Corporate Responsibility: Changing Business from the Inside Out

Find out why working for a corporation isn’t “selling out” as companies are adopting the field of corporate responsibility to the demands of an increasingly ecologically- and socially-conscious world.
By Timothy J. Mohin
January 2013
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“Changing Business from the Inside Out” details the programs and processes needed to support a comprehensive corporate responsibility effort, but perhaps more importantly, it identifies the personal and professional skills needed to navigate corporate politics and get buy-in from skeptical colleagues.
Cover Courtesy Berrett-Koehler Publishers
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For more than two decades, Timothy J. Mohin has worked to improve working conditions, clean up factories and battle climate change — all while being employed by some of the biggest companies in the world. In Changing Business from the Inside Out (Berrett-Koehler Publishers, 2012), he’s written the first practical, authoritative insider’s guide to creating a career in corporate responsibility. Mohin recounts colorful case studies from his own career, provides advice on how CR workers can have greater impact and even looks into how employees in other corporate functions can make a difference. Learn why working for a corporation isn’t “selling out” and why the emerging field of corporate responsibility will be a force to be reckoned with in the upcoming years. This excerpt is taken from the introduction, “Working for Good Inside a Corporation.” 

I was wise enough to never grow up while fooling most people into believing I had. — Margaret Mead

So, you want to save the world, but still need to earn a decent living? If this sounds like you, you have opened the right book.

The question is: how? Corporate jobs aren’t likely to send you to underserved communities to teach, and nonprofit jobs don’t usually pay very well. Most people entering the job market today are saddled with student loans and are looking for a role that will give them a financial foothold in life. Is it always one or the other — pursuing a living or pursuing your dreams? Do you have to abandon your values to earn a good salary?

The answer is: no. The emerging field of “corporate responsibility” (CR) is an attractive option that spans the traditional border between for-profit capitalism and applying your skills to help people and the planet. This field offers a way to have your cake and eat it too. In other words, you can realize your altruistic goals and still earn a decent living in the corporate world.

But wait, you say, aren’t jobs in CR rare and hard to get? Yes, this is a new field and, while there are not as many opportunities in CR as there are in more traditional business roles, it is a rapidly expanding area and new jobs are being created all the time. Further, there are many ways to contribute to social and environmental causes outside of the formal CR department. Most companies have a small CR staff that is focused on marketing their CR story, but it is the traditional business functions that create that story.

Isn’t working for a company selling out?

To some readers, the very notion of working within a corporation is tantamount to selling out their values as advocates for social or environmental justice. While this is a valid perspective, there is another view. Liz Maw, executive director of the MBAs for Social Justice Group “Net Impact,” articulated this view in her opening remarks for the 2011 Net Impact conference, when she said, “We are here to occupy Wall Street from the inside.” The standing ovation was spontaneous, sustained, and genuine. The audience represented a whole new generation of young people moving into the workforce with their sights set on working for societal good from within a company.

But, as the occupy protests drag on, the popular view is far more divided. Are all corporations greedy and self-interested? Can corporations really be a force for good? These are questions that have been pondered for some time. The legendary economist Milton Friedman authored a New York Times op-ed in 1970 titled “The Social Responsibility of Business is to Increase its Profits.” Friedman pulled no punches in the opening to this piece:

The businessmen believe that they are defending free enterprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are — or would be if they or anyone else took them seriously — preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.

Is corporate social responsibility “undermining the basis of a free society?” Should companies have any role in protecting people and the planet? Should the excesses or externalities that can result from the pursuit of profit be the sole province of government and/or civil society to monitor and regulate? Friedman and a line of followers (see “The Case against CSR,” Wall Street Journal op-ed, 2010) have articulated the popular perspective that companies have no obligation to people and the planet. Their only obligation to the world is to generate profits for their shareholders.

BUNK!

