Debate: Can Corporations Save the World?

“We recognize water as a basic human right.”

That is exactly the sort of sentiment you would expect to read in one of the world’s most respected nature-focused magazines. And indeed, National Geographic’s April 2010 Special Issue, Water: Our Thirsty World, does a fabulous of job of illustrating how a world water crisis is affecting communities and water resources.

But who made this powerful statement? Was it a respected environment writer, social justice advocate or prominent United Nations official? Neither. In fact, the declaration was made by multinational soft-drink manufacturer PepsiCo in a 3-page advertisement in that month’s issue.

Meanwhile, communities in India are protesting against the company’s US$40 billion activities, which they say pollute local water resources and deny people’s water rights.

No doubt the corporate giant’s history of bad publicity led to the 2009 decision to adopt a water rights policy under the guidance of human rights NGO Unitarian Universalist Service Committee (UUSC).

Truthout Blogger W. David Kubiak believes that corporate ‘greenwashing’ and lobbying will intensify as companies seek to buy into October’s COP10 Convention on Biological Diversity meeting in Nagoya.

“The planet’s big corporate bodies clearly recognize the bottom line implications of COP10 and have rushed in to dominate its organization, framing and regulatory intent.”

Kubiak points out that the International Union for the Conservation of Nature, publishers of the Red List of Threatened Species, and Nippon Keidanren (the body that represents the largest companies in the world’s second largest economy, Japan) are now closely related.

What would you do? Compromise or ostracize?

Putting BP to one side, do you believe multinational companies are at the root of the world’s environmental problems, or can they be the vehicles to drive human behaviour towards sustainability?

As a person working towards positive environmental change, would you work with companies like PepsiCo, in the way that NGOs like UUSC have? Or would you prefer they be sidelined until either ‘governance’ improves, or so-called ‘consumers’ awaken and push corporations to honour their corporate social responsibilities?

Alternatively, do we require a fundamentally different, perhaps more radical, approach?

We want to hear what you think in this week’s Debate 2.0.

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Debate 2.0: Can corporations save the world? by Mark Notaras is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

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Author

Mark Notaras is a member of the Sydney Slow Food convivium and accompanied the Australian delegation to the 2014 Salone del Gusto/Terra Madre. The views expressed here are his alone and not those of Slow Food or any affiliated organization.

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  • http://www.merikariu.com Michael Perkola

    With powerful technologies and organizational structures of the 21st century, you’d hope to see people operating them with a 21st-century mentality. Unfortunately, it’s same human psychology of Ancient Rome and Medieval Europe. That is to say, empire building and a fanaticism towards (economic) ideologies. Can we wait for consumers to awaken? No. If they were “awakened,” they wouldn’t drink Pepsi and they couldn’t sleep with the knowledge of the dozen or so fatal crises converging on us (water, collapse of oceanic ecosystem, global warming, erosion of topsoil, etc.). So yes, a fundamentally different, more radical approach is needed. I wish it were another way, but it’s all or nothing.

    • Jonathon

      But what would that ‘fundamentally different … radical approach’ be? How would you reform things?

      • http://www.merikariu.com Michael Perkola

        The radical change begins with your psychology. Our inaction is fundamentally more due to amorphous fears and internal inertia than external obstacles. By facing your fears in small things, you can build confidence in yourself to do more. How does a man become brave? By doing brave acts. How does a man become great? By doing great acts.
        We must rise to the task. And if not you, then who? If not now, then when? Our generation has the opportunity to take responsibility for and correct the mistakes of the past. It’s a great honor to have this chance. We stand at the threshold of a withering end or a new beginning.
        Jonathon, to answer question about reform… I would not attempt to reform the system. The elite hold all the keys and guard all the doorways. This economic system serves their interests and values. The legal system has nothing to do with justice. It has always been most concerned with property and it guards those with wealth and power. Any reformed system would be based on the same fundamentals. It would eventually be corrupted and controlled by the same mediocre politicians and corporate elite. I would have us reform ourselves into our own ideals and then seek to be the new masters.
        Now… progressive, ecologically-minded, democracy-supporting people such as ourselves loath to use the word “master.” But that’s just a sign of how we’ve been sold a castrated ideology with fictional histories of “successful” peaceful protest and resistance by MLK Jr. and M. Gandhi. It is mind-control. (Megumi would know what I’m talking about if she had overcome her anger and read past the first few pages of the book!)
        If you aren’t responsible for… If you aren’t master of yourself, your family, your office, your community, or your cause, then is who is? Is he a better or worse man than you?

