The nonprofit B Lab that certifies B Corporations is running the first B Corp ad campaign to share with people like you the great things these companies and community are doing. Below is the ad launching the campaign, showing how you can support a better way to do business by making other B Corps like ES Global a part of your home.

So, what’s a B Corp? It’s a certification that goes beyond looking at just our products – it looks at our whole company and the impact we have on our workforce, suppliers, community and the environment. Think of it as a certification for sustainable business like Fair Trade is for coffee or LEED is for green buildings.

You can learn more about the business practices that stand behind our products by checking out our B Corp Impact Repor. B Lab publishes these for all Certified B Corporations so that you can learn more about hundreds of companies that meet the same rigorous, independent, and transparent standards of social and environmental performance as we do. By supporting these B Corps, you’re supporting a better way to do business.

Be on the lookout for the B Corp campaign in online communities like Care2.com and in magazines like Mother Earth News, Natural Home, Herb Companion, Utne Reader, and Sustainable Industries. We hope you’ll tell your friends.

As always, please let us know what you think.

The team at ES Global

http://www.esglobal.com/ |   marketing@esglobal.com | 52(777)313-0438

 CSR Counts

Measuring to maximize returns and value on CSR by Marc de Sousa Shields

Dear Friends

Over the last several years I have followed a number of really great “what is” CSR/sustainability and “why is it important” blogs. I also follow some really great niche CSR issues blogs on communications and reporting, many of which are truly excellent and very much worth following.

I noticed, however; that there is little in the way of concentrated CSR/sustainability information focused on helping managers maximize the profitability of sustainability investments.

So that is why I am starting a blog dedicated to better management and measurement of CSR/sustainability investments. My goal is to bring together information and ideas on managing and measuring for more and better corporate sustainability.

My hope is to provide an action provoking, management enhancing blog and I want to invite you to participate with ideas, thoughts and comments as I work to serve the interests of CSR/sustainably.

Here you have it…

Greetings!

Marc de Sousa- Shields
Managing Partner ES Global Consulting

tel:52 777 313-0438 tel/fax: +52 777 102-1324
mobile: 202 415-2633
email: mdess@esglobal.com

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Did I say 2020? Yes, it is my firm belief that by the year 2020 (or maybe sooner) all publicly listed corporations and their major suppliers, private or not, will be required by law to publicize an annual audited sustainability report.

Here’s why:

Follow the Money I

Consumers are changing rapidly in the US and Europe and demand for products and services with inherent sustainability value has grown 30% to 50% annually over the last decade. Even assuming slower future growth in these markets, a minimum of 30% of all demand will be driven in whole or part by sustainability value. And remember Europe and USA generate 50% of the world’s GDP (about USD 31 trillion) and while this share will decline by 2020, these two markets will still generate at least 40% with a commensurate influence on supply.

Follow the Money II

In 2000, there were no sustainability stock market indices. Now there are 5 and they are not small. The market cap of the Dow Jones Sustainability World Index is over USD 10,418 billon. Moreover, social investments generally are growing over twice the pace of other investment types. Where will your company get its money from and how will it demonstrate its sustainability performance?

New Money leads to Higher Consciousness!

Maslow correctly predicted that as individuals satisfy basic needs – food, housing, health care, etc. –. They turn to focus on higher order needs – communities, environment, education, and stabilizing social institutions. This is happening in developing countries the world round, with the greatest change expected in China and Brazil. So we can add another USD 10 trillion or 60% of world’s GDP where demand for sustainability category products and services will grow quickly.

Governments are Regulating I

Don’t think governments care about social and environmental impacts of business? Think again. In Spain, China, Netherlands and Sweden all state owned companies are now required to produce a sustainability report. In a host of European countries regulations already require pension funds disclose whether or not they make social and environmental investment and how. The smartest US pension funds like the USD 220 billion CalPERS (the California Public Employees’ Pension Fund) are increasingly and voluntarily making social and environmental considerations in their decision making processes.

Governments are Regulating II

Developed country governments will never be the same after the debts they acquired in the run up to and aftermath of the 2008 financial crisis. Governments will look to substitute regulation for money as they seek to balance the social and environmental impacts of economic activity. And remember, it took Canada, one of the most fiscally conservative countries in the world, over 20 years to balance its books from financial excess in the early 1980s. Regulations are cheap and look to governments to use them.

