Regarding sustainability “fragments,” can the sum of the parts equal less than the whole?

Originally posted on the CSRwire website.

By CSRwire Contributing Writer Elaine Cohen

As the sustainability movement grows, we witness the growth of single-focus fragmented sustainability initiatives based on subject-specific cross-sector collaboration platforms. But does the sum of the parts equal less than the whole?

Enter a fledgling member of the Sustainability Club: the Global Phosphorous Network. It’s a an initiative of the Global Phosphorus Research Initiative, a group of five independent research institutes in Australia, Sweden, the Netherlands and Canada, supported by the Global Phosphate Forum, itself a non-profit industry association of companies who manufacture phosphates for cleaning applications with a mission to promote use of phosphates in detergents. The Global Phosphorous Network is also supported by Novozymes, a bioinnovation company that markets enzymes to replace phosphates in dishwashing detergents. Phosphorous is a non-renewable resource that is essential for life. Phosphorous scarcity will affect global food security. To ensure reserves don’t run out before we can find sustainable solutions, those with a vested interest in phosphorous being around for a long while are getting their heads together to manage its use more efficiently and its recovery even more efficiently. Phosphate replacement is in everyone’s interest, those that manufacture it and those that replace it. No surprise, then, that industry associations form to protect such interest.

Sustainable Phosphorous joins Sustainable Aluminium, whose industry association has been around a little longer, and the Advanced Sustainable Iron and Steel Making Center, another multi-sector collaboration - which for $25,000 a year promises to give industry access to a new generation of sustainable, economical iron and steel making technologies. Sustainability Club also welcomes the Sustainable Aquarium Industry Association designed to self-regulate marine aquarium trade and contribute to the conservation of natural marine resources, whilst the Sustainable Energy Industry Association of the Pacific Islands was recently launched to foster renewable energy and energy efficiency in the Pacific region. The Environmental Institute for Golf is committed to strengthening the compatibility of the game of golf with our natural environment, whilst Clean Technology and Sustainable Industries Organization is bent on advancing commercialization and global adoption of clean technologies and sustainable industry practices through community building, advocacy and knowledge exchange. The EICC promotes sustainable ICT development in supply chains, and no one could have missed the Equator Principles, the largest sustainable banking initiative created in 2002 by 10 leading banks, soon to be joined by a further 30 or more, to set standards for determining, assessing and managing social and environmental risk in project financing.

Sustainability fragmentation supported by industry interests is not a new concept. One of the earliest and very well-known initiatives was the Marine Stewardship Council (MSC), which was founded in 1997 by the World Wildlife Fund and visionary company Unilever, whose motivation was to protect long-term sources for its frozen food business. MSC now employs over 100 people, and over 1,300 fisheries comply with its sustainable fish ecolabel. The World Bank estimates livelihoods of about 200 million people depend on fishing and associated activities, and MSC has been a leader in setting sustainable standards so future generations can continue the fishing tradition and companies can continue to profit from it. Unilever has now sold most of its fish business, leaving an important legacy for this industry, but continues the fragmentation approach for the protection of food sources with the co-founding of the Roundtable on Sustainable Palm Oil in 2004, along with The Body Shop, Aarhus Karlshamns (AAK) and others. Unilever is also a member of the Roundtable on Responsible Soy Association for producers, industry and civil society actors involved in the soy value chain.

Fragmenting sustainability is a way to empower focus on anything, anywhere that could benefit companies operating in specific market sectors or regions of the globe. In fact, we are perhaps reaching the point, if an industry sector exists, it needs a sustainability fragment. The day is not too distant when the number of fragmented sustainability initiatives will far outnumber the number of industry sectors, if that is not already the case. It makes sense for businesses to take this approach. Investing funds in dedicated research, advocacy and cross-sector collaboration to promote long-term viability of their sectors is clearly in the commercial interest of corporations, appeases NGOs who fight for the cause and serves to provide impressive sustainability performance content for sustainability reports, reducing reputational risk and elevating status in sustainability indexes. In addition, the world benefits.