Such black and white distinctions only make sense in the academic ivory tower. In the shades of gray that color the real world, companies must make trade-offs every day on where to invest and how to conduct their business. High-profile cases of corporate misconduct mask the less sexy, but no less important, cases of companies choosing to do the right things right. Even Friedman admits that business leaders must conform to the basic rules of society and ethical norms in his 1970 article:

[The] responsibility [of the business executive] is to conduct the business in accordance with [the owners’] desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom (emphasis added).

The “ethical customs” of society have changed a bit since 1970 when this article was published. On December 2nd of that year, President Richard Nixon created the Environmental Protection Agency (EPA) in response to public outcry over corporate pollution disasters such as the near extinction of songbirds from the use of the insecticide DDT (unveiled by Rachel Carson’s 1962 book A Silent Spring), the Cuyahoga river fire in 1969 (yep, the river actually caught on fire), and the first Earth Day held in April, 1970.

So, by following the “ethical customs” before 1970, rivers caught on fire and songbirds were driven to the brink of extinction. Thank goodness today’s ethical norms are more enlightened. Society expects more from corporations and, as these expectations increase, there is a growing need for people to work for social and environmental justice from inside companies.

By effectively working within a company you can influence decisions that can have massive societal benefits across the globe. And there has never been a better time to work on these changes. The race to be the greenest, most responsible company on the planet is under way (e.g., last year, more than 5,500 companies around the world issued sustainability reports, up from about 800 ten years ago) and appears to have substantial staying power. Companies of all types are looking for people to help improve their environmental, social, and ethical performance. By learning the skills and strategies of working for good within a company you can create large, immediate, and lasting change.

Instead of empty rhetoric, this point of view is the essence of my own career choices. I have done more for people and the planet working within corporations than I could have ever expected to achieve had I stayed in the government (I worked at the U.S. Environmental Protection Agency and the U.S. Senate in the first ten years of my career). While government regulators and nonprofit activists are very important drivers for social and environmental justice, they must work from the outside to cajole companies into good corporate behavior. The threat of enforcement or activism as a tool for change pales in comparison to the sweeping implications of, for example, leveraging a multinational corporation’s buying power to transform working conditions in a global supply chain.

To a certain extent, being a corporate treehugger is a line-walking exercise. Corporations are indeed focused on profit, and being an activist within a company is very different than being an activist for a nonprofit organization. But as expectations and transparency increase, the “ethical customs” for corporate behavior are changing. These macro-level changes are opening up new jobs in CSR and changing “mainstream” roles across almost all corporate functions.

I wonder if Milton Friedman would think that the inmates had taken over the asylum if he could witness 2,600 enthusiastic MBA students and professionals cheering for corporate responsibility at the 2011 Net Impact conference. As these business leaders of tomorrow increasingly occupy Wall Street from the inside, even Friedman might have to concede that the profit motive and social justice can be mutually supportive.

What you will get from this book

The idea behind this book is to provide practical advice for people looking to enter the world of CR, either in the official CR department or within a more mainstream role. This book is not about theories, case studies, or abstract business strategies. There are numerous books presenting hundreds of theories about how companies can both “do good and do well” through corporate responsibility. While these theories are important, they are often not practical unless you are the CEO or have similar decision-making authority. For the rest of us — those who haven’t made it to the executive suite just yet — this book is a how-to manual for contributing to social and environmental well-being through a career in business.

The recent explosion of interest in CR has created an exciting new career path and new job opportunities to work within a for-profit company while pursuing altruistic goals. For those who are interested in the CR field, this book outlines step-by-step tips for designing and running a successful program as well as the essential skills and attributes for this career path. For those who are not interested in working in the CR department, the guidance in this book can be applied from almost any position within a company. As you will see, the opportunities to contribute to society may be even greater from outside the CR department. The key is to lead from where you stand. Anyone in any department and at any level can make a difference.

I wrote this book because I wanted to share the practical lessons gained over more than 25 years of work that included much trial and error. As this field has grown, it has also become popular with a legion of young adults who are looking for their first job as well as career-switchers who want more meaning from their work. This trend is inspiring and motivated me to share what I have learned. My intent is that this book provides some practical guidance for those who seek a career in corporate responsibility. While it is obvious that not every tip will work in every situation, I hope that the stories and examples in the pages will inspire you to make career choices that will make a difference.