Competitive Advantage

Unable or unwilling to invest in education and infrastructure as they once did and fully committed to free markets, developed countries are fast running themselves into a uncompetitive corner. As traditional advantages and market barriers become less available or desirable look for governments to impose compulsory sustainability reporting as a means to protect national markets.

Strength of the Internet

It has been said before but must be said again: companies can run but they can not hide from the bad things they may do, on purpose or accidentally, because mobile phones, video cameras and the internet will find them. Does anyone disagree?

Almost as Rigorous

Buildings off of the foundations of financial reports, sustainability reports now have the same fundamental goal: adding to a corporation’s credibility when asserting its corporate record (in the case of sustainability, reporting on sustainability activities and performance) by decreasing the possibility of a material misstatement (deliberate or by error). While too many corporate sustainability reports don’t fully support this goal, the fact there are reporting formats that do, gives confidence that sustainability reporting will soon be as credible as financial reports.

And then there is the GRI

The UN-born Global Reporting Initiative (GRI) is the most important sustainability reporting format in the world. In 2010 there were over 4,000 sustainability reports – that’s an increase of 20% over the previous year and of these, almost 40% used the GRI format. Expect more every year.

Focusing on economic, social and environmental issues, the GRI’s 72 indicators and reporting methodology enable companies to monitor and improve sustainability performance in very much the same way as audited financial reports do. Companies using the GRI can fully integrate sustainability into their business operation as the format facilitates decision making based on globally recognized indicators. This aids management, board and investor decision making.

When will Sustainability Reports be required?

It took auditing 454 years to achieve the standards it has today, in less than 30 years sustainability reporting has achieved almost the same level of rigor.

When will sustainability reports be required? No one can tell precisely but the story of audited financial statements teaches us caution, because its own history shows us that regulation becomes more complex incrementally but can take radical leaps after
crises. Remember Enron?

Is your company prepared?

Companies that work now to developed credible sustainability reports will avoid the cost of being underprepared for regulation, crisis driven or otherwise.

But more important than the reports themselves simply paying heed to sustainability opens a world of opportunities and savings that would make Queen Elizabeth very happy indeed to have contributed to.

By Marc de Sousa Shields
Managing Partner ES Global Consulting
www.esglobal.com

The first video in the series is an informative overview of how the gasses in the atmosphere can promote warming (and/or cooling) and what is causing the current warming of the planet. Of particular interest in videos 3 and 4, however, is the debunking of urban myths that have been propagated by both supporters (e.g., Al Gore) and skeptics (e.g., Fox News) of climate change:

Have a good spring break!
David

http://www.nbs.net/knowledge/culture/systematic-review-organizational-culture/

Do this with compassion, selfishness and great purpose and all sorts of positive things start to happen but mostly you will start to attract the things and people you need to reach your goal. You may never reach your objective, but if you take a journey in this fashion, it is guaranteed, you will never be unhappy with the results of whatever you land and you will be happier and “richer” for the travel.

It is in this spirit I offer my intentions personal and professional intentions for the New Year (and beyond). And consistent with my company’s focus on measuring sustainability performance, I provide a measure for each of these goals!

Sustainability in Our Home

1. Cut Waste, Labels and Eat Local

I have nothing against sellers of processed food. But let’s face it, the verdict is out: compared to local and fresh food, processed food is bad for our health and it is terrible for the environment. My intention is to eat less processed food.

Measure: Less packaging and fewer labels on the food my family buys.

2. “Orgullosamente Mexicano”

The “buy local” movement is not without its detractors who make many salient points about the positive aspects of globalization (I say this while typing on a computer with component parts from all over Asia). But we do need to recognize the more local the better: better for the environment and for helping out our neighbors. Some benefits are clear – contribution to tax base, local employment, reduced environmental costs etc. But I want to be honest: its just nicer buying things from my people I know.

Measure: If I have to have stickers, the more with “hecho en Mexico” the better.

