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Captains of industry must stop playing the blame game — now

A recent landmark encounter in a bookshop in Chennai, India, showed how business and the environment must go hand in hand from now on for both commercial and moral reasons

by Stephen Hesse

While visiting India earlier this month I had a revelation.

It wasn’t a burst of enlightenment of the spiritual sort, though India offers those, too. It was a realization about corporate social responsibility that came with the lifting of a misapprehension I have toiled under for too long.

Business was the last thing on my mind when I arrived in India with a group of undergraduate students for two weeks of volunteer work at NGOs in and around Chennai (formerly known as Madras).

Not surprisingly, when I travel abroad with students my primary concern is simply to bring them all home (relatively) free of physical and psychological trauma.

I haven’t always been successful, but this time it soon became clear that the group would be fine without me hovering. This was a relief — if a bit of a blow to my paternal instincts — and their common- sensical pluckiness gave me a chance to think about more than just potable water and suicidal auto-rickshaw drivers.

Thoughts of business first came into my mind while speaking about careers with two students from Anna University in Chennai. Anna is a large, respected science and engineering school, and I asked the two young women why they had chosen to study engineering.

They told me there are really only two well-respected professions in India: medicine and engineering.

As a lawyer, my professional ego prickled. “How about law?” I asked.

“Not law. Lawyers become politicians and all politicians are corrupt,” one replied.

Later I shared this conversation with an Indian computer engineer, hoping he would have a different take on the situation, but he was quick to agree.

“Here in India the two uniforms we hate most are brown and black,” he explained.

“Don’t tell me. The police and the judiciary?” I asked, grimacing.

“Exactly,” he said with a sympathetic smile.

Of course, three opinions do not make for a national consensus of more than a billion souls — but if the chaos on the roads and the raw sewage pouring into India’s rivers are any indication, the enforcers are certainly not doing their job.

In search of more information, I head off on a recommendation to the Landmark Bookstore — which turns out to be a goldmine. One book I began skimming there was titled, “The 80-minute MBA: Everything You’ll Never Learn at Business School,” by British writers Richard Reeves and John Knell (Headline; 2009). The first paragraph to catch my eye was this: “The post-2008 world requires a new spirit of stewardship in business leaders, a new focus on building businesses that are both environmentally and financially sustainable. . . . Our planet is broken, and organizations have a responsibility to help fix it.”

Jumping back a paragraph, “[T]here is no doubt that the ethos of some MBA programmes is part of the problem rather than the solution. The high-octane, risk-taking, money-chasing approach favoured by some graduates may have contributed to the overreach of many firms in the runup to 2008. There is some evidence that business school students become less ethical in their outlook and behaviour during the course of their studies. Graduates of business school are more likely than their non-business peers to cheat. Education corrupts; business education corrupts absolutely.”

This was clearly not a run-of-the-mill business text. The hook was set and I bit.

Later, the book’s Web site inspired more confidence, noting that Reeves has worked with companies including Accenture, ICI, Microsoft and GE Capital, and has taught at the London Business School. It also states that The Guardian newspaper has called Reeves “Britain’s leading expert on workplace trends.”

His coauthor, Knell, has worked with Microsoft, Tesco, Lloyds TSB and Siemens, the site informed me, while his present firm, the Intelligence Agency, has an eclectic array of clients, including Bristol Old Vic, Creative Scotland and The U.K. Film Council, according to the Web site.

From the outset, the authors make it clear that success in business now requires putting the environment first. In fact, Chapter One is titled “Sustainability,” and it begins with a quote that struck me as particularly poignant, having just come into the quiet of the bookstore from the din, dust and bustle of India, where the economy is growing at near double-digit rates and the environment is taking a beating.

That quote, attributed to U.S. Sen. Robert F. Kennedy (March 18, 1968), reads: “We cannot measure national spirit by the Dow Jones Average, nor national achievement by the Gross National Product. For the Gross National Product includes air pollution, and ambulances to clear our highways from carnage. . . . The Gross National Product includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm and missiles and nuclear warheads . . . It includes the broadcasting of television programs which glorify violence to sell goods to our children.”

My sentiments exactly.

From there, the first chapter lays out the arguments, both commercial and moral, for a new business ethic.

Yes, some businesses are changing, but many still “blame consumers for being unwilling to pay extra for greener products when much of the time they should be cheaper anyway because of reduced packaging and fewer resources used,” the authors argue. “Or they blame governments for failing to provide a level, green playing field. Both arguments have some apparent force, but in the context of our planetary crisis they are simply pitiful.

“Any business that can survive only by threatening the survival of future generations through its polluting activities should not, in fact, survive,” they conclude.

If this sounds a bit extreme, it won’t for long. I promise.

So if your boss, or the CEO of any company you hold shares in, still insists that consumers must lead corporate change, it’s time to head for the door. And on your way out, file a complaint charging mismanagement.

The truth is that corporations spend billions annually to convince consumers they need things they don’t: softer tissues, whiter clothes, smoother skin . . . you name it. The new business ethic will demand that some of those billions be spent on raising consumer consciousness and selling products that are less harmful to our planet’s ecosystems.

Certainly, consumers should be better informed about the impacts of their purchases, but much of our ignorance is due to the failure of corporations to make information available.

Of course, it’s impractical to ask companies to list on each lipstick all the chemicals and potential carcinogens those products may contain. However, in today’s digital age it is reasonable to expect “Environmental Full Disclosure” pages on company Web sites that, for each product, list all ingredients and highlight those that are of concern to consumer advocacy groups and government investigators.

The next step will be for corporations to publish full details of materials sourcing, labor, production, packaging, shipping, consumption and recycling.

You say you care? Show us the money and spend less on glossy pictures, more on the planet.

CEOs in major corporations take home a fortune in salaries and stock options. It is time they earned and deserved those millions by embracing ethical business practices and convincing shareholders of the obvious — that corporate survival requires radical change.

“Some chief executives now recognize that it is their responsibility to lead consumers, rather than the other way around,” note the authors of the “80-minute MBA.”

Some are already changing, most can, and now all must try. The year 2008 ushered in a new paradigm in the United States, and the onus of responsibility is being passed from consumers to CEOs.

It’s now well into 2009, and the writing is on the wall: Excuses for inaction can clearly be understood for what they are: A failure to lead.

Stephen Hesse can be reached at: stevehesse@hotmail.com