Category Archives: Governance

Feeling the Pain

By Robin Porsfelt.

While the recent US ’opioid crisis’ has been widely reported, a second, less recognized, crisis related to opioids has been taking place, and is still ongoing, more quietly in countries with less Western media visibility. Whereas the crisis in the US is arguably related to an over-subscription to opioid-based pain relief, such as OxyContin, the second crisis could rather be seen as a case of too tightly regulated access to opioids in health-care systems. This is at least the argument of a recent report commissioned by The Lancet which proclaims that the world is experiencing an under-management of pain where as many as 25 million people are suffering partly as a result of regulatory and cultural approaches to the use of opioids.

Severe lack of access

The report was the result of a three-year study on the integration and access of pain relief and palliative care in health systems. It opens with a succinct description of the problem: “Poor people in all parts of the world live and die with little or no palliative care or pain relief. Staring into this access abyss, one sees the depth of extreme suffering in the cruel face of poverty and inequity” (Knaul, Farmer & Krakauer et al, 2017: 1).

Those suffering from lack of access to adequate medication are predominantly found in low-income and middle-income countries, often with terminal illnesses, and includes approximately 2.5 million children dying with, what the report terms, ‘serious health-related suffering’ each year (Knaul, Farmer & Krakauer et al, 2017: 2). Of the almost 300 metric tons of morphine-equivalent opioids distributed annually, only 0.1 metric tons reach health systems in low-income countries. This is something the report’s authors condemn as: “a medical, public health, and moral failing and a travesty of justice” (Knaul, Farmer & Krakauer et al, 2017: 1).

Addiction and pain relief

But what are the reasons for this state of potentially unnecessary suffering? In contrast to many other debates on access to medication, the problem is in this case not predominantly related to questions of scarcity, costs, or tightly enforced intellectual property rights to drugs, but rather a mix of cultural and regulatory factors. There are (at least) two factors that explain the pattern: One is a lack of visibility due to fragmented patient advocacy and exclusion of pain alleviation from standard measures of health. Another key factor is that opioids do not only fall under the scope of medical regulation but are also controlled substances under international drug conventions (Ibid.).

As substances such as morphine are listed and regulated as narcotic substances by the UN, they become part of a machinery of international checks and balances on their flow, including import quotas and reporting requirements. The UN treaties are based on two imperatives, on the one hand the limitation of harmful and addictive substances, and on the other hand to secure access to medically vital analgesics.[1] In recent decades, the war on a drugs-compatible first imperative of strict control has become increasingly dominant, making such medication harder to access (Knaul, Farmer & Krakauer et al, 2017: 8).

A second related issue suggested by the report is ‘opiophobia’, described as prejudice and misinformation concerning medical use of opioids. Whereas a balanced approach to opioid prescriptions is needed, a prevalent fear of non-medical use and its side-effects among health-care providers, regulators, and patients have led to an underestimation of needs and insufficient medical use in many countries (Ibid.).

What’s to be done

Even though this inequity in pain relief is indeed under-acknowledged, potential solutions should at least, in theory, not be gridlocked by economic interests. As morphine and morphine-like medication is cheap to produce and commonly used in Western medical systems, the problem is rather about framing and contesting stigmatization. While acknowledging the risks with a too laissez-faire approach, there is a need to recognize the value in a controlled medical use of opioids to avoid unnecessary suffering as well.

A way to do so, as the report highlights, would for instance be a broadening of the third Sustainable Development Goal (SDG) on ensuring healthy lives and well-being for all. Currently, the battle against substance abuse is covered in the SDG target 3.5, a step forward however would be to include pain alleviation and access to pain relief as similarly essential objectives – for instance as part of SDG target 3.8 on universal health coverage. As a measure, this is of course not enough, but at the current stage, and given the documented ‘abyss’ of equity in pain treatment worldwide, simply diagnosing the issue as problematic per se would to some degree seem like progress.