“For” local benefits – http://www.psfk.com/2009/08/infographic-why-buy-local-ten-reasons-to-shop-local-first.html
“Myths” of local benefits — http://www.fastcompany.com/magazine/126/neighborhoodlums.html

3. Less Stuff More Services

I was in Blockbuster the other day and I had to ask my wife what a Blue Ray was. Her answer “it´s another type of DVD player”. Another type? What is wrong with the DVD player we have? Seems like we just rent things no a days as manufacturers come up with things that are marginally better to look at, play with or drive in than the things we already own. It took 40 years to get rid of black and white TVs, then another 30 for boxy color TVs, 10 for fairly flat ones, 3 for really flat ones and we have to have 3D. I-phones last about a year; fashion 3 months… Who can keep up all this (and why) and what is the cost personally and to the environment?

While I can’t find many “factoids” about how living simply is better I will go out on a ledge on this one: life is better with fewer “things.” Oh! You might say, if we buy less stuff our economies will fail to grow and we will loose our jobs. Not true, we can buy things but buy more services (i.e., less stuff).

Some questions: what is the comparative happiness factor of 20 massages versus a yet another suit? Is a family better off with a flat screen TVs in three separate rooms? How much greater is the pleasure of a third car over that of a work of art from a locally renowned artist? Which is better, spending time with a group of friends over coffee or buying the latest shoes that will look ridiculous next year?

Measure: Sample two or three months of personal services versus consumer durable consumption through the year to chart trend.

4. This Car Offsets

All of us can offset the carbon produced for our air and train travel relatively easily. But how many of us offset their car’s emissions (private cars contribute to over 5% of total carbon emissions in the US figure)? I will offset my car emissions this year, it will cost around $500, a lot I know, but I d rather have a clean environment for my kids and their kids.

You can measure your car’s carbon emissions using http://www.jpmorganclimatecare.com/ (my company has offset over 400 tons of carbon using this site!)

Measure: Tons of carbon produced by my car and dollars paid to offset

5. Meditate and Pray (or both!)

In other columns I have argued that the values we hold dear as individuals we do not always employ as consumers, employees or investors. Life is fast and the demands and the distractions of modern life cause us to do many things we would not intentionally if we had taken but a moment or two to reflect upon what was really important and how we want to live our lives.

I believe that through prayer and meditation or both, we can make better decisions for the planet and for ourselves. Taking just a few moments every day to reflect upon what is important helps to keep things in perspective and to separate the insignificant and irritating from the meaningful and important.

Measure: 15 minutes a day for meditation or prayer.

For my inspiration on meditation and prayer see Chopra Center at http://www.chopra.com

In My Work

1. Core Process, Products and Competencies

I recently sat through a presentation by an executive from Pfizer. It was in a word, outstanding. Instead of a CSR program centered on donations, Pfizer chose to apply business principles to CSR by creating a business unit to help solve health challenges in Africa and other developing areas of the world. The unit was to use core process and product competencies to address health challenges in a sustainable manner: good for those suffering from health problems and good for Pfizer.

It is time for all good companies to go far beyond donations. They band-aid and do not address root causes of the ills affecting our societies and ecologies. If sustainability is to be achieved, companies need to reduce their negative ecological and social impacts while finding away to profitably provide the product and service that meet our needs as a society.

Measure: More CSR budget of clients devoted to integrating CSR into core processes and products.

2. Agrocolonialsm or Smart Development Investments? Agriculture the Next Conflict Zone?

As with most of my colleagues, I have many different professional and personal interests. If you follow my columns you will know I am passionate about food, agriculture and rural development. A looming crisis preoccupying my thoughts these days relates to rich country investments in agricultural lands in developing countries – some 10 million acres that’s equal to all of California’s cropland in 2010 alone.

The basis for my concern is resource conflict. If you pay attention to resource conflicts you know that various regions of the world have been and are beset by resource conflicts. The most famous is Sierra Leone and blood diamonds. Other more current examples include conflict minerals in the Democratic Republic of Congo and oil in Sudan and Nigeria.

I don’t know about you but the genocide, mass rape and murder, use of children soldiers and uncontrolled environmental destruction so common in these conflicts is unacceptable, and as consumer and investor I want to avoid abetting these conflicts. Daily these conflicts inflict horrors most of us can not even imagine.

