Considering realistic scenarios will help develop the next generation of corporate responsibility
It always seemed to me that there was little point in scenario planning unless you plan to use the information obtained in shaping a better business strategy.
Since so much of the sustainability agenda is all about the future, it should come as no surprise that what is likely to take place in five or 10 years time has become more of a feature in corporate planning.
It always comes as a surprise to me, however, how many corporate responsibility practitioner meetings spend so little time in considering where CR might be heading and what they could be doing to shape the future they want.
In my work with business, I frequently ask the resident sustainability experts what the CR standards landscape might look like in, say, 2020. To help discussion along, I usually offer five different ‘straw man’ scenarios.
First, there is the Business As Usual scenario. This is basically that there continues to be a proliferation of CR standards and tools, developed either by the private sector alone, or in multistakeholder frameworks.
The upside of this trend is continued experimentation and diversity, including at the national and sector level; the downsides include a lack of coherence, issue overlap, user confusion and a high transaction cost.
The second is the Super Group scenario. This would see some of the more widely-used standards cooperating more closely together to offer users a more integrated and functional platform.
This scenario is being pursued – with greater or lesser success – by the likes of the UN Global Compact, the OECD MNE Guidelines, GRI and ISO, most of whom have cooperation memorandums of understanding with each other.
Together, they give complementary guidance on what responsible business behaviour is and on how it might be embedded in business practice.
The third scenario is the Disruptive Frameworks scenario. This would involve the replacement of much of the existing CR landscape with new initiatives, designed to build on the strengths of the CR 1.0 generation (eg multistakeholder developed) and address its weaknesses (eg level of uptake or impact).
This thinking can be seen in the development of the integrated reporting framework and Sustainability Accounting Standards Board (SASB) approaches.
A fourth scenario might be called the Normal Business Practice scenario. Here, business, impatient with the limits of existing tools, would drive and develop (probably software based) tools that were more user-friendly and effective.
Philosophically these would integrate key elements of the sustainability agenda, but would be designed, for example, for practical use in contracts along the supply chain and in the investor relations’ context. Legitimacy and assurance questions might be seen to be of less concern if the results included greater uptake and improved sustainability performance on the ground.
The fifth scenario is the Mandating Voluntary scenario. If social or environmental changes bite more deeply, governments could come under greater pressure to make the private sector do more. In this scenario, governments might require larger companies not only to ‘report or explain’ their CR policies and performance (as Denmark has done), but also require fund managers and stock exchanges to explicitly address sustainability performance issues. They could also back this up by linking government procurement to sustainability performance.
Filling in the gaps
The reaction to these scenarios is always fascinating.
In large part they are accepted at face value as plausible possible developments between now and 2020. Rather than offering a different taxonomy, respondents invariably add missing detail and illustrative examples.
Notably, however, responses usually make the important point that these scenarios are actually not mutually exclusive. What worries CR practitioners most is that all of these scenarios are currently playing out in parallel, complicating rather than simplifying the management landscape.
To this, my response is to challenge the practitioners.
They know what works and what doesn’t. While recognising that the demands of their jobs allow too little time to shift their attention from the application of existing frameworks to ways of improving them, this is precisely what is required. Voluntary frameworks are the product of those that make them.
Unless the business community, and indeed all of us who are deeply dependent on it, spend more effort in co-designing the more transformative framework we need, we’ll end up with something that is not only costly, inconsistent and complex, but one that virtually guarantees we won’t get the future we want.
Paul Hohnen is an Amsterdam-based consultant who advises, speaks and writes on global sustainable development issues. He is also a member of the Ethical Corporation advisory board.business strategy CR Strategy Paul Hohnen sustainable future
October 2013, London, UK
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