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DR. V: Welcome back again to the TrendPOV show. We’ve been talking with Linda Hwang, Manager of Environmental Research and Innovation at Business for Social Responsibility. Check out their website at BSR.org. Loads of great research and an entire community of other businesses that have been there and done that and are working together to create CSR initiatives at work for everybody’s bottom-line and top-line.
Now, we had another great question come in on the Tweet stream, Linda during the break. And the question goes back to that social license to operate. And the question is has a company ever had to move out of an area because the public wanted them out? So, does anybody had their social license to operate revoked?
LINDA HWANG: Certainly! In fact, we’ve been talking about Coca-Cola and they have had to shut down their operations in Southern -- in Kerala in Southern India. And so, I don’t actually have any specific examples that come to mind, but there are certainly cases where companies are beginning to face legislative pressure because communities are beginning to band together and fight for different types of rights related to protecting other natural resources or their own human rights.
And so, it may not be that a company faces sort of the extreme situation where they have been kicked out of a region or kicked out of a market, but certainly, where they’re beginning to face lawsuits, I think. There’s an example of how their social license to operate is becoming challenged.
DR. V: Right! And now, kind of on the opposite side of that, there are many times when countries are seeking to boost their economic growth and they make a conscious effort to welcome in companies and seek out companies to do business within their boundaries. So, one thing I’m wondering is when that happens, when a country actively seeks out companies to operate within their boundaries, do you ever sort of suffer the CSR efforts in that sense? Do they feel that maybe they don’t have to do it or they get a free social license to operate card and they don’t have to make an effort?
LINDA HWANG: I think that that may have been the case twenty, thirty years ago. But the world, we are living in a hyper-transparent world today and standards that are set in one country quickly become global norms and standards around the world. So, I think that while it may be tempting for some companies to kind of adhere to the lowest environmental standard and regulation that make this governing, say, environmental aspect in a country, I think today, because people have so much access to information that that’s simply is not a good way to do business. I think companies today recognize that they really must adhere to global, international standards at the highest possible standards that do exist for them.
Our Sustainable Water Group is actually a really good example of this. That group came together nearly a decade ago because their supply chains for apparel in retail companies were expanding into China. They got there and they realized that in fact, there were almost no regulation, no government standards governing the management of waste water. So, the production, manufacturing costs for jeans and for t-shirt and all of the clothing that we wear produces quite a lot of waste water. And again, it’s not the cleanest stuff that you’ll find on the planet. And so, you really need to take steps to manage that, to treat the waste water for discharge.
All these companies that got to China, they said, “You know what? We just don’t even know what we’re supposed to do with it. We don’t even know how clean the waste water needs to be before it can get discharged. We need a standard. We really don’t want to just kind of get into the situation where we’re in the wild west here and everybody is just kind of doing their own thing.
And so, what we did was created a set of guidelines that actually helped them determine kind of what this quality of waste water should be before it gets discharged.
And so, and I think that was happening ten years ago. And we’re well into corporate CSR and sustainability efforts that today, I think, global companies operating that are world-recognized that if they’re going to do business, they really do need to adhere to the global standards. It’s just a hyper-transparent world that we live. It kind of helps to keep everybody accountable.
DR. V: Right! And I love the idea that if you go into a particular location, there isn’t a standard that ought to be, have a standard. Make your own. That’s an excellent way to go about it.
Now, in terms of this sort of collaboration, which is one of the things that really intrigues me and interest me about BSR, companies working together to create CSR strategy, along those lines, have you seen a lot of teaming of companies in various countries? In other words, companies teaming up for CSR efforts?
LINDA HWANG: Absolutely! Absolutely! I mean, we see it across multiple regions, across many, many issues. Dealing with sustainability and really addressing the challenges in sustainability require collaboration. I mean, no one company and no one industry can do it alone.
Just think about an issue like water, helping thinking about managing your impact to water resources. A water shed, a body of water is so complex because there are so many different players that all have giant straws sitting in ruin. And so, no one company can manage the health and the healthy functioning of a watershed by itself because there are so many different players involved. You have multiple levels of government agencies that govern everything. In any one body of water, you have many difficult types of industries that also operate in the area. We have a lot of different types of users, as well. You may have domestic users. You have [00:45:02] You have agricultural users. But for companies, if you are one company operating in a region and maybe you’re withdrawing your water from a given watershed, even if you have everything in your house in order towards being as efficient as you can be so you’re not wasting a single drop of water, you face quite a lot of risks if you are operating in a watershed that is not well-managed, that is not well-governed.
So, it behooves you to really get out there and talk to as many different industries, as many different players, as many different sectors as you can to make sure that you are managing all of the potential risks as well as you can.
And I think it’s exactly the same for sustainability issues. A lot of the social challenges that we face today don’t really stem from any one root problem. They stem from kind of a whole, you know, a set of issues that worked together to impede people’s abilities to access basic resources, to ensure that their quality of lives are high.
