Author: jembendell

I'm a British national living in Indonesia. I am known for my work on societal collapse risk and response. That includes the Deep Adaptation paper and Breaking Together book. I cofounded Scholars’ Warning to help academics communicate about a post-Sustainability agenda for reducing harm in the face of catastrophic ecological change. I cofounded Bekandze Farm School to enable smallholders to switch to organic and resilient farming methods. Last year I quit my full Professorship to focus on deep adaptation to societal disruption and collapse.

Loose Change We Can Believe In? Why Salary Caps Won’t Do

jembendell5 Comments

Barack Obama has made international news announcing a salary cap for the heads of companies that are being bailed out by government. Other governments are expected to follow suit. Billions have been lost, and trillions pumped in to keep these companies afloat. Compared to that, these salary caps are loose change, not the ‘change we can believe in’ people hoped for.

That bankers are being bailed out, while home owners struggle, and people are laid off, is galling to many. Robert Borosage, president of the Institute for America’s Future, has said that “many homeowners were misled by predatory lenders to taking mortgages that they didn’t understand and couldn’t afford. It would be simply obscene to help the predators and not those that they preyed on.” Some also question the revolving door between bankers and regulators, and whether people like former Treasury Secretary Hank Paulson, who became super-rich from working in one of the firms whose practices had helped create the crisis, should have been deciding how to hand out billions to the same sector. News that the bankruptcy courts released $2.5bn to secure Lehman Brothers bonus payments at a time when savers were losing out, is just one example of a situation that seems to many like a systemic abuse of power by a professional elite of regulators, judiciary and bankers. Then Merryll Lynch giving out more millions to its staff as the crisis really crunched is not just obsence, as time may tell, it is likely criminal.

The bail-outs are defended by the fact that a financial institution is “too big” or “too interconnected” to fail and that its failure would cause a systemic risk. If governments and regulators have let financial institutions become so big that they cannot be allowed to collapse, shouldn’t they be encouraging more competition and more diversity? This is at least the view of trade unions. UNI Finance, the global trade union for finance workers, has repeatedly called for a diverse finance market that includes not only private banks and insurance companies but also public banks, savings banks and insurances, co-operative banks, mutual insurance companies and foundations. However, this does not seem to be the view of governments and regulators who are pushing failing institutions into the arms of healthier ones (e.g. acquisition of Merrill Lynch by of Bank of America in the United States or the takeover of HBOS by Lloyd’s TBS in the United Kingdom). As Lina Saigol, a Financial Times columnist, has argued, this “new generation of gargantuan institutions [will have] the power to dictate the next financial boom and bust.” With the new injection of funds from governments, many banks have since turned their attention to attempts at buying each other out, and thus compounding the problems associated with market domination by too few players, rather than quickly getting back to the business of lending money to people in the business of making things for others.

In many cases the bailouts have became part nationalisations of the banks involved. This gives governments some additional influence over their practices, yet most politicians are currently cautious about what influence they exert, and act on issues like future executive pay, as the new announcement from the US illustrates. The irony of increasing government ownership of the banks, is that the tax payer may face a double whammy of their own. Not only have they bought up bad debts, but they have bought into potentially massive legal liabilities. In a comment in The Guardian, Nick Leeson, the trader who brought down Barings Bank in 1995, said: “For my role in the collapse of Barings I was pursued around the world, and ended up being sentenced to six and half years in a Singaporean jail. Who is going to go after the reckless individuals responsible for the financial catastrophe? Apparently no one”. However, there appears to be growing pressure to hold companies as well as individuals responsible for the global financial crisis. Regulators have announced the broadening of the investigations into the collapse of the subprime mortgage market to include Fannie Mae, Freddie Mac, Lehman Brothers and AIG. In addition, many observers expect a sharp rise in shareholder lawsuits against investment banks and other financial institutions following the millions of dollars of losses they made by gambling money in asset-backed securities and the like. Law suits are emerging from Hong Kong to Paris to Rekjavik.

These actions slam the legal door after the capital horse has bolted. Rather than punishing the individuals who profited from using other people’s money to buy derivatives they did not fully understand, but knew could turn a profit in time for their next bonus, this legal action will cost the companies’ new owners, including the tax payer. First the bankers, then the lawyers, will have bled the collective purse. The sick irony of this is that many ex-bankers are getting in on the game: they are helping fund the lawyers to pursue claims against financial institutions for those who have lost their money. In doing so they aim to make a nice commission. They screwed the public purse once, and now will do it again, through taking a slice of payments paid out by their old employers. As this situation becomes visible to the general public, calls for the people who made millions from speculating with their money to replenish their depleted pension funds may grow. There could be investigation into whether there was abuse of fiduciary duty by those who received large bonuses through creating, investing, rating or trading in mortgage backed securities or credit-default swaps since the deregulation of those markets in 1999. Given the mobility of capital, such processes would require international cooperation, to freeze assets of those being investigated. If this happened, it would remind us of Interface CEO Ray Anderson, who said that people like him would in future be regarded as criminals for doing things that at the time they considered normal business. Letting bankers live as millionaires, some as billionaires, from creating a crisis that has emptied the pensions funds and now the coffers of government, would sadly stand as a testament to systemic injustices of contemporary societies. However, it is unlikely that governments will want to see such a wave of litigation. As such there may be growing calls for some form of ‘financial truth and reconciliation’ commission, to explore how this crisis developed, where fault lies, and how to repatriate some savings.

