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Corporate Social Responsibility (CSR) and Sustainability

Today I received in my LinkedIn inbox an invitation/email to a new group. If you can get around the grammar and spelling issues, the premise is interesting. Below is the text verbatim -

'Development' or Crises; Whose sustainability? Created: May 04, 2010 | Type: Non-profits | Members: 6 The massive movement of early and mid-20th century for alternative practices as against top-down state-led development, has got intertwined with the state and its collaborators. Result: Non-proft organisations have largely been reduced to mere intermediaries for self-styled and meaningless social projects.

If I understand correctly, they make the argument NGOs and non-profit organizations have been reduced to intermediaries by "the state" and by corporations.

First of all I don't think so. However, their make up, focus, and "product" may be adapting to meet the demands of the their stakeholders (foundations, donors, partners, constituents, and their target of their cause.)

In Peter Senge's latest book Necessary Revolution, he discusses the revolution and evolution that is occurring in Corporate and NGO relationships. The drive for sustainability and corporate social responsibility and environmental issues have got corporations looking at their adversaries (NGOs who often boycott or sue them) as potential allies. The need for greater impact, resources, and business savvy are getting those same NGOs to see corporations as the tool to achieve their goals.

Senge lays out a great example of the work CocaCola and World Wildlife Foundation have been doing together. It is not all roses and sunshine. These two organizations had it out for each other and fundamentally distrusted each other. Through conversation, collaboration, and education, they have each learned how to grow with each other and leverage the relationship. Coca-Cola radically reducing their water consumption through both awareness and efficiency. WWF through use of Cokes global value chain infrastructure to get messaging and understanding to parts of the world that out rejected them, but love coke.

So have NGOs "sold their soul" so to speak as the linkedin group suggests or have we all been adapting to the modern needs of the world to find collaborative solutions?

Your thoughts?

Matthew Rochte - CSR/Sustainability Consultant
Twitter: @mrochte for trends in CSR and Sustainability.

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Dear Matthew

Thank you for your observations. Clearly there has been a tectonic shift in the way the corporate community has positioned itself over the past 50 years ... and the same goes for the "State". A large part of the world 50 years back was very comfortable with the idea of "State" intervention whether it was in the Soviet bloc, Western Europe or Developing Countries. State planning ... Gosplan ... was considered an efficient way to progress!

The demise of communism as an effective economic system took a long time ... but it eventually happened, and in retrospect one should ask why did it take so long. I answer this question with the observation that nothing changes until the wealth runs out ... which is pretty much what happened in the Soviet case.

But the demise of communism is different from the "win" of capitalism. After the failure of communism, the corporate world and those who are enthusiastic about the efficiency of the capital markets were left standing as the "winners" ... and it has been easy to look good relative to the failure of communism. There has been a nice track record of the corporate world reporting profits ... and stock markets going up ... and GDP increasing ... and inflation absent. Wow ... capitalism and the market economy works!

But clearly the market economy has its problems ... bubbles are one of these ... sovereign debt issues ... questions about sustainability in many different flavors cannot be answered ... private profit, public squalor is emerging again ... growing income disparity ... unemployment ... etc.

I keep thinking about why some 4 billion people on the planet are poor and hungry ... this is a problem that should not be!

I think about the amazing progress of science and technology ... ICT is a million times more powerful than what existed at the start of my career ... yet social problems, and the governance of society has progressed very little.

As a professional in the field of metrics, I see the system of metrics being used as a big part of the problem. Metrics get beyond what people say to what people do ... and that is powerful. Change the way the game is scored and you change the way the game is played! You cannot manage what you do not measure!

And for the moment the big problem with metrics is that it is only metrics about profit that are ubiquitous ... anything to do with social value is ad hoc metrics and easy to ignore.

Community Analytics (CA) is my attempt to make metrics meaningful ... and to start holding all sorts of organizations accountable for their contribution to social progress or regression. Profit and value both have their place ... progress is needed, but there also should be performance.

Both the corporate world and the not-for-profit world need to embrace transparency and accountability ... most are prepared to talk about these things ... but nobody wants to actually do these things!

With the rotten metrics we have ... metrics that do nothing to take into account value and things like the commons ... our capitalist system and the market economy is heading into an economic train wreck without knowing it! I am appalled that so much profit has been reported, while so much of the "balance sheet" of society has been gutted. Many individuals and families are less wealthy ... towns and cities are less wealthy with huge unfunded liabilities and deteriorated infrastructure ... same for states ... same for countries.

Whatever happened to "money"? Who understands the changes that have happened ... and how fragile this profitable institutional structure has become? Maybe nobody! The demise of the communist system eventually happened. The demise of the capitalist and market oriented socio-economic system we now use will also happen unless the capacity for productive activity is used to do things of value not merely to do things that report profit!

Peter Burgess
NGOs sold their soul ?

Sometimes yes, sometimes you can't get through with a good NGO project.
Why ? In France the current Gov sees NGOs as competition, when serious
projects go forward, or they ask you to create a classic enterprise. In the US
many good projects run out of funding after the sub-prime crisis.

Good point Matthew thanks, may be a new hybrid Enterprise
Commercial & NGO could create more impact


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