And we're back! India's recent CSR mandate

Wow!  So sorry - it has been a while.  But I'm back!  With a focus on International Business practices.  For those MBA students who plan to be corporate jet-setters - you better know a thing or two about the countries you plan to visit.  So today's focus: India.

The Ministry of Corporate Affairs (MCA) has made it mandatory for all companies to disclose to shareholders whether they have made a contribution of 2% of net profit toward corporate social responsibility efforts.  In 2009 MCA released the voluntary guidelines on Social, Environmental, and Economic Responsibilities of Business, but with this new mandate – the guidelines have been updated. 

According to the latest minister of company affairs, M Veerappa Molly, CSR is a “Western” idea.  It hasn’t taken off in India but Molly believes that companies need to start thinking about it.  Especially since, according to my research, India has just become a major economic player and needs to position itself as an inviting and friendly country in and with which to do business. However, Molly realizes that he cannot force these CSR guidelines on companies who may be international and are in India in order to escape regulations, or – on the other hand – are home-grown companies who have grown so rapidly and economically strong that they don’t want to rock the boat.

So - by requiring the companies to report their CSR efforts on financial statements, at least the stakeholders know what’s happening.   By releasing these guidelines – MCA hopes that the companies will look to the guidelines for reference, and over time, that these guidelines will become more refined and specific to certain sectors.  This is as close as the companies can get to hiring their very own CSO (Chief Sustainability Officer) saving the company millions of dollars in research and salary. 

Do people care?  Will top investors pull out of a company due to the lack of CSR efforts?  I am sure they realize that eventually the company will have to get on the bandwagon but for now a gentle urge toward those efforts will suffice.   However, especially with the recession still fresh in my mind – if a company is profitable - why rock the boat?  Of course, if CSR is a Western notion and is making its way around the globe – then it stands to reason that those companies may lose their hold and be less profitable (although- I feel that’s a long way off for some of the companies that make the cheapest products in their industry). So if the idea of decline is merely looming in the distance – what’s the rush?  And that may be what the new minister is doing by passing this new law.  He’s merely placing the thought in people’s minds – before it becomes mandatory.  It’s akin to setting your alarm clock 10 minutes before you actually have to wake up.  Therefore, when you press the snooze button, you don’t feel so bad.  Unfortunately, I think the world’s alarm clock for sustainable business practices and triple bottom line operations went off 40 years ago.  I guess we’re now just waking up  - better late than never…?

Sustainability conference

The best thing about the Bay Area is the fact that there is always something going on!  A couple of weeks ago I attended a great Sustainability conference at Mills College.  Had I known about their sustainable MBA program earlier – I may have considered it.  It’s not in the city, but the campus is gorgeous.  The conference was held on a Friday from 8 am to 5pm in their new LEED-certified building. 

The morning started off with a great panel with reps from Clif, Title Nine, and Eileen Fisher.  This was, in my opinion, the best panel of the day. There were a few things each person said that really inspired and excited me. 

So the panel was:

-       Kevin Cleary, Clif Bar

-       Susan Schor, Facilitating Leader & Chief Culture Officer, Eileen Fisher

-       Janis Abbingsole, Director of Operations, Title Nine

So the main takeaway from this panel was: it can be done.  Making a profit and doing good can work!  So how does each company do that?  Clif bar actually has a fully integrated model that includes 5 different components (going beyond the triple bottom line): People, brand, planet, community, and business.  Clif holds the company as a whole and every employee accountable to each of the 5 bottom lines.  Title Nine and Eileen Fisher mention that their integration isn’t as structured but rather just in everything that the company does.  Title Nine values independence.  The company always holds themselves accountable without answering to any others (such as outside lenders or a Board of Directors).  Eileen Fisher believes that work in a way of which you can be proud and the profits will follow. 

One thing that all of these companies have in common is their commitment to the people who work for the company and their community.  Eileen Fisher provides a physical allowance for employees; if your employees are sluggish or not taking care of themselves – how are they supposed to bring good energy to their workday? 

Title Nine makes sure to trust each other – they don’t answer to a Board of Directors or outside lenders.  The employees are encouraged to own their mistakes.  In fact Janis mentioned that her biggest mistake last year was hiring from the outside.  She should have hired from within, but even though the new hire turned out to be a mistake – it was a great learning opportunity.  Every person adds to the culture of the company and the wrong person can throw it all off.  Janis accepted her mistake and presented it at the company’s annual  “biggest mistakes awards.” 

Clif bar makes sure to promote from within.  On top of that, the employees are encouraged to give back to the community, on company time.  20 – 40 hours per year.  Clif believes when your employees are happy so is the company and encourages its employees to do things that make them passionate.  

Basically, what I learned was that I really want to work for any one of these companies! Their employees are happy, the companies are profitable, and the community loves them! It’s a win-win(-win)!

Bad CSR?! How can it be??