Those calls will grow louder in the coming months, with major activist mobilisations planned to call for financial justice before the G20 meeting in London. Obama was expecting a hero’s welcome at his first big meet up in London. But saving a few million in salaries in return for the trillions thrown at the financial sector, while millions of people lose their jobs? Salary caps aren’t the loose Change We Can Believe in. He will have to do more. Far more. As will the rest of the G20. They can start by endorsing a more legitimate and inclusive process to develop principles and rules for a new financial order, and coordinating a process to repatriate some funds from the pockets of the irresponsible bankers, some of whom now seek to even profit from the coming litigation.

– More analysis of the future of the financial system will appear in the next Lifeworth.com Annual Review of Responsible Enterprise, released at the end of the month.

– For a discussion of the corporate responsibility movement’s contribution to the future of capitalism see my new book http://www.greenleaf-publishing.com/productdetail.kmod?productid=2767

Naked in Davos

jembendell4 Comments

Davos kicks off again this week, with its head Klaus Schwab saying he wants to help shape the new rules for global finance, with the World Economic Forum (WEF) playing a similar role to the Bretton Woods meetings at the end of World War II. Given that his organisation praised and promoted the very actors whose greed and pride combined to ruin so many people’s lives, some might ask “does he have no shame?” Before the Forum can play a useful role in convening dialogue to generate any useful insights into what we need to do internationally in face of the crisis, its management could benefit from some ancient truths about how we understand our world.

“We see things as we are, not as they are” it says in The Talmud. If I am someone who wants to benefit from society’s resources and respect, and therefore associate with the people, organisations and ideas ‘in power’, how will I see “things”? Will I see them in a way that accepts, even praises, the status quo, and scoff at ideas which seem to challenge power? Most likely.

Since the beginning of recorded history there have always been people willing to sell their intellectual prowess to those in power. “The exceptions seem so rare that they are talked about for centuries afterwards. The most famous being Socrates. More typical are those who come up with reasons that the status quo is the appropriate organization of society and that those in power are the perfect persons to be running things” explains Robert Feinmann.(1) Until the 18th Century religious leaders played a key role in providing justifications for power, such as the “divine right of kings”. Their influence waned with the Age of Enlightenment and modern science. “What is needed is a “scientific” rationale for the organization of society” says Feinmann. “This role has now been taken over by economists. Using statistics and mathematical theories they have been able to produce whatever justification was desired by those employing them. Proof of their intellectual dishonesty is easily found. For every economist who can “prove” the effectiveness of, say, trickle down economics there is another who can demonstrate that such policies are a complete failure,” he notes.

In the field of academia called “business studies” this approach is often taken to the extreme, as an academic’s concept finds its validity in being adopted by a famous CEO. As a result business academics have often been seen as the intellectual rentboys of corporate elites. The alternative should not be a retreat to the libraries, but to be clear about the type of business and business person a business school seeks to inform. For the difference between a management guru and a management geek is not only the style of communication and the reach of their ideas, but also how they see a wider context and serve a higher purpose.

Organisers of the World Economic Forum like to think it is the leading intellectual forum on the world of business. It is the leading forum in terms of size and power, but intellectually? As the financial system has unraveled, their minor mea culpas mixed with “told you so” (due to passing mentions of house price bubbles in their reports) have been particularly revealing. In interviews with Bloomberg, leading staff at the WEF said “chief executive officers who gathered in Davos, Switzerland, over the last five years didn’t listen to warnings from their peers. Davos organizers also say they failed to play tough with the financial-industry bosses, opting to accept their funding and let them turn Davos into a rave-up for Wall Street excesses.” (2). Leaders of the Forum have been putting their failure down to excess, rather than principle. “We let it get out of control, and attention was taken away from the speed and complexity of how the world’s challenges built up,” said Schwab. If not so much money had been taken from Wall Street speakers at Davos, would the WEF really have been much smarter? Hardly. The lesson for us must be that an institution that pays its bills by convening the world’s largest companies to entertain them at high-powered meetings will be beset by systemic sycophancy.

Some Forum staff complained that delegates did not seriously listen to helpful sessions on emerging bubbles. But what do they expect when you are in the Alps and Angelina Jolie might be at the bar? The hubris of some involved in the Forum is that they are an emerging power in global governance as significant as the UN. Yet, despite any good intentions, would it not be a fascist planet if the world’s largest corporations would be able to set the agenda for policies across the world?

A Davos delegate for seven years warned finance bosses “about global risk and the abusive nature of their actions, but they had no incentive to change.” The World Bank Director of Governance and Anti-Corruption, Daniel Kaufmann continued “why should they have listened to us? I see it with my 10- year-old daughter, who scolds me because I don’t put the garbage in the correct bin. Let’s not delude ourselves. It’s impossible to teach old dogs and investment bankers new tricks unless you change the incentive structure.” (2)

This story implies that if one is truly committed to improving the state of the world then one must reach out beyond the old dogs and fat cats. More than that you must seek to be accountable to others. Perhaps if the WEF had listened to the protesters outside the luxury hotels, rather than only their handpicked NGO leaders, might they have developed a better sense of the state of the world? Mamy WEF staff mistakenly thought such protests were about specific social and environmental concerns, which they could then effectively incorporate into the agenda with some new initiatives. A bit of glam philanthropy to warm hearts in the Alps. Other staff realised that the criticisms were of an economic kind, particularly as the counter World Social Forum developed. However, their disagreement is not merely on economic theories of how to encourage social development, but on the legitimacy of WEF delegates to decide for others.

