Recently one of the members of a LinkedIn
group started a discussion – Whose
responsibility is social sustainability? It is sometimes interesting to
hold back one’s perspective and just read different shades of views coming 24X7 from professionals around the world. The thoughts expressed
by professionals reflected years of experience behind them. The discussion got
so tempting that I could no longer stop myself from joining in, only to receive
quick rebuttal from another member. The house was a divided lot on a rather
familiar line. Some arguably put forth the onus of sustainability on company
while others did the same on consumers. There was also an overwhelming third
view i.e. both company and consumers are responsible for current growth on
linear path that cares little for people and planet.
My view is closer to the third one.
A company, in most cases, represents the interest of shareholders, who are also
consumers of goods and services. In my view, what is good for consumers, is
good for shareholders too i.e., there is no conflict of interest. The problem begins
when duality of thoughts of shareholders of a company and its consumers becomes
obvious on sustainability issues. According to me, as one of the members
opined, society is an amalgam of everything that we do. So is the company,
tirelessly responding to consumers’ (and stakeholders’) needs and demands in
market economy. The company has taken the profit route because its consumers
(read shareholders) wish their company to show astronomical financial returns
on their investment without bothering about the planet and/or other people
getting affected by company operations. We cannot be indifferent to prevailing
reality of market economy. Turning a
blind eye would not resolve current sustainability issues. The day we, as
consumers/stakeholders, start demanding socially and environmentally sound behaviors from company
management, I think, the company would fall in line. In fact, consumers have
begun to understand their power and have already started exercising their
choices for socially responsible behavior from company. That is why we see so
many companies making deliberate attempt to integrate sustainability concerns
in their business. They know it is simply the right and the profitable thing to
do.
Contrary
to general belief, companies have no illusion on this matter. I think the days
of conservative economist like Milton Friedman, who advocated that proper
social responsibility of business is to focus on wealth maximization and
shareholder value, are long over. The attention has long shifted to stakeholders,
affected by business activities, beyond shareholders. Hence we see many companies
adopting Corporate Social Responsibility (CSR) in their agenda for survival. I
agree that some of these companies, might have adopted CSR purely as a marketing
ploy to increase their market share. But subsequently, many of them understood
the enshrined philosophy and potential benefits behind it and whole heartedly strived
to become good corporate citizens. Examples of such works are in plenty and
they are truly changing lives of people around the globe. I recently read about
Phillips Lighting project in Africa. The company is installing solar powered
LED systems for communities, which previously did not have light. This would really
be a game changer for people living in that area.
Now lets focus on consumers. When they talk about consumers,
people normally mean 6 billion individual consumers spread around this globe. As
someone noted in the post “If you are alive, if you
are working, if you shop -- then you own each and every action you take every
day and you are responsible for it”. I agree. I don’t think anyone can deny the
fact that everyone has a voice which one needs to raise to make oneself heard. Every
time you buy a product or service, you are casting a vote for
sustainability of some company. It is time we cast our vote for needs of future
generation. I understand that as an individual we are small fry for the
company and our voice may not make the impact that we want. But someone
somewhere has to make a beginning. Exercise your choice while buying a new
product!
Is it not surprising that we forget the big fat consumer,
such as governments, while demanding responsible behavior from consumers? They
are the one who spend about 20 – 30 % of
GDP of a country depending on their place on the development curve. They are the one whose activities have the
largest impact on society and environment. Why are they not demanding socially and
environmentally responsible behavior from the companies they deal with? The
government, as consumer, has some unique advantages too that individual consumer
does not posses. They have both regulatory and purchasing power! Their demand
for products and services are so big, they can trigger competition among
companies to produce greener products and services. Despite this, governments
in most developing nations have failed to realize this power. There is
absolutely no action on their part to integrate sustainability in their public
buying. Indeed many times they put the entire blame on consumers! Why? Because we,
as consumers, are not demanding from our government to spend responsibly and
provide us true value for our money. Remember
the government only reacts; the trigger has to come from the consumers.
Jeffrey Sachs has pretty well summed up this dilemma
in his book Common Wealth: Economics for
a Crowded Planet,
“Markets, we have emphasized,
won’t do the job by themselves. Social norms do not suffice. Governments are
often cruelly shortsighted. Sustainability has to be a choice, a choice of a
global society that thinks ahead and acts in unaccustomed harmony”.
