Upcoming SlideShare
Embedding Ethics and Sustainability in Business and the Differences Between The Two
- 1. Embedding Ethics and Sustainability Prague College Conference June 5th 2014 Tobias Webb, founder, InnovaCon Forum Tobiaswebb.blogspot.com www.innovaCon-‐forum.co.uk
- 2. So what are we talking about here? It’s important to disCnguish between ethics and sustainability as they are oLen understood: • Ethics are how your people act every day beyond what's legally required. BUT -‐ Ethical expectaCons are not fixed, they evolve over Cme
- 3. So what are we talking about here? • Sustainability is oLen seen to be more about how your company uses resources and affects the environment • Sustainability is evolving. For the leaders it now means shiLing towards an overall posi2ve impact on society & the environment
- 4. Interface pic here Interface’s state of the art factory in Sherpenzeel, the Netherlands. The company is seen as a leader in sustainability thinking and pracCces. But ‘ethical leadership’ is seen as slightly more problemaCc. Why is this? Discuss…
- 5. How does ethics relate to sustainability? • Well, if you want a parCcular agricultural commodity to be sustainable, ethics plays a role in how you treat your relaConships with farmers of that crop • If you want to secure supply you need long-‐term trust. That’s built on a series of mutually beneficial ac2ons, not the purely transacConal nature of most purchasing relaConships
- 6. Social Enterprises such as CoonConnect are now being set up to bring farmers and buyers closer together
- 7. Ethical Trading means different things to different people Labour condiCons for many EU firms But also minimum prices for commodiCes See: hp://www.nikeresponsibility.com/report/content/chapter/labor#infographic397 See: hp://www.primark-‐bangladesh.com/our-‐work-‐in-‐summary/
- 8. Sustainability issues are oLen misunderstood…
- 9. Embedding sustainability is easier than embedding ethics -‐ Why? • Sustainability (as most companies interpret it) is more easily measured. i.e. Carbon emissions, chemicals use, waste generated or saved • Ethics can be ‘measured’ to a degree but doing so is more complex • Why? Because we are dealing with people. People are highly complex beings. There are so many variables with regard to why people do what they do. Ethics are highly subjec1ve: • E.g. Edward Snowden: Ethical or not?
- 10. Culture audits: A useful tool (as long as they are done right!)
- 11. Embedding ethics comes from both leadership and culture • AcCve Leadership: with clear simple acCons • Clear, simple expectaCons • Regular re-‐enforcement of these • Accountability mechanisms • Visible consequences (reporCng, firing) • Constant celebraCons of success • Regular involvement of everyone in “living our values” • But this is not easy…
- 12. Ethics: An approach or a standard? Fundamental differences between compliance and ethics. Companies confuse the two and have “Ethics and Compliance Officers”. They are almost always lawyers, who focus on rules rather than values. This leads to problems… i.e. Banking: Heavily rules based, not values based If ethics is a standard then it simply becomes compliance with a set of wrien rules The problem with a rules-‐based Approach? People immediately look for ways around the rules rather than considering what meets their values
- 13. Yvon Chouinard: Patagonia founder. Author: “Let My People Go Surfing”
- 14. Embedding sustainability is more process driven A six stage management process: (there are others) Step 1: Insight, Research, Benchmarking Step 2: Headline goals: Carbon, safety Step 3: Establish Baseline for Future Progress Step 4: Allocate Responsibility for AcCon Step 5: Public ReporCng of Progress Step 6: Revisit and Challenge Original goals
- 15. Lots of companies now have headline plans to help them mainstream sustainability • Unilever: “Sustainable Living Plan” • Nestle: “CreaCng Shared Value” • Coca-‐Cola: “Deliver for Today, Inspire for Tomorrow” • Marks & Spencer: “Plan A” • Sainsbury’s “Twenty by Twenty” • Interface: “Mission Zero” • Asia Pulp & Paper / Wilmar / Cargill…
- 16. And here is a typical set of headline targets to embed corporate sustainability
- 17. Industrial companies find it harder to come up with ‘catchy’ names for their sustainability work. Why? • Their direct footprint is much higher i.e. carbon, safety • Tackling these challenges oLen involves serious money • Their names are less known to the public / consumers • However, many are at the forefront of embedding innovaCon: Siemens, GE, Interface, SKF, Skanska, BMW, Dow, DuPont, Anglo American etc… • Even large B2B Asian firms (APP) ‘get’ sustainability
- 18. Sustainability requires vision and strategy, Ethics are oLen more tacCcal (but not always) • Ethics CAN be: “This is the way we do things around here, every day” • But only if those things are ethical • TradiConal sustainability paradigm: “We must reduce our energy use, minimise waste, recycle, and help our employees/ suppliers be greener • Modern sustainability paradigm: “Our Vision is to be the world's most sustainable company in our sector” • But few would say “we will be the most ethical company in the world” – Why is this? Discuss…
- 19. Plan A pic Marks & Spencer: Simple name for 180 commitments on sustainable business
- 20. In conclusion (1) • Ethics and sustainability ARE different • Ethics is an approach, not a standard set of behaviours • But they work together very well in some cases • You can be a company that works on sustainability without being believed to be ethical (every big firm has a plan) • But you can’t be ethical in the long term without being much more sustainable in the modern sense • The two together create both significant opportuniCes and a decision making framework to get there, and stay there • Large companies have a significant challenges given ethics are subjecCve: RelaCve (local) vs. Universal (global)
- 21. In conclusion (2) • But: It is not easy. The bigger a company is the harder it becomes for them to innovate, embed new pracCces and be consistently ethical in their day to day work – and to keep up with changing expectaCons… • Some sectors have very serious/complex sustainability and ethical challenges: Banking and Finance, Mining, Fossil Fuels
- 22. In conclusion (3) • The BIG challenge is scaling smaller company pracCces (Interface/Patagonia) to the size of Unilever, Nike or GE etc etc • Technology is speeding up change. But improved incenCves for investors, boards, managers, consumers are the key • We’re sCll a long way away from being sustainable, but some companies have made great progress in recent years…
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