A see-through world

What makes a responsible company? It's a fair question. Terms such as CSR, sustainability and corporate citizenship are on everyone's lips these days. Even so, there is often a sense that they mean different things to different people.

But sometimes an issue cuts through. As the world economy attempts to put itself back on its feet, somewhat bloodied and bruised after the experience of the last couple of years, transparency is suddenly the buzzword du jour.

Our annual study of consumer views of CSR across 30 countries asks people to say what they consider to be the most important thing a company could do to be considered socially responsible. Treating employees fairly still tops the list, but behaving transparently and ethically is coming up hard on the rails – it was named spontaneously by just 8% of our global sample of consumers in 2005, 10% in 2008 but 20% this year. In the wake of the economic crash, when lots of apparently sound businesses turned out to have feet of clay, consumers increasingly want the whole picture about the companies they deal with, warts and all.

This is backed up by a Business Week survey of the world's top 100 brands, as Sustainable Life Media reports. Trust and transparency top the list of consumer concerns in 2009. The piece also makes the point that as well as expecting companies to keep them fully informed of what they're up to, consumers are quite prepared to use the opportunities the internet affords them to make sure that, when a company falls short, everyone knows about it.

We also share the assessment here that water use is going to be a big, big issue for companies over the next decade – and increasingly, one of the issues on which consumers will be expecting them to be transparent and lay their cards on the table. Water emerged as one of the most pressing issues in our survey of sustainability experts around the world at the end of last year, and our 15-country study of consumer views on the issue revealed that 72% considered water pollution to be a 'very serious' issue and 71% felt the same way about fresh water shortages.

Responsible water use is, in one way or another, a pressing issue for all sectors, not just heavy industry or beverages – and the way companies handle it is likely to be a litmus test of how they respond to the challenges of an increasingly see-through world.

The American nightmare: over at last?

Cast your minds back, if you will, to the 1990s. The USA had ‘won’ the cold war. The long economic boom was in full swing. Few had heard of Osama bin Laden, outside a coterie of Middle Eastern policy specialists, and even fewer took his threats seriously. America felt, for the most part, prosperous, vindicated and relatively invulnerable.

We all know what happened next – the contested presidential election of 2000 brought George W Bush and the neo-cons to power who swiftly disengaged from international initiatives like the Kyoto protocol, the dot-com bust gave a strong hint that US capitalism might not be as robust an institution as it looked, 9/11 reminded everyone that not everyone shared the American dream, Iraq and Afghanistan were invaded, and swiftly degenerated into running sores that looked like an object lesson in the consequences of hubris.

And sure enough, we saw the effect on global public opinion. We’ve just released the latest wave of our regular tracking with BBC World Service of the way people globally see the influence of different countries in the world. When we started tracking perceptions of US influence in 2005, the proportion of people across our 14 tracking countries who felt that it had a ‘mainly positive’ influence in the world stood at 38% - hardly stellar when set against the nearly 60% that saw Canadian influence as positive in that year. But as the body count in Iraq mounted, it dropped still further to 28% by 2007 – behind not only all the other major powers of Europe and North America but behind Russia and China, too.

That now looks to have been the low point. In the last year of Bush’s presidency positive views of US influence breached the 30% mark, continued to improve in 2009 and this year, with Barack Obama’s first term well underway, are now back at 40% and have overtaken negative views. The rehabilitation, if not complete, looks at least well on track. The USA has China in its rear-view mirrors once again in terms of global public perceptions.

What to conclude then? The upswing in positive perceptions of the US appears to date from the time when the country lost its appetite for projecting its strength in a unilateral way and started trying to mend fences with the international community. At the same time, the countries still felt to be projecting the most positive influence (Germany, Canada, the EU generally) are those that appear most fully committed to international cooperation, while as China’s economic strength and assertiveness has grown, its positive influence is felt to have declined. As far as international public opinion is concerned, it would appear, cooperation, stability and – perhaps - humility rules.

Politics: pass the salt, please...

