University of Makeni

Sustainable Enterprise – 2

An Introduction

The module focuses on the following major challenges of the 21st century.

Can we balance the need for vigorous, successful economies with delivery of aid to some of the poorest regions of the planet?

What role can major corporations play in poverty-afflicted regions? Will climate change produce massive migration, and how will that affect security in host countries? How can NGO’s, governments and business work together to reduce armed conflict? Where does the corporate social responsibility movement go from here?

1. The ‘developed’ world did, in part gain its wealth from a period of blatant exploitation. – known as Empire or Colonialism. Prior to this, a number of rich nations had used slavery as the driving force of commodity growing that included bananas, tobacco and other highly priced goods – these in turn were sold in Western Europe and the emerging United States. As colonialism grew so such commodities as palm oil were used to allow processing in the empirical power and is some cases, such as margarine, the end product was sold back to the country from when the palm oil had been exported e.g. Nigeria. This means that to close the gap between the the rich and the poor nations the later has to be able to (a) process the commodities within its own political boundaries (b) keep the majority of the value earned and (c) be able to distribute such products to the developed world. The level of international given by richer countries has been considerable and even with the use of R.C Testing it is difficult to decide how much real impact on ‘development’ it has had. Social science does not allow a laboratory based experiment – we have to hope that the lives of ordinary people has been improved by the money and human effort shown since independence. There is now a growing movement to encourage developing countries to seek finance from bond and other capital markets – so making them re-pay their own debts and suffer the ‘market’ consequences if they do not. It may well be that in the lifetime of the current Makeni students that ‘aid’ will cease, except for humanitarian flows and technical advice.

2. The large corporations are normally attracted by low cost labour, fewer rules and regulations, corruptible officials and access to high value/lowed taxed commodities. This puts an enormous burden on those charged with negotiating with them. It needs a change in the mind set of international capitalism and this will to led, in part, by consumers. Buyers have power and sellers are aware of this. They need to put pressure on business but that takes organisation and some level of acceptance that for fair trade to exist the end consumer will probably pay more for their goods. With the advent of social media and the speed at which a Tweet can ‘go viral’ it might be that adverse publicity caused by blatant exploitation will become something MNC’s will want to avoid. IN fairness, some are speaking of social awareness, re-investment of profits in country of resource origin etc. but returns to shareholders will always hold more power. All that can be hoped is that a fairer amount of the profits earned from the resources of developing economies can be kept in the domestic economy and used honestly and openly to help the majority to gain access to the facilities the citizens of the home country of the majority of MNC’s take as a norm for their style of life.

3. There is now little, if any, doubt that climate change will affect the ways of life of those living in the developing world. Erratic rainfall, increases in temperature, land erosion, fires and other issues associated with rising temperatures, such as disease vectors widening will be a feature of life for those living in the developing world. Let’s use some visual materials to emphasise this:

Who is most vulnerable?

Temperature rises over many areas will be greater than the global average. The general predicted rise is 4C by the 2080s. But temperatures could rise to 7C in southern Africa and 8C in northern Africa - almost double the global average

Significant changes in rainfall could be experienced across the continent, with the area around the Sahara and in southern Africa

Desertification is likely to increase around the Sahara, causing populations to move. Rising temperatures, widespread water stress, increased frequency and severity of droughts and floods, and rising

sea levels will severely damage progress on development goals in Africa. Cereal crop yields could fall between 10 to 30 percent by the 2050s compared to 1990 levels.

Heat waves will bring increased injuries and death. Vector- and water-borne diseases such as malaria, dengue fever and cholera may increase. An additional 67 million

people in Africa could be at risk of malaria epidemics by the 2080s. Greenhouse gases must be curbed and help must be given to vulnerable Africans to adapt to the new climate

conditions. The cost of climate-proofing current investment plans will be between $10bn and $40bn. World population projected to rise to 9 billion, yet food production static World Food Programme now feeding 73 million people in 80 different countries

What should we be thinking about?