 

[1] A member of a group of drugs to achieve analgesia, i.e. relief from pain. (editor’s note)

References

Knaul, F. M., Farmer, P. E., Krakauer, E. L., et al. (2017). Alleviating the access abyss in palliative care and pain relief––an imperative of universal health coverage: The Lancet Commission report. Lancet. DOI: 10.1016/S0140-6736(17)32513-8


Robin Porsfelt is a PhD fellow at the Department of Management, Society and Communication. He is part of a PhD cohort on time and societal challenges, with particular research interests in the sociology of valuation and global governance

Photo by rawpixel on Unsplash.

A framework for assessing the potential of behaviour change for global decarbonisation

By Kristian Steensen Nielsen

Addressing climate change requires an urgent implementation of far-reaching solutions. Policy-makers and natural scientists have mainly offered supply-side solutions to solving the climate problem, such as widespread adoption of new or innovative technologies. While of critical importance, strictly prioritising supply-side solutions is unlikely to deliver the necessary greenhouse gas (GHG) emissions reductions within the desired time frame. An often-overlooked demand-side solution is behaviour change, which can offer both immediate and long-term reductions in GHG emissions.

There is an urgent need for rapid decarbonisation to reduce the magnitude of climate change. The Paris Agreement reflected this urgency in its formulation of ambitious goals to keep the global temperature increase below 2°C and preferably 1.5°C. Since the Paris Agreement, researchers—often affiliated with the Intergovernmental Panel on Climate Change (IPCC)—have with accelerated frequency been building scenarios for potential pathways to reach the temperature goals.[1] These far-reaching—and arguably radical—pathways involve urgent transitions to renewable energy sources and the majority assumes the use of carbon dioxide removal (CDR) technologies, such as afforestation or bio energy with carbon capture and storage (BECCS). Neither of the pathway scenarios take behavioral changes into account despite the fact that studies have shown its potential to reduce GHG emissions. For example, Thomas Dietz and colleagues (2009) found that a national implementation of behavioural changes in the United States could reduce U.S. households’ direct emissions by 20% within 10 years (representing 123 million tons of CO2). Although not sufficient single-handedly, behaviour change can help speed up the decarbonisation of societies.

 

Three dimensions of behaviour change

To identify the potential of behavioural changes to reduce GHG emissions, it is critical to consider three dimensions[2]:

  1. the technical potential (TP) of a behaviour, or the emissions reduction achieved if an individual or a target population collectively adopted the behaviour;
  2. behavioural plasticity (BP), or the proportion of the technical potential achievable through the most effective behavioural interventions; and
  3. feasibility of initiatives (IF) to induce change, which refers to the likelihood that the most effective interventions are achievable within a target population.

Focusing exclusively on either of the three dimensions will result in skewed analyses from which only imperfect interventions can be developed. For example, substituting a GHG-intensive behaviour with a less GHG-intensive alternative (e.g., flying to Bermuda on vacation versus vacationing in one’s own country) will promise a high TP but the extent to which people are willing to make such a behavioural substitution may be less promising (BP) and so might the feasibility of achieving the behavioural change across a large population (IF). Conversely, a behaviour could be easy to change (e.g., getting people to shut off lights in unoccupied rooms) and feasibly be implemented in a large population, yet hold a very low TP and therefore even in the aggregate fail to reduce emissions by much.

Identifying the most promising target behaviours

The task of researchers (across disciplines) in collaboration with policy-makers and companies is to identify the behaviours with the highest potential to reduce GHG emissions while considering all three dimensions in cohesion. Making such calculations is no easy task—as the dimensions may vary substantially between and within countries—but neither is adopting innovative technologies at a massive scale. However, focusing on both supply- and demand-side solutions will heighten the likelihood of achieving the Paris goals.

[1] Rogelj et al., 2018.

[2] Dietz et al., 2009; Vandenbergh & Gilligan, 2017.