We have a great GBA this year.  They listen to the students and try to give them what they want.  This includes guest speakers in certain topics of interest that are not necessarily portrayed through the curriculum. Last Tuesday there was a CSR guest speaker – Mike Kanze.  President of Cornerstone Services. 

Mike has been a key player in many corporations but most notably in progressive responsibility with The Procter & Gamble Company. He has also acted as a consultant, which ranged from giving procurement strategic direction to client supply chain functions, savings identification and implementing organizational mergers, to individual coaching and project management.

Mike is a great and enthusiastic speaker – he really got the group engaged.  It was actually a smaller group, which allowed us to ask questions, participate, and work in small groups.  We got started with defining CSR and the triple bottom line.  People, planet, and profit.  This goes beyond business as usual.  Sounds great right?  We are all about that - but sometimes CSR can have bad implications.  And, yes obviously it can affect the profits, but even if it doesn’t affect the bottom line - how can it ever be bad? I am all gung-ho about CSR but I heard two examples I never thought of:

·      Nestle – gave women the baking tools but then the women baked unhealthy foods

·      Possibly socially responsible in one country but it doesn’t translate for all countries

So later in the night we got into a debate about whether or not companies should really invest in CSR, is it bad or good?  Is it even worth it?  Most people in that classroom knew the benefits of CSR or were interested in learning more.  However, as the daughter of two attorneys, I understand the power of knowing your opponent’s side.  Unfortunately, because of a lack of time, the argument was mostly one sided.  The for-CSR side gave its opinion and we didn’t get to hear much from the anti-CSR side.  Without knowing your opponent you will not be able to give a good argument.  So even though we were cut short – it was definitely an eye opener.  It gave me a lot to think about.  I am still pro-CSR, but you can’t just run into a business and say, “invest in your community, go organic, save the whales!” without knowing the benefits (yay whales!) or the potential issues.  We’re MBA students – we need to look past the passion to the business – but it doesn’t have to be either/or.

USF Professional Development Day

So on Friday, USF MBA students had a great day of presentations, panels, and discussions at the downtown Westin.  I arrived too late to hear the first presenter, but heard it was a great presentation.  I mostly heard that during our second presentation, because she was having a bit of difficulty grabbing our attention.  To be fair, we were all on twitter - #usfprofdev if you want to read more.  But, as I heard before, these days you have to assume your audience is otherwise engaged.  If they aren't, then they hide it well.  

Anyway - returning to the day - the 3rd and 4th speaker were fantastic.  

Mitch, formerly of VMWare, talked about the importance of start ups and working with them.  Working at one as an un-paid intern - I definitely understand the risk.  In fact, I think most interns understand this.  We love the company, the energy and the fact that we can take on so much responsibility in such a little time - but we also understand that this usually leads to little return.  Oh well, thus the life of a student.  I notice the same with non-profits.  And also, I can imagine some greener business models are met with either resistance (therefore not much revenue and a lot of risk) or are met with open arms at first until they need money.  Green is usually more expensive up front - but saves over time, people don't seem to like that.    

Moving on to our next speaker - economist, Jim Shaw.  He too has a hash tag #jimshaw.  One of our favorite professors.  He mentioned that a recession is like a cleanse.  I interpret this as the fact that possibly bailing some of the companies are not helping the cleanse, that the reason some industries drop is because they aren't needed anymore - so why are we holding on to the old way of life.  This reminded me of natural resources - we are so dependent on these resources, so we cling to them as they are being rapidly depleted.  So we need alternatives.  Of course, as my professor says, "If you get the business card of somebody when you need them, it's already too late"  So now that we are thinking about alternatives - it's too late.  (Of course, they were talking about this back in the 70s, but now it's much worse of course)  We need to make sure to integrate alternatives now - so that when the big cleanse comes, society as a whole and the economy doesn't get hit as hard is could.   Jim Shaw believes that the time is coming for that.  And it's already too late.  I agree we are in a crisis and it will only get worse -   the economy will collapse but so will society as we know it.  These alternatives to our current way of life better be ready - or  ready to grow and fill in the gaping hole the depletion of resources will leave.    

With great power comes great responsibility

A few weeks ago I attended the Women’ in Leadership conference at UC Berkeley.  It was an amazing day.  My very first panel was: Social Impact.  It was fantastic – I was worried it may be heavily non-profit oriented, but it ended up being a good mix.   

A woman on the panel – has the job that I want – though I didn’t know it until she spoke.  Meg Garlinghouse, Head of Employment Brand and Community for Linkedin.  From her title I would have not guessed she was so invested in the social responsibility aspect, but was happy to learn so. I guess it does go hand in hand with working with brand and community.  She had some great advice, but one piece of her advice gave me pause. 

Let’s start with the good.  All the ladies in the panel agreed that you have to work past your organization.  Creating a network, helping other and other companies may end up helping you and yours.  This worked well for one woman who ran a non-profit, but even in the private sector – working with other companies creates alliances and also the ability to venture into socially responsible practices in good company.  Some companies may think “well, if we’re the only ones, either we’ll be trend setters or foolish” having a partnership will allay these fears. 