Politics in Western democracies these days can seem like a somewhat insipid affair. Ideological cut-and-thrust is hard to come by, leaving political parties to argue about who is best placed to administer the state on the basis of a set of ground rules that are never seriously called into question. Lots of sound and fury masking a great deal of consensus.
Hardly surprising then, maybe, that electorates seem to have concluded that rather less is at stake than it once was and that election turnout continues to slip in many countries.
Ironically, a common complaint is that the truly contentious issues are left off the political agenda as being ‘too difficult’ for parties to handle. In Europe, the debate about continued EU integration is one that is often cited. Which MEP to vote for to voice opposition to the Lisbon treaty, for instance? And while at one level economic questions completely dominate the current UK general election campaign, and there are real differences of opinion between the competing parties as to the best strategy to adopt in the face of a ballooning budget deficit, there seems sometimes to be a conspiracy among politicians from the main parties not to talk in too explicit terms about the stark financial decisions facing the country and their consequences, for fear of giving too many hostages to electoral fortune.
Another ‘hot button’ issue is migration. The extent and effect of the inflow of migrants into Western economies is endlessly argued about, particularly within their popular media. But mainstream parties often try and steer well clear of taking too overt a position for fear on the one hand of alienating an electorate where anti-immigrant feeling is widespread, or on the other hand of being accused of ‘playing the race card’. The FT reported recently that votes for far-right parties were on the rise again in many countries, who find a ready audience for accusations that the mainstream parties are colluding to keep the issue off the agenda.
What’s clear is that the arguments advanced both for and against restricting immigration often rest not only on assertions about the relative value of immigrants to countries’ economies, but also to their culture. Those in favour of liberal immigration policies often argue that the exposure to other ways of life, value systems and beliefs that immigrants bring can be a huge benefit to a society and promote a sense of global citizenship. Our data suggests that, at the very least, opinion is sharply divided on this idea– our latest polling revealed that roughly equal numbers around the world see themselves as chiefly either global or national citizens, but that this isn’t strongly associated with numbers of immigrants – in largely monocultural China there appear to be rather more self-declared global citizens (70%) than in multicultural Britain (54%).
Whatever the truth, these questions of identity seem to be largely absent from political debate in most countries. The future health of democracy will surely be partly dependent on a braver generation of politicians who are willing to stand up and be counted, and tackle the issues that really define us all.

You can take the company out of Japan, but…

Have you noticed? It’s been several weeks now since Toyota had to recall any cars. The temptation to be wise after the event, of course, is almost irresistible - but if the crisis is, at last, over, what can the rest of us learn from this unhappy episode in Toyota’s history?

Jonathan Hemus of reputation management consultancy Insignia argues in The Guardian that it was actually a corporate strength - Toyota’s hard-earned reputation for quality and an internal culture that regarded anything less than perfection as shameful - that meant that its first instinct may have been to ‘put a lid on the stink’ rather than come clean and thus precipitate the crisis.

But is that sort of culture really so particular to Toyota? Perhaps if there are morals to be drawn, they may have to less to do with Toyota itself and more with the influence that a national culture can have on the way a global organization behaves.

It’s arguable that the very same combination of respect for authority, hierarchical management structure and fixation with the ideals of craftsmanship that allowed Toyota to grow to be the world’s leading car maker and define the much-lauded Toyota Way – but left it unable to respond in a credible and sure-footed way to a major crisis- is the very same one that is espoused by many top Japanese companies. In a culture where successful product liability claims by consumers are, moreover, few and far between, Japanese companies rarely respond to crises well – a point made recently by Jeremy Cato in the Toronto Globe and Mail.

This, then, may be one feature of the rise of the global corporation – the way that nationally-defined company cultures shape the fate of their organization, for good or bad. In the same way, perhaps the most important distinguishing feature of the buccaneering high-profile casualties of the recession – Lehman Brothers, AIG, Bear Stearns, RBS – was their very Anglo-Saxon-ness.