But fragmenting is fine up to a point, and that point is where sustainability segments combine in a holistic fashion, where the sustainability of anything affects the sustainability of everything. This bottom-up approach to sustainability cannot live without top-down leadership where initiatives such as Millennium Development Goals examine overriding global sustainability issues which encompass all fragments and the way they impact each other. The danger in fragmenting sustainability is a siloed approach where the sum of the parts equals less than the whole, whilst everyone thinks they are saving the world.

In the meantime, however, the Global Phosphorous Network has its work cut out. With three billion more mouths to feed by 2050 and phosphate reserves, which are controlled by just a few countries, expected to start depleting in the next few decades, this sustainability journey had better move into high gear. At the same time, other businesses will scurry to align themselves with sustainability fragment associations which best serve their long-term needs. Simply put, at this stage in the game, they cannot afford not to.

About Elaine Cohen

Elaine Cohen is a Sustainability Consultant and Reporter at Beyond Business and blogger on sustainability reporting and author of CSR for HR: A necessary business partnership to advance responsible business practices.

Talkback Readers: Can the sum of fragments equal a holistic approach to sustainability? Tell us on Talkback!

As part of the New Economy 2.0 series 

By David Korten

In America we are taught from birth capitalism is synonymous with markets, democracy and individual liberty. Whatever its flaws, the only alternative is communism, or so we are told.

This sets up a false and dangerously self-limiting choice between two economic models both of which create concentrations of power that stifle liberty and creativity for all but the few at the top.

Communism is dead. As we now look for solutions to our current economic crisis, the relevant distinction is not between capitalism and communism, but rather between Wall Street and Main Street.

The Wall Street economy is centrally planned and managed by big banks and corporations for which money is both means and end. The primary goal is monopoly control of markets, physical resources and technology to maximize profits and bonuses.

Main Street economy is comprised of local businesses and working people who self-organize to provide livelihoods for themselves, their families and communities producing real goods and services in response to community needs. Main Street exemplifies the market economy envisioned by Adam Smith; Wall Street is the antithesis.

Smith believed people have a natural and appropriate concern for the well-being of others and a duty not to do them harm. He also believed government has a responsibility to restrain those who fail in this duty.

Smith and the political economists who followed in his tradition developed an elegant theory of the market’s capacity to self-organize in the community interest based on a number of carefully articulated assumptions, including the following:

• Buyers and sellers must be too small to influence the market price and must honor basic principles of honest dealing.

• Income and ownership must be equitably distributed.

• Complete information must be available to all participants, and there can be no trade secrets.

• Sellers must bear the full cost of the products they sell and incorporate it into the sale price.

• Investment capital must remain within national borders, and trade between countries must be balanced.

• Savings must be invested in the creation of productive capital rather than in speculative trading.

These are characteristics of a real market economy. Wall Street capitalism violates them all.

Capitalism is a term originally coined to refer to an economic and political regime in which ownership and benefits of capital are appropriated by the few to the exclusion of the many who through their labor make capital productive. It describes Wall Street perfectly.

Markets work wonderfully within a framework of clear rules and a caring community. The stronger the relations of mutual trust and caring and the more equitably power is distributed, the more the market becomes self-policing and the less need there is for formal governmental intervention. An economy comprised of powerful corporations governed by a culture of greed and a belief that their only legal duty is to maximize their profits requires a strong and intrusive governmental hand to limit abuse and clean up the messes.

The “free market,” a code word for an unregulated market, is a contradiction. A market without rules facilitates and encourages the unlimited concentration and abuse of corporate power unconstrained by market discipline and democratic accountability.

Market fundamentalists selectively cull bits and pieces of market theory to argue that public interest is best served when economic power is concentrated in unregulated globe-spanning mega-corporations engaged in monopolizing resources and externalizing costs for short-term financial gain. They distort market theory beyond recognition.

Like cancer cells that attempt to hide from the body’s immune system by masking themselves as healthy cells, Wall Street institutions attempt to conceal themselves from society’s immune system by masquerading as agents of a healthy market economy.

The credit collapse penetrated the façade to reveal the inner workings of Wall Street capitalism as a criminal syndicate engaged in counterfeiting, predatory lending, usury, tax evasion, fraud and extortion. It may be legal because Wall Street funds politicians and writes its own rules, but it should be illegal and treated accordingly.