The ambitions of this year’s Forum suggests that message has not sunk in. To seek to shape the future of global finance, and thus the global economy, and hence the lives of all peoples on Earth,  in their current elitist and unaccountable form, will cause concern from across civil society. The World Economic Forum might soon find that not only were they some of the highest praisers of the Emperor’s new clothes: they were those clothes. If the Forum wishes to become more than an insubstantial adornment to power, and play a positive role in the future of the world, the organisers  must recognise the role of power and pride in shaping what we are able to truly “know” and embrace greater accountability and diversity. Otherwise, if the delegates remain intellectually naked in Davos, our world may catch their cold.

If interested in NGO accountability, check out my UN report on the topic at:

Click to access NGO_Accountability.pdf

If interested in a concept for a new form of democratic capitalism, check out my new book at:
http://www.greenleaf-publishing.com/productdetail.kmod?productid=2767

Refs
(1) http://robertdfeinman.com/society/whores.html
(2) Copetas. A. Craig, `Out of Control’ CEOs Spurned Davos Warnings on Risk, Oct. 24, Bloomberg.

Sceptic anti-septic – cleaning up climate doubt

jembendellLeave a comment

I met a chatty cabby the other day, and found myself getting annoyed as he explained how he thinks climate change is a hoax. I see from a recent Monbiot article that there is a mini heatwave of scepticism due to the recent temperature data showing 2008 was a cool year.

I’d always thought that people who don’t believe in climate change are just ignoring the overwhelming evidence because its uncomfortable for them, and reminded them that in 1987 the UN General Assembly adopted a report which said that climate change is happening and we are causing it and its a problem, so that the real issue is why we live in a world where we have to wait for 20 years until a movie moves the public debate forward.

I decided to check up on the latest sceptics arguments and the counter arguments, as Id got the cabby’s email and was going to write to him. In doing the search, I realised that climate change proponents are partly at fault for the ongoing scepticism, for continuing to present a graph of temperature and CO2 correlation as if proving human induced climate change, rather saying it shows there are positive feedbacks on Co2 levels when temperatures increase (which when you prove with other data that CO2 increases temperatures, this positive feedback becomes more worrying).

So, now to the substantive section of the email I wrote to my driver….

“I found the following are the main arguments used against climate change:

1) “the Earth ain’t warming”
– evidence for this is last 10 years when global ambient temps have been steady while co2 has increased 4% in this time
or
2) “if it is its because of natural processes not us”
– evidence for this are the graphs mapping CO2 and temp rise over 1000s of years that show temperature rise happens before the CO2.
or
3) “if it is because of us then its more because of them, not me/us, and it doesn’t matter anyway.”
– evidence for this is that somewhere else is industrialising so fast so it doesn’t matter what we do (the West speaking of the Rest), or somewhere else has already benefited and we should catch up (the Rest speaking of the West), or that the cost of action is too expensive (as people look at costs of switching away from carbon intensive economies).

The evidence I have read to counter act these claims are the following. It seems most of these issues are dealt with in the IPCC reports (perhaps all, I haven’t time to go through all sources at http://www.ipcc.ch).

2) To: “the Earth ain’t warming”, with the evidence for this is last 10 years when global ambient temperatures have been steady while co2 has increased 4% in this time

Response:
– the Earth has warmed in the decades previously as carbon has increased.
– the melting of the poles has increased in the last 10 years significantly in ways that are affecting ocean currents, and sea temperatures, leading to a decline in the heat transportation effect of currents like the gulf stream, which has lost about 30% of its power. Thus, there has been cooling in certain places, such as Europe, while there is still warming in other areas, creating an overall appearance of temperature stability in the last 10 years.
– Modelling predicted volatility in temperatures as a result of more energy in the atmosphere. i.e. more energy retained in the atmosphere due to being trapped by greenhouse gases (most of those with carbon in them, like methane, co2, CFCs etc), does not necessarily mean more immediate heat, as melting ice absorbs energy. Yet this does mean more volatility, and we are seeing greater intensities of droughts, floods and storms, as predicted by more energy in the atmosphere overall. Once the ice cover is reduced, then the energy will produce greater heat rise.
– Atmospheric particulate pollution is causing a shielding affect, reducing sunlight hitting the ground, leading to slightly lower temperatures than if this effect were not occurring. naturally this happens when volcanoes erupt. However, its happening because of our dirty forms of industrialisation and transport, worldwide. This process has been called Global Dimming. The problems with particulate pollution are huge, and so efforts are under way to reduce them, and thus the dimming effect will be reduced.

2) To: “if it is its because of natural processes not us”, with evidence for this being the graphs mapping CO2 and temp rise over 1000s of years that show temp rise happens before the CO2.