In my mind these conflicts are harbingers of things to come if investments in agricultural lands do not benefit both investors and the families and communities living on and from the land (in many cases for countless generations). More concretely, I refer to investments being made by US, Canadian, Chinese, Libyan, and Saudi investors who are securing long-term agricultural leases for some of the best land in developing countries like Mali, Uganda, Kenya and Sudan.

Long-term leases and outright ownership are central to critical agricultural infrastructure investments in developing countries but maximizing investment value to all involved is a tricky calculus. On one side of the equation is the need to feed a growing world population this will require improved and sustainable productivity and that requires investments, lots of it. To attract capital and know how will require security of investments, interesting potential returns, and transparent property rights. On the other side, there must be local food security and investment deals that maximize benefits to all stakeholders involved. There has already been and there is potential for much more physical dispossession (violent or otherwise), cultural dislocation, uncontrolled urban migration, food scarcity and corruption.

I am not privy to the deals currently being made, but I will go out on another limb by saying, many them, some of the largest of which are being transacted in Africa, the financial benefits to local famers and communities are small to nil. As the World Bank reported, most deals in Africa are negotiated by government in capitals far from the lands actually leased or sold and are – to say the least — far from transparent or public…. Would murky 50 year land deals to foreign companies for millions of acres made by leaders in Australia, Canada, the UK or the United States be tolerated?

Probably not but as a citizen of the world, I see don’t know reason why food security as term applies only to national interests alone (as it typical does) but at the same time the interests and rights of famers and their communities must appropriately considered in the bargain. Balancing the equation will not be simple as recent World Bank research reports.

Measure: Two columns and one research paper on the issue

3. Proselytizing Measuring to Maximize CSR Value

Unless the CFO can put her arm around you and say “Wow this CSR project has great IRR projections” I beg of you don’t propose it. Not having a rigorously defined and attractive return potential will only reinforce the notion that CSR or sustainability “takes” and doesn’t give. Every sustainability project has return potential even if measuring it can be difficult. And more importantly, sustainability projects are often the gift that keeps on giving, for as I have noted in other columns, there is no limit to human generosity, kindness and happiness key definitional elements of sustainability. Like any business concept, to tap these elements, to manage them and maximize them you must measure.

Shame on your company if it is not already measuring the easy things to measure: energy, water, carbon, and resource input use. But as important as these are, they are only elements of sustainability and capture but a small fraction the value CSR and sustainability can bring to your company. If you want to maximize this value you need to undertake a CSR brand valuation measuring the contribution of CSR to earnings and or corporate share value.

Through our valuation methodology we estimate Coca Cola has an estimated CSR value of $600 million, FEMSA in Mexico around $50 million, and the East African Brewing Company about $10 million, figures any manager, CFO down, should be interested in managing to maximize. More than just a coming up with a monetary value, however, the process of valuing CSR Brand Value contribution helps uncover incredible insights on what your company does well, not so well or not at all, and how fairly simple projects and relatively modest CSR investments can exponentially increase returns.

Measure: Help ten companies measure their CSR Brand Value

Love to Hear From You….

These are some of my intentions for the New Year and beyond. Please write if you want to connect on any of these themes or any of your own intentions. Together, let´s make 2011 a more prosperous and sustainable year.

The neuro-linguistic challenge is not as much about the word itself however as it is recognizing the underlying concept, or the how, in a capitalist economy, can the widespread and growing belief in the need for sustainability be transformed into stronger, more actionable market signals — because, lets face it, until companies can hear the signals not nearly as much sustainability will be achieved as is necessary to stave off looming inevitable ecological and resource shortage crises.

Like any other market shaping phenomenon, the question executives should be asking is: where are the sustainability market signals and how can I benefit from them now and into the future?

A Giant Short Circuit

Fortunately, capitalism is pretty straightforward (despite what economists such as yours truly like to publically admit). There are two things to consider.

First, to gain profits companies produce goods and services that somehow capture what the market “values.” The more it captures the better it does.

Second, the market sends out signals to companies as to what it would like to see produced.

