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9 March 2018

Wiggo, grey areas and business ethics

I am a cyclist and I use performance-enhancing drugs.

Well, one drug. I will never set out on a long ride without a couple of cups of strong coffee and all my training rides are punctuated by a further coffee stop en route. You will see almost every endurance athlete, from lowly weekend warriors like me to professional marathon runners, take exactly the same drug to improve their performance.

If you think I am being facetious, I'm not. Caffeine is not only a stimulant, it is catabolic – it facilitates the burning of fat for energy as well as more immediate energy reserves, just like the steroid triamcinolone. It is completely legal in professional sports at present, but until 2004 the World Anti-Doping Agency put a limit on the amount of caffeine used by athletes, and it remains under consideration.

If you follow sports at all you can hardly have missed this week's Parliamentary report into doping in sport which made a variety of scathing pronouncements about the alleged use of drugs, particularly triamcinolone, at Team Sky during the build up to Bradley Wiggins' successful tilt at the Tour de France in 2012. 'Wiggo Doping Shock' screamed The Sun and other papers were not much more sympathetic. Read the rest of this entry »

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2 December 2016

Let's Build the Sustainable Future we want to see

sunrise

After the groundswell of hope after the Paris Agreement this time last year, 2016 hasn't been a great year for sustainability in general and climate change in particular, cumulating in the election of a (probable) climate change sceptic to the White House.

But I am cheered by the 400 businesses who wrote to the President Elect and told him to keep on the low carbon trajectory. Don't forget the much repeated lament of anti-capitalist activists as to how much power the corporate world wields. Much as I'm a staunch democrat, if business has that power and uses it for good, I'm not going to complain. That's true Corporate Social Responsibility.

So I call on every corporation to create a vision of a sustainable future for their business eco-system and develop a strategy to deliver on it. Don't wait for politicians to lead; if you forge a sustainable path, they will follow (and, some at least will try to claim credit - just let them). Build the future you want to see.

 

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26 September 2016

Bradley Wiggins and the Spirit of the Law

braddley_wiggins_2011_criterium_du_dauphine_stage_7There can't have been a more disconsolate figure than that of Bradley Wiggins, almost certainly the greatest cyclist of our generation, on the BBC yesterday explaining the conditions under which he (legally) took a steroid injection before his 2012 Tour de France win.

You are probably aware of the backstory – a group of Russian hackers have taken revenge on the sporting world for the banning of many of its athletes for illegal doping by releasing the medical records of others, in particular the therapeutic use exemptions (TUEs) which allow athletes to get treated with banned substances for particular medical conditions. And Wiggins' name popped up with a TUE for a steroid which has long been linked with cheating in the sport, taken at a particularly convenient time.

The hackers have certainly won this one as Wiggins and his former Team Sky have long made a virtue of a zero tolerance to doping. In his 2012 ghost-written memoir Wiggins claimed to have a no-injection policy, but now claims he was referring to intravenous injections, not intramuscular ones (a bizarre distinction as illegal doping can involve either or both). And only a few weeks ago, Wiggins lambasted women's world champion Lizzie Armitstead (now Deignan) for missing doping tests.

On the other hand, the TUE system approved the dose and the 40mg dose he took is the standard medical injection. Perhaps unsurprisingly, I can't find precise details of how much the dopers took, except that it can be 10-100 times as high (I don't know how much you have to take to make a difference to performance). If the system is wrong then change the system.

Well, at the end of the day, Wiggins is not being judged in a doping investigation (because he didn't dope), but in the court of public opinion with the mainstream media as prosecutor in chief. And, as many disgraced politicians will tell you, that court looks to the spirit of the law, rather than the letter, and it looks as if Wiggins and Team Sky fell short of the expectations they created for themselves.

There are obvious parallels here between sporting ethics and business ethics. In both, the media will be sniffing out any perceived hypocrisy and the public will not give the subject the benefit of the doubt. Transparency can go a long way, particularly by qualifying any broad statement of principle. And, it goes without saying, being seen to walk the walk as well as talk the talk is all important.

By all means set yourself a high ethical bar, but you better clear it by a wide margin of error.

 

Photo © Petit Brun, used under a creative commons license.

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13 June 2016

How good are you, really?

business angel

Cracking column by Eva Wiseman in yesterday's Observer on the trials of trying to live ethically – self-coruscating about the blind eye she turns to ethical issues we don't really want to confront, as we all do.