Response:
– the geological record shows what happened before humans affected atmospheric chemistry. Before we did that, climate change occurred probably due to changes in solar radiation and events like meteorite strikes. Changes generally occurred over thousands or 10s of thousands of years. Thus when the temperature rose, this would dry out peat bogs, cause droughts and thus more fires, and all this would increase the CO2 in the atmosphere. It is true, therefore, that these graphs do not prove that CO2 and other greenhouse gases drive temperature changes in the past. Their use in presentations to argue for climate change is therefore unwise. However, the proof that CO2 and other greenhouse gases capture heat in our atmosphere is beyond doubt, as its basic science that can be conducted in any school laboratory – the molecules in these gases trap more infra red. No greenhouse effect, no life on earth, as it would be too cold. Therefore it is the most basic logic that tells us more greenhouse gases equals more energy trapped in the atmosphere. Some scientists were even predicting this, on the basis of this simple logic, about 100 years ago.
– what the graphs show us is that there is a major feedback loop, for when temperatures rise, for whatever reason, this makes the ecosystem release more carbon dioxide into the atmosphere, consequently maintaining and possible escalating the heating effect. This is what worries many climate scientists.
– a rise in greenhouse gases damages the oceans through acidification. so even if it doesn’t impact on climate (which is does), we should be concerned about what more acidic oceans will mean for marine life, and the social and economic implications

3) To “if it is because of us then its more because of them, not me/us, and it doesn’t matter anyway,” with evidence for this being that somewhere else is industrialising so fast so it doesn’t matter what we do (the West speaking of the Rest), or somewhere else has already benefited and we should catch up (the Rest speaking of the West), or that the cost of action is too expensive (as people look at costs of switching away from carbon intensive economies).

Response:
– If the West doesn’t act then it will be more difficult to persuade the rest of the world.
– If the rest of the world just blames the West then they will miss out on more energy efficient forms of economic development
– if we don’t act now the costs will be far greater in future (cf the Stern and Garnaut reports)
– if we don’t act now then we will have to face peak oil in any case, and so we need to transition from a hydrocarbon society in any case.”

I’m a bit hurried this weekend as leaving the country on Monday, so haven’t popped in all the references, but wikipedia is a good layman’s jumping off point for more evidence on these issues.
http://en.wikipedia.org/wiki/Global_warming

Cheers, Jem”

There is one lesson I learned from checking back with the science… that the image that might make the best communication tool may not actually be the right one to use. The hockey graph, showing CO2 and temperature levels over hundreds of years does not on its own effectively predict a temperature rise because of C02. More concerning, it shows a likely CO2 rise due to our heating of the planet. Other evidence shows that human released greenhouse gases are creating that initial temperature rise, and an increased level of energy in the atmosphere, resulting in increased weather volatility. Many climate change proponents use that graph without nuancing what it means, because that would get to complicated: which means they shouldn’t use it.

Monbiot article:
http://www.guardian.co.uk/commentisfree/2008/dec/09/climate-change-science-environment

Sceptic anti-septic – cleaning up climate doubt

jembendellLeave a comment

I met a chatty cabby the other day, and found myself getting annoyed as he explained how he thinks climate change is a hoax. I see from a recent Monbiot article that there is a mini heatwave of scepticism due to the recent temperature data showing 2008 was a cool year.

I’d always thought that people who don’t believe in climate change are just ignoring the overwhelming evidence because its uncomfortable for them, and reminded them that in 1987 the UN General Assembly adopted a report which said that climate change is happening and we are causing it and its a problem, so that the real issue is why we live in a world where we have to wait for 20 years until a movie moves the public debate forward.

I decided to check up on the latest sceptics arguments and the counter arguments, as Id got the cabby’s email and was going to write to him. In doing the search, I realised that climate change proponents are partly at fault for the ongoing scepticism, for continuing to present a graph of temperature and CO2 correlation as if proving human induced climate change, rather saying it shows there are positive feedbacks on Co2 levels when temperatures increase (which when you prove with other data that CO2 increases temperatures, this positive feedback becomes more worrying).

So, now to the substantive section of the email I wrote to my driver….

“I found the following are the main arguments used against climate change:

1) “the Earth ain’t warming”
– evidence for this is last 10 years when global ambient temps have been steady while co2 has increased 4% in this time
or
2) “if it is its because of natural processes not us”
– evidence for this are the graphs mapping CO2 and temp rise over 1000s of years that show temperature rise happens before the CO2.
or
3) “if it is because of us then its more because of them, not me/us, and it doesn’t matter anyway.”
– evidence for this is that somewhere else is industrialising so fast so it doesn’t matter what we do (the West speaking of the Rest), or somewhere else has already benefited and we should catch up (the Rest speaking of the West), or that the cost of action is too expensive (as people look at costs of switching away from carbon intensive economies).

The evidence I have read to counter act these claims are the following. It seems most of these issues are dealt with in the IPCC reports (perhaps all, I haven’t time to go through all sources at http://www.ipcc.ch).