 

References

Dietz, T., Gardner, G. T., Gilligan, J., Stern, P. C., & Vandenbergh, M. P. (2009). Household actions can provide a behavioral wedge to rapidly reduce US carbon emissions. Proceedings of the National Academy of Sciences106(44), 18452-18456.

Rogelj, J., Popp, A., Calvin, K. V., Luderer, G., Emmerling, J., Gernaat, D., … & Krey, V. (2018). Scenarios towards limiting global mean temperature increase below 1.5° C. Nature Climate Change8(4), 325.

Vandenbergh, M. P., & Gilligan, J. M. (2017). Beyond Politics. Cambridge University Press.


Kristian Steensen Nielsen is a PhD Fellow in environmental behaviour change at Copenhagen Business School. His research interests are self-control, behaviour change, and environmentally significant behaviour.

 

Pic by Duncan Harris, Flickr.

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.

CSR: When High Aspirations Go Low – and How to Avoid it

By Peter Winkler & Michael Etter.

Managers’ public claims to improve CSR can have self-persuasive effects on corporations and their members. However, sometimes such “aspirational talk” can have the opposite effect. We explain why this may happen and how to avoid it.

“Green washing” or “smoke and mirrors” are labels that are often attached to the promises of managers who publicly claim to improve CSR. CBS researchers have challenged this sceptical view and argue that “aspirational talk” by managers, by raising public expectations and scrutiny, can make corporations and their members live up to these aspirations.

Sometimes, however, we argue that even the best-intended aspirations can have opposite, even detrimental effects. In the following we provide some reflections on the conditions, under which high CSR aspirations may “go low” and we suggest some ideas how to prevent such outcome.

From persuasive to provisional aspirations
Aspirations are helpful to direct and motivate employees. However, the last thing managers need on a mission towards substantial corporate responsibilisation are “blind believers”. Employees, who simply rely on a visionary manager and do not voice, where current business conduct impedes aspired CSR, will contribute little to change. Hence, we propose that managers should avoid getting too persuasive and creating “corporate cultism” around aspired CSR. Rather, managers should signal that visions are provisional and that employees, who critique contradictions between vision and reality, are the true driver of change.

From insistent to revisable aspirations
We suggest that managers should not stick too closely to their initial CSR aspirations. As innovation research tells us, insistence on initial ideas is never a good advisor to affect change. In contrary, managerial insistence on initial CSR aspirations may prevent that different ideas about future CSR by employees develop. Hence, managerial willingness to revise their aspirations in accordance to what employees consider responsible practice is crucial. After all, it is the employees who enact CSR in their daily work.

From broad to locally grounded aspirations
Aspirations, by nature, have a bias when it comes to envisioned scope and gravity. Dreams are larger than life. On a managerial mission towards better CSR, hence, the goal cannot, and maybe should not be to live up to managerial ideas. Rather, we suggest that corporate responsibilisation is about local grounding and depth of CSR in situated understandings and practices. In other words, CSR is less a question of reaching an aspired scope, but about winning depth and grounding in corporate practices.

Our ideas should by no means discourage managers to think big and speak out about CSR. However, we suggest that voicing CSR aspirations is only the first step. In a second step, managers might need to modify or sacrifice these aspirations for locally committed CSR practices.


Peter Winkler is a FH professor at the FHWien der WKW – University of Applied Sciences in Management and Communication, Vienna, and guest professor in organizational communication at the University of Salzburg, Austria. He is interested in sociological approaches to organizational and management communication research. In 2015/16, he was a research fellow at the Governing Responsible Business Research Environment at CBS.

Michael Etter, Ph.D., is a Marie Curie Research Fellow at Cass Business School, City University of London. He is interested in CSR, new ICTs, and social approval of firms. He tweets about media, technology, and business & society issues @MichaelEtter_.

Pic by Nick Fewings, Unsplash.

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.

Multi-Stakeholder Initiatives and Legitimacy

By Mikkel Kruuse.

