At Monday night’s inaugural Pears lecture, HSBC Chair and UK government minister-in-waiting Stephen Green argued for a revitalised form of Corporate Philanthropy, where all companies asked themselves “how do we contribute to the common good?”. I came away not sure if he is a cynical conservative or careful radical.
The first day of November was also the first Pears Business School Partnership lecture at London Business School. The lecture was given by Stephen Green, chair of HSBC, lay preacher, author and soon-to-be UK Minister of State for Trade and Investment. He gave a subtle speech on how companies need to respond to shifts in their operating environment. I agreed with the shifts he described, but was troubled by how he framed how to respond.
Anyone who has to frame the business case for sustainability should pay attention to how he explained the shifts in operating environment following the financial crisis.
– Public opinion has changed, so companies need to acknowledge wider social needs and expectations.
– Global challenges have a radically different nature and vast scale, so no one stakeholder group can solve them alone
– The financial crisis exposed short-term thinking in boards and investors.
The implication behind the specifics is that the context in which business makes money has changed. It is not a question of taking on responsibilities for moral reasons. He is arguing for an enlightened self-interest, where companies create a better future so they can be more successful. This confirms the notion of a leadership business case I developed as part of Better Decisions, Real Value – companies can lay the foundations for a sustainable business context by aligning the drivers of business success with the needs of society. In this way they can create more ‘win-wins’ where sustainability and profitability go hand in hand.
What I found strange was Green’s proposed response: we must create a new vision of corporate philanthropy. He wants business to expand move philanthropy beyond just giving to the favoured charity to a new mode of thought that considers “how the company contributes to the common good through its business model”. At various points he equated this with corporate sustainability, community investment, social investment and a few other buzzwords (so companies must “integrate community investment into the core business model”, whatever that means).
What troubled me was making corporate philanthropy do all the work. Why bother giving a well-worn phrase such a radically different mean from the one in current use? Yes, the original Greek meaning had something about a love of humanity for greater production. But that was a long time ago. Today’s mainstream business commentators would at the least be sceptical, especially ones who believe the business of business is business. Why bother using “philanthropy” when sustainability is coming to mean a lot of what he said?
My immediate reading was not generous. One critique of philanthropy is that it addresses the symptoms but not the cause. Indeed, the reason why some people and companies have such concentrations of resources and power is because of the status quo. Why should we expect them to change it? So, at first I concluded Green is cynical conservative: here’s is a banker and future minister appropriating just enough of the language of change to be convincing but doing so in a way that leaves the fundamentals untouched.
But on the way home I realised there is a second reading: careful radical. Let’s take a generous reading of his motivation. He knows business people are a sceptical bunch. The evidence of environmental crisis and failure of social systems just bounce off their cognitive frames. If he comes out with all guns blazing sustainability his peers will just put pigeon-hole him as ‘gone dotty’.
Could using corporate philanthropy be a wise and far-sighted attempt to use ambiguity to create longer-term change?
Even if he does have that intention, I’m afraid that I don’t like it. The Met Office publication on Informing Choices last years said we need to have a peak of global emissions in 2020 and 5% reduction each year to stand a 50:50 chance of avoiding dangerous climate change.
That’s a lot to do in a short time. Using ambiguity for longer-term change is simply not enough.