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Systemic CSR: Ethical Companies Create Scalable Innovations

For many forward-looking companies, CSR has generated significant sustainable growth and business opportunities that otherwise would never have been possible.

Submitted by: Jonathan Løw

Posted: Feb 01, 2013 – 09:24 AM EST

Tags: business ethics, leadership, csr, unilever, patagonia, general mills, cipla, innovation, stakeholder engagement

 
Jonathan_low

By Jonathan Løw

According to U.S. marketing guru Seth Godin there is "No such thing as business ethics." In particular, I feel challenged by his claim that: ”Only people can have ethics”. His point: only individuals can have desires to do something good for the community, whether it will be financially beneficial or not. Ergo, companies have no ethics.

I understand Godin's point, since companies are increasingly under pressure from a reality where shareholders and investors demand quick and bottom line-oriented solutions, while the world's problems grow increasingly complex and, by contrast need long-term change.

However, Godin overlooked something critical: CSR in the more forward-thinking companies of the world has generated significant sustainable growth and business opportunities that otherwise would never have been possible.

This is business created out of ethical concerns about the company's role in the world – and the resulting innovation and business and product development.

Systemic CSR

If you start by asking yourself why a company exists, you create a new approach to product development and strategy, for example. CSR becomes systemic – and the company a part of something bigger.

Simply looking through this lens creates new dynamics and new solutions, and examples of this are many:

  • Among other products, Unilever has developed a hair conditioner that uses less water. By their own admission, the R & D department would never have come to this solution without having a sustainability mindset.

  • Food manufacturer, General Mills is working on reducing its energy consumption by 20 percent by combining a "responsible business mindset" with the need to cut spending.

  • Through social innovation, pharmaceutical company, Cipla, developed HIV-product "Triomune" as a low cost alternative for the poor in India. Since its launch, Triomune has become a billion dollar business, and is currently sold in 130 countries.

  • Through its "Common Threads Initiative," clothing manufacturer Patagonia has managed to create a recycling programme that has increased its sales and improved its market position, while reducing people's consumption of those same products.

CSR and a Welfare Society

I believe that most companies have a unique opportunity to become market leaders when it comes to systems thinkingsystematic and innovative CSR.

In my home country of Denmark, we are children of a welfare state that, whatever your opinion of the state may be, is an example of taking responsibility for one another and our society. Our welfare society gives us a certain way of thinking that allows us to think of product innovation, business development and thereby sustainable business on several levels.

New studies from Harvard Business School and The Fudan University in China suggest that companies with a strong focus on CSR outperform the market when it comes to the ability to create new technologies, business models and "creative quantum leaps”.

The same studies also point out that CSR can strengthen relationships with external stakeholders – be they customers, suppliers, NGOs or governments. All these stakeholders hold important knowledge – knowledge that can help the company stay ahead of changing market conditions, preferences and new technologies, thus facilitating these "leaps".

Ultimately, it is about daring. Taking that leap.

As the author of Fahrenheit 451 Ray Bradbury said: ”Living at risk is jumping off the cliff and building your wings on the way down.”

About the Author:

Jonathan Løw is the Event Manager for Scandinavia's largest CSR Event – Who Cares Wins 2013, He is also is also the Marketing Manager for entrepreneur and leadership school, KaosPilots known for its focus on social innovation and entrepreneurship, and named one of the World’s 10 Best Educations in Innovation and Leadership by FastCompany.com and Business Week.

Løw has a background in social entrepreneurship and, among other things, started the internationally renowned organisation, aGoodCause.com, which was active in eight countries and raised millions of kroner for charity last decade. He has also been the Marketing Manager for Denmark's largest bookstore chain and is a popular keynote speaker at home and abroad.

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

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