It reminded me of one of my favourite books, How to Be Good by Nick Hornby. It concerns a middle-class left-leaning doctor, whose feckless, selfish husband suddenly flips into a paragon of selfless virtue. He insists on giving away any unnecessary possessions to those less fortunate, and lets random homeless people live in their house. She knows she should welcome his values, but hates the privation and fears for her family. It's not the world's greatest novel, but I just love the premise.

As a local elected politician for the last 12 years, I've learnt not to try and portray myself as ethically superior to my political rivals as no-one is perfect and I'll eventually stumble. And I am always instantly suspicious of those who do claim the moral high ground as they're often the very ones who turn out to be crooked.

Which brings us to business. If you are going to portray your organisation as 'ethical', you'd better expect the press to go over your affairs with a fine tooth comb and you won't be able to control the stories that emerge, whether fair or otherwise.

In my opinion, the best strategy is 'show, don't tell' – demonstrating good behaviour in practice with with no overarching claim to sainthood. After all, people believe what they see more than what they read.

 

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8 June 2016

Beware the safety of the herd...

herd of african elephants on the move

Have you ever tried making a complaint to a large organisation? You'll get a whole load of guff back about how they take every concern seriously, explaining the process they will follow and what do you almost certainly get by the end? A half acknowledgement that they got something wrong and a convoluted explanation of why they're not going to do a damn thing about it.

Just this morning I presented a large committee (unrelated to my professional career) with photographic evidence of a serious local problem along with other evidence as to the cause. Others around the table simply talked away the problem (with no counter evidence, just anecdote, opinion and subject changing) until it was implicitly agreed that while this was indeed an issue, there was no real need to do anymore than the current, evidently inadequate actions. Next agenda item...

This frustrates the hell out of me, but more seriously, when you look at huge scandals such as the child abuse in the Catholic Church, the emissions cheating in the car industry, or the prevalence of doping in Lance Armstrong-era professional cycling, the herd will always close ranks to see off any perceived threat. The logical knots that groups of people will tie themselves in to avoid uncomfortable truths is astonishing. We are herd animals and the instinct to run with and defend the herd is very strong – which is why whistleblowers get ostracised when they do stand up and say "this isn't right!"

This is one reason why trying to bring sustainability into large organisations is so difficult. Of course the trick is to get the herd moving in the direction you need it to move, but believing that this direction is the best way to go – what I call Green Jujitsu.

 

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6 November 2015

Milton Friedman was not only wrong on CSR, but dangerously wrong

1024px-Portrait_of_Milton_FriedmanThe continued fall out from the VW scandal has made me mull on the risks of ignoring corporate social responsibility (CSR) in the favour of profit. Milton Friedman, the late guru of the Chicago School of Economics and advisor to both Ronald Reagan and Margaret Thatcher, had no time for CSR, famously saying:

There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

Now you could argue that if the business case for CSR is as strong as people like me argue it is, then CSR is compatible with the Friedman Doctrine as it will lead to increased profitability.

There is some logic in that, but the problem is the mindset. As soon as you read the doctrine, your mind narrows down to a purely financial/economic frame. You start ignoring the fact that any business is completely dependent on society and the environment to survive. If you forget that crucial truth, you are putting the long term future of your business at serious risk.

We have to do business in the real world, not within the models of economic theorists.

 

Photo: The Friedman Foundation for Educational Choice

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28 September 2015

There's no silver bullet in CSR

business angel

For those of us searching for ways of making business more responsible, it is all too easy to call for simple solutions. Unfortunately recent scandals have torpedoed many of the broad brush solutions held up as panaceas:

  • The German approach to business: VW;
  • Family owned business: VW;
  • Worker representation and strong unions: VW;
  • Co-operatives: The Co-operative Bank/Paul Flowers;
  • Nationalised industry: the NHS and Jimmy Saville's abuse of kids therein;
  • A higher calling: child abuse in the Catholic Church.

That's not to say that any of the above things are wrong or are not better than unfettered capitalism, just that they are in themselves no guarantee that unethical behaviour (or turning a blind eye to such behaviour) won't happen.

People are people. We take shortcuts and we chance our arm - some more than others, but we all do it. We are tribal, so we tend to defend our own – sometimes defending the indefensible. Simply changing business models or management structures won't weed out millennia of human evolution.

Culture is key – people need to stand up for what is right, whether the CEO or the software programmer who is asked whether they can they code a cheat into an emissions control system. Those who transgress need to be held accountable, those who blow the whistle on transgressions need to be cherished not shunned.