  • Which groups of actors typically drive the standard development within Multi-Stakeholder Initiatives (MSIs) and why?
  • Power imbalances between actors within MSIs go beyond the global North/South dichotomy.
  • There seems to be a trade-off between input legitimacy (via equal participation) and output legitimacy (outcomes) of MSIs.

Approximate Reading Time: 2-3 minutes.

Private governance in a globalized economy
While it is difficult to dispute the benefits of globalization, the integration of production and trade has made it increasingly difficult for even highly developed nations to regulate activities that extend beyond their borders. For example, how do we decide who is responsible for the negative externalities of global production, such as emission of greenhouse gasses, when considering that goods often pass through several countries before reaching their final destination? Some of these issues can potentially be resolved through cooperation in intergovernmental organizations that are able to establish extraterritorial jurisdiction, but it is important to keep in mind that the implementation relies on the individual governments that in some cases may not be able or willing to do so.

Resulting from the absence of legally enforceable regulation, there has emerged a great number of non-state market-driven governance systems since the 1980s. However, unlike democracies where the government derives its legitimacy through public elections, this is not an inherent part of private governance. As such, a particular concern is that private governance could essentially be equivalent to corporate self-regulation. In order to avoid this issue, non-governmental organizations are increasingly encouraging companies to participate in so-called multi-stakeholder initiatives (MSIs), in which different types of stakeholders work together to achieve a common goal, such as the implementation of social and environmental standards for global production.

Stakeholder Participation and Distribution of Power
Some of the more well-known examples of MSIs include the Forest Stewardship Council (FSC) and the Marine Stewardship Council (MSC), which have both grown considerably since they were established in 1993 and 1996, respectively. Although the membership diversity ideally helps to ensure that MSIs are not being controlled by a single type of actor, this may not always be the case in practice. In particular, it has been suggested in the academic literature that this form of civil regulation is primarily being driven by actors from the global North, while values and knowledge originating in the global South are often marginalized.

Notwithstanding this naturally questions the legitimacy of MSIs, it still seems appropriate to ask why this tendency persists. First, there is a significant cost associated with creating a new initiative and the individual actors must therefore possess sufficient resources to do so. However, as resources are finite there is a trade-off between where to best apply them, and as such it appears reasonable to want something in return. In other words, there must be an opportunity to realize highly valued interests for an actor to spend the resource required to create and maintain an MSI. To be sure, this is not to say that the global South does not share an interest in solving the various social and environmental issues, but when viewed as a single group they have fewer total resources compared to the North. This may offer a partial explanation of why MSIs appears to be dominated by Northern interests, yet it is highly unlikely that there are no actors within the global South group that have the required resources to participate in the various standards-development activities.

Input and Output Legitimacy
Returning to the question of legitimacy, it does not really improve the situation to replace the commonly remarked North/South divide with a big/small distinction. Even so, it may help to better understand why actors behave in a certain way and how MSIs function. As noted above, the purpose of MSIs is to provide for a common good when national governments are unable or unwilling to do so, but at the same time it is not free to create and maintain these initiatives. Thus, while all parties may benefit from the common good, the associated cost renders it implausible that actors would be willing to carry the burden of providing it – that is, unless the reward is considered to be proportional.

In summary, it can be argued that having a small group of actors responsible for the majority of standards development will question the input legitimacy of an MSI, in terms of who participates in the process. But at the same time, the issue at hand is likely to remain unresolved if no one is willing to allocate the necessary resources, which ultimately lowers the output legitimacy of the MSI. In this way, some MSIs may present a trade-off between input and output legitimacy when it comes to regulating global production, where some actors gain increased influence over the decision-making in exchange for spending additional resources.

Finally, it is important to mention that there are a great many different MSIs in existence, and that the contents of this post do not apply to every single one. Instead, the purpose is to help advance the discussion of MSI and legitimacy in general, where these insights will hopefully prove beneficial.


Mikkel is a MSc Candidate in International Business and Politics at Copenhagen Business School and research assistant at the Department of Management, Society and Communication

Pic by Margarida CSilva, Unsplash.

