The Quest for Sustainable Business

An Epic Journey in Search of Corporate Responsibility

Wayne Visser

• Publisher: Routledge
• Year: 2017
• Print ISBN: 9781906093761
• eBook ISBN: 9781351277624
• Topic: Business
• Subtopic: Business General
• Index: Business

In January 2010, author, academic and social entrepreneur Dr Wayne Visser set off on a nine-month, 20-country "quest" to talk to entrepreneurs, business leaders and innovators and learn about how companies in all parts of the world can and are helping to tackle the world's most pressing social and environmental problems. His aim was to explore the many varieties of global approaches to sustainable business practices first-hand and to share some of the most innovative global examples.The result is this treasure trove of a book, full of stories, ideas, links to more than 100 video interviews, best practices and tools for making sustainable business work in a myriad of different contexts, cultures and settings. Besides sharing insights from his 2010 "CSR Quest World Tour", the author captures his professional experiences and the evolution of sustainable business over the past 20 years.The path begins in Africa and winds its way through Asia, North America, Europe, Australasia and Latin America. The author shares what he has learned in encounters with mega-corporations and small farmers, and conversations with CEOs and social entrepreneurs. There are facts and figures about world trends, and interviews with thought leaders and activists. This is a tale that consciously weaves the personal and the professional, mixing anecdotes and case studies. It looks outwards and reflects inwards, and is both autobiography and the life story of a global movement.

Part 1
Africa

1
Divided and united

Investing in change (South Africa: 1978–1991)

Innocence lost

I moved with my family from Bulawayo to Cape Town, South Africa, in 1978, to escape the escalating Rhodesian bush war. My growing love affair with nature continued to blossom when I joined Scouting movement – first Cub Scouts and later Boy Scouts, where I eventually achieved the accolade of Springbok Scout, the highest award possible in South Africa. I have many great memories of numerous hiking and camping excursions – whether it was striding along the beach and wading over sand dunes for two days (the Rayner competition); trekking through the mountain wilderness for ten days and scuba-diving in deep rock pools (the Cederberg adventure); or hiking down a canyon river for five days and sleeping under the stars (the Fish River Canyon) – I ended up growing to relish spending days and nights outdoors.

I think it’s fair to say I lived a privileged and sheltered life in Cape Town, attending racially segregated schools without much understanding about the immoral politics of the day, or the storm of popular discontent that was steadily building. My naivety was brought into sharp relief when, in my final year of school in 1987, I went on a Christian work camp to Namaqualand. This arid area, situated on the north-west coast of South Africa, is famous for its multi-coloured carpets of daisies that erupt in the spring. Its population is mostly rural and poor, of mixed race (classified as so-called ‘coloured’ in South Africa at the time), with strong ancestral links to the San Bushmen of the nearby Kalahari desert. A few copper and diamond mines in the area provided what little employment opportunities were available.

Our mission was to help to build a community centre, working together with local community members. Believe it or not, the fact that people from different races were mixing ‘socially’ was, in 1987 South Africa, considered radical; apartheid was still legally in force, institutionalised through dozens of racist laws such as the Group Areas Act, which segregated living areas and public facilities. It soon became clear that years of separation and suspicion had taken their toll. At one point, the ‘black’ volunteers (‘black’ was used in South Africa as an umbrella term for all races of non-European descent, including African, Asian and Coloured) started singing political protest songs while they were working. The ‘white’ volunteers (myself included) promptly took offence, believing that politics and religion should not be mixed – this was a Christian work camp after all.

This just shows how naive we were as white children growing up in South Africa. After all, not only have religion and politics always mixed throughout the history of the world, but more specifically, the Church had been complicit in apartheid – for better and for worse – for decades. For one thing, the Nationalist government, which came to power in 1948, used the Bible to justify its racist policies. The Truth and Reconciliation Commission later reported:

Some of the major Christian churches gave their blessing to the system of apartheid. And many of its early proponents prided themselves in being Christians. Indeed, the system of apartheid was regarded as stemming from the mission of the church.

On the other hand, it was also church groups that were among the most vociferous anti-apartheid activists, both at home – led by the likes of Anglican Archbishop Desmond Tutu – and abroad.

Ethical investment roots

Most significant for the emerging corporate responsibility movement was a campaign by African–American minister, Reverend Leon Sullivan, to hold US companies operating in South Africa accountable for their ethical practices. Sullivan had been serving on the board of General Motors (GM) since 1971 and was described by his colleagues at GM as the ‘Lion of Zion’ and the ‘conscience of the board’. In addition to pushing for diversity within the company in America, Sullivan began campaigning to raise standards for black workers living under apartheid, since GM had significant operations in South Africa.

