Climate Change and Social Responsibility

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Climate Change and
Social Responsibility
A Reality Check
Dr James Bellini
20 April 2008
CSR Defined

CSR is about corporate behaviour

That behaviour includes:
◦ What you do or say
◦ What you do not do or say

CSR is not only about climate change
It’s All In The Mind
The successful companies of the future will base their
strategies on a healthy corporate psyche founded on
clarity, integrity and authenticity
The New Scarcities

Time

Attention

Trust
‘The pressure to deceive
is felt everywhere in business and
deceptions are ethically justifiable …
departing from the strict truth and the
golden rule is part of the strategy of
business.’
Albert Z Carr
Is Business Bluffing Ethical?
Harvard Business Review
Building The Company ‘Trust Bank’
What ‘Trust’ Is Not

Familiarity

Heritage

Low cost

Local

Availability
Who trusts whom?
100
90
80
70
60
50
40
30
20
10
0
trusted to tell truth - % of sample
Doctors
Business
leaders
Journalists
MORI
Govt
ministers
Future Conditional
Blueprint for Tomorrow?
The Millennials’ Agenda

Authentic companies

Courageous leaders

Sustainable future
Millennium Poll

Public opinion on the changing role of companies

25,000 citizens worldwide

Most important corporate values by rank:
1. Social responsibilities
2. Brand quality / reputation
3. Financial success
The World in 2032
%
Key Issues
Oil famine
Climate change impact
Future Leaders Survey 2007
The New Agenda

86% agree material consumption must reduce

66% think 4x4s should be banned from city centres

41% support personal carbon quotas
Future Leaders Survey 2007 - 08
‘This world cannot continue to function the way it is if
we wish to live out the next hundred years.
Not only do both government and the individual’s
perspectives on the environment need to change, but
also the way we relate to each other’
Camilla van Klinken, 18, Netherlands
Future Leaders Survey 2007- 08
‘There is no trade-off between economic growth and
responding to climate change. Either we do something
about it, or all our growth will go to waste when
climate change begins to wreak havoc with markets,
international relations and the world in general…’
Matt Bardley, 18, Cardiff University
Future Leaders Survey
Corporate Denial
Casebook
‘The national science academies of the G8 nations and
Brazil, China and India, three of the largest emitters of
greenhouse gases in the developing world, have signed a
statement on the global response to climate
change...and call on world leaders to ... acknowledge
that the threat of climate change is clear and increasing’
June 2005
Case Study in Denial
“We in ExxonMobil do not believe that the
science required to establish this linkage
between fossil fuels and warming has been
demonstrated”
Lee Raymond
Chairman/CEO ExxonMobil 2002
‘In September 2006, the Royal Society wrote to
ExxonMobil to express concern that some of its
corporate publications were presenting a misleading
view of the scientific evidence about climate change
The Society raised concerns about Exxon's position on
climate change and the company's funding of lobby
groups that misrepresented the science
Although we have exchanged further letters with
ExxonMobil, it has still not addressed this issue’
Royal Society press release
EXXON VALDEZ

Good Friday 1989

1100 miles Alaskan coastline affected

Clean-up bill $3.5bn + private lawsuits

Two years after 70% believed still polluted

34th largest spill in history - not large but effects on
reputation critical
Case Study in Denial
Alaska Oil Spill: “An Act of God”
ExxonMobil management
Case Study in Denial
On oath before Congress 1994:
“The presence of nicotine does not make
cigarettes a drug or smoking an addiction”
Q: “Does smoking cause lung cancer?
A: “I do not know.”
The Badvertising Backlash
A Crisis of Trust
The 21st Century Corporate Agenda
Dishonesty Pandemic
Enron
 WorldCom
 Tyco
 Qwest
 Global Crossing
 Arthur Andersen
 ...........

