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: firstname.lastname@example.org and @RascheAndreas. More at: http://www.arasche.com
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.
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.
Never seen a 3-legged carrot in real life? You might not be alone, because you can’t find crooked fruit and veggies in Danish supermarkets, where all produce has exactly the same size, shape and colour. Give this a thought or two more and you might ask yourself: what happens to all those cucumbers, potatoes and apples that are aren’t big, small, red, green, square, round or straight enough to “pass” the strict retail beauty test?
The Issue with Standardisation Right now, what you get in supermarkets is according to UNECE standards categorized as “first class produce”, which has to be uniform in colour, shape and size. What is being withheld from you is the perfectly edible produce of the second class or even below, which might be visually defective but retains its “essential characteristics as regards the quality, the keeping quality and presentation” – yummy stuff just with marks of life experience, so to speak!
If not sold cheaply to the food processing industry, all too often “ugly” produce never reaches end consumers. Farmers, who are well aware of their demanding buyers, have different options when it comes to dealing with the unwanted produce. It can be left on the fields as natural fertiliser, used to feed animals or to produce biogas, and often it is simply thrown away in a landfill.
In Need for New Understandings of Quality Food waste is a huge problem globally, as about 1/6 of all veggies and fruits grown are lost on farms, where in some cases every second piece is tossed due to cosmetic flaws. EVERY SECOND. In Denmark alone, that amounts to about 100.000 tons of food waste a year during primary production only. Food waste happens in every step of our food supply chain, so globally we use about 21% of the world’s fresh water and 28% of arable land to grow food we never eat.
At the same time we are worried that we don’t have enough food for a growing world population – a narrative I have found particularly prevalent in marketing food items as the “solution” to global health and climate challenges caused by unsustainable food systems, such as quinoa and edible insects. But what this narrative often fails to address is the difficult configuration of ‘how’ to achieve a positive impact in practice. How can we say we are worried about food security while throwing away or misusing food that has been grown with the purpose of feeding people? The narrative about doomsday being just around the corner is not telling the whole story. Something’s rotten here… and it’s not an apple!
It’s Time to Feed “Ugly” Produce back into our Food Systems The whole story describes a reality where each actor in our food systems continues to market and accept flawlessness as an indicator for quality, with the consequence that produce earns its edibility through its looks and not through its nutritional qualities. And while there are several solutions in Denmark tackling food waste at the end of the food supply chain, such as WeFood, YourLocal or TooGooToGo, there are almost none at the beginning of it. Danish farmers are lacking time, resources and channels to connect with consumers while being constantly under price pressure from cheaper producers located down south and the short contractual agreements with buyers.
As a response to this craze, my partner and good friend Petra Kaukua and I founded GRIM, a new Copenhagen food waste business. Our mission is to fight food waste and traditional food industry beauty standards by delivering boxes of ugly, organic & seasonal fruits and veggies of all shapes, colours and sizes right to Your door, which we source directly from awesome farmers located in Denmark.
Petra and I met in the first week of our Master studies in Organizational Innovation & Entrepreneurship at CBS. We are both internationals in Copenhagen and share a love for food and music, so there was no party and no school project we didn’t do together. In that sense, GRIM was really a brainchild of our teamwork in a course in Social Entrepreneurship, where we investigated with a problem-centered approach how food waste is rooted within the Danish society.
Are you the next GRIM Ambassador? Fast forward: Since February 2018, GRIM has been part of the one year start-up incubator InnoFounder run by Innovation Fund Denmark, where we receive funding, mentoring and a desk in one of Scandinavia’s best co-working spaces, Founders House (A little side note: the application round for the next InnoFounder batch just opened, so if you are a recent graduate or about to graduate soon, go apply now!) Last month, we completed our first test run. Soon, we are hoping to come back with a second round of ugly delivery, where we for the first time want to test out pick up locations. But we need YOUR help!
We are looking for GRIM ambassadors who help us make the world an uglier place. So if you are excited about what you’ve just read and you want to be with us in our mission to put a hold on food waste, you can get involved or help us find the next GRIM pick up point location – maybe at your school, your workplace or kollegium? Drop us an email to email@example.com to learn more about what we are looking for and get yourself and your friends some great GRIM rewards.
We believe it’s time for an ugly food revolution – one where we are questioning the current concept of quality and edibility. The future of eating is ugly!