Next: storytelling.  For non-profits this may mean hearing from the people you have directly helped – making sure that you are constantly assured that your efforts are going to good use.  However, for a for-profit company – what is story telling and how is it helpful?  This may be different in the fact that the company may be doing the telling.  In forms of PR and Marketing, reminding the customers that the company has the community’s best interest at heart.  Or even just reminding the company every now and again that Sarah in Ohio really likes the fact that she can buy fair-trade coffee at your store.  Stories help keep the company on track and motivated to do more. 

The one piece of advice that concerned me was “take the professor, not the class.”  This translates to the corporate world to “work for a company you admire, not because of the job title.”  She went on to say, if you admire the company start wherever you can, and then find ways to move up or even create a social responsibility program.  I don’t know about that.  When I worked in non-profit, I saw that there was a lack of social media marketing.  I encourage the non-profit to allow me to work on a plan.  I felt a lot of resistance; I wasn’t being paid for that.  And even when I was allowed- it was for, at most, 2 hours a week.  Not a great start – I ended up doing a lot on my own time.  To go into a company with the full intention of creating a job or disliking your current position seems sneaky and troublesome.  In an ideal world, the company would be happy to hear new ideas, but the company hired you for a reason, do you expect them to let you grow your new found passion into a job, just to have to hire somebody else for the job you abandoned?   Honestly, not many companies have openings in a CSR dept. they are usually made from within, but even those seem very unlikely to create.

I definitely need to work for a company I admire – one in which I can take pride and maybe even help grow in a certain direction.  I however, don’t expect to be able to create my own job. 

The last piece of advice that I loved and why I got back into my MBA is because: “The Wal-Marts of the world can do more than any government.”  Sometimes we forget just how much power businesses have, let’s make sure they use their power for good. “With great power comes great responsibility.”  

Green Washing

I was watching the Colbert Report recently and he was talking about Wal Mart growing a conscience.  Wal Mart will stock healthier products and has aligned with Michelle Obama and her “Let's Move!” campaign.  I looked into Wal Mart for their MBA internship – even applied.  I wasn’t too surprised when I didn’t hear back from them, but I gave it a shot.   

I know that Wal Mart has a bad reputation; killing off the mom-and-pop shops and having low quality items.  I personally have never shopped at Wal Mart, but the fact is, people do.  And as long as people are going to shop there, they should have options of quality and healthy products.  I don’t know if people are aware of Wal Mart’s CSR manifesto, but those who are aware call it “green washing,” that all of Wal Mart’s efforts are only for show.  So what?  If green washing leads to better wages, unprocessed foods healthier for our country, fair trade, or higher standards for factories abroad, then let the green washing continue! the fact is, the conversation has started and the idea of change is out there.  At some point companies will be held accountable for their "green" claims - and will have to produce evidence otherwise they'll lose any credibility.  

Green washing or not, Wal Mart has made changes in energy efficiency, healthier food, less packaging, and caring about where their products come from. I don’t shop at Wal Mart, I like my local groceries and trust Whole Foods more than a “super store.”  I also buy non-food items from small mom-and-pop shops – support local.  But there are those in our country who cannot afford to do so.    And for them – Wal Mart may be a viable choice.   And for those of us looking at internships, just know they probably only hire from Harvard – but don’t rule the company out.  Most companies – even Wal Mart has somewhat of a conscience.  And if they don’t maybe you can be a positive influence?  

Talking Trash!

I am so proud of my Net Impact chapter!  Our team is fantastic!  Our Director of Campus Greening has really stepped up to the plate and created a bunch of fantastic events for this upcoming semester.
Coming up we have "trash talking with Anthony."  We need this at USF.  Even I need this - so many times I wonder - did I just throw away something that could have been recycled?  or, did I just recycle something that wasn't supposed to go in there?  Then I feel guilty for the rest of the day!!

The city of Santa Monica offers free classes teaching its residents about reusing, reducing, and recycling.  My friend decided to take this 6-week course last summer.  I remember the day he went to the city recycling center to pick up his worm-composting bin.  Or the day he put a bucket in his shower in order to catch excess water which he then used to water his plants.   The coolest thing though, was the week he weighed his trash.  Yes, sounds as weird as the others – but every morning he weighed his trash against his recycling.  Since most of Santa Monica’s retailers and restaurants use recyclable or compostable materials, it was cool to realize that most of what we thought was trash – really wasn’t.  It’s just like dieting – you know that you can eat less, or in this case: waste less, but until you make a conscious effort – it is easy to get off track. 

I used to work for a non-profit that supported an aquarium.  Marine education and conservation was part of our every day life.  We were aware of the garbage patch in the Pacific long before Captain Charles Moore went on the Colbert Report.  There is a serious problem out there- and I am excited that we are shining light on the problem