Changing Sustainability Norms through Processes of Negotiation – Strategic Arguments and Collaborative Regulation

By Karin Buhmann.

Two newly published CBS-authored books look at how public-private collaboration can bring sustainability norms into existence and offer recommendations for civil society, business, regulators and academics. Based on research on the discursive evolution of the Business & Human Rights regime and taking an interdisciplinary social science approach, both volumes target broad audiences of sustainability-concerned practitioners and academics across the social sciences.

Read on to learn about the background (urgency for sustainability-concerned stakeholder to have knowledge on processes to develop norms of conduct for transnational economic operations) and insights offered by the books in regard to argumentative strategies for advancing new sustainability norms and their acceptance; and procedural organisation to balance power disparities and avoid capture of the negotiation processes. Titles and details for ordering can be found at the end of this post (with discount offers).

The urgency
What does a Tesla in space have in common with conflict minerals or labour abuse in the garment supply chain? The question may look like a new school children’s riddle. In fact, it is a strong reminder of the urgency to consider how public and private organisations can collaborate to develop norms of responsible conduct, especially in areas marked by governance gaps; how such processes can avoid capture by particular interests; and what communicative strategies actors can deploy to advance the acceptance of new norms across functions and interests.

When Elon Musk earlier in February 2018 successfully launched a space rocket that carried a Tesla headed for Mars (although in missing that target it was less successful), the project was heralded as a break-through in private space exploration. Some have described Musk’s idea of colonizing Mars as a ground-breaking response to the Earth’s depletion of resources and space (!) for an ever-growing human population. Others have lamented the quest for extra-terrestrial resources, and called for humanity to solve problems on this planet before moving on to (as it has been put: wreck) other planets and their eco-systems. Some have been raising warning signs in regard to private exploration of resources in space at the backdrop of an absent or at best immature Earth-ly system for governance of earthlings’ interests and desires in extra-terrestrial resources, whether explored and potentially exploited by private or public actors.

Unfortunately, issues of territory and governance gaps are not limited to outer space. They are very much a fact of life on Earth. They are the cause of many of the social and environmental sustainability concerns that keep media, corporate watchdogs and CSR consultants busy. They are also the causes of tragedies like the 2013 collapse of the Rana Plaza building in Dhaka, Bangladesh, which killed more than 1000 workers employed in garment factories in the building, and injured more than 2000.

Governance Gaps – not only a matter of state weakness
Governance gaps caused by limited territorial jurisdiction of companies’ home states and limited political will to adopt international rules setting a level playing field for companies without freezing the bar at low levels are also at least partial reasons for abuse of workers in numerous other factories, mines, quarries, infrastructure or agri-industry projects or in the informal industry that form part of global value chains, typically supplying goods made in low-wage countries to buyers or retailers in higher-wage countries. These problems have been argued to be due to states (in capacity of governance phenomena) being absent, weak or ineffective. Academics have been debating so-called political CSR, arguing for private enterprises to fill gaps left by ineffective nation states. However, the reason for governance gaps is not only state weakness. Jurisdictional limitations on states’ powers to regulate and enforce rules outside their territory is also part of the reason, shared by nations across the world and exacerbated by disagreement and lack of political will at the international governance level to adopt international rules pertaining to business.

The issue of nation state jurisdiction and territory can be compared to tedious situations in everyday life that are annoying but hard to change: If your neighbour plays music that you do not like in his or her home, you are not allowed, to access that home and turn down the volume.  Unless, of course, the neighbour invites you to do so, or a prior agreement has been put in place. Similarly, you probably would not be pleased if your neighbour trespassed your property to turn off your music. Instead, the solution is to communicate and to do so in a manner that will – hopefully – drive change with your neighbour. Governance of transnational business activity largely depends on similar action, at least until governments agree to adopt and accept strong national rules with extraterritorial application, and/or international rules that apply to business. And as long as Earth’s governments do not agree on such rules for earthlings’ activities beyond our planet, this goes for exploration and exploitation of outer space too.

