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By Thomas S. Lyons, Ph.D., Baruch College, City University of New York

Typically, when we think about “sustainable business,” we concentrate on corporate social responsibility (CSR): energy efficiency, reduced carbon footprint, recycling and reuse, fair treatment of employees, and charitable giving, among other considerations. Most of the sustainable business programs, in the universities that have them, are corporate focused. Yet, corporations are not the only variety of sustainable businesses.

Sometimes sustainable business is manifested in the activities of startups and small businesses that pursue double and triple bottom lines. These are mission-driven companies that are dedicated to being socially responsible from their inception, unlike most (though not all) corporations that pursue CSR for marketing purposes or to cut costs and increase profits. While there is value in doing the “right” things, even if it is for selfish reasons, there is a certain purity about these social enterprises that has a special appeal for those of us who cherish people and planet as well as profits.

The realm in which these mission-driven enterprises operate has come to be known as “social entrepreneurship,” a term widely credited to Bill Drayton, founder of the social venture philanthropy, Ashoka. What exactly is social entrepreneurship? My colleague from New York University, Jill Kickul, and I have suggested in our book, Understanding Social Entrepreneurship: The Relentless Pursuit of Mission in an Ever Changing World, that it is “the application of the mindset, processes, tools, and techniques of business entrepreneurship to the pursuit of a social and/or environmental mission.”

This is a good starting place, but it assumes knowledge of business entrepreneurship that some readers may not have. Because of this, it might be helpful to go back to a definition developed by J. Gregory Dees, widely considered to be the “father” of the field of social entrepreneurship. In an unpublished paper written in 1998, Dees stated that:

Social entrepreneurs play the role of change agents in the social sector by:

• Adopting a mission to create and sustain social value (not just private value),


• Recognizing and relentlessly pursuing new opportunities to serve that mission,


• Engaging in the process of continuous innovation, adaptation, and learning,


• Acting boldly without being limited by resources currently in hand,


• Exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created.

In defining social entrepreneurship this way, Dees helps us to understand the major characteristics of business entrepreneurship that apply, the characteristics that make social entrepreneurship unique, and how the two are blended. The second, third and fourth bullet points in the definition provide the business-related core.

First, all entrepreneurs are what the late entrepreneurship educator Jeffrey Timmons called “opportunity obsessed.” They constantly look for opportunities to add value to the lives of their customers and prospective customers. Social entrepreneurs, too, are always looking for opportunities to advance their mission, social and/or environmental, thereby enhancing the lives of their target beneficiaries. Second, entrepreneurship is synonymous with innovation because entrepreneurs implement inventions, their own or those of others; that is, they find ways to get the given invention to market by addressing issues of affordability, quality, durability, accessibility, etc., in a way that meets the needs of the customers in that market. Social entrepreneurs do the same thing for people facing social challenges and for the environment. Finally, business entrepreneurs utilize the resources of others to start and grow their ventures. They do this by selling these “others” (investors of various forms of capital) on their business concept’s potential for success. Social entrepreneurs must do the same, utilizing the strength of a compelling mission.

What makes social entrepreneurship distinct from business entrepreneurship is its unwavering focus on the social/environmental mission. This is true, no matter what legal structure the social entrepreneur chooses. For-profit social enterprises put mission before profits, typically using their excess revenues as a means of scaling the reach of their mission. Nonprofits are increasingly finding that they cannot rely on philanthropy to sustain themselves, much less grow. Thus, they are pursuing earned income strategies that leverage the organization’s excess capacity and capability. By law, the earned income they generate must be reinvested in the enterprise and its mission. Hybrid social enterprises, which combine features of both for-profits and nonprofits, use this legal structure to expand potential revenue streams, all aimed at increasing and sustaining the organization’s ability to pursue its mission.

In Understanding Social Entrepreneurship, Kickul and I ask the question, “Is a venture that offers dry-cleaning services using environmentally friendly processes and cleaning products a social venture?” The answer lies in this enterprise’s mission. If this dry cleaner is “green” because she has recognized a market niche catering to people who value the environment and her goal is profit, then hers is not a social enterprise; although, it may be a sustainable business. If, on the other hand, the entrepreneur is focused on environmental sustainability, and profit is secondary and a means to growing and sustaining that mission, this business is a social enterprise.

