Why Corporate Social Responsibility and the Triple Bottom Line are NOT the Answer (Oct. 3rd, 2011)

Kelly Hawke BaxterKelly Hawke Baxter, Executive Director, The Natural Step Canada, addressed the TSSS audience on Oct. 3, 2011.  She expressed her appreciation of the TSSS community as a network of Toronto professionals committed to advancing the sustainability cause through sharing and dialogue, announcing, “I’m here to contribute to the conversation.”  The event video is available at the end of this post…

CSR and TBL are outdated and counterproductive

Baxter immediately began with her assertion that corporate social responsibility (CSR) and the triple bottom line (TBL) approach are becoming outdated and can be counterproductive to global sustainability challenges.  These concepts present the danger of setting the bar too low and becoming complacent at a time when we need to dramatically up our game.  Baxter stated, “CSR won’t lead us to sustainability.  It is time to move on.  The time for CSR has passed.”

Why care about sustainability

As the mother of two boys, Baxter explained her concerns about their future, wondering what kind of world will they grow up in, what kind of economy they will face and what kind of jobs they will have as a direct result of the impact of our way of life on their future.  Her concerns motivated her to work to raise awareness to accelerate change toward a more sustainable world and to build the leadership capacity to get there.  The Natural Step is a national charity that raises awareness about the urgent need to accelerate change toward a more sustainable world and helps to build leadership capacity to get there.

The Natural Step Canada

The Natural Step Canada helps organizations:

  1. Define sustainability
  2. Embed and integrate sustainability into strategies, products, services, operations, culture, processes, governance, stakeholder engagement
  3. Develop collaboration amongst teams, departments, and stakeholders to develop innovative solutions they can’t achieve on their own

Defining sustainability

Baxter defined sustainability as “thriving within the limits of nature, of our one planet.”   Our current way of life is inherently unsustainable – unsustainable because it simply can’t last; we are exceeding the earth’s carrying capacity as a global society.  We are 7 billion people sharing a common fate on a common planet and we must address the reality of challenges such as climate change, water shortages, the rise of toxic substances and their impact on our health, loss of biodiversity, poverty, and famine.  The stakes are high for us, our children, and our grandchildren.  “How do we dramatically accelerate the rate of change when it feels we’re already doing a lot, how do we step up our game, how do we better address the root causes of why we’re unsustainable?”

Defining CSR as a flawed paradigm

CSR is an approach that respects the triple bottom line, expressing a broad commitment of business to a better world and a means of measuring and reporting corporate performance against economic, social and environmental parameters.  This approach has fostered a widespread commitment to sustainability and has changed what gets measured, how we rate corporate performance, has led to many things worth celebrating including waste reduction, emissions reduction, employee health and safety, green buildings, community investment, energy and resource efficiency. While these are steps in the right direction, Baxter argues that this is a flawed paradigm, as CSR remains an agenda that is committed to business as usual, still based on a model of unlimited growth, a model that does not allow us to thrive within nature’s limits.

Why is a triple bottom line approach NOT a strategic approach to sustainability?

  • Based on forecasting – Asks ‘what did we do yesterday?’ and looks for only marginal improvements
  • Encourages efficiency but still perpetuates a  flawed ‘take-make-waste’ model
  • Looks downstream at impacts rather than upstream at causes
  • Doesn’t take into account natural limits to growth and the value of ecosystem services

Time for a paradigm shift

With our current model we’re looking in the rear view mirror, congratulating ourselves on being less bad but still going in an unsustainable direction – our car is heading towards a cliff, and while efficiency measures are slowing down our movement towards the cliff, what we should be doing is turning the car around!

Sustainability is the greatest challenge of our time.  We must figure out how to tie it with profit and sell it to business, not simply as a way of ‘doing less bad’ but as an imperative to assure our collective future.  Now is the time to pause, reflect, learn from research and best practices.  Sustainability champions and practitioners must work together to advance the sustainability agenda.   How can we shift gears and turn our car around before we careen off the cliff?

  • Move from a linear view to a circular view – we must think of economies and societies as living within nature rather than separate from nature
  • Acknowledge rather than ignore natural constraints of our planet
  • Eliminate concept of ‘waste’ and disposable single use society – Recapture, reuse, close the loop
  • Dramatic changes to resource use, business models
  • Redefine how we measure and value wealth and progress
  • Business must prosper and profit while living within a sustainable model based upon NON-NEGOTIABLE principles of natural world

Sustainable enterprise of the future

Sustainability means thriving within the capacity of nature to sustain us AND continue to run her cycles. Tomorrow’s business needs to be able to prosper and profit while respecting and living within limits of those cycles.  What would define the truly sustainable enterprise of the future?

  • Doesn’t undermine the earth’s capacity to sustain us or undermine our ability to meet our needs
  • Works within the capacity of natural world –  zero waste, zero impact, zero emissions, zero carbon
  • Dramatically different business models that are restorative and by their nature make the world a better place
  • Idea of living within nature’s limits embedded into core business strategies

There is an understanding in the business world that becoming sustainable is a way to capture value for an organization.  The business case for sustainability can include mitigating risk, attracting talent, driving innovation, increasing consumer loyalty, and improving competitive advantage.  93% of CEOs say that sustainability is important to their company’s future but most admit they don’t fully know how to embed sustainability into their company.   For those CEOs, and others who share their confusion, here are some simple rules to consider:

  1. Don’t start with the present, define the destination.
  2. Plan the journey: identify gap between current reality and end goal
  3. Get started: assess what is needed for success – e.g. committed leadership, engaged employees, talent to drive innovation
  4. Measure, monitor, evaluate, get better

From best practice to next practice

What does this all mean for business?  Leaders must shift from incremental change to transformational change, from best practices to next practices.  This kind of transformational approach requires leadership, commitment, creativity, innovation and unprecedented collaboration.  It is not good enough to be the same as your competitor – the sustainability imperative requires you to be better, to figure out tomorrow’s best practices, today.

Baxter challenged the audience to imagine if awards were given for progress towards sustainability rather than for being less bad:  “What if we measured the gap to sustainability rather than measuring how far we’ve come?  It would change the rules of the game overnight.”  She presented examples of companies that understand the need for a paradigm shift and have embraced transformational change.  These examples of companies that are working towards an aspirational end goal of sustainability included Interface and its concept of “Mt. Sustainability” and Nike’s “North Star” vision.

A call to action

Baxter concluded with a call to action, encouraging sustainability professionals to be true leaders, to push for the next huge leap forward, to move the business world from ‘best practice’ to ‘next practice’.  It is time to get companies to stop asking, “Based on our business plan, what should our CSR strategy be?”, and ask instead, “In light of the sustainability imperative, what should our business plan be?”

Below is the first video for TSSS  events and we apologize for any technical difficulties – we are always improving and we appreciate your feedback.  Enjoy the video!

(To make it easier to navigate, we’ve provided a summary of the contents of the video with approximate times below)

Introduction by Brad Zarnett, TSSS Founder and Director
8:40        Nelson Switzer, “5 minutes with a Sustainability expert”
18:00      Kelly Hawke Baxter
47:35     “Energy Break” where audience talks about the presentation in small groups
53:09      Audience Discussion and Q and A begins
1:18:00   Summary thoughts from Bob Willard