the role of trends and fashion in corporate responsibility and sustainability policy and practice.

The Risks of Disruption

Whilst none of the above mentioned parties are a priori wrong to think that technology and innovation can help address many of the world’s most pressing problems, Project Breakthough’s implicit suggestion that business has a responsibility to disrupt markets (and societies) is facile. Companies like Uber, for example, are clearly new and disruptive. As ongoing disputes with its partner and not employee drivers indicate, however, Uber’s emphasis on technological disruption and new business models seems far removed from both the concern to end poverty (2030 Sustainable Development Goal No. 1), and the UN Global Compact’s concern with labour rights.

In short, the current emphasis on exponential mindsets, disruptive technologies, and tomorrow’s business models, is not risk free. Indeed, without significant qualification, it is not clear how Project Breakthrough’s recent championing of disruptive change is to be rendered consistent with George Kell’s 2003 suggestion that the Global Compact “can only effectively serve as a learning platform that facilitates gradual, incremental change”. So perhaps the Global Compact should adopt a more precautionary approach to the disruptive possibilities of technology for society and the environment. Alternatively, it might further investigate how such ideas as the universal basic income much loved by Silicon Valley could hedge against them.


Glen Whelan is Marie Curie Research Fellow at Copenhagen Business School. He researches Business Ethics, Politics and Corporate Social Responsibility, Internet Studies and Organization Theory. He’s on Twitter.

Pic by: cnet