July 24, 2014

CSRWire.com The Corporate Social Responsibility Newswire

news by category

Can Corporate Sustainability & Economic Growth Coexist?


We chatted with SAP, BSR, CDP and 232 communicators.

Generating over 1,300 tweets.

9,437,880 impressions

&

Engaging over 377,000 Twitter accounts.

See more Analytics!

&

Let's chat!

Reversing Perception, Creating Impact:

We Chat with MGM's Executive Team!

MGM executive team

Generating 5.6 million impressions.

Engaging over 270,000 Twitter accounts.

With over 650 tweets.

mgm

See more Analytics!

&

Let's talk!

#BaBf: What Does it Mean to Brew a Better Future?

We chat LIVE with

Heineken

Generating 6.2 million impressions.

Engaging almost 300,000 Twitter accounts.

With  146 communicators.

And almost 800 tweets.

Heineken sustainability goals

See more Analytics!

&

Learn more about our Twitter Chats!

When Corporate Citizenship Integrates with Business Strategy: In Conversation with

HP Living ProgressGenerating 7.2 million impressions.

Engaging almost 1.3 million Twitter accounts.

With 193 communicators.

And almost 800 tweets.

See more Analytics!

&

Let's chat!


What Does it Mean
to Compete to be
Best FOR the
World?

We chatted LIVE
with:

Badger Balm, Indigenous Designs

Generating 8.1 million impressions.

With 128 communicators.

And almost 900 tweets.

See more Analytics!

&

Let's chat!

CSRwire Talkback

| join the conversation

Davos 2013: Global Leaders Seek Resilience, But Will Efforts Match Intentions?

World leaders ponder systems change to fix financial instability and foster sustainable growth, but are big institutions up to the job?

Img_1701_2

By Francesca Rheannon

Resilience is the new buzzword. Ever since Hurricane Sandy assaulted one of the world’s top financial capitals, it seems to have been dawning on the global elite that business-as-usual is no longer a viable option. New strategies that can afford a nimbler response to catastrophe must be found.

And so the R-word was adopted by the World Economic Forum at Davos as its central theme this year. The catchword was “resilient dynamism” and building “risk resilience” was its goal. 

What did resilience mean to the corporate, political and NGO leaders who paid $40,000 per head to palaver with their peers and hopefully come up with some strategies that can stick? Karl Schwab, founder and executive chairman of the World Economic Forum, defined it:

“The system should be strategic, not crisis-driven. Most of our energy is currently absorbed by reactive rather than proactive measures. Managing crises instead of thinking about the future leads to defensive attitudes. We must adapt to a changing world, not defend outdated models.”

Sustainability And Stability Named As Chief Goals

Concerns centered on two broad goals: sustainability, or how to assure economic growth without overshooting limits, and financial stability, or ending the bubble-bust vicious cycle. 

Both are tall orders. The imperative of growth may not be even achievable in a world of finite resources, at least not under the current single-bottom line model that still rules global capitalism. And ending the bubble-bust economy has gotten, if anything, more difficult since the financial crisis of World Economic Forum 20132007, with financial institutions ever bigger and finance ever more opaque, while moral hazard shrinks down like Alice in the rabbit hole.

Financial Stability

Schwab’s warning to stop defending outdated models is right on the mark – but change comes hard to any elite. When Wall Street titans like Jamie Dimon and Lloyd Blankfein are rubbing shoulders with heads of state at Davos, the winds of change tend to moderate to light breezes -- or dip into the doldrums.

Financial stability depends on transparency and accountability, which have yet to make their appearance on financial markets. Instead, what rules is what Bill Black, author of The Best Way to Rob a Bank is to Own One calls “systemically dangerous institutions (SDIs)” that create “criminogenic environments for Accounting Control Fraud” and he takes the WEF to task for ignoring them.

In 2010, the WEF annual meeting had a panel discussion on the issue of financial risk, but financial leaders at the 2013 WEF found themselves having to issue a warning that the world economy was still unstable, the Euro crisis endures, and mass unemployment on the continent will continue for the foreseeable future.

Debt, Austerity And Unemployment

Mario Draghi, Europe’s chief central banker, advised Davos 2013 participants, “Growth can't be achieved through the endless creation of debt.” Yet, there was no mention of how the banks themselves profited mightily off the debt they pushed citizens of Greece, Spain, Ireland and Italy to take on – and then made sure that when the bill came due, they got out (mostly) unscathed. Meanwhile, the austerity policies imposed by the elite to pay the bankers back are choking off prospects for economic growth and driving unemployment. 

