Juggling corporate citizenship with business goals
Klaus Schwab, founder and executive chairman of the World Economic Forum, Gareth Ackerman, chairman of the CIES global summit and Professor Franz-Josef Radermacher, one of the chief initiators of the Global Marshall Plan Initiative, air their views on how companies can align their ideals with their business goals. How do companies face the challenge of satisfying their increasingly ‘green’ customers, planning for future social and environmental legislation while at the same time keeping their shareholders happy?
Elsevier Food International, Vol. 11, Number 2, May 2008
It is a challenge facing all businesses. Speaking at the World Economic Forum which met in January in Davos, Klaus Schwab, its founder and executive chairman, told the world’s influential leaders, “This year, we placed particular emphasis on corporate global citizenship, the principle that companies must be involved in addressing the major challenges we face today, aligning their engagement in society with their business goals. This commitment is at the core of what the Forum stands for.
The practice of corporate global citizenship is crucial for a company to succeed, yet requires collaboration throughout the industry. Hence the theme of this year’s annual Forum was The Power of Collaborative Innovation and particularly for business: Competing While Collaborating."
To survive and prosper in the rapidly evolving global marketplace, companies must win the war for talent and innovate rapidly but also, where appropriate, collaborate − even with the competition,” said Schwab.
Open talk In this context, Gareth Ackerman, chairman of the CIES global summit, and chairman of Pick n Pay Holdings in South Africa, is in agreement that companies must collaborate on non-competitive issues such as sustainability.”
Within the next 20-30 years it will be necessary to reduce our global carbon emissions by 50 per cent as pressure from governments mounts. It will be up to retailers to champion this movement.”
CIES has been dealing with sustainability since the mid ‘80s. “We had a big push towards environmental issues when we had to change all our fridges and freezers to reduce CFC emissions. At that time it was not taken up by consumers and industry but it has remained on our backburner.”
Now it is firmly back on the agenda and at the moment there is a lot of experimentation with in the industry which in the long run will result in change.
“We see a lot of trial and error but also benchmarking against each other. It is crucial that we talk openly with each other because these are non-competitive issues.”
In this respect the CIES World Food Business Summit in Munich in June will not report on what is happening today but instead on what we can expect over the next three to five years. “We will be doing a lot of forward thinking, which will be very challenging considering the global trends which are taking place,” said Ackerman.
Rising food prices The scale of the trends is huge and will affect the fundamentals of food retail, hitting the bottom line. Food prices are rising around the world and are being directly determined, firstly, by the price of fuel and the shift to bio fuel production; secondly by the weakness of the dollar which is pushing up commodity prices and creating huge inflation: “Don’t forget that around 80 percent of all food is produced directly or indirectly from soya and maize,” says Ackerman. Thirdly, there is a shortage in the Helen Armstrong Sustainability has been thrown into the heart of the fire. Although it has been on the retailers’ backburner for many years it is now the hot topic at virtually all conferences and is a driving force not only for do-gooders but also for strategic business plans. However, it is not all plain sailing and many controversial issues will have to be overcome in the coming years.
Dilemma of child labour 
With regard to corporate responsibility and sometimes the dilemmas associated with doing the right thing, Rader macher and Ackerman speaking independently both highlight the unsolved controversy over child labour.” CIES has been dealing with child labour for 12years but it remains a very controversial issue. On one hand you are putting money into the pockets of families who otherwise might starve but on the other hand we don’t want to encourage child labour. We have to consider if child labour is so bad so long as it does not involve slavery practises and if the children still have the opportunity to go to school,” says Ackerman. Rader macher agrees, “Most countries have signed up to the anti-child labour convention but still there is much child labour in the world. Sometimes the child is the main bread winner and without whom not only that child but also brothers or sisters may starve. But, he adds, if the child is denied an education, “then the family should be paid for loss of income so that the child can go to school and be educated.”
Food supply, largely as a direct result of consumers in Asia changing their eating habits and eating more meat and grains.”
“We trust in technology and assume it allows us to extract even more from less resources.”
For example, oranges have a high water content and are often grown in regions which are short of water and are then exported to wealthy countries.”
“Companies have to strike a balance between this and activists who can destroy the brand.” And technology is not always the answer, he said.
“We trust in technology and assume it allows us to extract even more from less resources.” But concentrating exclusively on new technological solutions could result in precisely the opposite effect of what was intended, he said. Prof. Radermacher described this boomerang effect in the following terms: “The more technological we become, the more resources we consume. For example, as microchips have become smaller and cheaper we use more of them and they generate more waste. A balance must be struck between the efficiency of economic activity and the efficacy of the aims of economic activity”. Ackerman concludes, “Sustainability is about having a good business plan and looking at the bottom line. But that doesn’t always mean going directly for the highest profit. You also have to constantly reinvest in the soft side of the business which will bring long-termmaximum return for shareholders.” •
“Companies have to strike a balance between this and activists who can destroy the brand.” And technology is not always the answer, he said.
“We trust in technology and assume it allows us to extract even more from less resources.” But concentrating exclusively on new technological solutions could result in precisely the opposite effect of what was intended, he said. Prof. Radermacher described this boomerang effect in the following terms: “The more technological we become, the more resources we consume. For example, as microchips have become smaller and cheaper we use more of them and they generate more waste. A balance must be struck between the efficiency of economic activity and the efficacy of the aims of economic activity”. Ackerman concludes, “Sustainability is about having a good business plan and looking at the bottom line. But that doesn’t always mean going directly for the highest profit. You also have to constantly reinvest in the soft side of the business which will bring long-termmaximum return for shareholders.” •
*Prof. Dr Dr Franz Josef Radermacher is one of the chief initiators of the Global Marshall Plan Initiative based in Hamburg. www.globalmarshallplan.org In 2002 he became a member of the Club of Rome, a global think tank and centre of innovation and initiative. www.clubofrome.org He also heads the Research Institute for Applied Knowledge Processing at the University of Ulm, Germany, where he is a professor of computer sciences.
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