Corporate responsibility after September 11

Simon Zadek

It is widely predicted by self-styled progressive internationalists that the ghastly destruction of the World Trade Center, the quintessential symbol of global capitalism, will bring with it a realization that ‘business as usual’ is both morally bankrupt and, critically, no longer feasible. A radical reappraisal of globalization, and in particular of the role of the US and the corporate community, may be one potential silver lining to the otherwise dark events of last autumn.

So how is the business community responding to the world since September 11? In particular, how have those corporations responded that have in recent years identified themselves with the movement to make business more responsible? Indeed, what is the future of ‘corporate social responsibility’ (CSR) in a new century already beset with worrying signs of conflict and extremes?

The Institute of Social and Ethical AccountAbility set out to explore these questions, especially the last, in an event in London in early December 2001.[1] Attending were representatives of such diverse organizations as Amnesty International, British Airways, the European Commission, KPMG and Oxfam, with many of the doyens of the world’s corporate responsibility movement leading the discussion.[2]

The refreshingly frank debate raised real concerns as to the future course of corporate responsibility as a means of addressing major social and environmental challenges. Even the most inveterate inside players were vocal in challenging the adequacy of progress made to date. Such challenges are undoubtedly good news. Like all movements in their early stages, the field of corporate responsibility has been dogged by over-idealism, evangelism, and a lack of serious self-critique. What the debate revealed was that its leading advocates are now able and willing to tussle, more publicly, with the tough questions. In so doing, we are set for a new round of insights both about the short-term corporate response to September 11 and more generally about possible futures for corporate responsibility. Below are some of the key perspectives that emerged from the AccountAbility event.

Frustration and disempowerment

September 11 has starkly revealed what many already knew – that there is enormous anger and frustration across the world at how globalization is playing itself out. It was notable that contributors from outside the North Atlantic community highlighted the considerable support around the world for the view that the attack on the World Trade Center was understandable, although unacceptable. Public opinion surveys, for example in Brazil and South Africa, revealed support for the view that the US and the global business community need to understand the implications of the despair that communities feel in the face of globalization. Such views are indicative that for many this is not a ‘Muslim issue’, but one that reflects the facts of how globalizing business and US foreign policy are undermining and disempowering people and communities.

That does not, the participants stressed, mean that global business was responsible for September 11. But it does mean that corporations are an integral element of an economic and associated political environment that creates unacceptable outcomes for many, many people, and ultimately for us all.

Corporations and public debate

The corporate community has been almost entirely absent from serious public debate about what the events of September 11 mean for the future. One obvious reason is the perceived need to show unquestioning solidarity in condemning any and all groups dubbed terrorists and their supporters. Another is that most businesses – and so most corporate leaders – have been painfully focused on just trying to survive in what is for many the roughest economic climate for over two decades.

A further, less obvious reason is that even the most out-there corporate leaders, who are used to opining on all manner of issues, have been humbled by the enormity of the possible implications of recent events, and are honestly recognizing that they don’t know how best to address them. It was refreshing, if ironic, to see civil society and business leaders together struggling to understand the practical implications of the current situation with few of the normal pretences that ‘the answer is obvious … if only you would understand me’. The acknowledgement of a common set of challenges that require joint action was really grounded, a hopeful sign for the future.

Kicking the tyres of the corporate responsibility movement

The current political and economic turmoil seems to have presented the first real test of the embeddedness of many corporations’ approaches to social and environmental responsibility.

For those mainly engaged in short-term reputation management, there has been a welcome relief as the anti-globalization movement has been driven into at least temporary recess. Indeed, many of the short-term drivers for CSR have weakened as the media’s appetite for corporate social and environmental misdemeanours has diminished (with the notable exception of Enron), the labour market has loosened, and consumers rediscover their primary interest in price (if, indeed, most of them ever lost it). Add to this the financial belt-tightening within businesses, and the scene is set for a shake-out.

On the other hand, there has been a notable robustness in approaches to corporate responsibility on the part of those companies that are most advanced in aligning their long-term business strategy to enhanced social and environmental performance. It is becoming painfully clear that accountability processes that are not part of an organization’s underlying success model are unlikely to survive tough times, a salutary lesson for NGOs as much as the business community.

Raising the bar

The September 11 events have highlighted the need for those advocating corporate responsibility to honestly face the challenge of what can and cannot be achieved through its current forms. In so far as poverty and inequality have some bearing on those events, the participants at AccountAbility’s seminar were united in agreeing that corporate responsibility will have to go a lot further than the isolated good practices of individual companies if it is to make a serious contribution in the future. Many highlighted the need for leadership companies to step forward and join (rather than resist) the critical public debate about globalization. They should also work more closely with public bodies and civil society organizations to explore what international frameworks would support companies committed to enhancing their social and environmental performance as part of their core business process and long-term strategy, and force companies that are not to reach agreed minimum standards. Again it was stressed that corporate leaders should avoid the inclination to conclude that the correct public policy response is simply ‘more of the same’ globalization.

Don’t predict the future, create it

It is really far too early to tell what the longer-term effects of the events of September 11 will be. But then the real challenge is not to predict the future, but to create it.

The event and its fall-out to date creates the potential for both positive and negative change.  For corporate responsibility to count (positively) in this larger macro-landscape requires that it evolves beyond its current forms – what I have called elsewhere ‘third generation corporate citizenship’. Ultimately, any serious notion of responsible business will have to address the question of what business’s appropriate purpose is, and seek to establish the global governance mechanisms to ensure that these purposes are effectively met.

The events of September 11 will test the foundations of corporate responsibility. Bits of what many of us have worked to create over the last decade will undoubtedly fail the test, revealed at best as being of marginal significance and at worst as part of the problem. But the shake-out in the field will strengthen the resolve of those who are serious about business making a real contribution, and encourage them to set themselves apart from, and bring pressure to bear on, those who are currently along for the ride.

This will certainly challenge the current Big-Tent approach, which argues that it is better to have the half-serious part of the business community in the team. On balance, it is probably time to mark out real difference, and the dynamic debate at AccountAbility’s event did suggest that the corporate responsibility movement is perhaps now ready for this challenge.

1 AccountAbility has placed audio streams of the main presentations on its web site at http://www.accountability.org.uk
2 These included Bob Dunn, Executive Director of US-based Business for Social Responsibility; John Elkington, Chairman of SustainAbility Ltd; Jane Nelson and Robert Davies, Directors of the International Business Leaders Forum; Ed Mayo, Executive Director of the New Economics Foundation; David Logan, Director of the Corporate Citizenship Company; Bradley Googins, Executive Director of the Boston College for Corporate Citizenship, and Nelmara Arbex from the Brazil-based Ethos Institute.

Simon Zadek is Executive Director of Institute of Social and Ethical AccountAbility. His most recent publications are The Civil Corporation (Earthscan, 2000) and Third Generation Corporate Citizenship (Foreign Policy Centre/AccountAbility, 2000). He can be contacted at simon@accountability.org.uk


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