Beyond CSR guidelines, reporting and codes of conduct
Global sustainability concerns go beyond climate change, often related to economic practices with social and environmental impacts. Excessive natural resource exploitation, land grabbing and sub-standard labour conditions in global supply chains are frequent occurrences that also have high sustainability relevance.  Such practices pose risks to the environment and human lives currently as well as in a longer term sustainability perspective of balancing current needs with those of the future. Investments and trade have caused depletion of large stretches of tropical forests, which not only harms the environment and adds to climate change, but also affects the socio-economic conditions of communities. The transnational character of these economic activities often involve or affect numerous private and public actors in several states or regions. This causes challenges for singular or even sector-wide private self-regulatory initiatives, and reduces the effectiveness of self-regulation by individual actors on their own. The enormity and encompassing character of global sustainability challenges have also drawn attention to the limitations of singular initiatives like private or sectoral Corporate Social Responsibility (CSR) guidelines, reporting schemes and codes of conduct. Hence, broadly applicable multi-stakeholder-created sustainability governance schemes have emerged to fill gaps left by public as well as private governance.

Breakthroughs in global sustainability governance
The UN Global Compact with its ten principles in the four issue areas of human rights, working standards, environment and anti-corruption, is a prominent example. Yet like the Paris Climate Change Accord offers a general normative framework but leaves much to further detailing of implementation. The UN ‘Protect, Respect and Remedy’ Framework  and Guiding Principles on Business and Human Rights (UNGPs) offer more detailed guidance that has inspired several other transnational business governance instruments even beyond human rights, thus influencing the evolution of CSR norms and governance in a broader sense (Buhmann 2016, 2015). All these instruments were firsts within their fields, and broke previous stalemates. What causes such breakthrough? How can organisations concerned with sustainability engage with a regulatory process to advance substantive outputs? Understanding this can have far-reaching impacts for future public, private and hybrid governance of sustainability, locally, globally and beyond, and whether private, public or hybrid.

Norms of conduct: the road to the product is as important as the product
When we think of normative directives for private or public organisations for actions that conform with global sustainability needs, the focus is often on the substantive content of the rule as such: in other words, what are organisations encouraged or required to do? However, the road that leads to that substantive content of a rule is a condition for what ends up in the rule, whether soft (guiding) or hard (binding). It is therefore crucial to understand what makes some processes progress and deliver results, whereas others stall.

Across the globe, organisations of many types encounter difficulty in adequately meeting environmental and social sustainability challenges. The diversity of processes and outcomes calls for insights on what drives and impedes processes of clarifying what constitutes acceptable conduct. There is a particular need for knowledge on what makes for effective processes for defining norms for such conduct, and for the norms to become accepted with a view to integrate into organisational practice.

The field of business responsibilities for their societal impacts is marked by a diversity of interests that are often not aligned, even within a sector: those of different business organisations and sectors, different civil society organisations with diverse focus issues, and various national or local governments with diverging interests. As result, developing norms of conduct becomes a process of negotiation in which participants often have regard to what is in their own interests. The bumpy road to the 2015 Paris Climate Change Accord is a case in point, but not unique. The evolution of international normative guidance for businesses in regard to human rights leading to agreement on the 2008 UN  Framework and 2011 Guiding Principles on Business and Human Rights have received less attention and acclaim outside human rights circles, but the processes to those results represent important innovation too and potential lessons for future collaborative regulation.

Studies suggest that while some initiatives to develop norms of conduct for responsible business conduct get weakened in the process, typically as a result of lobbying by certain organisations (Kinderman 2013; Fairbrass 2011; Buhmann 2011), in other cases the key to a strong or weak result is in the capacity of actors at making the effective argument, and linking up with the right partners for that purpose (Hajer 1995; Kolk 2001[1], Arts 2001[2]).