Carolin is the co-founder of the start-up GRIM and former student assistant at the CBS Centre for Corporate Social Responsibility (cbsCSR). She graduated from her Master in Organizational Innovation and Entrepreneurship at CBS in June 2017 and is the co-author of the book chapter “Marketing insects: Superfood or Solution-Food?” in: Edible insects in Sustainable Food Systems (out soon on Springer International Publishing).
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.
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, Arts 2001).
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.
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.
 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.
 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.
In the absence of an over-arching world tax authority, much agency and power remains in the hands of the corporations operating the system.
Much of the discussion on responsible corporate tax practice is focused on those corporations that maximize the use of the rules to minimize their tax payments
But what about those corporations that do not participate in the race to the bottom on tax practices – can we see emerging trends of responsible corporate tax practice and where?
Approximate reading time: 2-3 minutes.
The issue – corporate tax and globalization Corporate tax planning is high on the political agenda in Denmark and, indeed, internationally since the revelations of how corporations minimize their tax bills through the use of tax havens have started rolling. Several corporations have been exposed for their aggressive practices by the European Commission, NGOs, journalists – to the great outrage of the public and politicians.
Valuable work is being undertaken to understand the depth of the crisis for society, the seriousness of the problem – its persistence and scale, and the dynamics of the politics of solving it. Much of which is focused on those corporations that maximize the use of the rules to minimize their tax payments.
But what about those corporations that already pay their so-called fair share and do not participate in the race to the bottom on tax practices? In particular, those who are not afraid to show it?
The governance challenge – tax competition among sovereign states and the offshore world The challenge of all this arises because of the way in which the governance of the tax affairs of multinational enterprises (MNEs) is set up. MNEs that operate in several countries from the North to the South of the world operate in various judicial systems. Many of them also have mobile assets that can be moved from one jurisdiction to another through the click of a mouse and has little to do with the physical world. Some jurisdictions have set themselves up to attract the location of this type of intangible assets and will give favourable tax conditions in return. Judging where corporate assets should be taxed and what the market value is of intangible assets is no easy task for any one country in the world. With no over-arching world tax authority the outlook for permanent solutions to some of these fundamental challenges to the taxation of MNEs corporate profits is looking somewhat long-term.
What role for business and for responsible corporate tax practices? So it looks that much agency and power remains in the hands of the corporations operating the system. In a society where the focus on corporate tax payments remains one of the hottest topics and trust in corporate tax affairs is dwindling for years on end conditions are perfect for encouraging greater responsibility in corporate tax matters. But what responses are we seeing from the business world of their own initiative if any? How are they responding to this mounting distrust in corporate taxation practices from “society”?
My research going forward will focus on investigating this emerging trend of responsible corporate tax practice. It will investigate to what degree it is already taking place and what it might consists of, as well as its meaning and potential in an international political economy with a great focus on corporate tax payments and MNE’s role in supporting the achievement of the sustainable development goals around the world.
Sara is PhD Fellow at Copenhagen Business School and her research is focused on the emerging relationship between responsible business conduct and corporate tax planning of multinational enterprises. Building on several years of experience from working with international development NGOs, Sara is particularly interested in how this affects developing countries’ financing challenges and the focus on the role of the private sector in achieving the sustainable development goals (SDGs).
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.
How can the standardization of green default rules influences those living in or working with buildings?
Both the green and performance gap can be bridge through choice architecture within building infrastructure, thus facilitating sustainable consumption.
Counter to prior literature on default rules, my research finds that one key aspect of how design affects people is through awareness.
Approximate reading time: 2-3 minutes.
The Green Gap and the Performance Gap There has been a wealth of research into sustainable consumption suggesting that individuals may value protecting the environment, but then not make green purchases, known as the “green gap” (Barbarossa & Pastore, 2015; Johnstone & Tan, 2015; Gleim & Lawson, 2014). At the same time there is a discrepancy between the way green buildings are built to energetically perform and how they perform in reality, known as the “performance gap”. Theorists, practitioners, and policy makers alike have sought to tackle the green gap with choice architecture, designing the way choices are framed to increase the likelihood of some choices over others (including choosing green products over standard ones) (Thaler & Sustein, 2008). And in recent years, there has been a demonstrated shrinking of the performance gap when learning from buildings as they are used, and then using these learnings to improve building performance predictions (Menezes et al., 2012). But what if these two strategies came together?
