Should companies also be activists for system change?

Sustainability is one of two things; it is either:

doing the same things very differently, or;

doing very different things.

Sustainability is a transformative agenda. It requires companies to not only develop new priorities, behaviors and approaches within their own operations and supply chains, but also to act to affect the wider system within which they operate.

To use a metaphor, a farmer that grows crops in a field relies upon productive soil. Their use of inputs, irrigation and planting regimens will have an impact upon the quality and quantity of soil in their field. However, the soil in that field is also affected by factors outside the direct control or influence of that farmer: surrounding land use and catchment management, use of chemicals on neighboring fields, development plans and incentives for building houses, trends in gardening of nearby houses. . . . The list goes on forever.

No change without change – the case for corporate activists

If the farmer wants to protect the health and integrity of the soil in their own field, they must engage with the factors, factions and actors outside their farm which can impact upon them.

The same goes for companies seeking sustainability; they can improve their own performance to the extent that they can exert control and influence across the value chain, but they won’t actually achieve anything resembling true sustainability unless they also act to influence and stimulate sustainable change outside the company.

This is where the concept of corporate activism comes in: just what are the expectations, limitations and challenges that companies should consider when they undertake activism?

The 2018 Trust Barometer Survey from Edelman highlights that consumers are increasing their expectations of companies to undertake activism in social and environmental dimensions.

Edelman found that:

Trust in companies headquartered in the U.S. has dropped five points from 55 to 50 percent just in the last year, after having already fallen from 61 percent in 2014.

64 percent of respondents agree that CEOs should take the lead on social change, rather than waiting for government to impose it.

79 percent of U.S. employees trust their employers to do what is right.

What is activism, and is it inherently political?

The distinction between activism and other corporate advocacy activities is not entirely clear.

Some examples of companies acting like NGOs are Dell, leading the NextWave ocean plastic campaign, Ben & Jerry’s work on Climate Justice and Patagonia’s actions to support legal challenges to threats to U.S. National Parks.

These might be considered “positive” activism or even “social justice activism.”

However, it is worth remembering that companies are politically active all the time, and those of us involved in sustainability and responsibility may perceive many of these activities as being either positive or problematic, indicative of the use of power for political ends.

Examples of the types of activities in which companies may be involved include:

Political donations – a very traditional activity for which various corporate reporting regimes require transparency of disclosure (the Institute for Business Ethics has produced a set of useful guidelines for best practice in this area).

Lobbying – through the development of relationships with politicians, influencing policies and actions designed to amend, alter or remove existing regulation.

Secondments, staff donations and secretariat funding – in the United Kingdom, there are often secondments from companies to governments as well as in-kind support or contributions, such as the provision of secretariat functions.

Public relations activities – designed to support particular interests, which might include sponsoring public and academic research, surveys and driving editorial.

Sector and business body membership – can have a powerful influence on policy formation, either for “good” or “bad.”

Support for activist groups – this can be seen in two ways: first, as “astroturfing” – where companies support the formation of groups that appear to be community or NGOs but actually serve to perpetuate a view of primary value to corporate interests; and alternatively, where the private sector provides funding for NGO campaigns or through wider partnerships between profits and not-for-profits.

NGO and collective action platforms – e.g. membership of organizations and initiatives which develop joint position statements to encourage change or new legislation – a good example of this was the CEO statement on climate change.

Partnerships for change – not political per se, but perhaps one of the original examples of this was WWF and B&Q’s partnership for sustainable forestry – which lead to the formation of the Forest Stewardship Council.

A thin line between activism and lobbying?

Is it only good activism if we agree with its goals or they align with our own agendas?

Perhaps the distinction is between activism for private gain versus activism for the public good (which may also include private gain).

In addition, the definition of what constitutes “political” action may well be worth exploring – is something political when it involves engagement or targeting of political processes – or instead, when it focuses upon stimulating social change and evolving social norms?

If activism happens all the time – how do we judge it?

Companies launch activities all the time which are designed to further and protect their interests. Is this a negative? Certainly not, under the current imperatives and rules of modern capitalism. In fact, many would argue that this is their only legitimate priority.

However, is consistent self-interest likely to achieve a sustainable world?

I think it’s unlikely.

The examples noted above of companies taking activist positions, which would traditionally have been those of NGOs or other pressure groups, are doing so because they believe that a moral social or ecological wrong exists and that they believe it is positive to be involved in addressing that wrong.

Assessing activism – logically aligned or strangely divergent?

There is also the question of alignment with a company’s activities impacts and legitimate interests. In my opinion, activism that has no logical connection to the business just reminds me of old-school charity giving or philanthropy.

This is clearly not unconnected with their own self-interest, but it is not clear whether they are simply trying to signal their selfless behavior or whether they are prepared to act against their own interests if they feel it is morally right to do so.

In order to check alignment or congruence with the business, it might be worth asking the following questions of corporate activities outside the sphere of direct sustainability management could include the following:

Focus and brand cohesion – does it relate to material sustainability issues, corporate priorities or business impacts?

Brand value and outreach – how does a project relate to environmental or social issues that have a clear, defendable, link to the company’s brand perception or explicit values?

Sector issues – does this project address an issue common to and shared across the company’s sector?

Creating enabling conditions – does the project or activity focus upon a systems level challenge that is preventing, or even slowing, the move towards a sustainable equitable economy?

Social capacity, value chain – does the project develop the capacity of a producer or producing region to generate or retain higher value from their activities?

Societal capacity – does the project invest in or contribute to the capacity of existing or potential customers in terms of education, access to resources and services and economic capacity?

Social cohesion/ economic capability – can this project improve the ability of a producing or manufacturing community to generate income, or enhance the economic capacity of disadvantaged groups?

Innovation and added value – is there the possibility of adding to the supply of new products or added value products?

Standards development/ testing – does the idea provide insight into the use, applicability and utility of sustainability standards of possible wider application?

Towards Common-Self interest

Ultimately of course, within the relevant laws, there are many shades of legitimate and desirable behavior. However, if we are truly interested in encouraging and supporting companies to play a role in developing a sustainable world, then we should also be interested in those which undertake activism to address or respond to clear social and ecological challenges.

The idea of “common-self-interest” is a useful one for guiding corporate activism.

Companies seeking to assess the legitimacy of their activism should ask themselves the following question: “Is this activism clearly for the common good - even as it also delivers private benefits for us?”

Originally posted on the terrafinity blog.

Image credit: Patagonia blog

Joss Tantram

Act Now for Sustainability! Should Companies Be Activists?