The evidence of this national DNA in organizations is something we see a lot of as we work with global companies – and their local offices - around the world. Scratch the surface, and maybe the multinational corporation isn’t as bland and homogeneous an entity as we all thought.

The net widens

The term ‘tipping point’ is wildly over-used these days (thank you, Malcolm Gladwell). A quick Google reveals that in the last few weeks it’s been applied variously to phenomena as diverse as the Greek budget crisis, rising CO2 emissions, The Hurt Locker’s Oscar prospects and the antics of the Chicago White Sox baseball team’s manager. Enough already, one is tempted to say.

Sometimes, though, something really does reach a certain level of ubiquity, passes a point of no return or breaks through into public consciousness in such a major way that the ‘t’ word is hard to avoid. Twenty years or so on from the birth of the World Wide Web, the internet may, definitively, be said to have ‘tipped’.

Our latest poll for BBC World Service reveals that four in five adults across 26 countries surveyed regard internet access as a ‘fundamental right’. That those who use the internet now overwhelmingly regard it as a sine qua non of modern life is less surprising than that over seven in ten of those who aren’t online - that is to say, who haven’t used the internet in the last six months - feel the same way. Yes, those on the other side of the digital divide do know what they’re missing. This raises big questions for governments around spending priorities as they try to bring down budget deficits.

The Economist recently reported that, with its 350 million users, Facebook now has more ‘citizens’ than all countries except India or China. Our poll found that more than half of all internet users enjoy spending their time on social networking sites, and the usage statistics bear this out. We may now be reaching a point where Facebookers have more in common with each other in the way they live their lives and their expectations of their community than they do with their non-connected compatriots. Again, a potentially huge shock for our elected representatives. Nationality is still a big deal in driving attitudes, of course – as our polling continues to show – but for how much longer?

Another straw in the wind – our latest polling on corporate social responsibility has suddenly recorded a substantial increase across many countries in the proportion who look online for information about how responsibly companies are behaving. This is the internet as the modern oracle – the definitive arbiter and repository of collective wisdom about all elements of life; companies, political parties, products and services, celebrities: work, rest and play.

A final and revealing statistic from our BBC poll – nearly half of the web users surveyed did not feel they could cope without the internet. And, let’s not forget, it barely existed twenty years ago. For better or worse, this looks like an evolutionary change. Homo hyperconnectedus, your hour has come.

Not-So-Healthy Debate

We noted a couple of weeks ago that the Obama administration had run into the sand on one of its main campaign promises – to close the Guantanamo Bay detention centre. But next to the the liquidizer of political capital that is healthcare reform, the fate of the detainees in Cuba is small beer.

A David Brooks op-ed in the New York Times last week argues forcefully that, such is the endemic lack of trust in government in the USA, that a would-be reforming administration needs to move slowly and incrementally on a hugely contentious issue like healthcare to build the confidence of the electorate rather than attempting a 'big bang' approach. The Times now advocates a 'weak and feckless' strategy of retreat and regrouping, rather than a 'heedless and arrogant' drive to push the reforms through in the teeth of huge opposition.

Curiously, the assumption that trust in government is at rock bottom isn't borne out by our regular public attitudes tracking data. For ten years, we've been measuring the degree to which people across the world trust a range of institutions to act in the best interest of society, and recorded a twenty-two point jump in Americans' trust in government between late 2007 and late 2009. Certainly, 2007 represented the dog days of the Bush administration, and the shine has certainly come off Obama and his team since our poll was taken, but still. A net trust rating of +25 isn't the worst starting point for major reform.

What looks more likely is that Obama's problems getting healthcare reform through is less because Americans across the board don't trust their government, and more because the nation remains hopelessly, viciously, ruinously divided on a whole range of emotive issues. Despite a filibuster-proof majority in Congress, Obama in fact invested a lot of time and energy consulting on the shape of a reformed healthcare system, trying to forge a 'bi-partisan' plan with support from both Republicans and Democrats. It's far from clear that much common ground exists. The resulting fudge, as the Times correctly points out, hasn't satisfied anyone and the wrangling has in the meantime allowed the reforms to be painted – ludicrously - as something akin to a Communist takeover of the federal government. This is one instance where, ironically, a less inclusive approach might have proven less divisive in the longer term.