2) To: “the Earth ain’t warming”, with the evidence for this is last 10 years when global ambient temperatures have been steady while co2 has increased 4% in this time

Response:
– the Earth has warmed in the decades previously as carbon has increased.
– the melting of the poles has increased in the last 10 years significantly in ways that are affecting ocean currents, and sea temperatures, leading to a decline in the heat transportation effect of currents like the gulf stream, which has lost about 30% of its power. Thus, there has been cooling in certain places, such as Europe, while there is still warming in other areas, creating an overall appearance of temperature stability in the last 10 years.
– Modelling predicted volatility in temperatures as a result of more energy in the atmosphere. i.e. more energy retained in the atmosphere due to being trapped by greenhouse gases (most of those with carbon in them, like methane, co2, CFCs etc), does not necessarily mean more immediate heat, as melting ice absorbs energy. Yet this does mean more volatility, and we are seeing greater intensities of droughts, floods and storms, as predicted by more energy in the atmosphere overall. Once the ice cover is reduced, then the energy will produce greater heat rise.
– Atmospheric particulate pollution is causing a shielding affect, reducing sunlight hitting the ground, leading to slightly lower temperatures than if this effect were not occurring. naturally this happens when volcanoes erupt. However, its happening because of our dirty forms of industrialisation and transport, worldwide. This process has been called Global Dimming. The problems with particulate pollution are huge, and so efforts are under way to reduce them, and thus the dimming effect will be reduced.

2) To: “if it is its because of natural processes not us”, with evidence for this being the graphs mapping CO2 and temp rise over 1000s of years that show temp rise happens before the CO2.

Response:
– the geological record shows what happened before humans affected atmospheric chemistry. Before we did that, climate change occurred probably due to changes in solar radiation and events like meteorite strikes. Changes generally occurred over thousands or 10s of thousands of years. Thus when the temperature rose, this would dry out peat bogs, cause droughts and thus more fires, and all this would increase the CO2 in the atmosphere. It is true, therefore, that these graphs do not prove that CO2 and other greenhouse gases drive temperature changes in the past. Their use in presentations to argue for climate change is therefore unwise. However, the proof that CO2 and other greenhouse gases capture heat in our atmosphere is beyond doubt, as its basic science that can be conducted in any school laboratory – the molecules in these gases trap more infra red. No greenhouse effect, no life on earth, as it would be too cold. Therefore it is the most basic logic that tells us more greenhouse gases equals more energy trapped in the atmosphere. Some scientists were even predicting this, on the basis of this simple logic, about 100 years ago.
– what the graphs show us is that there is a major feedback loop, for when temperatures rise, for whatever reason, this makes the ecosystem release more carbon dioxide into the atmosphere, consequently maintaining and possible escalating the heating effect. This is what worries many climate scientists.
– a rise in greenhouse gases damages the oceans through acidification. so even if it doesn’t impact on climate (which is does), we should be concerned about what more acidic oceans will mean for marine life, and the social and economic implications

3) To “if it is because of us then its more because of them, not me/us, and it doesn’t matter anyway,” with evidence for this being that somewhere else is industrialising so fast so it doesn’t matter what we do (the West speaking of the Rest), or somewhere else has already benefited and we should catch up (the Rest speaking of the West), or that the cost of action is too expensive (as people look at costs of switching away from carbon intensive economies).

Response:
– If the West doesn’t act then it will be more difficult to persuade the rest of the world.
– If the rest of the world just blames the West then they will miss out on more energy efficient forms of economic development
– if we don’t act now the costs will be far greater in future (cf the Stern and Garnaut reports)
– if we don’t act now then we will have to face peak oil in any case, and so we need to transition from a hydrocarbon society in any case.”

I’m a bit hurried this weekend as leaving the country on Monday, so haven’t popped in all the references, but wikipedia is a good layman’s jumping off point for more evidence on these issues.
http://en.wikipedia.org/wiki/Global_warming

Cheers, Jem”

There is one lesson I learned from checking back with the science… that the image that might make the best communication tool may not actually be the right one to use. The hockey graph, showing CO2 and temperature levels over hundreds of years does not on its own effectively predict a temperature rise because of C02. More concerning, it shows a likely CO2 rise due to our heating of the planet. Other evidence shows that human released greenhouse gases are creating that initial temperature rise, and an increased level of energy in the atmosphere, resulting in increased weather volatility. Many climate change proponents use that graph without nuancing what it means, because that would get to complicated: which means they shouldn’t use it.

Monbiot article:
http://www.guardian.co.uk/commentisfree/2008/dec/09/climate-change-science-environment

Issues Arising for Corporate Responsibility due to International Developments

jembendell4 Comments

Stepping back from the day to day, we should at times ask what is happening in the world of corporate responsibility and corporate sustainability, as a field of interest, and to the voluntary pursuit of responsible or sustainable behaviour by business people? To answer that we can try to consider what is happening in the worlds of business and society more broadly.