  • Roger

    If corporations can save the world, the question is “what are they waiting for?” The sad fact is that most people who work in business may be in some kind of “consensus trance” that convinces them that the only thing they need to do to be successful is make money. We can’t really count on corporate social responsibility precisely because they put corporate at the front – which means that these activities have also to be profitable for companies – i.e. sell their brand. Also, it would be a vast improvement if their expenditure on social responsibility was more than just a fraction of their marketing and advertising budgets. But that is not going to happen. At the end of the day, most corporations seem to be tied into the idea that they can make the world a better place simply by selling more of their product. The real questions about how to ensure the long term future of the world are left for someone else or some other entity – like the government to deal with. This is a real shame, because when things go wrong, everybody is affected including companies. Just look at what happened with the financial crisis. It seems to me that the boardrooms of this world are full of people who are sleepwalking the world into an even bigger mess in the future.That is really a sorrowful situation, but what can you expect. People who work for companies that cause huge environmental damage are hardly likely to suggest that their company should shut down. Just ask anyone who works for BP.So far, looking at what most corporations have done to address issues like climate change, you have to feel that there is more greenwash than real action. I truly wish this wasn’t the case.

  • http://twitter.com/NiekMilder NiekMilder

    this is a part from a book called “when china ruled the seas”

    ” Confucius had not only put forth the ancient Shang notion that the emperor was the link between man and the heavenly spirit, but he had said that the true ruler could “transform society with his virtue.” The Han emperors set up an academy to transmit the teachings of Confucius formally, and under the influence of the great sage, government service and farming were quickly elevated as the honored professions for virtuous men, while commerce and the barter of goods were shunned as inherently exploitative and corrupt. Merchants were ranked below artisans and were forbidden by sumptuary law to wear the finest quality silk.”

    This part comes after a long chapter about 2 traders first centuries A.D who had their grasp on all trade from madagascar (china did some buisiness there before even knew easafrica) to borneo to Korea.

    I like to think the following: Why not learn from the past of one of the oldest civilizations on earth? Do not ever trust something as important as water in this case ( silk in the chinese context) to the merchants…

  • AlanZulch

    I’m afraid the basic corporate structure, based as it is on maximizing shareholder values, belongs to an obsolete paradigm. It’s said that you can’t dismantle the master’s house with the master’s tools, and in the same vein, you can’t rejigger an entity based on endless growth in a finite system to be sustainable and look out for the common good using the same greenwashed tools.

    I concur with Merik that a more radical approach is required.

  • Jonathon

    Well, a couple of things:

    You might have to look at legislative changes. For example, under Australian law the directors control the company but are confined to acting in the best interests of the shareholders. This ‘best interests’ concept generally involves the direct economic interests of shareholders. It would be difficult to argue that community projects, arguably saving the world would be in the direct economic interests of shareholders.

    But more importantly, who pays for it all? It’s easy to say that ‘for-profit’ corporations are rich and should pay for ‘saving the world’, but ‘for-profit’ corporations generally source their money from debt and equity. Shareholders/lenders provide corporations with that money because they want the corporations to use that money in their business, and eventually generate a return which they pay back to the shareholder/lender (i.e. a dividend or interest). If corporations were going to use shareholder/lenders’ money in non-profitable projects, shareholder/lenders would cease providing money to the corporations, and the corporations would no longer be rich. Also, the shareholders would presumably vote the directors out and get new directors who were willing to engage in profitable projects.