A criminal syndicate is “fixed” by shutting it down through the enforcement of laws that protect public interest. You “fix” a cancer by removing it and rebuilding the healthy tissue. Main Street is the healthy tissue from a healthy real market economy that can be built.

About David Korten

David Korten (livingeconomiesforum.org) is the author of Agenda for a New Economy, The Great Turning: From Empire to Earth Community and the international best seller When Corporations Rule the World. He is board chair of YES! Magazine, co-chair of the New Economy Working Group and a founding member of Business Alliance for Local Living Economies (BALLE).

About New Economy 2.0 

Visionary economist David Korten introduces a national conversation series, New Economy 2.0, on CSRwire Talkback based on his acclaimed book, Agenda for a New Economy, 2^nd edition. For the next several weeks, Korten will summarize the main points and key lessons of each chapter of his book, leading from a dissection of what went wrong in the “phantom wealth Wall Street economy” to the presentation of a vision of a world of real wealth Main Street economies that support strong middle class societies, honor real market principles and work in partnership with Earth’s biosphere.

New Economy 2.0 envisions an economy in which life is the defining value and power that resides in people and communities. It contrasts with the popular New Economy 1.0 fantasy of a magical high-tech economy liberated from environmental reality and devoted to the growth of phantom wealth financial assets.

This exciting, new series is co-published by CSRwire and YES! Magazine.

The arguments presented here are developed in greater detail in Agenda for a New Economy available from the YES! Magazine Web store.

Talkback Readers: Is capitalist economy the antithesis to market economy?

Striking the right balance between continuity and change.

(See Part One here.)

By Lucy P. Marcus

The boardroom agenda is going through a reformation. To ensure we are helping organizations future proof themselves, what are some essential things boards and board members need to think about, no matter size, location or sector of the organization? Five areas need an update in the way we as board members think about them: infrastructure, technology, internationalization, communication, and balancing continuity and change.

Infrastructure

Boards must embrace the political, economic and social reality of the way the world is operating today and tomorrow. One of the areas that needs a real rethink is building organizations that can operate effectively in a low-carbon economy. The main issues here are about energy consumption and integrating clean tech and sustainability. They apply to all facets of the business: from facilities to building stock and rolling stock; from changing work patterns and practices to the ways in which companies engage with their stakeholders and the local communities where they are based. It touches everything an organization does, how it behaves and how it invests. It means board members need to be asking the questions about how these decisions will impact business five and 10 years down the road. Most importantly, it isn’t about green washing or perception; it is fundamentally about how the organization does business.

Technology

At the heart of many issues on the modern board agenda is technological innovation. Technology, thus, is not a stand-alone issue, but an integral part of how effectively and successfully a company can be run. It is not an end in itself, but an instrument that can only prove its worth if it serves a concrete purpose. Coupled with that is the speed at which new technology comes into play and the level of disruption it creates in the process of integrating it into the daily running of a company. For all the importance of disruptive innovation, if ‘old industries’ and the tech sector communicate effectively, understanding each other’s needs and coming to grips with the significant benefits that today’s technology offers, innovation can be enormously helpful in future proofing companies.

For this potential to be fulfilled, boards must make sure their organization is flexible enough to recognize important technological developments and incorporate them into existing business models.

Internationalization

Regardless of a company’s main business or where it is located, its success will ultimately depend on grasping the internationalized environment in which it operates. The world today is politically, socially, and economically inter-connected.

This offers opportunities and poses risks at the same time. Board directors need to be able to think outside the walls of their own corporate boardroom. They need to speak their own language as well as the language of the markets where they want to be; for while the world gets smaller and in some respects more similar, local cultural difference remains and understanding it gives companies a distinct edge.

Corporate boards need to set an example and help implement an agenda that is focused on attracting the best people from anywhere and put them in a place where they work most productively for the success of the company as a whole.

Communication 

No corporate board will be able to implement its modern agenda without effective and dynamic communication, both with its stakeholders (customers, staff, investors, etc.) and within the boardroom.