In 2008 we are experiencing the same megatrends that have made this area of interest more important in the last 15 years: continuing challenges with our environment, increasing inequalities, persistent poverty and injustices, and a continuing situation where economic globalisation has given some corporations more power in relation to governments and communities, but where people also have new opportunities to connect and to pursue business for social purposes. But this year three developments are becoming clearer that are particularly interesting for how the field of corporate responsibility (CR) may develop:

  • The Financial Crisis
  • The “Rise of the Rest”
  • Rising environmental awareness across the South

Implications of the financial crisis

The stock market is crashing around the world, exchange rates are volatile, and credit is expensive or unavailable, there is recession in the West, and a slowing rate growth in the rest of the world. Therefore people are beginning to ask the following questions:

  • Is CSR recession proof? Meaning: is the voluntary pursuit of responsible business going to suffer when budgets are squeezed. Is CSR a choice? Articles in blogs and magazines are asking about that.
  • Has most responsible business activity been irrelevant, beside the point, not focused on the basic issues of governance and economic systems? This was asked in 2001 after Enron collapse, and is being asked again, this time also in terms of the work on socially responsible finance and investment.
  • Will people demand deep reform of the financial system, and therefore perhaps the wider economic system? The questions about executive pay are now mainstream. Litigation is beginning. People are becoming aware of the licence to print money that is given to banks and thus their shareholders and employees that is enshrined in a monetary system based on the issuing of debt by private banks.
  • Will values change? As people question the unrestrained pursuit of financial self interest, and as people fall on hard times, will people think again about themselves and their neighbours?
  • Will neoliberal ideology around deregulation and market approaches be fractured and new ideas emerge about managing capitalism and if so how will voluntary corporate responsibility efforts relate to that?

Implications of the “Rise of the Rest”

The current financial crisis is hitting the whole world, but it originates in the late industrial countries we call “the West” and is having a greater impact on both their financial systems and real economies, while also undermining the basis of the West’s levels of power and consumption in recent decades – cheap credit. Many nations in the Middle East and Asia have huge reserves and are now investing this through Sovereign Wealth Funds. The fundamentals of many Asian economies remain strong. The growing role of non-Western companies around the world, in influencing the lives of workers, communities and their environments, is shaping the future landscape of corporate responsibility challenges and initiatives. Therefore some people are beginning to ask the following questions, albeit not the mainstream CSR practitioners, most of whom are yet to awaken to the implications of these shifts:

  • Will non-Western companies experience the same pressures for adopting voluntary corporate responsibility as Western companies have in recent years?
  • Will investors and consumers in non-Western countries become aware of what is done throughout the value chains of the products and services they benefit from, will they care, and will they be able to express that in behavioural change?
  • Will managers in non-Western companies see it more as government’s role to manage social and environmental issues, not a part of their own work as globally responsible business leaders?
  • Will voluntary corporate responsibility continue to be seen as a Western import by many non Western business leaders, and thus seen as doing whats required by Western consumers rather than emerging from your own community’s values? If so, what might happen if the West becomes less important to their businesses?
  • Will the Sovereign Wealth Funds compound problems with disengaged bottom-line focused share ownership, rather than active responsible investment, due to political pressure not to engage with the management of the companies they invest in?
  • Will new initiatives emerge from the rest of the world that are persuing values through the private sector in ways that might affect the lives of workers and communities in the West and how will the West react to that, especially if the values are culturally specific?
  • Will the rhetorical power of universal principles relating to human rights and dignity that are enshrined in conventions of the United Nations become less authorative if that organisation is increasingly challenged as an anachronism of the World War II settlement? How might moral power on the global scene evolve?
  • As Western philanthropy wanes, due to the stock market crash, and Eastern and Southern philanthropy grows, what are the implications for civil society organisations, everywhere, and at the international level? In turn, what are the implications for the way civil society shapes the field of corporate responsibility? Will different agendas begin to be favoured over others by the new philanthropy? How could the new philanthropists of Asia be encouraged to learn from the history of efforts at social change and play a useful social purpose, internationally?

Rising environmental awareness in Asia and ‘South’

Many people working on corporate responsibility have assumed that the drivers for voluntary responsible business are higher in the UK and Northern Europe than Southern or Eastern Europe, and higher than in North America, and in turn higher than in the rest of the world. This is largely put down to the levels of consumers and investor awareness, free media, and sizeable middle classes with disposable incomes, and thus with a level of discretion in their consumption and employment, as well as a reasonable level of philanthropy to support a civil society. People in the West and in the rest of the world have often articulated aspects of that view, to say that contemporary voluntary responsibility is a Western originated phenomenon. This seemed intuitive, but the evidence to back up this view was not systematically gathered. In 2008 some market research agencies, including WPP and IFOP did global studies on environmental awareness and consumer behaviour, and found that levels of concern about the environment are actually higher in parts of Asia, particularly in China, than in parts of Europe or in the USA. They also found higher levels of concern about the environment in Asia, when purchasing products. This is a major finding, and raises a number of questions, which are not being asked yet because not many people know about this data and are operating on the basis of a false assumption of a lack of interest in environmental issues:

  • Is evidence of green consumer awareness across Asia and the South the product of poor research, rather than a real situation?
  • If it is real, is this a new phenomenon and why is it happening?
  • If it is real, does it stem from similar values to environmental consumer concern in the West, or from something else?
  • Is this a widespread phenomenon and an early sign of a turning away from the major commercialisation of cultures in Asia and the rest of the world in the past decades?
  • Could the pace of eco-modernisation in Asia be faster than in the West due to the stronger role of government in society?
  • Are companies ready to provide the necessary environmentally preferable alternatives to help this awareness become behavioural change?
  • Will the institutions to watch out for and punish greenwash be put in place fast enough to enable this new awareness to lead to effective behavioural change, rather than mistaken understandings and eventual disenchantment due to corporate greenwash?
  • Could this wave of awareness lead to a wave of eco-innovation in Asia that could help solve some of the worlds resource and energy challenges, and how could that be supported?