Closing the Gaps: Design for Awareness
As outlined in my recently published article “At Home with Sustainability: From Green Default Rules to Sustainable Consumption” (Hale, 2018), choice architecture within building infrastructure can be the starting point to sustainable consumption; and buildings designed this way can work towards reducing both the green and performance gaps. The article examines the building demonstration projects using the Active House standard and how the standardization of green default rules – choice architecture that sets the default choice for settings, such as temperature, lighting, water pressure, etc. (Sunstein & Reisch, 2013) – influences those living in or working with the buildings. Counter to prior literature on default rules, the research finds that one key aspect of how the design affects people is through awareness. By experiencing the Active House buildings and then later experiencing a contrast in a different built environment, they gained an appreciation for the conveniently designed way with which the buildings helped them to live better and consume fewer resources.
A “Learning by Living” Approach to Sustainable Consumption
These positive effects work both ways. On the one hand, the very real impact of living in a sustainable home can generate an interest in seeking a green lifestyle in broader ways. For example, while living in one of the demonstration homes named Maison Air et Lumière, the Pastour family’s youngest child did not experience asthma attacks and was even able to stop taking his medication. However, upon moving back to a standard house, his attacks resumed. This poignant change in their child’s health drove the Pastour family to testify for the significance of sustainable living (Pastour, 2013). On the other hand, the standard makers learn from the experiences of those living in the demonstration buildings and can adapt and improve upon the building projections so that there is a better match between expectations and reality, and so that the buildings are better designed with people at the center.
Altogether there are promising avenues for combining choice architecture and sustainable building design that make more healthy, comfortable indoor spaces for people, while basically offering a “learning by doing”…or “learning by living” approach to sustainable consumption.
Lara Anne Hale is an industrial postdoc fellow with VELUX and Copenhagen Business School’s Governing Responsible Business World Class Research Environment. The 3-year project is part of Realdania’s Smart Buildings & Cities cluster within BLOXHUB’s Science Forum. It builds upon her PhD work on experimental standards for sustainable building to look at the business model innovation process in organizations’ adaptation to the smart building business. Follow her on Twitter.
How can business, government, and civil society interact to better address societal challenges such as climate change, immigration, social exclusion, and poverty?
The 6th biennial International Symposium on Cross-Sector Social Interactions (CSSI 2018), hosted by Copenhagen Business School (CBS) on June 10-12 2018, will bring together researchers and practitioners to understand and address this question. The event is a meeting point for the fast-growing research community on cross-sector interaction and collaboration.
Under the theme of “Collaborative Societal Governance: Orchestrating Cross-Sector Social Partnerships for Social Welfare”, academics and practitioners will present and discuss new and innovative ideas for organizing and managing cross-sector collaboration. How can current and future approaches, systems and tools foster cross-sector collaboration and create societal impacts?
The event will include keynote speeches, panel debates and workshops related to cross-sector collaboration and partnerships. Topics to be addressed include, but are not limited to the following:
Cross sector collaboration and the Sustainable Development Goals (SDGs)
Communicating collaboration and partnerships
The role of partnership brokering
Financing cross-sector collaboration and partnerships
Formal and informal governance of cross-sector collaboration
Tracking the impacts of cross-sector collaboration
Cross-sector collaboration for the circular economy
The changing role of the state in the partnership society
Call for Extended Abstracts and Full Papers The organisers of CSSI 2018 Symposium invite scholars and practitioners to submit papers linked to the overall theme ”Collaborative Societal Governance”. The aim of the Call is to open up collaborative societal governance as a new multi-disciplinary area of research by inviting contributions on the nexus of public administration, social policy, management and sociology. See the full Call text here.
CSSI 2018 Special Issues Papers presented at CSSI 2018 can be submitted to either a symposium issue of Nonprofit and Voluntary Sector Quarterly (NVSQ) on “Collaborative Societal Governance” or to a special issue of Business and Society entitled “Collaborative Cross-Sector Business Models for Sustainability”. More information about special issues and other publications will be uploaded on the CSSI 2018 website.
Doctoral Consortium The CSSI 2018 event will begin with a Doctoral Consortium, where PhD students will present and discuss their research with senior researchers from the CSSI community. Participants will also get new insights on theories, methodologies and tools for research on CSSI-related topics. The Doctoral Consortium will be held Sunday, June 10, 2018. You can read more about the Doctoral Consortium on the CSSI 2018 on the CSSI 2018 website or click here.
Copenhagen Business School Centre for Corporate Social Responsibility (cbsCSR) is responsible for the organization of CSSI 2018. Questions and comments regarding the conference should be sent to: CSSI2018.firstname.lastname@example.org. The CSSI 2018 event is organized with support from The Danish Chamber of Commerce, the GRB Research Environment and The Carlsberg Foundation.