Within the boardroom, this is about asking the necessary questions and being open to hear the answers, however uncomfortable they might be. Outside the boardroom communication is about the image and strategy of the company; it is about the methods used to communicate this message, and increasingly so.

A board that sends out a message of a forward-looking, socially and economically responsible, and politically aware strategy and does it by old and new forms of communication also sends a message about the right balance between continuity and change, about the unity of word and deed, demonstrating in action to which it rhetorically commits.

Balancing Continuity and Change

Embracing new ideas and ways of thinking does not mean completely disregarding the old. Boards will only succeed in their task of future proofing their organizations if they see the connections between the old and new.

This requires casting a critical eye on the old, innovating where fruitful, and integrating new technologies and items on the corporate social responsibility agenda into the tried and tested business practices of corporate governance, risk assessment and finance.

Corporate directors need to understand the purpose, strengths and limitations of existing practices and be willing and able to take steps to address them. The modern board agenda does not disregard ‘old issues,’ it is not driven by short-lived ‘flavors of the month’ or temptations of every disruptive technology or idea that comes into the room, but is rather guided by the needs and vision of the business. This need for balance requires boardrooms to have a mix of people to ensure a comprehensive and complementary diversity of approach, background and skills.

Stargazing is most effective if it is done from a strong foundation where the nuts and bolts of the company work, and where they are grounded in a solid foundation. This is nowhere more obvious then when it comes to a company’s financial stability and sustainability. Past, present and future are a continuum when companies seek opportunities for investment and expansion, when they carefully assess risks connected with either, and as they determine the right level of (not only monetary) compensation for their directors and staff.

About Lucy P. Marcus 

The founder and CEO of Marcus Venture Consulting, Lucy P. Marcus currently serves as the non-executive chair of the Mobius Life Sciences Fund and as a non-executive director and chair of the board audit committee of BioCity Nottingham. She is a fellow at the University of Cambridge’s Judge Business School and a member of the board of IE Business School. She is a prolific writer on global economic trends and best practices for corporate governance, venture capital, entrepreneurship, biotech, cleantech and women in business, and regularly speaks on these topics to diverse audiences around the globe.

Follow Lucy P. Marcus on Twitter: @lucymarcus

Talkback Readers: What challenges have you seen boards confront as they seek to balance continuity with change? Share your stories on Talkback!

Is your company’s board “grounding” and “stargazing?”

(See Part Two here.)

By Lucy P. Marcus

The role of modern corporate boards is the juxtaposition of grounding and stargazing.

Grounding is about making sure the company fulfills all its legal requirements, manages risks properly and does business in a responsible way. It is about all the vital things we associate with board oversight tasks in corporate governance, compliance and corporate risk.

But with that comes an equally and perhaps even more important role: grounding needs to be complemented by stargazing. This is where a board demonstrates its mettle in making sure their organization is ready and able to expand its horizons, strive to achieve more and stretch itself to become the robust and resilient business that is capable of responding effectively to the unknowns in its future. Stargazing should be a big component of the strategic work a board does.

Both grounding and stargazing require asking questions, looking beyond the obvious and the comfortable, and actively engaging with the organization.

The emphasis these days seems to be on the tick-boxing of risk management. In speaking with fellow board members from around the world and across a wide variety of sectors, I’ve found that concern for risk exposure coupled with a desire not to appear too meddlesome and the time commitments required to do the job properly means they sometimes leave too little time room for discussions of strategy.

This is a real loss for organizations of all sizes, as part of the purpose of having independent directors with a broad range of skills is to draw on the knowledge and understanding around the table and the broader perspectives they bring to help propel the organization to new heights.

Grounding is a big part of the vital role of directors – ensuring that companies are managing their risk, fulfilling their requirements, “playing by the rules” and being good corporate citizens. But even when fulfilling that role, strategy needs to play a part. In every audit committee and compensation committee, there must be room for considering what the company can do to push itself that much further to achieve more, and better, things for all its stakeholders.

Most importantly, getting the balance right between the two functions of grounding and stargazing helps to ensure the company is doing what it needs to future proof itself. It requires board members who can think outside the box, and who also know when to get back in the box.