In 2008 I have spent many months in Asia, meeting with people in the marketing and financial sectors, as well as the broader corporate responsibility arena, and the budding philanthropy sector, to develop some insights into these underlying trends that I believe will shape the future of business in society.

Some of the questions relating to the financial crisis I discuss in my new book “The Corporate Responsibility Movement” and in the forthcoming issue 31 of the Journal of Corporate Citizenship. In The Lifeworth Annual Review of 2008, to be published in late January, we will discuss all of these issues in further detail. In advance of that I’d welcome any thoughts on these issues…

I’m also looking forward to discussing these issues at the first Global Social Innovation Forum in Singapore in November. If you are interested in going, request an invite by mentioning my name to Erin Frey <erinfrey@socialinnovationpark.org>

Free the toddlers, save the world, n let me write in peace

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Its what’s great about modern cities. Wifi! Its all over the place here in Singapore. Which means I get to sit in this cafe and work. Freedom from my office.. and I’m so dedicated to my vocation that I don’t get distracted by my surroundings.

Except by screaming toddlers at the table next to me. And now I’m further distracted by how irate I’ve become about it. Surely I should care more for kids?! Ah.. I realise I do, and I’m still annoyed. Because why are they here hurting my ears?! Its a stylish cafe, for people to read in. Last night I was sat in lovely bar in the middle of the botanical gardens to finishing writing my next book. Surrounded by shrieking kids. A bar, in the evening, toddlers screaming.

I do care – why aren’t they outside playing, or in a play group? Toddlers are meant to kick and scream, to run around shrieking at the joy of their wobbly legs careering them around, and the full-on colour, texture and noise of their surroundings.

Now it hits me. This is the country of coast to coast apartments and shops. The ultra modern city, the vision of the urban dream made real. Because this year the human race has become, officially, an urban species. In 1800 only about 3 percent of people lived in towns, but almost exactly around now, according to the UN, the majority of us live in cities. And the largest share of that – in Asia.

So this is now distracting enough for me to blog about it.

As a child I was able to play in the fields nearby, or just mess about in my garden, or the neighbours gardens. Its the simplest of joys, the most basic of needs. And its now being denied to millions, nay, billions of children. So I feel a bit melancholic, as I look at these kids next to me. If they’re lucky they might have a balcony at home. Or a parent who will take them to one of the few parks in this city state. Perhaps the supremely manicured botanical gardens, the massive walk-though plant pot that I escape to most days. But if mum doesn’t like the heat, she might take you to the air con shopping mall instead, and therefore, to a cafe like this one when your little feet get bored of shopping. God I hated walking around shops as a kid.

This isn’t nostalgia. I’m feeling some sadness and fear. Because without that connection with nature, or just a back garden, what are today’s urban toddlers missing out on? As their synapses are formed, along with their sense of reality and their place within it, where will the natural world be in their future consciousness? Will they be most relaxed under neon lights, and feel they are what they buy?

I just saw a tragic parent child pantomime play out. A toddler gets excited at the table, laughs and smiles, the parent laughs back and so the kid jumps up and down and shrieks, and then the parent looks a bit guilty and shushes the child. And then the whole thing happens again. That must be one of the quickest ways to raise a scitzo child. If I was one of them, Id surely go berserk. When I was 3 years old, I was here only 3 days, and was “the naughtiest you ever were” as I discovered the joys of the switches of huge electric curtains and long corridors to run down, in the Mandarin Oriental.

Things are made worse by the family dislocation that’s going on due to migrant labour.. many of the young families here are expats and don’t have extended family to help out.

One great thing today was seeing thousands of Philippinos in the botanical gardens, in huge groups, with loads of kids who zoomed around on the grass, as kids do, running towards, nothing much, shrieking about, whatever, then turning around and charging back to where they were. Perfect. Now their parents just have to set a good example by picking up their litter…

The lack of nature in kids lives is something that a mate of mine here is doing something about, through his art show on Nickelodeon. Its working, as he is now officially the most famous Norwegian TV star.. which surprised most adults living in Norway who read that fact. But not to the crowds of thousands he speaks to when doing publicity gigs around Asia… thousands kids who want to draw animals! So lets hope that’s nature not nurture. Although we could do more to help kids connect with their environment, if our urban species is going to have enough natural consciousness to know how to survive this century. www.earthtree.com.sg/

From bailouts to a better capitalism

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What do you think about the current financial crisis? Im focusing on this topic in the next issue of the Journal of Corporate Citizenship, so would welcome your thoughts…

A bailout of any banks using public funds should only occur in return for those banks agreeing to act more explicitly in the public interest in concrete ways.

Thus, participating banks must have to agree to:

a) ensure no reduction of banking facilities provided to the general public in the next year and seek to reach more unbanked from disadvantaged communities
b) suspend all potential bonuses for the current year, and roll these into a new bonus system based on performance over 4 years, which must not total more than an equivalent of double a salary during that period
c) within one year complete and publish a carbon audit on all investments and loans, and a plan to reduce the carbon profile of investments and loans through shifting their portfolio or engaging the management of those investments or debtors
d) provide an equity stake for the government to ensure that if toxic assets do not recover their value that the government has some share of the banks other assets
e) pay more tax in the country they are headquartered if their global profits increase, no matter where those profits are booked
f) sign up to the UN Principle on Responsible Investment (UNPRI) to learn how to be a more socially progressive financial institution.

