[Editor's Note: This article is part of GreenBiz.com's coverage of the 2009 Business for Social Responsibility conference. To read all our coverage, visit GreenBiz.com/BSR2009.]
The past year has been a whirlwind -- or perhaps more of a hurricane -- for the business world. Between the Great Recession, increased realization about how rapidly climate change is happening, and the expansion of political and economic influence to new nations, it all adds up to what the leaders of the upcoming Business for Social Responsibility Conference call a "reset world."
The conference aims to explore how this reset world has changed, and show how companies can adapt and even thrive to the new business and ecological environments.
To get a sneak preview of the BSR conference, and talk about the state of responsible business in general, I spoke with Aron Cramer, the President and CEO of BSR.
Matthew Wheeland: Aron, thanks so much for taking the time to talk with us today. I want to talk mostly about the upcoming BSR conference, and the theme of this year's conference is "Reset Economy, Reset World." Tell us a little bit about what that means.
Aron Cramer: Well, the world has been through a roller coaster over the last year, and in some ways, going back a couple of years. So we've seen a trio of things happen that have immense impact on businesses everywhere. One, of course, is the recession and the steep fall. We seem to be seeing a bit of return, but we've been through a very, very difficult economic time. That's number one.
Number two is lots of evidence that natural resource constraints are becoming more pressing. There's evidence of faster than expected climate change taking place. Last year, we saw amazing pressure on commodity prices. All of these things suggest that the natural resource limits to business-as-usual are under more pressure.
And the third is, the world is changing very, very fast. You know, this year we've seen a transition from the G8 to the G20, and that's just one symbol of how political and economic influence is shifting to be held in a much wider set of hands.
So all three of these things and, by the way, adding to it the fact that trust in business has declined very rapidly -- all of these things suggest a very, very different frame for the world and for our economy.
Our conference is designed to put that front and center and to ask all the thousand or so participants at our event to think about how they can change business strategies and sustainability strategies that will meet the challenge of this reset world.
MW: And it's great that you brought up the issue of trust because I wanted to ask about that as well, that that's obviously another big theme is regaining the public's trust in business, which is something that at times can seem like a pretty tall order. What's your take on what companies can do to rebuild those bridges, or things you've seen companies already doing?
AC: Well, there are a number of things that companies can do to regain public trust. One thing that I think will make a big difference, quite frankly, is if the economy begins to recover, the public is going to be more comfortable with what the private sector is doing.
But in addition, I think looking at ways to show that businesses are interested not only in their own short-term profits, but also in building businesses and building an overall economy that delivers on the biggest challenges we face globally. Good stable jobs certainly, but also addressing climate change, also looking at labor conditions, both domestically and in their supply chains, looking at water crisis, looking at good transparent governance -- these are all the things that lead the public to say that businesses actually have a broader set of concerns that affect me and my life and not only delivering what Wall Street wants to see.
And by the way, this is not just an academic matter because when businesses have strong public trust, it means that their employees have greater trust in them, their customers and consumers have greater trust in them, and regulators are also more inclined to give them the benefit of the doubt.
So these are all things that have very practical impacts on how businesses -- individual businesses and business as a whole -- are positioned to succeed. And so regaining trust will really help businesses perform more effectively. It's not just a question of moving polling data up or down.
MW: And some of the examples that you mentioned, I know BSR is very engaged with especially water issues, there are supply chain issues. Can you give us an example of a recent activity that companies -- that BSR members or BSR projects have worked on, that sort of serve as an example for showing business concern beyond just profits?
AC: Well, we are, in any given year, we're working on 150 -200 projects with our 250-member companies, and there are a couple that, I think, are particularly interesting in this year, in 2009.
One is that we worked with Sprint and Samsung in the development of their reclaimed phone, which is an actual handset, a mobile phone, that Sprint's put into the marketplace. It's a Samsung phone that is a truly sustainable handset, and the issue of e-waste is obviously one of considerable concern.
A lot of people believe that companies are just always trying to sell the next new thing, regardless of the impact on the environment, but here's an example of a couple of companies who took a very common consumer device and tried to redesign it from the ground up to make sure that it didn't just have a green coat of paint, but in fact was based on sustainability principles from the beginning.
And I think when you see more companies designing for sustainability along the lines of this phone that we have the great opportunity to work on with Sprint and Samsung, then you get into an economy that is much more like a closed loop economy. And I think that's the kind of thing that will not only deliver great results for the companies that are doing them, but also I think will begin to reshape the very core of the economy.
On another note, we've been working with Walmart and a number of its suppliers in China. Walmart has made some very big, audacious statements about its objectives on sustainability, and we've been working right there on the ground with Walmart and a number of its suppliers, with staff person embedded in Walmart's headquarters in China to help these big suppliers simply reduce their energy use.
And in very practical ways, finding solutions so that the workshop of the world, as China's known, will use a lot less energy. Now this is relevant to trust for a very simple reason: we've seen the rise of a lot of claims by companies about emissions reductions, water use, you name it -- and there are a lot of people who are skeptical about those views, or about those statements.