Nobody ever said it was going to be easy – and the examples above show us that it's more difficult than many of us thought. Me included.

 

 

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21 September 2015

Is there any mileage in unethical business?

vwIt's well known that car makers use all kinds of tricks to bump up the apparent fuel efficiency of their vehicles (surely easily sorted by the authorities with a little effort), but the revelation that VW had engineered their diesel cars to only switch on emissions controls when they are being tested beggars belief. The company faces fines up to $18bn in the US, an expensive recall programme and untold reputational damage.

As an engineer, it pains me that (presumably) a whole bunch of engineers were in on this scam. They would've been much better off putting all that effort into creating engines which meet standards and give great performance.

The VW boss Martin Winterkorn has ordered an 'external investigation' into the scandal, but the question he needs to ask himself is how he let a culture develop where this kind of thing was deemed acceptable.

 

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4 September 2015

Digging an ethical hole...

sustainability climate CSR

Interesting example from Daniel Kahneman's excellent psychology book, Thinking, Fast & Slow:

A hardware store has been selling snow shovels for $15. The morning after a large snowstorm, the store raises the price to $20.

Is this Fair, Acceptable, Unfair or Very Unfair?

A whopping 82% of participants in the experiment rated this as Unfair or Very Unfair, despite the fact it is a simple case of supply and demand – the economic principle which determines everyday vital commodity prices such as oil or grain. Kahneman concludes that a basic rule of fairness is that you shouldn't use market forces to impose losses on others (the price hike was voluntary).

To me, there's a wider implication. Milton Friedman-style thinking says that the only social responsibility of the hardware store is to maximise its profits. However, this assumes that the consumer will accept such thinking as fair and yet it is clear from many real-life examples as well as psychology experiments like this one that they don't.

Fairness matters to people, and customers are people.

 

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26 June 2015

CSR - HR = PR

cipd bag lo resOn Wednesday I was at an event organised by CIPD North East for HR professionals. I'd been asked to come along by my colleague Tracy Scurry of Newcastle University Business School as she was facilitating a discussion session on the role of human resources on sustainability and she thought my experiences would add to the conversation.

As is often the case in these sessions, the interesting thing is the 'journey' that delegates go on. At the start, the discussion was centred around how people could be persuaded to behave in a sustainable way, by the end, it had evolved to focus on how to keep up with the sustainability demands of current and future employees. That's quite a change in perspective and the change in mindset of delegates alone made the session worthwhile, never mind all the hints and tips.

By chance, when I got home, I came across a zingy quote in a WBCSD document:

CSR - HR = PR

Actually, I'm not sure it is strictly true. Surveys suggest on 10% of business drive CSR/sustainability through HR (although that figure had doubled in the last few years). But it is certainly true that if employees are not involved, they will tend to see any CSR project as greenwash and the project will almost certainly be less effective than it would without the involvement.

Whether employee involvement in sustainability is driven by HR is a different matter... but if you want to engage your HR department in sustainability, it's a flattering quote!

 

 

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17 June 2015

If you can't trust a charity...

Giving to charityA couple of months ago, I was leaving the swimming pool with the older two boys and I was stopped by a nice man selling lottery tickets for a local hospice. I've long been of the opinion that larger charities have become too much like self-serving businesses, but this was a good local cause, so I bought a tenner's worth of tickets. I went happily on my way, a spring in my step.

Since then, I have been contacted several times by phone or mailshot to tell me my lottery has expired and asking would I like to make it a regular donation. Which begs the question, how much of my donation ended up in the hospice's running costs? It doesn't take a mathematical genius to work out that my original tenner must have atrophied to almost nothing through the costs of chasing me for more money. Was the original transaction effectively a con to get my details?

I know I shouldn't let it get to me, but it does. I have been bitten this way too many times over the years and now I am cynical. In the past I have found that any donation just leads to more emotionally manipulative letters through the door – "Imagine waking up to feel hunger gnawing at your stomach." And my experience fades into nothing compared to those kind souls such as the late Olive Cooke who was getting 260 letters a month asking her for more.

But from the charity sector's point of view, are they not biting the hand that feeds? The response from the charity sector sounded like any other bog standard corporate excuse with Peter Lewis, chief executive of the Institute of Fundraising telling the Daily Mail:

"We are absolutely committed to ensuring that our Code of Fundraising Practice achieves the right balance in setting robust and clear standards which enable fundraisers to ask for money in a safe and legitimate way while at the same time respecting and protecting the rights of individuals.