    Therefore, at least in Australia, the law and economics mean that for-profit corporations tend to only involve themselves in environmental projects to the extent that it benefits their bottom line, this is clearly going to be insufficient in solving environmental problems in many cases. Although I focused on Australian law, much of this applies to developed economies generally.

    You can’t just use shareholders/lenders’ money to clean up the environment. If you want the rich to pay for it, you have to tax them. That is, the best vehicles to solve issues involving the common good are governments.

  • Megumi Nishikura

    Part of me feels that it will have to be corporations that save the world but I do feel that the incentive to do so is not strong enough yet. I sometimes day dream that I’m most needed to work within the corporate system and change things from within but then I wonder if the structures are so entrenched that it wouldn’t be the most effective course of action…

  • BrendanBarrett

    Corporations are always evolving. They have not always been the way that they are now and they will be very different in the future. More and more corporations are thinking very seriously about the long-term sustainability of our planet. I have met with a lot of representatives from different corporations recently and I have to say that I am impressed by the efforts they are making to address climate change and to reduce their carbon footprints. What I could not confirm was the extent to which topics like peak oil are discussed in board rooms, but they must be.

    I sometimes try to imagine what corporations will look like in the not too distant future. I feel that they will be very different since they will have recognized that we face some pretty significant challenges with business as usual and when they focus their creative minds on tackling today’s problems, the results will and should be impressive.

  • marknotaras

    Thanks for the comments so far. I don’t have a fixed position on this yet so they have been very helpful for me at least. I agree with Jonathon to the extent that legal frameworks and tax incentives are important. But maybe something we haven’t yet admitted is the extent to which our democratic systems of governance are failing. We know about corporate capture of politicians in the US oligarchy, but this is being repeated all over the world where in the name of “national interest” and through the WTO, nation states empower their companies to work around the world extracting resources, whatever the consequences maybe.

    I really think distance is a big factor here. this is not to say that companies or governments or even individuals do not pollute in their own backyards – they do. but it is too easy, with globalization of transport, finance, labour etc, for multinationals to treat the world as their own personal sandpit/vege patch.

    On that basis I am a little more downcast on the ability for corporations to change. I think we need this house of cards to fall before we can build something more solid from the ground up. Nobody in the house really wants to see it fall; perhaps they don’t see the problem because they watch mainstream media and sit in London, NY, Tokyo, Shanghai and not in the places where the most damage is being done. Growth and our identity as “consumers” and “shareholders” has seen us create a wealthy society, but one that has no value.

    Talking about water companies in her book “Blue Covenant: The global water crisis and the coming battle for the right to water”, Canadian activist Maude Barlow says the following, in relation to companies like Coke and Pepsi and their CSR efforts to provide safe drinking water in the developing world:

    “While some of these individual efforts may bring some water to families and communities, it is very important to see them for what they are – an attempt by the companies to blunt criticism of their conduct with “feel good” charity while making money”.

    My question is are there any really good CSR initiatives out there, and how do we distinguish good initiatives from propaganda?

  • http://www.facebook.com/schmidt.stephan Stephan Schmidt

    I thought about the incentives for companies. Sending their staff out to the fields, getting their hands dirty, spending about 10-15 days doing social corporate responsibility, wearing a shirt or using tools branded by the corporate. “Do something good and talk about it.” Creating a win win situation.

    But bearing in mind that entrepreneurship and in this case social entrepreneurship drives people to act, corporates recognized this. Beyond this, the challenge is to bring people to create, design and conserve nature and environment and also get paid for. Had just today a conversation with the head of a major corporate and project developer showed, that even big corporates facing the challenge to attract farming, foresting, traditional handcrafting to especially younger people.