Dees’s final distinguishing feature of social entrepreneurship from business entrepreneurship is that the former is held to a higher standard of accountability. This is not to say that business entrepreneurs are not accountable; they are – to their customers and shareholders. However, social entrepreneurs are accountable to a much larger group – their stakeholders, who are people who have a financial and/or emotional stake in their success. This group includes investors, employees (including volunteers in nonprofits), direct beneficiaries, and the community or society. There is no such thing as a closely-held, private social enterprise. Social entrepreneurs operate in a fishbowl and are responsible for demonstrating their social impact and for complete transparency.

Further, measuring the performance of a social enterprise is much more complex than it is for a commercial business, which can simply measure financial success. Measuring and monetizing lives saved, quality of life increased, and environmental damage mitigated (among other impacts), while possible, are exceedingly difficult to do.

Thus, social entrepreneurship can be thought of as a unique, totally mission-driven form of sustainable business. This is why we include this subject in the curriculum of our MBA in Sustainable Business Program at Baruch College of the City University of New York. We want our students to be exposed to both the corporate and small enterprise manifestations of sustainable business practice. I would add that learning the entrepreneurial, in addition to the managerial, approach to sustainable business administration can give students who choose not to launch their own social enterprise the skills to be “sustainable business intrapreneurs” – managers who are thinking and acting like social entrepreneurs within a corporation.

Thomas S. Lyons, Ph.D. is Lawrence N. Field Family Chair in Entrepreneurship and Professor of Management at Baruch College, City University of New York.

Image credit: Pexels

The UN Global Compact and newspaper group Financial Times have produced the first benchmark for CSR in Africa. The joint initiative, the Africa Sustainability Barometer, gauges the state of corporate sustainability reporting on the continent and covers more than 1,000 international companies, as well as local and regional firms.

While corporate reporting on issues of sustainability in Africa remains patchy, the Barometer highlights the need to expand the scope of reporting. For those who understand how sustainability affects their corporate performance, increased reporting and integration of the sustainability agenda looks likely, says the report. For companies who operate in a more isolated manner, and for the many smaller companies who are not in the public eye, advocacy work has a long way to go.

“With the Africa Sustainability Barometer, we hope to shine a light on the current efforts by companies to report on their sustainability, make the case for the value of comprehensive reporting, and encourage more companies across the continent to commit to responsible practices,” said Georg Kell, Executive Director of the UN Global Compact.

Covering the scope of corporate sustainability, the Barometer assesses human rights, labour and employment, environment, anti-corruption as well as corporate governance and supply chain management.

 “A growing number of investors now include environmental, social and governance (ESG) in their due diligence and risk assessment as important factors in making investment decisions. Companies that have a coherent and effective approach to ESG stand out. As such, sustainability can play an important role in driving investment to the continent, and attracting the long-term capital it needs,” said Lanre Akinola, Editor, This is Africa, Financial Times.

You can download the Africa Sustainability Barometer here.
 

Swiss pharma giant Novartis is backing a new campaign in its long-term commitment to fighting malaria.

The Power of One campaign (www.Po1.org) aims to address the treatment gap – through direct donations and existing government commitments – in view of the 300m additional treatments estimated to be needed to treat malaria patients across Africa between now and the end of 2015. The company says that every dollar donated to the campaign will buy and deliver a treatment to a child diagnosed with malaria.

The website enables the public to purchase a treatment and track the journey of a treatment. Donors will be able to see the effect of their donation on the ground, share information with their networks and recruit other donors.Novartis is supporting the campaign financially as well as donating up to three million Coartem Dispersible treatments to match antimalarials funded by the public. 

Novartis is the exclusive treatment sponsor of the campaign. Additional sponsors include Alere Inc., which is providing malaria rapid diagnostic tests, 21st Century Fox, AHAlife.com, Causes.com, Time Warner, Twitter, Venmo and others.

Zambia will be the first country to receive deliveries of treatments and tests as a result of the Power of One campaign.