Transformational Corporate Sustainability – The Salon

Every few months, we invite ‘friends of GlobeScan’ - clients, fellow consultants and members of our network from across the world of business, NGOs, media and government - to join us for a Salon. These are informed but informal discussion evenings on one of the issues we regularly research, over organic beer and snacks at our offices in London. On Tuesday, speakers from GSK, Fairtrade, InterfaceFLOR and SustainAbility shared their thoughts about transformational leadership in sustainability.

This time last year our Salon’s focus had been on ‘the great disruption’ - the ongoing financial meltdown then at the forefront of everyone’s minds. Would it prove to be a turning point and the herald of the birth of a more sustainable global economic system, or merely a hiccup in business as usual? As SustainAbility’s Mark Lee, the evening’s moderator and co-host, pointed out, even if the crisis had had a profound impact on the pace and nature of the sustainability debate, the fact that a year later we were now able to meet and discuss the further transformational leadership needed could be construed as reason to be cheerful.

GlobeScan’s Chris Coulter opened with some findings from The Sustainability Survey – our regular study of experts opinion across business, NGOs, academia and government conducted as a joint venture with SustainAbility. This highlighted the growing sense of urgency surrounding sustainability, and also the ‘changing of the guard’ we’ve noted here before in terms of perceived leaders in sustainable business, with new names like GE and Walmart starting to emerge alongside the established names.
The two companies on the panel, both leading lights in their respective industries, symbolised this shift, with Interface having made the leap in 1995, but GSK’s renewed commitment coming more recently with the arrival of a new CEO.

Much of the discussion, indeed, focused on the role of CEOs in driving sustainable change. Thanks to some live polling with our audience, while we knew that 75% of our audience were optimistic that most FTSE100 companies would embrace sustainability at the core of their operations in the next decade, many saw CEOs as a major barrier to doing so. Not all agreed, though - few CEOs these days, we heard, are actively hostile to sustainability. Others stressed that CEOs leadership was indispensable – they were often uniquely able within a company to decide to take a longer-term view of an issue and override targets that other staff were subject to. The two corporate panellists both highlighted the central role of Interface’s Founder and Chairman, Ray Anderson and GSK’s CEO, Andrew Witty – had played in their company’s sustainability efforts.

Most seemed to feel that companies now best positioned to lead on sustainability and become transformational leaders were those that had integrated it into their activities before the recession took hold. InterfaceFLOR Europe CEO Lindsey Parnell said he thought that sustainability was now so embedded within his company and so much a part of how its people saw themselves that the culture would survive any change at the top. In contrast, the feeling was those companies that hadn’t already embraced sustainability so were now too preoccupied with survival to contemplate major culture changes.

But there were felt to be other barriers preventing transformational leadership by companies. GSK’s Duncan Learmouth questioned whether the short-term focus of financial markets was a major obstacle to transformation and a limit to companies’ ability to act on their own. He also highlighted the lack of reliable data and analytical tools available to corporate leaders, without which the adoption of a fundamentally new business model was just too much of a risk. Fairtrade’s Barbara Crowther stressed that market mechanisms still failed to adequately price in ‘externalities’ – environmental and social harm – and that greater regulation was needed. A more responsible approach to marketing, she thought, was also key, with less messaging focusing solely on tempting consumers with too-low prices.

So, was the tipping point coming soon? Most of the panellists thought it was, even if greater consumer impetus was needed to push companies over the edge. And meanwhile, perhaps sustainability as a professional discipline has come of age – as Chris Coulter pointed out, many of those involved in the development of CSR have now racked up the ’10,000 hours’ supposedly required to become an expert in any field. Maybe in 2010 we’ll start to see the fruits of that expertise.