Why corporate responsibility?

There are many reasons why increasing numbers of people are interested in the emerging field of corporate responsibility. As the reach and resources of corporations have increased, so has their ability to drive meaningful improvements. This broader reach, coupled with heightened awareness and scrutiny of corporate operations, has led to the emergence of corporate responsibility as a viable and meaningful career choice. Specifically, I believe there are three reasons for the rise of corporate responsibility:

1. Business is the dominant social institution of our time
In a globalized economy, the revenue of multinational corporations dwarfs the gross domestic product (GDP) of some countries. Many companies are now large enough to affect change on a global scale; their physical impacts and policies transcend national borders and the decisions made in corporate boardrooms can help or harm millions of people.

Take Walmart, for example. Love them or hate them, as of this writing, Walmart is now the world’s largest company with revenues exceeding US$400 billion and approximately 2 million employees (or associates, as Walmart prefers to call them). Mentioning Walmart in the same sentence as corporate responsibility will elicit strong reactions in some circles. Many people associate the brand with everything that is wrong with corporate America — from poor wages and benefits for their employees to shutting down small businesses by undercutting their prices. However, over the last several years, Walmart has developed an impressive sustainability program. In 2009, Walmart introduced its Supplier Sustainability Assessment Survey — a diabolically simple set of 15 questions examining the actions of its suppliers in order to better protect the environment and uphold labor rights. The survey is diabolical because to answer affirmatively, each question requires the supplier to have fairly sophisticated CR programs. For example, question one asks: “Have you measured and taken steps to reduce your corporate greenhouse gas emissions (Y/N)?” This Yes/No question sounds straightforward, but to answer “Yes” requires an in-depth carbon footprint study that many companies have yet to undertake. With the scale of Walmart’s purchasing power and the not-so-subtle commercial pressure to score well, this simple survey has already had wide-ranging impacts for manufacturing companies around the world. To up the ante, Walmart has publicly discussed its intention of turning the scores from this survey into a point-of-sale sustainability ratings label.

The scale of Walmart’s turnaround is hard to overestimate. Jeffrey Hollander, the co-founder of the cleaning product eco-brand Seventh Generation, was quoted as saying, “Hell would freeze over before Seventh Generation would ever do business with Walmart.” But in a 2010 interview with FastCompany.com he said, “They aren’t the same company they were when I said what I said. I’m the first one to admit that I was naive in thinking it was impossible for them to change.”

As the Walmart example demonstrates, working for social and environmental improvement within a large company can be effective on a massive scale. It can also be monumentally frustrating. Companies are profit-making institutions beholden to return maximum profits to their shareholders. In the past, this meant that companies cut corners to save money whenever it was legal and/or expedient. The good news is that today this kind of behavior is increasingly unacceptable. Watchdog groups monitor company behavior closely and have become very adept at drawing attention to corporate misdeeds through “name and shame” or “rank and spank” tactics. New laws such as Sarbanes–Oxley and Dodd–Frank continue to push companies into greater levels of transparency and accountability. This increased scrutiny and the growing awareness and expectations from customers, employees, and the general public have made it imperative for most companies to build a strong CR program.

2. Opportunity
Strange as it may seem, there is money in altruism. As the world runs short of resources there is an increasing market for more efficient products and services. The economic winners of tomorrow will be the innovators who find ways to do more with less — to stretch our finite resources. Continuing to prosper while using fewer resources is the definition and aspiration of sustainable development.

While there is a strong argument that the excesses of industrialization have led to many of the social and environmental problems we now face, there is an equally strong point that business will also produce the solutions. Business — or, more accurately, the profit motive — represents an incentive system that rewards the iconoclasts and creative innovators who can see around corners, think differently, and are willing to take risks. In today’s world, these inherent business incentives are increasingly being applied to help people and the planet. For example, rising fuel prices and the threat of global warming have shifted the auto industry away from making gas-guzzlers, and toward innovating with higher-mileage hybrids and electric vehicles. General Electric (no one’s idea of a corporate treehugger) has claimed billions in profit from its Ecomagination campaign — designing, marketing, and selling technology based on resource efficiency.