The pharma company’s commitment aligns with its long history in the fight against malaria; the Novartis Malaria Initiative is one of the largest access-to-medicine programs in the healthcare industry.

Picture credit: © Furtseff | Dreamstime.com

Despite a top down approach to sustainability, more than two thirds of chief executives (67%) believe that business is not doing enough to address global sustainability challenges, according to a survey by the United Nations Global Compact and Accenture.

The report is the largest study of top executives ever conducted on sustainability and details the views of 1,000 chief executives.

Entitled Architects of a Better World, the study demonstrates broadening awareness on the part of global business of the opportunities presented by sustainability. Fully 78% of surveyed ceos see sustainability as a route to growth and innovation, and 79% believe that it will lead to competitive advantage in their industry. However, ceos see the economic climate and a range of competing priorities creating obstacles to embedding sustainability at scale within their companies.

“With thousands of companies, from market leaders to small enterprises, committed to responsible business practices, we can see that there is enormous momentum. Now, we need policymakers, investors and consumers to send the right signals to spur the next level of corporate sustainability action, innovation and collaboration,” commented Georg Kell, executive director of the UN Global Compact.

See the full story in the October issue of Ethical Performance.
 

Picture credit: © Andrew Kazmierski | Dreamstime Stock Photos

Submitted by Guest Contributor

By Rebecca Busse, Senior Stakeholder Engagement Manager, Future 500

Teach a Person to Fish

“Know your stakeholders” is a ubiquitous mantra in corporate social responsibility and it’s not unusual for companies operating abroad to map in detail the indigenous communities affected by their operations. What is groundbreaking, however, is having a comprehensive Free, Prior, Informed Consent (FPIC) strategy in place and being able to showcase community benefits that leave a positive legacy long after operations have ceased.

In development, the expression, “Give someone a fish, they eat for a day; teach them how to fish, they eat forever,” is very common – and most community development practitioners would recite it hastily. However, it is rare to find this tenet well applied in public-private community development projects or corporate philanthropic projects. There are some notable exceptions, but, by and large, many of the projects that are implemented fail, do not reach their full utility, or just don’t have lasting positive effects.

Solutions on the Ground

For Indigenous People’s Day this year, Future 500 reconnected with Rebecca Adamson, founder of First Peoples Worldwide and one of the nation’s foremost thought leaders on indigenous issues, to chat about trends in indigenous activism, palm oil and other related issues.

Being a solutions-oriented team, we didn’t just want to discuss the problems, but rather to discuss solutions that have worked on the ground. With over 20 years of working in the field alongside a diverse set of change-makers from on-the-ground indigenous and tribal communities to extractives executives, Adamson had some insight for us: self-determination grants.

Basically, self-determination grants are what they sound like: grants to indigenous communities that are designed to bolster governance and communications in the community, by the community, for the community. Since much of the natural resource extraction happening globally is on indigenous land, these grants have big implications for community empowerment, which can lead to smooth implementation of FPIC, conflict avoidance and/or quick resolution, and, ultimately, lower risk to companies.

A Win-Win

The grants are a win-win: they are good for communities because they strengthen existing governance and communications infrastructure, which has myriad benefits even outside of natural resource development.

Not all indigenous people want development – this is true.

But, according to Adamson and other indigenous advocates, most do – who doesn’t want economic development and jobs? However, indigenous people want it on their own terms, with minimal environmental and social impacts. Most parents want to see more opportunities created for their children, just not if it means losing clean air, water, habitat or their ancestral culture.

Repsol and the Guaraní

A good example of how self-determination grants play out on the ground is the case of Repsol and the Guaraní in the Amazon: in 1997, Repsol (and two other oil companies) wanted to engage in exploration and drilling in Guaraní territory, and Repsol began the process without community consent.

Instead of fighting a protracted legal battle, the community reached out to non-profits for help. First Peoples gave the Guaraní a self-determination grant, and then got out of the way of the decision-making process. The community was then able to purchase boats and gasoline for community members to reach remote parts of the community and they were able to make an informed decision about the development that helped to preserve their right to the land, and thereby their way of life. They had also improved their communications and governance systems, making the community stronger as a result.

And the grant? Just over $11,000.