Dishonesty Pandemic
HIH -- $4 billion
 Parmalat -- €10 billion
 Ahold -- €500 million
 Mannesmann – six

execs tried for
‘breach of trust’
over €57 million bonuses

Multiple scandals in Japan
THE MAP OF CORPORATE MISCONDUCT
10 of the 15 biggest bankruptcies
in history have occurred since 2001
All have been driven by massive
corporate dishonesty
Corporation
n.
artificial person created by charter; an entity unto itself under the law.
‘The corporation’s legally defined mandate is to pursue,
relentlessly and without exception, its own self-interest,
regardless of the often harmless consequences it might
cause to others.’
Traditional ‘Mistrust’ Model
You are here
Virtual Trust-based Model
Contingent specialist
Knowledge broker
Customer
The Company – A Living Organism





A company has ‘psychological verities’
Corporate psyche can be analysed
Psyche can develop dysfunctions
Dysfunctions block clarity
Lack of clarity
◦ imperils psychological contract
◦ threatens corporate survival
Doing Business in 2020
The successful organisation of 2020
will have no HQ, no CEO, own no IT and will have
one-tenth the fixed assets
it has today
It’s most vital competitive resource will be the
authenticity and trust it has built with its
stakeholders
CSR – A Progress Report
CSR Value Curve
Growth platform
Efficiency
Value-based self regulation
Strategic philanthropy
Legal and compliance
IBM Institute for Business Value
The Future Company?
HYPER-ORGANISATION

‘Win’

Strip out unnecessary Ps
◦
◦
◦
◦

Positions
Processes
Purchases
People
Order workplace lives to
match corporate goals
The Future Company?
HYPER-ORGANISATION


‘Win’

Align with personal values

Mirror individual identities

Flatten hierarchies

Integrate workplace lives with
non-work goals
Strip out unnecessary Ps
◦
◦
◦
◦

DISORGANISATION
Positions
Processes
Purchases
People
Order workplace lives to
match corporate goals
Lost Opportunity
%
% engaged in CSR activities
IBM Institute for Business Value
Exploring Corporate Psyche
What drives corporate behaviour?
A New Psychological Contract
We are moving from the Industrial Age
to the Connected Age
Business needs a new mental
model of how to engage in
relationships with its stakeholders
Trust and truthfulness are key
‘The central theme of The Bullshit Factor is that organisations and
people inhabit the same psychological universe and that, like people,
organisations can have psychological issues.
These issues are manifested in patterns of behaviour that reflect levels
of ‘untruthfulness’, misperceptions, delusions or some other deceit.’
The Bullshit Factor p 171
What Makes A ‘Healthy’ Psyche?
Objective perception of reality
 Naturalness; simplicity; spontaneity
 Empathy for humanity
 Democratic characteristics

Goodbye Gordon Gekko
A New Business Ethos
Healthy Corporation
 Civilised Workplace
 Nice Company
 ‘No-jerks rule’
 “Our people are hired and fired for
attitude” SouthWest Airlines

Companies On The Couch
Case Study in Arrogance
[ Caught with their pants down?]
Case Study in Arrogance
Food Is Survival
Portrait in Courage: GE’s Jack Welch

Routinely fired worst-performing 10 per cent

‘Neutron Jack’

100,000 jobs disappeared during his tenure
Portrait in Courage: GE’s Jack Welch

Took GE in 20 years from $26.8 bn to $130 bn

Company share price rose 4000 %

‘I want bosses to have more candour, less bullshit’
Semco: A ‘Maverick Corporation’
KEY PRINCIPLES







Be dependable and reliable
Value honesty and transparency above all
Encourage creativity; support the bold
Question decisions imposed from the top
Pleasant and informal environment
No dress code; voluntary meetings; mandatory vacations
Employees set hours and wages, choose IT
Principled Leaders – A Checklist





Personal humility, not ego
Ambitious for organisation, not themselves
Defend beliefs with courage
Nurture core values – ‘integrity’
Hire people of right character
Elements of Courage

Consumers, employees, leaders
◦ New consumer equation / precision markets
◦ Optimum talent mix
◦ Metanoia for business decision-makers

Virtuous circle in the workplace
◦ Clarity, honesty, integrity
◦ End to ‘workplace schizophrenia’
◦ Principled leaders
Climate Change and
Social Responsibility
A Reality Check
Dr James Bellini
20 April 2008
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19 September 2007 | Slide 56
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