    In his idea there must be a business model behind to get younger people to create a business with environmental activities and evolving small solutions. So the driver would be money again…

    By saving your own environment and contribute locally, pay attention to a small place, the help of corporates could be help as well as the knowledge of colleagues and the stuff.

  • BrendanBarrett

    After just publishing my update on peak oil and having read the new report from Lloyds Insurance, I start to wonder if this debate should be phrased the other way around. Can we save our corporations?
    If most of our corporations are not aware or preparing for peak oil and if as we saw with the financial crisis they are not as resilient as we would hope with bail outs required, then we have to be concerned as to whether we can maintain them in the future based on current models.
    Unless they adapt as Lloyds’ recommends, they may implode. So I ask all business leaders to read and take seriously the new Lloyds’ report.

  • http://twitter.com/davidmbaptiste David Baptiste

    Nice article, thanks. I’ve switched over to bartering recently for most of anything I can get without having to shell out cash. There are a couple sites out thereto use, to connect with people who are looking to barter trade/swap items or even services (carpentry work for auto work, etc). One of the sites I use is Baarter – http://baarter.com
    They also have a ‘ Free Stuff 
    ‘ section.

    • Smitty

      similarly, freecycle (http://www.freecycle.org/) is a worldwide website with local freecycling communities all over the world. It is grass roots, community based and non-profit and keeps usable items out of landfill! We’ve given away an old television, old bed, couches and boxes full of pots and pans, which would otherwise have been landfill… feels good.

      But this is a slight diversion from the above. One of the main questions one should ask is: are corporations interested? Don’t be fooled into thinking that softdrink corporations are interested in getting clean water to communities…someone is paying for that! they’re making a profit. There is a lot of money and publicity to be made from the green dollar.

      Corporates are stealing my water and sell it back to me at a 1000% markup yet I am happy to be amongst abundant supplies of refreshment. One day, these people will be my saviour as they will supply me with the drinking water I need to survive….! Thank you, thank you!!! Without you we would not survive… but with you we live! But we depend on you, we rely on you and we work so that we can pay you. Slavery?

      So are corporations really interested in the environment or sustainability, I don’t think so… I think monopolisation and control of essentials is on the agenda. Control of the things you need, means control of you. This goes for food, water, energy in particular.

      I work my 9-5, 5days/wk so that I can pay my taxes, pay the conglomerate supermarket chain for food, pay the energy suppliers, pay for transport, pay my credit card and bank debts and all for the luxury of sitting on a nice couch and watching the idiot box… are we not slaves already?

      In a world controlled by debt, not a single being can ‘afford’ for the economy to collapse, yet the economy is our biggest weakness. The interests of the few (the elite) control the government, control national and consumer debt, they control corporations and they control you…. what is money anyway? If the bank of (insert country name here) said tomorrow the money in your wallet isn’t worth anything, what then? The rich still have everything, but you? You have a debt and you have nothing. For change to happen, an awakening needs to occur – are you prepared to lose everything?

      The alternative argument was legislation, but who is really in charge anyway? Do you really think you live in a democracy? In a two-horse race you only have one more choice than communism. The questions is, who is behind the facade of government. Sadly, the answer is the same corporations that are selling you water at 1000% markup, the banking elite who hold your debts, the energy companies who have enslaved you into a dependence on fossil fuels… the companies who sponsor and profit from wars and the same entities who will go in and re-build (for profit) afterwards. Wake up my friends!!

      For now though, release yourself from the shackles of your monopolised food, water and energy supply chains… use your local tradesman, buy food from your local market, grow your own, source green energy supplies, barter, give away your old things… make your own communities, unshackle yourself from debt, be sustainable, be free people…. BE FREEE!!!!

      • http://www.ourworld.unu.edu/ Carol S

        Brilliantly put.