Those tasked with justifying financial and social return on development projects would celebrate that hefty ROI, not only for the companies involved, but also for the community.

Not All Grants Are Created Equally

Not all grants are created equally. Not all of them solve the problem they aim to – some even cause unintended negative consequences.

As philanthropist Peter Buffett recently pointed out in his controversial New York Times piece the “Charitable Industrial Complex,” sometimes the most important thing we can do to help is listen. Listen to the communities and let them decide for themselves what change they want and at what pace.

Self-determination grants are a concrete way of providing resources to build what is essentially a deep listening infrastructure, encouraging alignment within the community and, ultimately, helping the benefits of development to last.

About the Author
As a stakeholder engagement manager, Rebecca Busse primarily focuses on the stakeholder landscape in the extractives sector: oil and mining. Prior to joining the Future 500 team, Busse earned an MBA in Sustainable Management at Presidio Graduate School. She also holds a B.A. in International Relations from San Francisco State University.

Environmentalists in the US are calling on the president of Tanzania to crack down on the country's elephant poaching epidemic. President Kikwete is currently in the US for private conservation meetings.

President Kikwete's visit comes just two months after President Obama's trip to Dar es Salaam, where he announced an Executive Order to combat global wildlife poaching and trafficking. 

Part of the Executive Order involves the creation of a Presidential Task Force to fight international wildlife trafficking to support countries, such as Tanzania, devastated by illicit poaching and trade. 

"The slaughter of Tanzania's elephants is threatening the billion dollar tourism industry and the thousands of jobs underpinned by revenue from United States tourists and others from around the world wishing to witness Tanzania's spectacular wildlife heritage," said Allan Thornton, president of the Environmental Investigation Agency, an international campaigning organization based in Washington, DC and London. "We appeal to President Kikwete to urgently confront this crisis."

It is estimated that 30,000 elephants have been killed in Tanzania's Selous Game Reserve between 2006 and 2009. 

Picture credit: © Andre Klopper | Dreamstime Stock Photos

British high street stalwart Marks & Spencer proved top of most consumers’ minds when asked to name a company that took environmental sustainability seriously in their daily business operations.

The Co-operative Group ranked second, Tesco third, BP fourth and Sainsbury’s fifth.

However, the study exposes the fact that two thirds (68%) of respondents were unable to name a company taking the issue of environmental sustainability seriously.

The research, conducted amongst 1,819 adults for the Carbon Trust by YouGov found that only 5% saw businesses as being most effective in helping the environment, when compared to environmental pressure groups, academics and the government. By contrast, 22% of those surveyed see businesses as being the most effective in helping the economic recovery.

 “Whilst it’s clear that consumers still care about the environmental future, their perspective on where the responsibility falls is skewed. It cannot be solely down to environmental groups to shoulder the weight of protecting our planet’s natural resources. Businesses have an enormous role to play here and need to be seen to be doing their part,” explained Tom Delay, chief executive of the Carbon Trust.

Read the full story in the October issue of Ethical Performance.
 

Land stewardship is not a well-known term; however, for the mining industry it is becoming increasingly critical.

The concept of land stewardship is intended to address what has been described as the next big environmental issue – how to maximise the efficient use of the same land by competing stakeholders, and how to minimise the degradation of natural capital and damage to ‘ecosystem services’.

Ecosystem services such as fresh water, climate regulation and erosion control, are provided free by nature. They are essential to humanity as well as the mining industry and, given the extended timescales over which a mine operates, they need to be protected – or replacing them could prove expensive or impossible.

Yet according to Cambridge University, 60% of global ecosystem services are being degraded or used unsustainably by mankind. The UN has estimated that in 2008, the economic cost of biodiversity loss and ecosystem degradation was US$2-4.5 trillion – or 3.3-7.5% of global GDP. Assuming ‘business as usual’, global environmental costs were projected to reach US$28.6 trillion by 2050, equivalent to 18% of GDP.

Our industry is not blameless and it can play an important role. We irrevocably change the land we use; mines require large quantities of water; and a mine is temporary and will eventually close. Unfortunately, the mining industry does not have a good track record of successful or responsible mine closures, and our reputation has suffered accordingly.