Here's a case where a company's made some big statements and is following it up by working -- and working with BSR -- to help realize those objectives. And when companies are not only making but delivering on those kinds of statements of intent, I think you'll see public trust begin to rebound.
MW: Absolutely, and I'm glad you brought up China. I know that is at least one element of the agenda for the conference, and it's obviously a huge issue in terms of it being the workplace for the world, as you just mentioned. Can you give me a thumb-nail sketch of the state of sustainability practices in China?
AC: Telling the tale of sustainability in China is Dickensian in the sense that it's almost always a tale of two cities. On the one hand, we're seeing an immense amount of innovation, and one of our plenary speakers at this year's conference is a gentleman named Zhang Yue who runs the Broad Air Conditioning, which is -- they are technological innovators creating an air conditioning unit that uses significantly less energy than traditional air conditioning units do. So this is a company that's finding a way in China and internationally to reduce reliance on dirty energy. And there are lots and lots of examples of that coming from China.
Politically, we saw that Chinese leadership make a strong commitment at the U.N. last month to using more renewable energy. Those are all very positive signs.
At the same time, China is a very big country, and it continues to invest in dirty power. There continue to be questions about the working conditions in the factories that export so many products around the world. So it's very much a work in progress, but I think there are lots of reasons to look at China and find examples of the kind of innovation that will be absolutely necessary if we're going to move to a low-carbon economy.
MW: One idea that keeps coming up, almost every time I talk with a business leader, is sort of the confluence between this increased awareness about environmental issues and concern about it in the business community, but then also the crashing economy. And so I'm wondering how you've seen your members sustain their sustainability goals in the face of shrinking budgets or make the business case for new sustainability goals.
AC: Well, in some ways, the tale of the last year is one of great success in terms of a company's maintaining -- and in many cases extending -- their commitment to sustainability. That might be counterintuitive, but in fact, I think what it reflects is a recognition of what many of us in the sustainability world have been saying for a long time, that actually, done right, corporate responsibility or sustainability is a key ingredient in business success. It helps companies anticipate broad social trends, environmental trends. It helps companies be more responsive to the dense network of constituencies it means to reach. And in many cases, it can be a real driver of innovation. And so we have seen very, very few examples -- if any -- of companies just walking away from their activities related to sustainability.
I think what has happened is a lot of companies have taken a cold, hard look and maybe dropped some activities that maybe they had engaged in traditionally, but didn't seem to be delivering so much value in today's more constrained economic times. We've seen that in some activities around philanthropy. We've seen that in some areas around stakeholder engagement. Not companies doing less of it, but using different methodologies, taking advantage of technology, or simply refining the stakeholders that they're talking to, to deliver more value.
So I actually take away from the difficult times of the last year an immense amount of optimism about the staying power of sustainability. I think that in some ways, the recession has accelerated the process of maturing of the world of sustainability and we've got a stronger, fit-for-purpose approach that most companies are taking, and it's clearly here to stay.
MW: And finally, I've been looking over the agenda for the conference, which is coming up in just a couple of weeks, and there's just a lot going on over those three days. I'm wondering if you have any highlights that attendees should know about, or if there are topics that might be of particular interest to people who are new to BSR or new to the world of green business in general.
AC: I think there, of course, are lots and lots of highlights, so let me focus on just a few. One -- let me start with the plenary discussions and just note that I find it really significant that we have four CEOs speaking, and one comes from Jordan: Aramex, the first country in the Arab world to do a sustainability report. One comes from China, which I mentioned. One comes from Europe: Alcatel-Lucent, the Dutch CEO of a French company. And one comes from the U.S.
And this, I think, is reflective of a really important change that's happened over the last two or three years, which is the sustainability agenda is now truly global. It is no longer just made in Europe and America. It is truly global, and I think this is not only a good development, but an essential one, and we're delighted to be able to reflect that at the plenary podium in our conference.
There are some great thinkers at our conference. I would point to Sylvia Earle, who is a renowned expert on our oceans, which in many ways reflect some of the climate crisis most acutely. And anyone who has ever heard her speak knows that she's incredibly inspiring.
I would also point to a dialogue that will take place around the link between corporate governance and sustainability, which is a hugely important topic. One of the reasons that trust has been shattered is there's a sense that Boards of Directors haven't been doing their job. We'll have one of our own Board members, Roxanne Decyk from Shell, who is a public company director herself, works with Shell's CSR committee of its Board, lots of great insights.
And then the last thing I'd say is that we have really worked hard this year to reshape the format of the conference so that it is truly interactive. Very few, if any, panel discussions. We've got extended workshops. We've got one-on-one dialogues.
And we hope that our conference will not only reflect great work that a thousand people there do all year long, but be a really dynamic environment in which new ideas can be generated right there on the spot. So there are lots of reasons to be excited going into it, and I know that the conference is going to produce some great, unexpected surprises and opportunities coming out of it.
MW: Well, Aron, the conference sounds great, and we will certainly be covering it throughout the three-day event. It's happening the end of October, and you can find out more at BSR.org.
AC: Many thanks, Matt. Great to talk with you.