In Part Two of this post, Lucy P. Marcus will spell out some ways board members can both “ground” and “stargaze” in five key areas: infrastructure, technology, internationalization, communication, and balancing continuity and change.

About Lucy P. Marcus 

The founder and CEO of Marcus Venture Consulting, Lucy P. Marcus currently serves as the non-executive chair of the Mobius Life Sciences Fund and as a non-executive director and chair of the board audit committee of BioCity Nottingham. She is a fellow at the University of Cambridge’s Judge Business School and a member of the board of IE Business School. She is a prolific writer on global economic trends and best practices for corporate governance, venture capital, entrepreneurship, biotech, cleantech and women in business, and regularly speaks on these topics to diverse audiences around the globe.

Follow Lucy P. Marcus on Twitter: @lucymarcus

Talkback Readers: Share your stories of corporate boards “future-proofing” themselves – or not. Tell us on Talkback!

Why should non-diverse boards set off alarms?

By Lucy P. Marcus

Discussions around diversity in the board room often focus on gender, and indeed women are severely under-represented on boards. Importantly, though, the lack of women on boards is a reflection of a wider problem: it is one of color, age, international perspective and more.

A lack of diversity is not simply a problem of “optics.” It looks skewed not to have a diverse board; but just because in the modern world it looks odd, does it make a difference in real economic terms? Does it actually affect the bottom line? To my mind the answer is a resounding yes. We do not need diversity for diversity’s sake, but because board diversity contributes to the profitability of the business.

There is a fundamental economic reason why diversity is important: diversity of thought, experience, knowledge, understanding, perspective and age means that a board is more capable of seeing and understand risks and coming up with robust solutions to address them. Businesses led by diverse boards that reflect the whole breadth of their stakeholders and business environment will be more successful. They are more in touch with their customers’ demands, investors’ expectations, staff’s concerns and they have a forum inside the board room where these different perspectives come together and successful future proofing business strategies can be devised.

An argument I have heard against actively seeking diversity on the board is a fear that too much diversity and independence of thought can be damaging to the cohesion of the board. Yet, for healthy boards with capable chairs, the very opposite is true. Board cohesion is vital, and everyone needs to be moving in the same direction, but within that agreed direction, the modern board requires open, constructive and dynamic discussion, rooted in respect and regard for the people around the table.

To come to the most robust conclusions, there needs to be rigorous discussion and action drawing on a whole range of stakeholder perspectives, fueled by as much diversity of thought and experience as possible. If everyone on the board is the same, then discussion will be dull, decisions stagnant, and the business will suffer. In my experience the result of a diverse dynamic group is a more capable and better functioning board that can withstand the challenges of an ever-shifting landscape in which the organization it serves operates.

It is not sufficient to have “diversity policies” in place. If a business is not demonstrating in deed that it values diversity, diversity policies are worth less than the paper they are printed on. Diversity is a matter of organizational culture, and significantly this is set through example from the top. A diverse board demonstrates that diversity is a value that the company holds throughout its business—the resulting culture then is not one in which the mentality is one of the lowest common denominator (how little can we get away with?), but one in which diversity is valued as part of building a robust and sustainable business. Diversity then becomes part of very DNA that marks a business out as healthy and ready to face the future.

Diversity is not a static one-time goal boards need to achieve, but one that poses a constant challenge of renewal. Good corporate governance requires “turn over” in the board room so organizations are capable of dealing with the challenges of today and the tomorrow.

In an ever more global business environment, diversity also has an international dimension that extends beyond gender, culture, age, etc. Every board needs to keep a finger on the pulse of what is happening around the world. International diversity broadens a board’s global knowledge and understanding, and how this affects the environment in which the organization it serves operates. International diversity means the best boards will be able to be proactive in instituting these changes, striving to live up to the highest standards of corporate governance from around the world, not simply waiting for the world to force them to do so.