The metals and minerals that mining produces make modern life possible. The challenge is to produce them in a way which minimises the impact on the environment and creates a lasting positive legacy. A mine can be a catalyst for all sorts of development opportunities within a community. It can bring jobs and prosperity, schools, healthcare and infrastructure such as roads, running water, electricity and telecommunications.

In order to ensure their own sustainability, mining companies rely on access to new resource deposits. Yet different stakeholders – and especially local communities – often value different services coming from the same ecosystem. The miner therefore must demonstrate that the benefits they bring outweigh the potential impact to the ecosystem – in both the short and the long term.

This is where progressive land stewardship and the implementation of systems and processes that look at the life and closure of a mine in an integrated way, become an imperative.

Anglo American has been working on this concept for some while. We have a rich history of operating in developing countries and we developed a Mine Closure Toolbox between 2005 and 2008 to help our operations with their long-term mine closure planning. The focus is on planning for sustainability beyond mine closure, supporting sustainable development and leaving behind a positive environmental and social legacy.

The latest version of the Toolbox – which we have made available to the industry as a whole – increases our focus on community engagement and on the importance of designing, planning and operating a mine with closure in mind, right from the outset.

Anglo American’s approach insists that all closure plans are site-specific, include plans for land and water management, and are developed in consultation with the stakeholders. Every community and region has its own needs and these may well change over time. Our plans must adapt accordingly. One size does not fit all.

It is not always possible to put the land back to how it was, and that isn’t always the best option anyway. Sometimes it is better to make the most of the new infrastructure and use the land differently, in order to support alternative development in the region.

We believe that the decision about what closure should look like – the closure vision – does not belong to mining companies. Rather, it belongs to the people that will remain in the area after the mine closes.

The objective should be to leave behind self-sufficient and self-sustaining communities, whose future is brighter for the mine having been there than if it had never been there at all.

Samantha Hoe-Richardson, head of sustainable development and energy, Anglo American
 

The Trades Union Congress (TUC) is urging the British public to back a new email campaign pressing major high street brands to sign up to the Accord on Fire and Building Safety in Bangladesh.

While many big high street brands have signed up - over 80 including H&M, Zara, Primark and Next - there are some notable exceptions. The TUC campaign, Who's Hanging Their Workers Out To Dry, specifically references River Island, Matalan, Bench, Bank Fashion, Peacocks, Jane Norman, Republic and Mexx.

The Accord follows April's Rana Plaza disaster in which over 1200 people died. The agreement commits companies to fund an independent safety inspection body that will involve workers in the process, through their unions, and to make long term deals with suppliers, offering more secure employment and training for workers. 

Consumers can sign up to the online campaign via the TUC's Going to Work website.

Joint venture company MeyGen is to begin installation of the largest tidal energy project in Europe. The 86MW tidal energy project has just received the official greenlight from the Scottish Government.

The project is located in the Inner Sound of the Pentland Firth off the north coast of Caithness, home to one of Europe’s greatest tidal resources. It is the largest tidal stream energy project to be awarded consent in Europe and constitutes the first phase of a site that could eventually yield up to 398MW.

MeyGen plans to build an initial demonstration array of up to 6 turbines, with construction starting in early 2014 and turbines commissioned in 2015. This initial array will provide valuable environmental data for the subsequent phases and the wider tidal energy industry.

Ed Rollings, environment & consents manager of MeyGen, commented:  “The Pentland Firth and Orkney Waters region is an internationally important area for wildlife and we are committed to continuing research with interested parties to ensure that the exploitation of this clean, predictable and sustainable energy resource is done so in a manner that does not have a detrimental effect on the species and habitats in the area.”

Dan Pearson, ceo of MeyGen, added: “While there is still much work to be done, the prospects for delivering the first tidal energy array in the Pentland Firth, thereby establishing a stepping stone to commercialising tidal energy, are promising”.

MeyGen is a joint venture between investment bank Morgan Stanley (45%), independent power generator International Power (45%) and tidal technology provider Atlantis Resources Corporation (10%)

Picture courtesy: © James Hearn | Dreamstime Stock Photos