News and Cluster Activities

Role of Business in Tomorrow's Society

Submitted by Arthur Dahl

The World Business Council for Sustainable Development (WBCSD) organized a debate on 20 February 2006 in Geneva, Switzerland on the Role of Business in Tomorrow's Society. The room was packed with 250 top leaders from business, international organizations and NGOs, with a fast-paced debate and wide participation conducted by a BBC anchorman.

The first issue concerned where business is today and where it is going, focusing on the key issue of the borderlines of responsibility between business and government. Without a framework of law and social services, business cannot operate effectively, but it was clear that business did not feel comfortable venturing too far to fill the vacuum created by failures in government. Business could not create equity. Business was particularly poor at taking a long-term perspective, and this is also reflected in business school education. The difficulty of doing business transnationally without an adequate framework highlighted the crisis in global governance, but with the slow pace of institutional reform globally, no one was confident that the necessary framework would be created in time.

One problem that was not adequately addressed was employment creation. The ILO estimates that 500 million new jobs will be needed by 2015. Yet the largest companies are capital intensive and create only 1% of employment, and the push to raise productivity makes the problem worse. As was to be expected, there was disagreement as to whether the business model itself needed to be changed, with some questioning the whole economic system.

Discussion then moved to the environment, and whether the market could work for nature. While business must be environmentally responsible, the market does not fully price nature's services, and many environmental resources have no market value, so governmental and intergovernmental regulation are also necessary. Business can only respond to an impetus from consumers or governments. The number of businesses that truly integrate sustainability into their strategies and meet their environmental commitments is very small. Many more only see CSR as an issue of image and branding. The issue of business free-riders who ignore their responsibility needs to be addressed, but by whom was not clear.

The final topic was development, and whether the market could work for the poor. There was a very negative perception of business in developing countries (and little trust of business in the West). While it was acknowledged that it was essential to do business with the bottom of the pyramid, and that the poor are tomorrow's market, in practice it was difficult to get the market to work for the poor without the necessary framework conditions of stability, the rule of law, education, basic infrastructure and utilities. Business can partner with NGOs on this, and must take a longer-term perspective. One company had pledged to do 10% of its business with the poor, and encouraged investment in innovation of new business models and products. This was an important source of employee motivation.

Some of the remaining problems that were raised but not resolved were the failure of capital markets to see more than short-term returns, the difficulty of scaling up small solutions to a significant level, the rapid expansion of unsustainable consumption patterns in places like China and India, the refusal of governments to allow Corporate Social Responsibility to be discussed at the UN level, and the failure of business to become involved in the debate on trade. While it was encouraging to see the progress made by committed companies such as those in the WBCSD, the scale of the problems was enormous and we were just comfortable with micro-solutions. Since the founding of WBCSD there had been no progress on issues it had raised such as pricing resources to reflect full environmental costs, shifting the tax burden away from employment, or reducing damaging subsidies. Business needed to provide more leadership in addressing the problems of global governance, but it could not find the solutions on its own. Today neither business nor governments have the trust of the public, and what is the price of trust?

As will be seen by this short and rather personal summary of a deep and wide-ranging debate by leaders from many perspectives speaking off the record, there is a clear awareness of the problem, but little in the way of solutions. Ethical issues and values were often touched on, as was the importance of human motivation and willingness to change. The WBCSD pledged to continue the dialogue.

The debate was based on and launched a report by the Tomorrow's Leaders group to the WBCSD which can be consulted at: www.wbcsd.org/plugins/DocSearch/details.asp. The WBCSD will prepare a more complete report later.

Role of Business II - Recommendations

Submitted by Andras Laszlo

The recent World Science Forum Event in Budapest produced some excellent insights which hopefully will be translated into concrete action.

The Session: The Role of Business - of which Andras Laszlo was the rapporteur - was concerned with the "valorisation" of knowledge in the 21st century with a major emphasis on a "new" model of interaction between the producers of knowledge, i.e. the scientific world/academia, and the "industrial consumers" of knowledge, i.e. the business world, and with special regard to a non-exploiting, inclusive, humanistic interaction between two equal partners.

We all agreed that the purpose of globally responsible businesses is to create economic and societal progress in a responsible and sustainable way. In the light of the Millennium Development Goals (MDGs) and the UN Global Compact, and acting in accordance with a (to be established) Code of Global Business Ethics and Global Governance businesses have the capacity to lead the way and show responsible leadership in partnership with the Multiple Stakeholders of society towards Sustainable Development that has a realistic and future.

For this to happen, it is, therefore, necessary to agree on a common ground between scientific advancement - as a main driver for development in society - and the business world that has become one of the most influential institutions worldwide with a tremendous opportunity and a global responsibility to shape a better sustainable world for existing and future generations.

The final recommendations were presented by Andras Laszlo during the closing plenary session in the magnificent Hungarian Parliament.