Today’s workforce increasingly looks at the world as a set of problems to solve rather than just a set of markets to exploit. Some may see this as a distinction without a difference, but the difference is profound. World population has doubled since 1960 and will double again in the next 50 years. With the rise of the emerging economies in China, India, Brazil, and others, our well-being and survival depend on the sustainable use of natural resources. Whether you subscribe to Adam Smith’s Invisible Hand economic theory (i.e., price signals control everything), or believe that government regulation is the only effective way to control the excesses and externalities of business, eventually it does not matter — in a resource-constrained world, sustainable innovation will always win.

“Build a better mouse-trap and the world will beat a path to your door” is the widely quoted phrase attributed to Ralph Waldo Emerson as a metaphor for the success that springs from innovation. Combine this axiom with the ancient proverb “necessity is the mother of invention” and you have the business case for sustainability.

The megatrends of increasing population, dwindling resources, and increasing pollution will spawn the major industrial powers of the future. These new super-companies will be global businesses led by bright young minds that will discover new ways for humanity to thrive without using up the planet on which we depend.

3. Legacy
The third major factor leading to the rise of corporate responsibility is the desire to leave a positive legacy. Clayton Christensen, author of The Innovators’ Dilemma and a guru in the business world, summed up this drive brilliantly in an article titled “How Will You Measure Your Life?” The article drew attention, not because it was another of his phenomenal observations on business strategy, but because it was a very personal exploration of his life’s legacy. Christensen makes the case that following the business law of maximizing marginal returns can lead to ruin. He distinguishes his career from his Harvard Business School classmates who initially found riches but ended with a life in tatters. Guided by his values, Christensen eschewed the traditional business doctrine, instead investing his considerable talents in research, teaching, and family. The take-home message of this paper is that there are far more relevant and important ways to measure your life than in dollars.

Another great example of a value-based business career is Gary Hirshberg, the former CEO of Stonyfield Farm (an organic yogurt company in New Hampshire). Rather than compromise his values, he founded a successful company based on sustainability and social equity. In his speech to young MBA students at the 2010 Net Impact conference, he outlined how he struggled through the early years after starting his business. He described how the experts derided his business model because organic foods were more costly and harder to produce. To ensure an adequate supply, he worked with farmers to teach them how to produce organic food and showed them that they could make more money with less price volatility. When the company gained enough of a foothold in an industry dominated by giant food conglomerates, he answered their multi-million-dollar advertising attacks with innovative packaging that contained quirky messages, yogurt container take-back programs and “guerilla” advertising tactics (i.e., people-to-people) to draw attention to the brand. He proudly reported that his struggling organic foods start-up is now commanding industry-leading margins and growth rates while continuing to pay dairy farmers higher prices. At the end of his remarks, Hirshberg left his most enduring mark when he declared: “You should never compromise your values for work. If a company makes you check your values at the door, find somewhere else to work.”

This profound statement generated a spontaneous and sustained standing ovation from the packed house and, I would guess, spawned more than a handful of new sustainable business start-ups.

Hirshberg’s enviable legacy shows us how to hold on to your social and environmental values, make your fortune in business, and redefine an entire industry. Christensen’s example shows us how to live a values-based life and define your legacy with accomplishments, not just dollars. Both men are icons for the central theme of this book: how to make your living AND make a difference.

This excerpt has been reprinted with permission from Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations by Timothy J. Mohin and published by Berrett-Koehler Publishers, 2012.


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stevenson
7/18/2014 7:40:40 AM
My older son started his own business five years ago and his business flourished after he started implementing corporate responsibility projects. He received a lot of help from specialists that showed him how things must be done, he even contacted a http://answernational.com/services.php to get professional service support. Now his company is well known for its corporate sustainability projects and all his clients know for sure his company is the best choice.








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