Then, in the longer run, we need to plan and facilitate a slow transition to a more balanced global financial system, one that: curbs all speculation; limits shortselling and derivatives; moves back from fair value accounting to a more concrete assessment of assets; deals with the problem that all money enters the economy as debt which necessitates unsustainable rates of economic growth and bubbles; creates new duties of responsibility on bearers of private property rights (both financial and non financial); does not let a financial institution become so large that it can either manipulate the system or threaten the system if it gets into trouble; achieves more tax harmonisation across national jurisdictions.

The Future of Corporate Responsibility Research

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Many people around the world are working on the social and environmental performance of business and financial institutions. A lot is being researched and written about it. Where is it all headed? What and where do we need to focus on in future, and what are the emerging knowledge needs?

I prepared at short paper on this topic for the UN Principles for Responsible Management Education working group on research. It incorporated findings from a survey of subscribers to my company’s CSR Jobs mailing list (www.lifeworth.com).

That paper, entitled “Broader and Deeper – the future of CSR Research” is downloadable from Lifeworth’s homepage, along with the survey results. (Visit http://www.lifeworth.com and click Future CSR Research Paper, or survey).

The paper concludes that the future of research on the social and environmental dimensions of business and finance will be both broader and deeper:
a) It will be geographically broader as the global shift in economic, political and eventually cultural power means that large emerging nations become important not only in terms of their domestic practices but their impacts around the world.
b) It will be intellectually broader, as practitioners demand greater relevance to complex decision making on societal dimensions of business and interorganisational relations from research by universities.
c) It will be organisationally deeper as integration of societal issues into all business functions, from marketing to accounting, becomes essential for risk management,  innovation and competitiveness.
d) It will be personally deeper, as more professionals will need to exist on the “bleeding edge” of innovation to drive forward organisational change, and to deal with ever greater complexity as business takes on more societal responsibilities.

I welcome comments and ideas.

Questions to Christians

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Over the years I have sometimes discussed religion, faith and spirituality with people at parties. I was asked to follow up with someone on this recently, and rather than providing explanations and references, in the first place I am writing down the questions I normally put to someone of faith. I pose these questions to explore with them the depth of their spiritual inquiry.

  • How can you be happy going to heaven knowing others have gone to hell?

  • Might your assumption or yearning for yourself to have an independent existence after death, worthy of being called or experienced as “you”, be a projection of ego consciousness, showing a fixation on your separate identity?

  • Given that you are not meant to worship material idols, why do you worship the bible, or sentences in it, when it is made of human invented things called “words” referring to human invented things called “concepts”

  • In a world of billions of people with their own histories cultures and belief systems, how can you believe you know the one right way, based on divine revelation to one group of people at one moment in time, without being racist or accepting that your God is racist?

  • Given that archaeological evidence from the past 100 years have highlighted how key elements of the biblical story, such as a ‘virgin’ birth, the numbers of disciplines, and some key Jesus teachings, were actually popular myths prior to the supposed lifetime of Jesus, how can you not wish to explore the historical and cultural origins and inventions of your religion?

  • Given the role of the roman empire in influencing what was chosen to be in the bible or be excluded, around 300 AD, shouldn’t you explore not only what was left out of the bible but also what the interests of the romans were in challenging existing spiritualities across europe at that time?

  • Given that those pre Christian European spiritualities, like many other non-Abrahamic spiritualities around the world, did not see a separation between the natural and spiritual realms, might that separation have been functional to forms of organisation and control that enabled those societies using Christianity to conquer more peoples and lands?

  • What might have been lost to our sense of self, community and world, due to that new understanding of natural-spiritual separation, which might be at the root of some of our problems today?

  • Why does your personal sense of joy and peace when you decide that doubts about your religion are mere tests of your faith, and that god transcends human understanding, validate your views and subsequent actions?

When I have some time in a week or two Ill write up the way the discussions normally go, and then the references I can recommend to help people follow up on the issues raised. Usually the questions do require a lot of explanation of the history of spiritualities, the development of religion, and Western notions of concepts and words.. and then alternatives that are as enriching, empowering and socially positive, as a feeling of being loved by “God”.

These are Financial Times for Sustainable Luxury

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I just participated in a panel with Marco Bevolo from Philips Design and Timothy Han from the company that bares his name. We discussed whether luxury can be sustainable at the Net Impact conference in Europe. Marco and Timothy captivated the audience with their enthusiasm for how high end design can inspire new levels of product and service sustainability and responsibility. Marco’s book will be interesting (www.futurehighend.com). If you havent seen Timothy Hans products yet, then have a look at http://www.timothyhan.com

The day after the Financial Times quoted us both on the question of sustainable luxury. It links to the professional network I launched on this issue, www.authenticluxury.net

So, we are getting there. Next stop is a talk the International Luxury Business Association next week, and a keynote at the IHT luxury conference in India.