Land usage Water provision Irrigation Marginal land Rural-urban drift Coastal erosion Who pays and how?

Other important issues

Land usage Water provision Irrigation Marginal land Rural-urban drift Coastal erosion Who pays and how

Risk of disease

Marine Resources

Are these important to your country and if so why Are marine resources being exploited How can value be added in this sector Who owns and regulates this part of the economy What are its future prospects How does the government address this area of the economy

Shore Line Erosion

One specific example

Which areas of your country would be most at risk if global warming increases? How would this affect parts of your economy Are these large contributors to the national economic wealth How might your government react to the possible economic changes that global warming might cause

4. Peace and Conflict NGOs, as ostensibly impartial actors with humanitarian goals, can play a unique role in resolving conflict at the international, intrastate, and local level. Peace and Conflict NGOs are non-governmental organizations that work to promote reconciliation and coexistence among conflicting parties. They engage in a wide variety of techniques to promote peace, both on-the-ground in conflict areas and at the policy level. The work of these organizations may include grassroots action (letter writing, direct action, petitions, demonstrations) or work in diplomacy (promoting and arbitrating discussions). Peace and Conflict NGOs may work at the policy level, developing policy recommendations and advocating for peaceful solutions at the international and national level. In addition, Peace and Conflict NGOs contribute to peacebuilding efforts after the immediate conflict is resolved, including community building and development efforts. In reality some business corporations earn their profits from war – arms dealers. The major world powers, including the United Kingdom, earn large sums each year from arming countries in areas of the world where conflict is already happening, or might arise. Some of these deals involve trade agreements forming part of the package. Other businesses know well that conflict reduces investment, return and image, so causing the concern to lose both money and reputation. If business, using NGO’s as specialist partners could invest in labour intensive ways of earning profits, which also include sensible training programmes for indigenous labour then all parties would gain. The business would be in place to earn long term returns as the indigenous population increases both its income and appetite for the goods NGO trade in – though one must hope that this list does NOT include fast food and all the obesity problems related with it. Part of the problem is that both business executives and politicians look to the ‘short term’ only. See Theory of Public Choice - http://www.perspicuity.net/sd/pub-choice.html - which notes this and suggests ways around such short-sighted decision-making. Conflict, as we have seen elsewhere in this Module has a complex mixture of causes. One thing is certain, when people see improved living standards, less ethnic tensions and a clear strategy for the continuance of this they seldom take up arms. Its insecurity, corruption and other de-stabilising factors that cause mistrust and conflict. Peace is cheaper, m0re secure and allows for much greater self-expression and freedom of thought!

5. The future direction of CSR will be: Stephen Jordan, leads BCLC’s engagement with a broad spectrum of companies, chambers of commerce, government agencies, and non-profit organizations in the United States and overseas. He has worked on numerous U.S. and global development and disaster recovery challenges including Katrina, Cedar Rapids, the Southeast Asia Tsunami, and the Haiti earthquake.

The Business Civic Leadership Center (BCLC) is a 501(c) 3 nonprofit affiliate of the U.S. Chamber. BCLC is a leading convener and thought leader on social issues that affect business, including corporate responsibility, philanthropy, nonprofit and social service effectiveness, global development, community investment, and disaster assistance.

Rahim Kanani: How did you first get involved at the intersection of business and civic responsibility?

Stephen Jordan: In the late 1990s, I served as the executive director of the Association of American Chambers of Commerce in Latin America, and had two different experiences that deeply influenced me. The first was Hurricane Mitch. This hurricane hit Central America in October 1998, and almost 200 companies came together to contribute over $70 million to the region. This despite the

fact that just three weeks before, Congress had dealt a major setback to trade in the region politically. There was no cynical reason for companies to do what they did, which made me very curious about what motivated this kind of action.