We welcome the opportunity to talk with the Minister for Civil Society to update him on the plans that we have in place to review our Code and make sure that we act on any learning that arises from the FRSB’s investigation into the tragic death of Olive Cooke."

It's not about rights, it's about trust. Trust is the glue that holds society together. And if we can't trust charities who can we trust?

 

 

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28 May 2015

The dumbest guys in the room

Last week, I finally caught "The Smartest Guys in the Room" – the story of the Enron scandal. If you have an interest in business ethics or corporate social responsibility, it is a damning tale of greed, egotism and self-delusion.

Imagine the culture in an organisation where the (perceived) weakest 15% of employees are fired each year. Where the organisation can report profits on energy projects which haven't even been built (or sometimes never were). Where people can be given multi-million dollar bonus for those imaginary profits. In such a poisonous environment, you can imagine that organisation deliberately withholding energy to the State of California until blackouts to push up electricity prices, so they can sell that energy at a premium.

And the extraordinary thing is how many people went along with it. The documentary referenced the Milgram experiments where ordinary people were persuaded to administer dangerous electric shocks to screaming actors (I had never seen the footage of these legendary and terrifying sessions before - truly harrowing).

And how did it end? In tears. The house of cards collapsed, the authorities started investigating and, of the two smartest guys in the room, Jeff Skilling went to jail and Kenneth Lay died awaiting his fate. In a word: Dumb.

But the lesson is, once again, culture beats everything else and culture flows from the top.

 

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20 April 2015

Is 'good business' unethical?

business angel

Last week I was asked to comment on a statement by Prof Aneel Karnani of the University of Michigan who proposes that Corporate Social Responsibility (CSR) actions are only truly 'ethical' if they reduce the profit made by a business – otherwise any claims are greenwash. I have a lot of problems with this thought, some philosophical, some practical – I've been mulling on these since I made my comments, so I thought I would share.

The philosophical side is about whether any action we take is truly altruistic. This is a matter of much debate in the philosophical sphere – when I pick up a piece of litter in the street, or help the old lady across the road replace a recessed lightbulb, I get a little dose of endorphin that sets up my day. Does that good feeling undermine the altruism of my act?

And every major religion teaches that those who are faithful/do good works will be rewarded after death – does that mean that every good deed by a religious person is done out of pure selfishness? Likewise I don't think any financial reward from CSR undermines the satisfaction from having done the right thing.

On the practical side, I'm not sure that any sensible CSR action will have a negative benefit to the company. Marks & Spencer's Living Wall won't save them any money, but it is a fantastic advert for the company's Plan A sustainability programme – whether to consumers or the next generation of recruits. Study after study has shown that businesses with good sustainability programmes outperform those that don't in financial terms.

Lastly, the sustainability of sustainability. If CSR is shown to add value to the business, then it won't get squeezed out if the going gets rough. If the business purpose is aligned to sustainability then we get a win-win. What's the problem?

In summary 'doing well by doing good' is a strong driver. 'Doing badly by doing good' isn't going to inspire many. I'd rather win-win than lose-lose.

 

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4 March 2015

Are we ignoring the 'social' in Sustainability?


In this edition of Ask Gareth, I consider whether we tend to ignore the social when we talk about 'Sustainability' and some of the issues surrounding definitions.

You can see all editions of Ask Gareth by clicking here.

I rely on a steady stream of killer questions to keep this series running - if you want to submit one fire away!.

 

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19 February 2015

The Only Way is Ethics...

timebombLook at the headlines.

Has HSBC been helping very rich people people avoid tax? Did the Conservative Leader know about it before ennobling an HSBC boss? Did the Labour Leader avoid tax himself on his father's estate opening him to accusations of hypocrisy? Is it OK for a national newspaper to avoid reporting on the scandal given HSBC is a major advertiser? Is it OK to pay tradesmen cash in hand? Did the Shadow Chancellor always get a receipt from his window cleaner?  Are the energy companies exploiting vulnerable customers by keeping them on higher tariffs? Is it OK to kick a robot dog?

In none of these cases did anything illegal take place - they are all about ethics.

So why then do leaders of great organisations still see ethics/corporate responsibility as a side-issue? Why do you rarely hear people talking about doing the right thing in a genuine sense, instead doing what is expedient and hoping for the best? Why are people happy to leave a ticking time bomb under their business?

Doing the right thing may involve a bit of pain at first, but compared to the agony of what can happen in the long run.

 

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1 December 2014

What makes a company 'good'?