The recommendations were divided into five sections: Business, Business and Academia, Business, Academia and Society, Europe, and Developing Countries. The recommendations are as follows:

Business:

1. Reassessment of the dominant business model towards a global governance;
2. Encouraging the progression from shareholder value to stakeholder value, from compliance to ethics (what world do we want to build together?), and from short-term maximization to societal and political debate;
3. Stronger enforcement of the criteria for granting patents and greater encouragement of the development of genuine innovation;

Business and Academia:


4. Development of mutual understanding to bridge the cultural gap between science and business with focus on interconnectedness, interdependence, ethics, and inclusive ways of sharing both scientific and business best practices;
5. Optimization of the complementary roles of Business and Academia in the creation, transfer and exploitation of scientific knowledge;
6. Usage of Intellectual Property Rights (IPRs) to encourage innovation but not in ways which restrict access to the results of fundamental research and destruct intellectual diversity;
7. Fostering a scientific conscience and a proper sense of values and standards as well as the development of rules of good practice as a major commission of universities and learned societies;

Business, Academia and Society:


8. A partnership between business and academia should provide new opportunities for scientists to engage in the societal debate;
9. Furthering proper public awareness of the important role of science and technology through a fair and open dissemination of scientific information, an open and honest dialogue with the general public and the media as well as placing "responsible science" high on the policy making agenda;
10. Encouraging Universities to formally and strategically incorporate knowledge transfer as a third mission activity alongside teaching and research, with the support of government funding;

Europe


11. Compliance with the Lisbon Agenda (investment of at least 3% of gross national product in R & D), guaranteeing social justice, respecting the environment, and providing the necessary framework for successful transfer of research results into innovative practice;

Developing Countries


12. In order for the developing countries to take part in the partnership of academic research and business there needs to be improvement of the educational infrastructure, the creation of high standard regional centres, accessibility of information, and an optimal knowledge transfer.

These are very strong and focused messages, and we all felt that it is very timely for the business world to take leadership and act accordingly.

Acuto: the Italian Board Continues to Mentor Future Leaders

Submitted by Samira Ciotti

EBBF Italy did it again this year, organising another successful meeting between the Forum, business mentors, and future leaders in AIESEC Italy. The meeting was held, as usual, in the scenic, mountain village of Acuto, Italy, from 9 -12 February, and brought together the young and the experienced to discuss under the theme: "Inspiring Corporate Social Responsibility for a Sustainable and Conscious Global Development - the Energy Challenge." Below, one of the participants attests to the eloquence of the event:

Oh yes, I too can now confirm all that I have been reading about this event, given that this year I had the opportunity and honour to take part myself. If through previous mails and forums I could get a feeling for the characteristics of this meeting, this year I breathed those emotions.

It has been a meeting where it was differences that created the real richness (you should have seen the results of our workshops where we were to convince the leaders of the G8 summit to use renewable energies! If we had worked on our own we would never have reached but a miniscule part of what we did achieve).

Every kind of barrier was overcome and some unbreakable links were cemented in a way that only love accompanied by the sharing of common values and the aim for common goals can create.

Nothing is more important.

All the topics were covered in an extremely professional manner, but the rational sphere was not the only part that was nourished: in a world (especially the business world) that is moving towards the awareness of the value of the individual in his totality, we also had our emotions deeply nourished, and our will to achieve certain objectives and to develop our interior qualities was further strengthened, together with a greater encouragement to focus on our values.

I am truly very enthusiastic of having been able to attend, I feel I have returned to work with a new awareness, that the company is like a living organism with a mind and a soul, the latter too often dormant. It becomes our role to increase the knowledge of our responsibility in progressing social and ethical responsibility in whichever environment we may be, not only for our own but for those who will arrive later with the final aim of contributing to the world that surrounds us.

It is a gesture of love, and we are less alone than we think.

With warmth,
Samira Ciotti

AIESEC re-invites Forum

Submitted by Ian Igor and Carolina Zagrecki Sawicki

Ten days ago, on the 17th of December 2005, two EBBF representatives, Ian Igor and Carolina Zagrecki Sawicki, participated at AIESEC Croatia National Conference organised in the town of Sisak, 40 km from Zagreb. External speakers, namely UNDP and EBBF, were invited to share their expertise on the last day of the conference. EBBF facilitated two sessions, one on the socio-economic situation and development trends in Croatia and its accession process to the EU, and the other on the topic of Corporate Social Responsibility.

The first session was a plenary attended by some 100 AIESEC representatives throughout Croatia and some from abroad. The presentation was followed by work in groups where Croatian development priorities were discussed. During this part EBBF members interacted closely with the participants exchanging their thoughts and ideas.

The second session took place in the form of an interactive workshop with 25 participants, starting with a presentation of a concrete example of ethical dilemma at the work place. The participants were then introduced to the main issues of relevance in the CSR context, following which the group split into two with the task of discussing applications of the concepts presented. The outcome was later used in AIESEC project preparation.

A number of participants expressed their interest in EBBF activities and their wish to stay in contact with EBBF representatives. AIESEC organizers also gave positive feedback about the presentations, which they received from the participants.