        ________________________________________

  • AlanZulch

    I can’t get past the fact that corporations exist to make a profit for their shareholders. They are legally bound to make that a goal first and foremost, otherwise they can be sued. As such, corporations have a vested interest in monetizing everything with profit-making potential and ignoring externalities.

    And there’s the rub. They can, and must, from a shareholder responsibility perspective, ignore those externalities which diminish their profit-making potential. Which makes corporations intrinsically ill-suited for an interconnected world because, greenwashing aside, they are ultimately looking out for their own survival. They are self-serving by charter and being self-serving goes against the tide of what this world needs in order to survive.

    If corporations understood (as if they’re persons, or, wait, they ARE persons, legally!) and acted upon the understanding that what I do to others I do to myself, and put that into practice from top to bottom, they’d be sued out of existence.

    I’m not waiting for corporations to save the world anytime soon. They have and will evolve as legal entities, but their main reason-for-being, at least in our contemporary economic paradigm, renders them more on the side of the problem, rather than the solution.

  • marknotaras

    Hi folks – there is another related and somewhat differently framed discussion going on here:

    http://socialentrepreneurship.change.org/blog/view/the_billionaire_pledge_gates_and_buffett_urge_ultrarich_to_give_away_50_or_more,

    Billionaires like Gates are putting huge amounts of money into “reducing poverty”. I feel that the adulation they receive, particularly compared to social and environmental justice activists and community workers is a bit overblown, and reflects how society confuses money with wealth (wealth may come in many forms – knowledge, experience, selflessness, humility, empathy). Others respectfully disagree. Any thoughts?

  • Deborah

    Hi all and great commentary!

    The issues in discussing this are countless but at this moment, I would like to zero in on the shareholder element and how markets determine the share price. It seems that without a shift in the way we measure the value of companies, we will always fall back on “blaming” the shareholders.

    But shareholders are human beings (unless I’m missing something ;) ) and hence, still reside on the planet. So, whether they like it or not, they are at some point going to need to bear in mind the external impact a corporation has on the world around us.

    So why do analysts not factor in the broader impact a company has in determining its true value?
    Looking at the BP case – the share price was oscillating depending upon news on how and when the leak was going to be capped. Now was that due to the amount of oil that was leaking or a deeper sentiment of what harm was being done?

    I believe a greater amount of shareholders would have a preference in investing in companies that have a good business model with healthy figures, as well as having a positive contribution to society and/or lessen their negative impact on the environment. So maybe we should provide them with true data in this regard – something like incorporating an ethical index as part of all company valuations…

  • Chewybunny

    Has it ever occured to anyone that if you show corporations that there is profit in conservation measures, or give tax breaks to corporations seeking research and development of technologies that will make the resources they consume more renewable? Has it occured to you that corporations are an organization of human beings just as any other, and not some evil manifestation of greed in as much as you’d like it to be?

    Everyone here is proposing radical ideas, psychological thinking, total world rewrite…The same exact thing that has been argued by the radical environmentalist movement for nearly three decades. And nothing at all to show for it, because it is a purple dragon; something that looks cool as hell in front of you but simply isn’t a reality.

    Or has it occurred to anyone to follow the examples of Patrik Moore who as chair of the Sustainable Forestry Committee of the Forest Alliance he spent ten years developing the Principles of Sustainable Forestry, which were later adopted by much of the industry? These measures are still growing and are being adopted by more and more forestry industries, and have had a radical change in the way the forest industry operates in the North American and European continents?

    Instead of focusing entire societal shifts, and allocating massive amount of resources unto projects that are backed more by emotional appeal than actual science, we can encourage those same sources of capital (corporations) to invest into renewable, and sustainable technology or business methods, which in turn have a direct, and immediate impact on global environmental problems, including resource depletion, because it is for their own good and their own sustainability.

    I’m sorry to burst this white-bred middle class guilt everyone has, but greed is not an evil spirit, a demon, or anything of the like, it is a trait of a human being that can be used for good or for evil, depending on how you want to use it.