Saturday, February 20, 2010

CSR leaders or hypocrites?

Martin asked the questions on Twitter. "What do you think of alcoa? hypocrite? trying to do the right thing? CSR leader?" and of course I can never resist a direct invitation to respond.

I was in the middle of writing my response to this post by Amelia Timbers to which he referred, but my reply was getting rather long, so here it is in full uninhibited Reporting Blog style.

Amelia described how the Aloca Company is a great CSR communicator, progresses great CSR programs and appears to be doing all the right things, with the exception of a highly criticized smelter build in Iceland which apparently was in conflict with good environmental practice. Amelia says: "The reality is that, even at its cleanest Alcoa still may be a top polluter.", and that we should give them credit for trying. 

I admit that I didn't know too much about Alcoa, it's not one of the Companies or sectors I track. However,  Amelia's post could be written about many Companies that are advanced in CSR practices and communications, but, are apparently not perfect. If the only way to achieve no impact is to stop doing business, then we are being unrealistic about what CSR and sustainability means. What we should be aiming for is a business which delivers more benefit to society via its core activities than the damage it does - e.g. a Net Sustainability Gain. Unless we are all prepared to go back to being cavemen (and women), (come to think of it, Fred and Wilma seemed to have a great ole time), we will always have industry which pollutes, uses non-renewable resources and creates inequal economic and social benefits. Even the best of social and environmental life-cycle thinking will not eleminate all the direct impacts of all businesses.

Of course, there are no good tools to calculate the NSG (Net Sustainability Gain) (this is my term - you saw it here first ! - good - eh ?) of a Company, so all we can do is make a judgement. Amelia refers to the many awards and high places in sustainability rankings that Alcoa has won, questioning whether this could be an indication of their  CSR standing relative to other Companies. But I have long since maintained that sustainability rankings serve the rankers more than the ranked. They are all positive, in  that they highlight some aspect of sustainability performance and serve to drive awareness and competitiion for higher ranking. but by and large, they do not give us a balanced or complete picture. The only ranking from which we can hope to gain true insight  is the calculation of a Company's  total Sustainability Impact and the advances it is making to improve this, against its own performance. It is not for a business to legislate itself out of business. If aluminium, or tobacco, or alcohol, or gambling  or defence systems are inherently undesirable or unsustainable businesses, Governments should outlaw them. Until they do, what we can expect of such businesses is to do what they do in a way which maximises their contribution to society and their NSG. (Net Sustainability Gain). The methodology for making such a calculation sounds impossibly complex, though some basic tools exist, such as the GRI performance indicators, SROI tools and so on. But no combination of these today goes quite far enough to bottom out all Sustainability Performance impacts into one multiple bottom line equation which is meaningful in any way.

You can read the Alcoa 2008 Sustainability Report online. Alcoa has reported on Sustainability since 2003, both at global and individual country level. They conduct Stakeholder Engagement panels and report openly on the feedback they have received. They give voice on their website to over 70 employees of different levels and regions. They have gone from 2% women senior executives to 14% in 10 years. They have reduced absolute carbon emissions by 36% since 1990, and significantly reduced absolute levels of energy and water consumption. Yes, they seem to be doing a lot of the right things and getting a lot of the right results. But, yes, producing aluminium cannot be done without taking something from the planet. Just as none of us can live without doing the same. (Unless, perhaps, we are Fred and Wilma).

As a consultant, I work with many types of Companies and sectors, including those who are not the sexiest or the most obvious in terms of sustainability. It's sometimes a challenge. But, for me, a Company who demonstrates year after year a commitment to dialogue, accountability and transparency, in pursuit of its own NSG (Net Sustainability Gain) improvement, and delivers tangible measurable results, earns my respect.

Thank you to Amelia for the inspiration for this post, and to Martin for inviting me to repond. Got more than you bargained for, huh?

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm. Visit our website at:  

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