During the forum, the global unemployment crisis was a prominent topic. In the same week, the jobless rate in Spain was reported at 26 percent (with 60 percent of those under the age of 25). The Jobless rate in Spain stands at 26%problem extends beyond Europe: some 200 million are unemployed worldwide, with 5 million more added each year, according to the ILO.

There were calls for “structural reforms,” but if those reforms mean austerity, neither growth nor stability will be the outcome -- only greater inequality and unemployment. If they mean structural reform of the banks – including breaking them up so they are no longer “too big to fail” – resilience may yet be possible. (They may also be “too big to manage,” as this week’s reports that traders at JPMorgan Chase bet against the bank’s own chief investment office positions on derivatives indicate.)

Antifragility and Small vs. Big

The key to unlocking the disconnect between the lofty goals given voice at Davos and what many point to as the WEF’s failure to make good on those goals may be found in the problem of bigness. Big institutions with little input from below, little or no external checks on their actions, and huge personal stakes on the part of their leaders in remaining the same, are prone to fail.

Resilient they are not.

Nassim Nicholas Taleb, author of The Black Swan, explores this territory in his fascinating new book, Antifragile. For Taleb, an ex-Wall Street hedge fund quant, small and redundant is beautiful. It is perhaps no coincidence for our argument that he has been called “The Ghost of Davos” (for his warnings at a previous annual meeting of WEF). 

“When these guys in Davos try to take the idea of dynamic resilience, they’re still trying to have tomorrow resemble the world of yesterday,” he said recently on CNBC’s Power Lunch. “You need to break eggs and what we need to break first is the banking system”.

Too much centralization of power, as in the banks, creates intolerance for error, Talib says – and it is the ability to make errors and learn from them to come back better than before that marks true resilience. Only economies that can tolerate “randomness, volatility and disorder as drivers of response and innovation,” he asserts, will survive disasters – and not only survive, but thrive.

Sustainability: A New Vision For Agriculture?

This lesson is salient to the other issue highlighted at Davos 2013: economic growth without overshooting the resource limits of the planet. The examples are many, but I want to zero in on just one: agriculture.

The WEF put out a white paper for the Davos meeting titled Realizing a New Vision for Agriculture, that acknowledged the needs for systems change:

Realizing agriculture’s full potential as a driver of food security, environmental sustainability and economic opportunity requires fundamentally shifting the way
the system operates.

Among the paper’s recommendations was an increased focus on the needs of smallholders – small farmers, declaring “Smallholder improvements are critical to address global hunger and poverty.” In other words, the food security resilience of billions may depend on decentralizing agriculture, supporting local agriculture, and promoting seed diversity  -- all only possible if small farmers thrive.

Some of the points and goals listed in support of this focus included:

  • Importance of crop diversity, nutritional content and food affordability;
  • Lessen agricultural impact on the environment;
  • Increase agricultural production by 20 percent each decade and substantially reduce waste;
  • Reduce emissions per ton of production by 20 percent each decade;
  • Decrease the proportion of rural inhabitants living on less than $1.25/day by 20 percent each decade.

All worthy goals, but in a food-and-water constrained world, it’s an open question whether Big sustainability and the economyAgriculture will tolerate Small Agriculture in a way that is in harmony with the above goals. We have already seen numerous cases where the global grab for land is pitting foreign corporations and national governments against smallholders. Responsible investments instead of land grabbing exist and can be a model for the future, but it will take a sea change in global governance.

I put the question to Raymond Offenheiser, president of Oxfam America, who attended Davos 2013. I asked him if he felt that the interests of small farmers were really addressed at the WEF. He responded in an email:

“No. It is impossible for the interests of small farmers to truly be addressed in a setting like Davos where their voices are rarely, if ever actually heard. And this time was no different. Frankly, it is a lost opportunity. The attendees -- executives at the highest levels — must understand that the challenges of sustainably feeding the world’s population will only be met if the opinions and concerns of smallholder food producers are heard loudly and clearly, front and center.”

Can globalized corporate agriculture interests really support the needs of small farmers? I asked Offenheiser what his thoughts were on that question, as well. He replied:

"The jury is still out, but partnerships such as those discussed at Davos will benefit small farmers only when principles and safeguards are in place so that small food producers are not saddled with risk when they engage with corporate agriculture."

The word is there again, the one that’s on everyone’s mind: risk.

The lesson of Davos is perhaps that “risk resilience” will require a willingness to up-end the extant power relationships that privilege the big and strong against the small and weak. It will take cooperation, rather than competition, horizontal governance rather than autocracy, and a willingness to let solutions bubble up from below.

That way, when catastrophe strikes, humanity will get stronger.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

Search The Blog

Twitter

 

Issuers of news releases and not csrwire are solely responsible for the accuracy of the content