The Business Role: Back to Basics

Geneva, 5 March 2007 - The Business Role Focus Area represents one of the longest continuous intellectual efforts of the WBCSD. “Business will play a vital role in the future health of this planet. As business leaders, we are committed to sustainable development, to meeting the needs of the present without compromising the welfare of future generations.”

These words about the business role begin the “Declaration of the Business Council for Sustainable Development” from the 1992 book Changing Course.

“This controversy (over corporate social responsibility, or CSR) suggests that the time is ripe for a focused look at the role of business in today’s, and tomorrow’s, society,” says the last chapter of Catalyzing Change, the 2006 history of the WBCSD.

Also in 2006 the Council published From Challenge to Opportunity: The role of business in tomorrow’s society, the result of the work of the eight corporate leaders who met over the course of a year on the title’s subject. This Tomorrow’s Leaders group signed a “Manifesto for tomorrow’s global business” in the beginning of their report.

“Our major contribution to society will… come through our core business rather than through our philanthropic programs,” the manifesto says, offering a traditional view of business that would comfort most CEOs.

However, the report’s other main conclusion was much more challenging: “We believe that the leading global companies of 2020 will be those that provide goods and services and reach new customers in ways that address the world’s major challenges – including poverty, climate change, resource depletion globalization and demographic shifts.”

Though the rest of the report offers examples of how some companies are trying to do this – and of some of the dilemmas they face in doing so – few companies have tried to align their core businesses with societal challenges.

The report itself notes that “while many businesses can point to specific activities as evidence that they are already applying such a model, we believe that to apply it at scale, and at the heart of business strategy, is extremely demanding.”

The Business Role FA is responding to the report and its manifesto by going back to basics and taking time to listen to what stakeholders around the world are saying about business and its interactions with society.

Such organized, careful listening also has a long history in the Council. When it was working hardest on CSR, it held stakeholder dialogues around the world and learned that different cultures have very different views on how companies should relate to society.

In 2006, The Business Role held a dialogue in Geneva in February, another in New York City in October to coincide with the Council Meeting, and a third in Buenos Aires in November.

It is hearing a great deal of controversy. Jeremy Hobbs of Oxfam International told the Geneva gathering: “We cannot solve poverty by turning the poor into customers. We need to understand structural reasons for poverty…. There is a crisis of global governance.”

Greenpeace’s Bruno Rebelle argued that “markets are not enough; we need government and regulations. We need to make changes to push government in the right directions.” In fact, a number of non-business commentators were suspicious of business but harder on the failures of governments.

In New York, Steve Rochlin of AccountAbility North America said that government “is essentially outsourcing the type of regulation that we’re looking for to either the business sector or the NGO sector and saying: ‘compete with each other’.”

Allen White of the Tellus Institute warned that with companies getting less capital from stock markets and investing more in hedge funds “we are seeing an epidemic growth in short-termism.”

Speaking of the dialogue process, FA leader Brigitte Monsou said: “The exact nature and extent of the business contribution to societal success – and the role of business in society – are constantly changing, adjusting to needs and requirements beyond its control. Ultimately, the success of business in society will depend on its ability to understand and influence its evolving roles and to work more efficiently with partners.”

The Business Role FA plans more dialogues in 2007. It also plans to report on trends and dilemmas around the business role, in part examining what business has accomplished in the 20 years since the Brundtland Report was published in 1987.

That document, published as Our Common Future, both defines and has popularized the concept of “sustainable development”. It warns of the costs of pollution and “inappropriate industrialization”, but is not anti-business or anti-growth. Its thoughts on business conclude that “many essential human needs can be met only through goods and services provided by industry, and the shift to sustainable development must be powered by a continuing flow of wealth from industry.”

The report calls upon nations to make sustainability a concern of every branch of government, not just the environment ministry. While no government has done this, most of the companies publishing sustainability reports are at least trying to look at the totality of their economic, social and environmental impacts.

Much has happened over the past 20 years, and some of the best news comes from business.

Author WBCSD Publication Date 5 Mar 2007 Document Type WBCSD news Issue/Topic Business Role/CSR Source WBCSD Include In RSS WBCSD News & Updates