Out with the old, in with the long-term

Al Gore has issued his latest challenge to the world: an end to businesses' quarterly earnings reports in order to allow a greater focus on long-term sustainabile value creation.

"While we believe that capitalism is fundamentally superior to any other system for organising economic activity, it is also clear that some of the ways in which it is now practised do not incorporate sufficient regard for its impact on people, society and the planet," he explains.

This proposal isn’t groundbreaking – Unilever stopped issuing quarterly reports in 2009 when the then new CEO Paul Polman argued that they only served to promote the short-termism that dogs the financial markets. But the fact that a well-respected global voice (who also happens to be a major investor) is making this call, reflects the growing tide of expectation on the role of shareholders to foster and enable sustainable capitalism.

Al Gore’s white paper issues a number of other challenges, including proposals to mandate integrated reporting and to integrate sustainability into business education at all levels. In fact, he uses the word 'integrate' a lot. Could 2012 be the year that corporate responsibility and sustainability are welcomed in from the silos and embedded at the heart of more of the world’s top businesses? Long-term-minded investors will be on the lookout.

Employees Protest Goes Viral

This week 7 staff members of a ski operator (Skithe3v) barricaded themselves in their chalet in protest of their unfair dismissal and were refused to be paid by their former employer. The‘Les Menuires 7’ as they call themselves have stirred up unanimous Twitter and Facebook support using the social network sites to generate publicity and facilitate discussion.

Having worked for a similar operator myself dramatic action such as this comes as no surprise. I am all too familiar with the poor pay, high staff turn-over and unprofessional behaviour that, it must be conceded, comes from both employers and employees in this sector.

In a time when companies reputations can be destroyed (and built) overnight due to social media, it has become more important than ever for companies and brands to consider their practices, transparency and of course their responsibility. Whilst employees can be excellent ambassadors they can also, as we have seen in this case, help destroy a company’s reputation. Social media is fuelling consumer and employee power which should be welcomed and it’s playing an important role in why companies need to be more responsible.

I hope that the debate that the Les Menuires 7’s protest has sparked moves the whole ski operator industry to act and consider their responsibility to their employees. The grievances they cite are a standard in this sector that is in desperate need of reform and independent regulation.

In fact there is something that can be learned by every company through the Les Menuires 7 example – employees, armed with the tools of social media are very powerful. If you treat them well and keep them happy they can be your best asset and if not well then they may just pull a stunt like this.

A bitter taste for Valentine’s

Hershey’s has announced that that the Rainforest Alliance is to certify its famous Bliss chocolates – what lovely news, just in time for Valentine’s Day! But it comes days after a rather more bitter sounding commercial titled Hershey’s Chocolate: Killed by Child Labor was scheduled to screen to the crowds at the Super Bowl. This so-called “brand-jamming ad” was withdrawn at the last minute when Hershey’s announced a $10 million project to tackle child labour in West Africa.

This is crisis management, not leadership. Hershey’s has been subject to an embarrassing multi-year campaign accusing the company of turning a blind eye to child labour on its cocoa farms. The onslaught included blanketing the company’s Facebook wall in messages, posting ‘brand-jamming’ videos and photos of Hershey products online and releasing a report of accusations and demands, titled ‘The Real Corporate Social Responsibility Report for the Hershey Company’. Hershey’s is reported to have received over 100,000 letters asking the company to improve its cocoa sourcing practices, as well as a barrage of Facebook posts, tweets and emails.

The attacks on Hershey’s are just the latest example of the spotlight being shined on the apparently murkier side of big brand supply chains. Certifying Bliss chocolate is a move in the right direction – but by letting the storm clouds gather before making this big change, the company has left itself looking reactionary and defensive rather than visionary.

The ‘Real Corporate Social Responsibility Report’ accuses the company of “greenwashing” because it “points to various charitable donations” rather than stamping out “forced, trafficked or child labour” in its supply chain. Hershey’s insists that it's taking a responsible stance towards its supply chain. But to quell the storm and protect its brand, the company now needs to demonstrate that it has a more comprehensive CR strategy. The alternative is to continue the embarrassing public battle with the activists and risk leaving a bitter taste with its consumers.

Keeping up with the lingo

Inclusive innovation is heralded as the solution to the problems faced by the financial sector. According to a report by the Center for Responsible Business at the University of California-Berkley Haas School of Business, The Future of Finance, the only way for the financial sector to get back on its feet and win back trust is to ‘turn their innovation outwards’ and ‘find ways to grow their businesses and build positive relationships through society’.

You’d be forgiven for thinking that this all sounds a bit familiar! Whilst the new term is nice – it reflects the importance for companies of engaging and listening to stakeholders, and continually innovating and changing to meet or, where possible, to exceed their expectations – the concept isn’t new. Perhaps, a new label is what is needed to inspire companies to take action, a way of re-engaging the corporate world and reminding them that operating in a way that has a positive impact on society and the world can also be better for business. Somehow I’m not convinced - surely time would be better spent acting, rather than coming up with new labels!