BSR puts transformation and transparency in the spotlight

Creating more uniform methods of reporting KPIs, fostering collaborations between corporations and NGOs and looking at what companies can do to improve living conditions for workers, were among prevailing topics at the BSR (Business for Social Responsibility) Conference. Laura Klepacki reports from New York

The BSR (Business for Social Responsibility) Conference, held at the Grand Hyatt Hotel in NYC last month, drew more than a thousand attendees to discuss the themes of business transformation and transparency.

In the opening session, GlaxoSmithKline ceo Andrew Witty (pictured below) set the tone saying that technology has changed everything, “so why should business operating models be the same?”

But implementing change can be challenging, acknowledged Witty. “If you are a ceo, ‘dynamic’ is a cool word. Two levels down, ‘dynamic’ means change or uncertainty.”

Among its responsible business efforts, Glaxo has ceased paying doctors to speak and also stopped rewarding its representatives on sales volume. The pharmaceutical firm has also been selectively opening up the use of its laboratories to others, as well as providing more access to its licenses to help get drugs to parts of the world where they are needed most. As Witty noted, 70% of the world’s health burden is in Africa, and yet it has only 3% of the world’s health resources. Through one employee program, Glaxo sends 100 workers to spend six months with an NGO of their choice in order to expose them to a “to system or society that is not like the one they grew up in.”

Meanwhile Pepsi ceo Indra Nooyi (pictured right) addressing the interests of investors, suggested a uniform, national scorecard that measures corporate steps toward responsible practices. It should “be simple, honest and balanced,” said Nooyi, describing the shift as a “new chapter in capitalism.” “We have to change the way financial professionals are incentivized,” said Nooyi. She also made a plea for media outlets to report more on a company’s long term mission rather than on the “short term returns.” To that end, she also suggested that business school education be reformed away from “make money at all costs.”

Additionally, Nooyi appealed to NGOs to collaborate more with companies, rather than criticize them. “Don’t keep moving the goal posts so you get more attention for yourself,” chastised Nooyi. She also lobbied for increased cooperation among competitors, particularly in the use of technologies that benefit society. “For example,” she said, “if we have a solution for solving water scarcity, we should share it much more widely.”

On the topic of women’s equality, Nooyi said in countries like Saudi Arabia where men and women are not legally allowed to work together, the company has created separate facilities, so women can be employed.

Swedish retailer H&M CEO Karl-Johan Persson (pictured bottom right) said it is testing a new fair wage programme at three garment factories – two in Bangladesh and one in Cambodia. The programme offers higher wages and more interaction between management and worker. Early results show that productivity is up and overtime is down.
But Persson stressed the topic of fair wages is a “very complex issue” and “not something one company can drive on its own.” In the environmental sphere, H&M’s garment recycling programme has been a tremendous success with more than 8,000 tons of materials collected to-date. All the materials are either reused or recycled.

Meanwhile, Maersk shipping ceo Nils Andersen has developed a shipping vessel that is 20% larger, but moves slower and uses 50% less fuel. He countered complaints of slower deliveries telling customers “if you want it faster you are going to have to pay more.” That ended that. Moreover this huge ship is completely recyclable. When it is no longer used for transportation, “everything on board can be reused,” said Andersen.

There are also new shipping containers that can extend the life of perishables. An avocado from Kenya can now makes it way to Europe because its lifecycle has been extended from 10 days to 40 days, and thus improved economic opportunities for growers.

In addition to the speeches, there were a series of breakout sessions, including one on Corporate Responsibility in the Age of Inequality which drew a standing room only crowd.

Moderator Peder Michael Pruzan-Jorgensen, vice president, EMEA for BSR, observed the packed house and pondered, “five years ago would we have had this attendance? I don’t think so.”

But the increasing concentration of wealth in the hands of a few is causing an imbalance in in purchasing ability and political power in society.

To help, panelists suggested companies pay more attention to investing in underserved communities to build business there, as well as address worker education to get more people on the path to success.

Stated Audrey Choi, ceo of the Institute for Sustainable Investing at Morgan Stanley: ““Every single company that sells stuff needs to be worried about inequality.”