Here’s where we meet the “signal” challenge head on: what is the market? Well, for lack of a fancier term, the market is: us. It is not some independent animate object comprehensible only through inexplicably complex econometric models. Rather, it is merely and simply the sum total of what “we” the consumers want or need, and are willing to pay for.

Understanding this is critical to advancing CSR and here is why I think so:

Very, very, very few individuals advocate massive pollution; fewer still wish children work fourteen hours a day in filthy sweatshops; and everyone wants to have fulfilling, and well compensated work. The list goes on but I think you get the point: as individuals we can communicate great values, as a market… not so much.

Somewhere between the home, church or community group there is a great big disconnect between the values we hold dear as individuals and the market in which we make our purchasing and investment decisions. The result: the signals we send to companies trying to capture what the market values tells them to pollute, exploit, and pillage unless otherwise held accountable by government or the media (that is, we don’t mind companies getting away with doing bad things even if we know more or less what’s going on, but coming face to face with the results offends the sensibilities of our values).

Connecting to Sustainability Value

I cringe when I read silly passive-voiced statements like “investments need to be directed towards renewable solutions.” It’s like my ten year old boy saying someone needs to get him a plate when he is standing right beside the cupboard.

Who is going to direct sustainable solutions?

The government? Government has seldom had sway over market signals and these days they seem so poll driven as to have abdicated all independence of mind, so who knows where they would choose to invest our tax dollars. Besides, most governments are as “green washy” as many companies are these days. Government does have a big role in terms of regulation. But if the line between “good” and “bad” corporate behavior must always be drawn by regulation then I am afraid the sustainability battle is already lost: this is true because companies will always find ways avoid regulations; and because voters world wide seem to want less not more government, leaving the prospect of more and or better regulation to reactive tactics than preventative strategies.

Companies? Well companies have made some advances towards meeting the market’s sustainability signals, but mostly they are willing accomplices to both feeding and feeding on our lesser virtues. Most have learned more about playing sustainability than seeking it, which is to say, much of what we see may just be good polish. A fine article in Ethical Corp Magazine (October 2010 issue) points out that BP, among other corporations, was heralded by many serious CSR rating/ranking schemes as an evolving paragon of sustainability. Learning from the past as we ought to, we find significant holes in the efficacy of sustainability reports, which BP, Shell, Citibank, Enron among others with significant CSR issues, had in great and picture perfect supply.

No, I believe that companies have not approached anything resembling full sustainability simply because they have yet to hear the cacophonous

clamor of the market demanding in big, clear signals that this is what we, the market wants. All the ranking, sustainability reporting, and seals of approval will only take us so far (centimeters really) towards sustainability. For as with BP, valuable as they may be in the narrow sense, compared to price and quality signals, rating and rankings have the behavior changing effects of being spanked with a wet Kleenex. (A thought: perhaps if companies won $1 billion for placing first on a CSR list we might see some significant corporate sustainability advances – an appropriate role for government perhaps?).

Both business and government have a tremendous role in creating the kind of world we want. The big job of CSR is not to wait for “them” to do it however but have “us” indelibly connect our values to the market place. Fortunately, the sentiment of our values already support sustainability even if the signals we send seem as clear as if being sent on child’s crystal radio set from Mars.

Five Steps to a Healthier Planet and a Bigger Bottom Line

So how do we as consumers and investors send stronger sustainability signals to the market and as corporate decisions makers, how do we take advantage of the latent market values inherent “us’ the market! There are four key signs and responses for CSR executives.

1. Taking Values to Market and Marketing to Values

Many CSR detractors say values have no place in the market. Baloney. The market is all about values. Why did everyone buy teal cars and jackets in 1990? Because it made the cars run better or jackets warmer? No, because it was the “new” color and “we” just seemed to like it better than other colors. If that is not a value judgment I can only respond by saying where are all the teal cars today? The reason why people buy brand names when non- brand names have the same or sometimes better quality at a lower price offers a similar insight. Brands makes us feel, well…. better, wiser, richer; whatever it makes us feel, none of these “values” send off non “values” driven price signals.