This led to the establishment in 1977 of what is arguably the world’s first CSR code: the Sullivan Principles. The Principles called for US companies operating in South Africa to integrate corporate facilities, establish equal and fair employment practices and increase the number of black managers. It was not uncontroversial, since the banned African National Congress (ANC) and its rising star, Nelson Mandela, were already calling for disinvestment from South Africa. According to Reverend Jesse Jackson,

When the big idea was to boycott South Africa, Reverend Sullivan’s point was that when blacks emerged they had to have infrastructure. He argued that if you run [out] all the companies, when black South Africans were liberated they would take over a shell. In the end these were not conflicting positions – Mandela had a long appreciation for Sullivan, as did the rest of the African National Congress.

Eventually, Sullivan did call for full divestment from South Africa, a position that alienated some of the 100-plus US companies that had signed up to his original proposal. However, in 1999 he joined with United Nations Secretary-General Kofi Annan to relaunch the code as the new Global Sullivan Principles. The overarching objective of these principles, according to Sullivan, is ‘to support economic, social and political justice by companies where they do business’, including respect for human rights and equal work opportunities for all peoples. By the time of his death in April 2001, more than 250 companies, including Coca-Cola, British Airways and Texaco, had endorsed Sullivan’s new principles.

Beyond contributing to the eventual dismantling of apartheid, the Sullivan Principles were significant for another reason. They added tremendous momentum to a movement that had barely just begun – the ethical investment or SRI movement. This was led by the US-based Pax World Fund, founded in 1971 by two men with a well-defined mission. Luther Tyson and Jack Corbett, who had worked on peace, housing and employment issues for the United Methodist Church, wanted to make it possible for investors to align their money with their values. At the same time, they wished to challenge corporations to establish and live up to specific standards of social and environmental responsibility.

Little could Tyson and Corbett have imagined that their fund, now called the Pax World Balanced Fund, would help give birth to the global SRI movement. Interest in the industry has expanded exponentially, with socially responsible and sustainable investment assets increasing from $639 billion in 1995 to $3.07 trillion in 2009, according to the US Social Investment Forum. In Europe, the figure is €5 trillion (more than $7 trillion), according to the European Sustainable Investment Forum (Eurosif). Hence, nearly one in every eight dollars under professional management in the United States today – 12.2% of the $25.2 trillion in total assets under management – is involved in some strategy of socially responsible and sustainable investing.

This explosive growth in SRI funds led to the establishment of the UN Principles for Responsible Investment (PRI) in 2006. The six principles reflect the view that environmental, social and corporate governance (ESG) issues can affect the performance of investment portfolios and therefore must be given appropriate consideration by investors if they are to fulfil their fiduciary duty. The PRI provides a voluntary framework by which all investors can incorporate ESG issues into their decision-making and ownership practices and so better align their objectives with those of society at large. As of April 2011 over 850 investment institutions have become signatories, with assets of approximately $25 trillion under management.

Removing the blinkers

Needless to say, when we had our little standoff about religion and politics in Namaqualand in 1987, I was ignorant of the important, positive role that Sullivan, Tyson, Corbett, Tutu and many other faith leaders were playing in nudging companies towards more socially responsible practices in South Africa and around the world. However, in a strange way, religion did play a pivotal role in my subsequent career path.

When I had to choose what to study at university, my two strong interests were commerce and comparative religion. I had started a few little business ventures when I was at school, selling chocolates and jewellery, and had also become fascinated by Eastern faiths by this time. When I sought spiritual guidance on my dilemma, I found a passage in the Bible, which said: ‘Take the ark of God back into the city . . . there is no representative of the king . . . Go back to the city in peace.’ (2 Samuel 15: 25-27). My interpretation was that I should pursue a business career, but try to bring spiritual values into my work. At some level, this is still what I am trying to do, although I no longer view it in religious terms.

I finally ‘woke up’ to the scourge of apartheid at university. As part of my Bachelor of Business Science degree, I took a course in development economics, taught by Professor Francis Wilson, who ran the Southern Africa Labour and Development Research Unit. He had written an outstanding book called Uprooting Poverty: The South African Challenge, together with Mamphela Ramphele – the doctor, anti-apartheid activist and former partner of the late black-consciousness activist, Stephen Biko. Wilson’s lectures, along with his book, brought me face-to-face with the brutal reality of South Africa’s discriminatory migrant labour system and the terrible consequences of apartheid in terms of poverty and under-development. Ignorance was no longer an excuse. Denial was no longer an option.

Even so, I was not one of those who immediately joined protest marches, threw rocks at passing cars on the highway, or confronted the police when they rolled onto campus in their armoured trucks – all of which was happening fairly frequently by this time. But I did want to make a positive difference and was fortunate to discover AIESEC, the International Association of Economics and Commerce Students, which seemed like a place where I could bring about change through business. AIESEC had many initiatives, such as the International Traineeship Exchange Programme and the Community Assistance Programme, all designed to promote intercultural understanding and develop leadership skills. So I ended up getting actively involved and serving first as Projects Director and then President of the Cape Town chapter.