Secondly, the WTO protests in Seattle provided a different kind of insight. Protestors didn’t differentiate between businesses. They were mad at all of them. I realized that people did not know that much about what companies do to help solve humanitarian, community, and societal problems, and I also realized that a lot of businesses did not know about best practices in this space either. We founded the Center for Corporate Citizenship – as the BCLC was originally called – to help provide visibility, insight, and connections and address these challenges.

Rahim Kanani: As the senior vice president of the U.S. Chamber of Commerce and executive director of the Business Civic Leadership Center since its founding in 2000, what are some of the trends you’ve observed in corporate social responsibility and corporate citizenship?

Stephen Jordan: There are many, but let me zero in on three. One is a huge shift toward transparency and communication. In 2000 there might have been a dozen Fortune 500 companies who issued a CSR or sustainability report. Now almost all of them do. Second is a big shift away from seeing corporate citizenship as synonymous with corporate philanthropy. I think it is becoming much more strategic and embedded in company operations. The third trend is that companies are moving away from playing defense and reacting to whatever social pressures are out there, and moving toward being proactive and addressing their external environment more intentionally.

Rahim Kanani: Recently, at the Corporate Citizenship Awards, it looks as though a running trend among the winners was health and wellness. What do you make of this trend and why do you think corporations are heavily focusing on this issue?

Stephen Jordan: When you poll companies, health care comes up consistently as a top social issue that they think affects their business, but historically, it has been one where they have felt stymied about how to act proactively. That has changed in recent years, particularly as businesses harness their innate skill sets. For example, Kraft Foods, the 2011 winner of the Corporate Steward Award, won because of their nutrition and health initiatives. It’s a natural fit for Kraft, a producer of some of America’s most iconic foods, to use their food and beverage insights to help promote nutrition and a healthy life style.

Rahim Kanani: Is being a good corporate citizen good for business?

Stephen Jordan: Yes. It is definitely good if you want to be in business for the long-term. What’s the old saying: “fool me once, shame on you, fool me twice, shame on me”? Anyone can make a fast buck, but consumers, employees, investors, and communities aren’t stupid, and bad apples don’t tend to last long. People vote with their feet and their pocket books.

Rahim Kanani: And lastly, what’s on the horizon for the Business Civic Leadership Center?

Stephen Jordan: Thanks for asking. This year is going to be exciting for BCLC. We have two major projects that we are building out: our Business for Good map and the International Business Corps. The Business for Good map already has over 200 projects on it, and we are finding out all kinds of information about the “who, what, when, where, and why” of community development projects. Likewise, the International Business Corps is piloting community capacity-building projects in Rio de Janeiro as we speak, and I am very impressed with the companies that are participating in that initiative. Finally, we are building out our strategic insight capability. We’ve launched a new monthly discussion series called “Conversations with Stephen” and I hope you will come and join us for one, Rahim. We’d like to turn the tables and get your perspectives too.

Source: http://www.forbes.com/sites/rahimkanani/2012/02/09/the-future-of-corporate-social-responsibility-csr/

Other Resourceshttp://www.bing.com/videos/search?q=the+future+of+corporate+social+responsibility&FORM=VIRE1#view=detail&mid=76CE2EF68590D8AF8F6F76CE2EF68590D8AF8F6Fhttp://www.bing.com/videos/search?q=the+future+of+corporate+social+responsibility&FORM=VIRE7#view=detail&mid=601ADBBA551AB78277E3601ADBBA551AB78277E3

We have to hope that ‘business’ views its customers as human beings and not just robots who can be persuaded to buy almost anything – if they do then Fair Trade, the addressing of climate change and other ‘longer’ ( but not that long into the future) will be seen as a normal part of business practice. If short-term, solely profit driven enterprise continues, then most of the course will be under enormous pressure to have the outcomes we want.

Let’s now start to look in more detail at the specifics on this Module. It is worth remembering that some of issues to be covered have already received considerable attention in our Module 1 materials.