Now other values, like sustainability and all its component parts are something we undeniable want. But as noted, the signals we are sending are undeniably weak. But they are getting stronger. More consumer and investors are taking their “values” to the market by asking for products or services that meet their “value” needs. Substitute fair trade, organic, fairly sourced, recycled, and recyclable for the word teal and you get the picture.

If your company does not imbue one or more of these attributes in each of its products then I can categorically say you are loosing valuable market share now, and every moment you wait to do so, you loose more. There are so many ways to find value “values” embedded in any product to attract more buyers, but for some reason conventional wisdom says we can’t or shouldn’t or it wont work. Like anything else in business, hire professionals that know how to do it and anything can be done. And the nice thing about creating CSR brand value is that because values have no beginning or end the potential market value to capture is infinite.

2. Invest for Reasonable Short-Term and Great Long-Term Gains

The dot-com bubble of the late 1990s led us to the crazy common notion that a 25% annual return was the norm even as long-term data shows 7% is a more reasonable expectation. In the exhausting and seemingly never ending aftermath of the financial meltdown of 2008-2009, many investors are recalibrating return expectations to focus on long-term value and not massive, immediate (and unlikely) profit levels. Don’t believe me? With growth of abut 20 percent, social investment with its longer-term horizon was the only asset class in the USA, with the possible exception of treasury bills and high quality corporate bonds, that saw net growth over the last two years (check out the report at www.sif.org).

Every day investors in Europe and the United States are demanding financial advisories have the information available to make sustainability investment decisions. Like it or not, a social investors some where in the world is judging your company’ sustainability performance even as you read this word. But never mind, they only control a rapidly growing 1/5th of market cap so maybe they aren’t so important.

As a corporate investor, a short-term investment horizon is as likely to be dangerous as not. Putting sustainability squarely in a mid to long-term investment strategy is not only sound but will, like investment returns generally, result in at least equal if not better results. (If you don’t believe me, check out the various sustainability indices which, for all their limitation including some once holding BP, typically outperform peer indices. I can send you the links). On the other hand, as more investors begin to scrutinize your company’s sustainability record, what kind of picture do you want to send them?

3. More Transparency – More Sustainability – More Value

When people buy a house they tend to read the fine print on the sale agreement (or at least have a trusted lawyer do it for them) so they know what they are getting in to. People are also starting to demand the same details for everything they buy. Just as we first got basic ingredient labels and then nutrition labels, we will get sustainability labels on everything from our food to our timber to our clothing. In fact, much of this is already happening. Timberland and others are pioneering full disclosure product labels that list where many component parts of a product are sourced and at what the cost to the environment. The Forest Stewardship Council label identifies sustainably harvested wood, and there are similar labels being proto-type tested for many other products.

There is only one thing I can think to say about that: in this, the sustainable century, the companies that labels first wins. They will win even bigger if they boost credibility with third party verification of their labels and have meaningful product “values” content. This makes for highly credible and not just glossy sustainability reports. The market is only just warming up to greater transparency now, but it is coming and those companies getting ahead of the curve are creating extraordinary and virtually free CSR brand value.

4. Demanding Action

Once credible sustainability reports and sourcing labels are widely available and this is inevitable, long buried consumer values will take voracious bites out of conventional or non-sustainable product market share (do you actually think market leaders will be selling gas powered car in the 2020s?). Consumer will want the ability to decide if shoes,  for example, made mostly the USA by decently paid adults are more aligned with their values than those made by companies employing workers the age of my eight year old ponytailed daughter.

At first transparency will seem like a small fissure in a giant damn, but like a good James Bond movie, water from that small crack will start spurting, then pouring, then suddenly explode as a wall of demand for sustainable products causing a torrent of good news for companies with sustainability foresight, and a lot of very bad news for those without.

Tapping the Infinite Value of Values

Companies must respond to market signals if they are to thrive: there is no other way in a capitalist economy. Consumers and investors are increasingly deciding in the shop, on the trading floor, and in our places of work that they want to see the values they hold dear reflected in the products and services they buy and in the investments they make.

Companies ignore weak but growing signals at their peril. Those that do not wait for stronger more obvious signals, those that respond to and seek to satisfy the infinite if still latent value of sustainability in the market, would seem to me to be the companies that are truly interested in maximizing stakeholder and shareholder return.