There was an article in the Observer yesterday on Simon Anholt and his 'Good Countries Index' that was so fascinating, I immediately checked out Anholt's TEDtalk (above). It asked a really fundamental question. What do we want a/our Country to do? Make us rich? Happy? Healthy?

Anholt's refreshingly selfless answer to this question is that he wants a country to do good for humanity as a whole. So his good country index consists of seven international metrics:

  • Science & Technology
  • Culture
  • International Peace & Security
  • World Order (not as ominous as it sounds - it includes charitable giving, refugees given refuge, UN declarations signed)
  • Planet & Climate
  • Prosperity & Equality
  • Health & Wellbeing

Ireland tops the rankings, with the UK 7th and the US 21st. My only quibble of Anholt's TEDTalk is his claim that Kenya making no 30 means money isn't a prerequisite for 'being good'. I think that's wishful thinking, the predominance of Western nations in the top 30 suggests resources and attitude help a country to make a difference in practice.

That aside, I found this a highly refreshing approach to measuring progress. And as Anholt briefly asks at the end of his talk, what would make a good company in this sense? Reporting standards such as the GRI allow companies to choose which issues are 'material' to them or their industry. But what would a standard, outward looking, international set of metrics look like? Who would top it?

That's too big a question to answer here, but we can ask "what does a good company look like from the outside?", and what are you doing with your company to fulfil that vision?

 

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26 May 2014

How many wake up calls does 'ethical' business need?

epicfailFirst it was the Co-op debacle, then it was the revelation that gender pay differentials are worse in CSR than in wider industry and now we get told that FairTrade maybe isn't actually so fair after all.

Yep, a study by the UK Government and SOAS has found that, rather than paying higher wages via the 'FairTrade' premium, some certified producers pay workers less than large 'unethical' farms in Ethopia and Uganda. FairTrade have responded that this isn't comparing like with like - that you should compare small non-FairTrade with small FairTrade.

THAT. IS. NOT. THE. POINT.

When you or I, as ethical consumers, go to a shop and pay over the odds for produce which we are told was produced by people paid a fair wage for their work, then we expect just that. If the same people can get the same job down the road at a non-certified producer and get paid more to produce products which cost the consumer less, then we are being swindled, plain and simple.

My patience with the 'ethical' sector is wearing very thin. It is very much starting to look like an industry taking advantage of concerned consumers to line their own pockets.

 

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16 May 2014

Practising what we preach...

cobbler

We're all human.

And a human trait that concerns me is a tendency for some who are on a CSR/sustainability/ethical mission to give themselves a 'pass' when it comes to their own behaviour. Cobblers being the worst shod and all that.

Some examples:

I'm nervous about preaching this myself in case someone unearths some enormous hypocrisy on my part (we're all human), but we should never be blinkered by our mission. Doing good at one thing doesn't trade-off against doing wrong elsewhere. We must meet - and surpass - the standards we expect of others.

 

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9 April 2014

What does the gender pay gap say about CSR?

Environmental data and analysisA very disturbing report from BusinessGreen (£) on the gender pay gap amongst CSR executives - women earn 23% less than men. To put that in context, the gender pay gap in the UK economy as a whole is 10% amongst full time employees and 16% amongst all employees, part- and full-time (source: Telegraph).

Does anybody see the irony here? Companies that employ CSR professionals are meant to be good at this stuff, but these stats suggest they are worse than average at gender equality. Much worse!

Can 'doing CSR' make you worse at CSR? That's a serious question a lot of people have to ask themselves.

 

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4 April 2014

Leadership is everything in CSR

I wrote The Green Executive in 2010 to provide both an inspiration and a manual for the new generation of responsible and progressive business leaders which appeared to be emerging from the ranks of the grey suits.

Therefore it is a bit depressing to see "engaging senior management" hitting the top of the 2degrees Network's survey of corporate sustainability challenges.

Let's get one thing straight:

Leadership is everything in Corporate Social Responsibility

Without leadership, you will not get the convergence of sustainability and business strategies. Without leadership you will find it impossible to change the behaviour of your employees (whether they'll admit it or not, most look to the leadership as exemplars). Without leadership you will never get the organisation to stop environmentally/socially damaging practices voluntarily. Without leadership, you are pushing, erm, water uphill.

And if it doesn't come within, it is very difficult to persuade indifferent business leaders to take on such an enormous challenge. But I'll give you a hint. The key is not to try to hector bosses into submission, but to help them to work it out for themselves. And that's green jujitsu, the topic of another book...

 

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