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October 11, 2005
Business Roundtable May Be Seeing the Light with New Initiative
    by William Baue

The SEE Change program hints at a tipping point for US business community engagement of social, environmental, and economic issues, but the program's success may depend on how critics view its performance.


Recent developments suggest that a paradigm shift is transforming the corporate world from exclusively assessing financial impacts of decisions to integrating social, environmental, and economic (SEE) considerations into corporate policies and practices. One such development is the announcement late last month by the Business Roundtable, an association of US corporate CEOs, of its SEE Change initiative that seeks to create synergies between environmental stewardship, social improvement, and bottom-line performance.

The initiative plays off the term "sea-change," invented by Shakespeare to describe a profound bodily transmutation wrought by the sea (bones to coral, eyes to pearls), to suggest that business community acceptance of corporate social responsibility (CSR) may be passing the tipping point.

"We expect that SEE Change will result in a transformation in how business leaders approach sustainable growth," said Marian Hopkins, the Roundtable's director of public policy as well as of its Environment, Technology, and the Economy Task Force. "While many companies now embrace this concept individually, SEE Change breaks new ground by making sustainable growth a concentrated focus for leading US companies from every sector of the economy."

"We want the public to literally 'see change' in key areas of social and environmental well-being, such as energy efficiency, water conservation and quality, reduction of disease and increased literacy, while economic growth is enhanced," Ms. Hopkins told SocialFunds.com.

The initiative specifically focuses on water sustainability, asking participant companies to engage in projects that improve water quality, quantity, and availability.

"Without water, nothing is sustainable," said Charles Holliday, CEO of DuPont (ticker: DD) and chair of the Environment, Technology, and the Economy Task Force. "It's not a requirement, but we're urging every company to consider a sustainable growth project that addresses water."

Participant companies include Coca-Cola (KO), Dow (DOW), Eastman Kodak (EK), General Electric (GE), Procter & Gamble (PG), Weyerhaeuser (WY), and Xerox (XRX). The first company on this list, Coke, illustrates the tension between the initiative's aspirations and corporate reality.

Coke's Plachimada bottling plant, the company's largest in India, has been shut down since March 2004 when the local village council (or panchayat) refused to renew a license to operate due to "overexploitation" of groundwater, which the council considers to be a common resource. Coke appealed the decision to the state court in Kerala, and last month the Kerala state government appealed the case to the Indian Supreme Court.

"While we welcome any initiative that supposedly promotes sustainability, we also view the Business Roundtable initiative, SEE Change, with a great deal of skepticism," said Amit Srivastava, director of Global Resistance, a California-based group opposing corporate globalization. He also coordinates the India Resource Center, a project of Global Resistance, which focuses on corporate globalization in India. "We do so because we are adamant that there can be no sustainable strategies on sustainability if the primary stakeholders--the community itself--is not at the table."

While this particular issue in Plachimada has yet to be resolved, it illuminates the double-edged sword of SEE Change. On the one hand, the initiative could inspire companies to develop truly sustainable, innovative solutions to such pressing problems. On the other hand, it could present opportunities for companies to greenwash, or mask environmentally and socially destructive or benign projects as if they are beneficial.

"We want this program to be judged by its results--we believe the accomplishments of our companies will answer any criticism that SEE Change is just about 'greenwash,'" said Ms. Hopkins. "That's why we're asking participating companies to commit to specific goals and metrics and report publicly on their progress."

To give "teeth" to the initiative, the Roundtable requires participant companies to measure improvement in SEE performance, but allows companies to choose which metrics to employ. The chosen metrics must be "material" in addressing social and environmental needs, "raise the bar" by implementing long-term improvements, be transparent, meaningful, and reliable, and be in place for significant periods--5, 10, or 15 years depending on the company.

This flexibility encourages more companies to participate but it lays the initiative open to a standard criticism of voluntary CSR programs; specifically, that a lack of standardized metrics allows companies to focus on their social and environmental strengths while downplaying or altogether hiding their social and environmental weaknesses. Stakeholders may ultimately decide if the initiative is substantive or greenwash by closely examining the changes they see in corporate performance.

 

 
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