And so, I think because the problem is multi-faceted, they kind of require solutions that are equally complex. And so, collaboration is absolutely the way to do it. I think that’s why we see so many global companies working together with either partners within their industry or even across other industry.
DR. V: Right! We saw an interesting example of that when we were looking at Coke in Scandinavia partnering with SAS, the airline. And so, beverages and airlines. Well, I suppose they do go together in a certain way. But it was kind of an interesting one and one that sort of suggested a partnership for local knowledge.
LINDA HWANG: Absolutely! Yes! And I think a lot of extracting companies come up with these, as well. I mean, they really put together some novel, interesting novel combinations of industries when they come together and kind of say, “Well, look! What’s happening in this region? Could we work together to really try to make positive change here based on what this community needs for itself and what [00:47:15] might work for it.
So, you’ll see mining companies working together with consumer electronics companies, consumer electronics manufacturers. Just really interesting partnerships that at first may not seem likely.
DR. V: Right! But now, of course, we often talk here about those unlikely partnerships spurring innovation, which brings it right back to that idea that your CSR efforts can be a real boom to your innovation cycles, as well.
LINDA HWANG: Absolutely! When we launched our research on sustainable consumption, we were just coming across so many fascinating examples of collaboration. Nike -- let’s see. The partnership, I think, really started with companies like Nike, Yahoo and Best Buy. They came together and they created a platform called the Green Exchange. You can just Google ‘Green Exchange’ and you’ll find it. Their ‘exchange’ starts with an x, not an ex.
But it is basically an online platform to share ideas around patents and intellectual properties. And so, for example, the air pump in the Nike running shoe actually can be something that increases higher pressure efficiency for its higher manufacturer. You just -- I think its higher manufacturer never has thought to talk to Nike about what…
DR. V: Probably not.
LINDA HWANG: …[00:48:47] Nike. You think, “Well, Nike is kind of an athletic company -- apparels. There’s celebrity endorsements.”
DR. V: Right!
LINDA HWANG: But what was Michelin’s higher [00:48:58] from Nike. And so, this platform is there to kind of enable and create these surprises for companies. They will actually, in fact, it’s the technology that we can borrow here or there, apply it. And what that does is set the stage for really redesigning new products, redesigning services. And ultimately, essentially, leading to new business models.
And I think that’s where we are really seeing companies using sustainability just unlock innovation.
DR. V: That’s absolutely brilliant! Now, that’s an interesting to kind of think about the future of CSR programs, this innovation play in that future and how do you see programs changing over the -- let’s say the next three to five years?
LINDA HWANG: Yeah, I think -- well, we’ve already seen quite a lot of change. What we are calling first generation sustainability efforts is really what companies had been doing the last decade, really thinking about their supply chains, looking at the material input, decisions, looking at processing, manufacturing and then, also distribution and trying to capture as much efficiencies they can in terms of materials used and even energy efficiency.
For us, we really look at this next frontier as thinking about areas of that value chain. That really has not had as much focus in the past. So, I’m thinking about product design. I’m thinking about consumer engagement and use of products. And also, about end of use. So, bringing that kind of closed loops together.
I think the future is really about developing sustainable offerings or just redesigning existing ones so that they are environmentally friendly. And I think along with that then, the future is about developing new set of competencies -- the new skills to know which product or service are going to be not only friendly, but unfriendly to the environment.
DR. V: Right!
LINDA HWANG: And so, with that then, the future will bring kind of the ability to generate real public support for these offerings. And then, the management know how to just scale both supply of these materials and also, manufacture these types of new products.
DR. V: Right! Right! So, it sounds like 2nd Gen CSR has quite a lot of innovation to offer.
LINDA HWANG: Absolutely! It’s really just about thinking -- it’s not just about your product and services, but about your business model.
DR. V: Right! Right! We are excited about -- oh, we love new business models over here! Very exciting stuff! Now, you there at BSR.org and Business for Sustainable -- uh, Business for Social Responsibility. I got ‘sustainable’ on the brain now. This is what you’ve done to me. That’s a good thing, though.
Over there, you’re an organization yourself, offices in many countries. Of all these best practices in terms of CSR efforts, how have you implemented these for BSR itself?
LINDA HWANG: How we implemented/practice this in BSR ourselves?
DR. V: Right, for the organization itself?
LINDA HWANG: Ah! Yeah! Because we are spread out around the world, we think a lot also about how we share expertise across the organization. So, for us, our product, if you will, is kind of this information that we all individually hold in our brain. And we are, as an organization, only as good as the degree to which we can get all of that information out across our colleagues as quickly as possible and as efficiently as possible and in a way where our colleagues can use that to the best of their ability.