How are norms on sustainability issues negotiated?
At this backdrop, it is highly necessary to understand how norms on sustainability issues are negotiated and how stalemates that mark many such efforts can be broken. Two new books by CBS professor Karin Buhmann deal with this issue, both drawing on the evolution of the emergent regime on business responsibilities for human rights. Of the two monographs, Changing sustainability norms through communicative processes: the emergence of the Business & Human Rights regime as transnational law (Edward Elgar 2017) undertakes an analysis of the discourse that marked the construction of detailed normative guidance for businesses and states in regard to business responsibilities on human rights. It analyses communicative and argumentative dynamics that allowed the multi-stakeholder process launched by the UN to break previous stalemates in several settings, as well as dynamics that caused previous initiatives to fail. It finds that the ability to address other actors in terms that directly speak to their rationality and interests holds big potential for obtaining significant influence on the details of the normative outcome, and its acceptance. The book offers a theoretical explanation of this, and expands the analysis through findings and explanations on how actors in multi-stakeholder regulatory processes may strategically play on the interest of other actors in change and in preserving their interests. It offers insights on argumentative strategies that can be applied by civil society, CSR- and sustainability-committed companies, regulators or others to advance the acceptance of new norms on sustainability with other actor

Collaborative regulation for balancing of power disparities
In recognition that where negotiations take place on issues marked by highly divergent interests and issues of power, legitimacy of the process and output are significant for a normative outcome to be meaningful, the other monograph, Power, Procedure, Participation and Legitimacy in Global Sustainability Regulation: a theory of Collaborative Regulation (Routledge 2017) offers a theory-based proposal for collaborative regulation that takes account of power disparities and continuously manages these. The analysis combines empirical experience on public-private regulation of global sustainability concerns and theoretical perspectives on transnational regulation to offer a new theoretical approach to guide multi-stakeholder negotiations. It sets out detailed suggestions for the organization of multi-stakeholder processes to regulate sustainability issues to avoid capture and ensure the legitimacy of the regulatory process as well as the outcome of that process. In a global legal and political order, in which the private sector is increasingly replacing the public in terms of power and privilege but lacks the democratic legitimacy of the state and international organisations, such issues are of global as well as regional or local pertinence.

By addressing the same overall topic of developing sustainability norm and empirical cases to inform the analysis, the books develop synergy through two separate analyses that are mutually complementary. Both volumes apply theoretical perspectives from organisational and communication studies, political science and sociology to enrich the socio-legal analysis of regulatory strategies and innovative transnational law-making. This makes the volumes speak to the broad audiences that are engaged in the development of sustainability norms in practice and theory.

Focusing on the processes for developing norms of conduct, the analyses leave assessments of the uptake and effectiveness of such norms in organisations to future studies.

Titles and publisher details

Karin Buhmann (2017) Changing sustainability norms through communicative processes: the emergence of the Business & Human Rights regime as transnational law Edward Elgar Publishers (Globalization, Corporations and the Law). 416 pages.  Order here; 35 % discount code valid through March 2018: VIP35.

 

Karin Buhmann (2017) Power, Procedure, Participation and Legitimacy in Global Sustainability Regulation: a theory of Collaborative Regulation. Routledge/Taylor & Francis Publishers (Globalization: Law and Policy). 200 pages.  Hardcover and e-book available here.

 

 


Karin Buhmann is Professor with special responsibilities for Business and Human Rights. She is employed at the Department of Management, Society and Communication (MSC) at Copenhagen Business School (CBS). She currently serves as the interim Academic Director of the cbsCSR (CBS Center for Corporate Social Responsibility) and CBS Sustainability.

[1] Kolk, A. (2001) Multinational enterprises and international climate policy. In Arts, Bas, Math Noortmann and Bob Reinalda (eds) Non-state actors in international relations, Hants: Ashgate: 211-225.

[2] Arts, B. (2001) The impact of environmental NGOs in international conventions. In B. Arts, M. Noortmann and B. Reinalda (eds). Non-state actors in international relations, Hants: Ashgate: 195-210.

Pic by David Watkis, Unsplash.