When I see a business with a board that has a preponderance of people with similar, if not identical, profiles, it is a signal it is not a healthy business. It is a canary in a mine that says they are not looking after the fundamentals of the business. Non-diverse boards set my alarm bells ringing because it is good corporate governance and good business sense to have diversity of thought, experience, knowledge, understanding, perspective and age, as well as a reflection of the whole range of a business’ stakeholders: customers, employees, investors and the communities in which they operate. If a board is not diverse, it makes me wonder about the business as a whole.

(Note: This article was posted on The Huffington Post and an extended version of this was originally published on the Marcus Ventures website. Also, Lucy recently gave a TEDx talk on Boardroom Activism.)

About Lucy P. Marcus 

The founder and CEO of Marcus Venture Consulting, Lucy P. Marcus currently serves as the non-executive chair of the Mobius Life Sciences Fund and as a non-executive director and chair of the board audit committee of BioCity Nottingham. She is a fellow at the University of Cambridge’s Judge Business School and a member of the board of IE Business School. She is a prolific writer on global economic trends and best practices for corporate governance, venture capital, entrepreneurship, biotech, cleantech and women in business, and regularly speaks on these topics to diverse audiences around the globe.

Follow Lucy P. Marcus on Twitter: @lucymarcus

Talkback Readers: Why should non-diverse boards set off alarms? Tell us what you think on Talkback!

What’s the public to do without responsible media?

By Mickey Huff

Over the past few decades in the US, trends of consolidation and conglomeration have been the norm from banking institutions and government contractors to the tech industry and major media outlets. The result is less choice, less diversity, less access and less say in things going on in society for most Americans. Chief among these is the winnowing of the so-called Fourth Estate, or the media. Information is the currency of democracy, and only accurate, fact-based information is useful to the public as we the people stride to practice republican self-governance.

Given the importance of the free press, it was protected by the founders in the First Amendment. However, these protections must be implemented and adhered to, not just used as window dressing for the masses. Not only do we now have fewer owners of the press in America, but we have the accompanying illusion of more choice because the network of interconnected boards of directorates, their commercial allies and connections in the private and government spheres remains nebulous. 

In order for the corporate media to act in socially responsible fashion, they need to be monitored by the very public they supposedly inform, which can only be maintained through transparency. 

Instead, corporate media (where the vast majority of Americans still go for news) operate in highly secretive, closed-door environs of private, for-profit business, virtually shutting the public out of the process of creating news. The result is a top-down, managed news system of pro-corporate, elite-based propaganda.

Even when polls measure public opinions on matters from health care to tax policy, showing that a majority of Americans want single payer care and higher taxes on the wealthy, these stories are buried or spun by the corporate press to mean something other than what they clearly state. Meanwhile, politicians are given endless airtime to distort, deny and/or discredit such findings until the next big distraction comes down the big media pike.

Even when covering important and substantive issues, corporate media oft fall for the path of least resistance, taking the low road for public discourse. One of the most glaring examples in recent memory was the handling of the WikiLeaks case and Julian Assange. Out of the plethora of cables and story lines that could be plumbed, facts exposed, questions asked or historical narratives revisited, the corporate media mostly led the charge in shooting the messenger. From unsubstantiated tales of Assange’s alleged salacious personal life to literal calls on air from journalists, pundits and politicians alike for him to be arrested and tried with treason (he isn’t even a US citizen) or in some instances, treated as a high-tech terrorist that ought to be hunted down and murdered in cold blood (which is illegal) – sober discussion and analysis clearly did not win the day.

In fact, very little of substance seems to come from our corporate media outlets these days. A quick overview of headlines on any given day shows the fickle frame of corporate media, from the mundane to the mendacious, from celebrity tripe and gossip reported with great urgency to outright lies or distractions in service of the powerful.

The public is left with plenty of inflated information currency in the 24/7 news cycle; it is, however, mostly useless for generating awareness. Instead, it creates a more hyper-real landscape where people can no longer discern between what is important and what is not, what is factual and what is innuendo and speculation. The result is disastrous for any people that wish to be their own governors.

About Mickey Huff

Mickey Huff is Director of Project Censored and Media Freedom Foundation and associate professor of history at Diablo Valley College in Northern California. Please visit and contact online at projectcensored.org.

Talkback Readers: What would a socially responsible media do? Give us your feedback on Talkback!