But for us, this is really about thinking about how do we support our staff here to access information and then, use it in the best way possible. We spent a lot of time kind of cross-training across our offices. We spent a lot of time thinking how we manage the information. So, when we do work with companies and we just think, “Wow! This was a really, really fantastic project from end to end, we saw fundamental change taking place within the individuals that we work with. We reach high up into the organization. We also got on the ground, talked to a lot of local stakeholders. How do we create that model and how do we scale that across industry or for other industries?”
So, a lot of what we do here is on how we make that information accessible so that we can get it out to as wide a market as we can.
DR. V: That’s right! Responsible use of your resources there.
LINDA HWANG: I think so, yeah! I mean, for us, it’s really about thinking well, what are we producing every day? And for us, it’s really information and it’s learning. So, we spent a big part of last year really trying to think about what our members needed. We spent a lot of time talking to them and engaging and really just asking them, “What types of challenges are you faced with? And what are some of the obstacles that you have either internally or externally? And what types of tools and what types of resources would be valuable to you?”
DR. V: Right, that all important listening.
LINDA HWANG: Yeah! Exactly!
DR. V: Excellent!
LINDA HWANG: So, for us, that’s how we manifest for us on a daily basis.
DR. V: Alright! Well, this is a good spot for us to pop over to our third and final commercial break of the episode. When we come back, it’s my favorite part of the show (and I know it’s yours, too), it’s time to put our guest expert in the hot seat. You don’t want to miss it. So, bring it right on back for more of the TrendPOV show with Linda Hwang of BSR.org.
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DR. V: Welcome back again. It’s our favorite time of the show. It’s time to put our guest expert in the hot seat. Linda, are you ready?
LINDA HWANG: I think so! Let’s hear what you got!
DR. V: Alright! Now, if your executive audience remembers nothing else from this show (which of course, they will), what are the top three points that they need to take away from this episode?
LINDA HWANG: I think the top three points to take away firstly is don’t silo CSR and sustainability in your organization. It is something that should be integrated into everything that you do. So, where companies has had standalone CSR departments or individuals that just focus on CSR, I think that’s where they have a lot of challenges because then, it’s kind of, “Well, that team is responsible for CSR issues. But over here, we’re running the business” and it tends -- CSR sustainability then tends to be kind of the warm and fuzzy issues, rather than the opportunities to really drive, as you said, top-line and bottom-line revenue. So, that’s the first one. Don’t silo CSR.
I think the second one is really about making sure that you find your internal sustainability champions that sit within your company. Every single company today has a set of individual for whom sustainability is just the most exciting thing that they’ve ever run across. And they are already beginning to see opportunities across what they do every day, with the different departments that they interact with on a regular basis. Every company has these internal sustainability champions. And it’s really up to the leadership to think about, to find out who they are and to get them in front of the right people and the right kind of collaborative partners to give them the resources they need to really make sure that their ideas and their vision gets integrated into everything that the company does.
And I think the third one is really just about -- you know, it’s something about building this capacity for experimentation. I think today, so many companies are really wedded to what they’re doing, to things that have always worked well in the past. “Well, this product has always sold well in this market. So, let’s not even touch it.”
DR. V: Right!
LINDA HWANG: “Don’t change a good thing. Just let it go.” But I think we are talking about really using sustainability, innovation and developing new business model, that’s going to really require exploring alternatives from the current way that people are doing things and to the way that companies understand how they’re meeting their customer needs differently. So, CEOs and business leaders really have to learn how to question the existing models that they have set, how to act and be like entrepreneurs again to develop new delivery mechanism to meet consumers’ needs.
Consumers’ needs are always going to be shifting. That’s the one reality that you could always count on. So, what does that mean for your business? And how do you build in that culture of experimentation? And I think that’s the third takeaway here, I think.
DR. V: I loved that! And it’s a perfect tie in with the concept that this can really drive innovation. And that’s the first time I have ever heard that you put together. So, I am just thrilled. So Linda, thank you so much for joining us today. It’s been such a joy to have you on.
LINDA HWANG: Thank you! I really enjoyed your questions. It was lovely!
DR. V: Well, I’m going to ask you to hang on the line for just a moment -- because everybody else, I cannot let you get away without letting you know what’s coming next week over here at TrendPOV.com. Next week, it’s all about Freelance Norm is the Employee of the Future. In fact, your future employee may not be an employee at all. We’re talking about freelancing and the trend that is really taking off.
Now, this is going to mean some significant things for your talent and workforce strategies, but it’s all positive and all good. Well, maybe except for just a little bit of legislation coming out of Massachusetts, but we’re going to cover it all next week right here on TrendPOV.com.
So, catch the article on Monday. Join us for discussions on LinkedIn and Twitter all week long. And of course, bring it right back here next Friday. We’ll be joined by folks from Back of the House. You don’t want to miss it right here at TrendPOV.com. Thanks for joining us on the show today. And we’ll see you next time.