Discovering sustainable development

It was AIESEC that introduced me to sustainable development and linked the concept to business. With the Brundtland Commission having launched its 1987 report, Our Common Future, and with all eyes firmly set on the upcoming United Nations Conference on Environment and Development (the ‘Earth Summit’) in Rio de Janeiro in 1992, AIESEC began organising seminars and conferences on business and sustainable development. I ended up attending two landmark events – the South African National Conference on Environment and Development, held in Johannesburg, and the World Theme Conference on Business and Sustainable Development, held in Tokyo in August 1990.

You can read more about the latter in Chapter 11 where I discuss Japan. Suffice to say, the impact on a young management student such as myself was profound. In preparation, we had to prepare local case studies to share with our international colleagues. I chose waste management and found myself meeting local recycling groups and attending a metropolitan recycling meeting chaired by the mayor of Cape Town, which included representatives from the plastics, paper and bottling industries. I made many interesting discoveries. For instance, I learned that South Africa had the third highest aluminium can recycling rate in the world, largely due to the armies of poor people that collected and returned the cans for a small fee. I also learned that there was a glut in the city’s recycling system – not enough people were buying products with recycled content; hence, supply constantly exceeded demand.

I later wrote for the International Ecological Economics Bulletin that:

recycling is an obvious win–win for the environment and economics. But in South Africa, it takes on a different face than the conventional concerned housewife separating her garbage. Here, much of the recycling being practiced is by poor or homeless people, who collect door-to-door, or clean up litter from the streets and parks, in order to generate a meagre income on which to survive. The tiny economic incentive provided, which probably only captures a fraction of the real environmental benefit of recycling, is sufficient to mobilise large numbers of people behind this ‘worthy cause’ and provide them with a basic livelihood.

Today in southern Africa, over two billion steel beverage cans are ‘consumed’ every year. They are 100% recyclable and the current recovery rate is around 70%. This impressive achievement is mostly thanks to Collect-A-Can, established in 1993. Annually, more than R20 million (around $3 million) is paid to an estimated 100,000 collectors, most of whom have no other source of income. Millions of school children are also introduced to the idea of caring for the environment through Collect-a-Can’s schools competition, which attracts between 300 and 500 schools annually, earning cash and prizes. The scheme is creating a culture of recycling.

Other countries have also made great strides on recycling since my fledgling interest in 1990, although there is still a long way to go. In Europe, Austria leads with approximately 60% of its waste being recycled, while the United States recycles about 30% of its waste, double the rate of a decade ago. The United Kingdom is estimated to recycle less than 20%, with Ireland, Italy, Portugal and Luxembourg being not too far behind. Greece props up the league table with only 10%. Paper recycling is a little more encouraging, with both the United States and the European Union recycling more than 50%. On recycling of steel cans, Japan leads with 99% of the municipalities collecting and recycling. In 1973, the Japan Steel Can Recycling Association was established to promote the recycling of steel cans and today an impressive 90% are recycled.

Starting to change course

My growing interest in sustainable development led me to focus my final year dissertation on the subject. As my honours degree was in marketing, I chose ‘green marketing’ as my topic and focused on the efforts of a national retail, Pick ’n Pay. As it happened, Pick ’n Pay, led by founder and chairman, Raymond Ackerman, was one of the 50 cases included in the Business Council for Sustainable Development’s book Changing Course, which was prepared as input to the Rio Earth Summit. The company had developed a range of ‘green’ products, mostly toiletries and household cleaners. It had also realised the enormous opportunity it had to educate its customers. Hence, stores were used as distribution points for environmental factsheets on everything from the destructive impacts of dragnet fishing to the benefits of recycling. The company also produced some credible glossy reports about its positive impacts on society and the environment.

In terms of the way I now characterise responsible business into five ‘ages and stages of CSR’ (more about this in Chapter 25), I would probably describe Pick ’n Pay’s approach then as typical of promotional CSR, located firmly in the age of marketing. But at the time the company was considered, rightly, as pioneering. To its credit, it was also one of the more vocal companies pressuring the government to change its racist policies on employment. Today, looking at the four-page sustainability section in its annual report, I’d say it is well on its way to strategic CSR in the age of management, with the expected range of key performance indicators on energy, waste, employment equity and community investment. There are even little g...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Author's introduction
• Prologue. Roots and shoots: Early days (Zimbabwe: 1970-1978)
• PART I: AFRICA
• PART II: EUROPE
• PART III: ASIA PACIFIC
• PART IV: THE AMERICAS
• PART IV: THE UNITED KINGDOM
• Epilogue. Smart, shared and sustainable: The alchemical quest (2012 and beyond)
• About the author
• Index