Bath Business and Society

Research, analysis and comment on the role of business in society from Bath's School of Management

Make green the new black - sustainable fashion meets Black Friday

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📥  Consumers, Research, Sustainability

 

The fashion industry has the fourth largest environmental impact of any industry in the UK, exceeded only by housing, transport and food. Yet it's all too easy to forget this impact, not to mention ethical concerns around supply chains and factory working conditions, in the rush for Black Friday bargains.  In this post Amira Battle, a first year PhD student at the Centre for Business, Organisations and Society, considers the tensions between consumerism and sustainable fashion.

 

Black Friday is one of the largest shopping days of the year, with consumers spending an estimated $5 billion in the US and £2.6 billion in the UK. As consumers and retailers count down to the big day, ethical and environmental concerns are quickly forgotten.

So what is Black Friday? It’s the “official” beginning of the Christmas shopping season as goods are sold with steep discounts. And it has become much more than one day, with promotions and discounts spanning the weeks leading up to and post the day itself.  The UK is still finding its feet with Black Friday, but many Britons have added the date to their shopping calendar. Clothing and fashion goods, alongside electronics, are among the most desired items during the holiday season, bringing in over $40 billion to US clothing stores.

 

What does sustainability have to do with fashion?

Clothing production and consumption has significant social and environmental impacts throughout its life cycle and has often been critiqued for its lack of sustainability.  Environmentally, the fashion industry has the fourth largest environmental impact of any industry in the UK. Socially, the working conditions in many factories could be described as dubious at best. From faintings in factories in Cambodia and factory collapses in Bangladesh to the destruction of textile industries in developing countries, the impact of the fashion industry on social and environmental sustainability cannot be underestimated.

The fault lies on both sides. Many fast fashion and luxury brands prioritise volume of production, quick turnaround, and sales over sustainability. Falling for the charm of lower priced clothing that mimics runway trends, shoppers value cost and look over ethics.

At the same time, people's motivations in fashion buying are not straightforward. People may consume for fun and entertainment, to bond and socialise, and to create identity through consumption. Black Friday sales heighten these aspects by enabling consumers to buy items they might not otherwise be able to afford. By emphasising the apparent scarcity of items and time available to buy them, retailers create a sense of urgency that compels people to spend money. The result is that Black Friday sales provide a temporary relief to consumers' inner discontent; however it's estimated that buyers will be left with £441 million worth of regret from these purchases, and regret leads to increased waste.

 

Sustainable Shopping Habits 
Even if you have a desire to consume and still “do good”, it's difficult to know how to shop for fashion sustainably. As a part of the research for my Masters degree, I conducted a study to explore what practices people thought were sustainable and unsustainable in fashion consumption.

Participants in the study were unsure about what qualifies as sustainable, but found it easier to identify unsustainable habits. These included buying items unnecessarily, impulse purchasing, following trends, and not considering materials or sourcing whilst shopping. These habits become even more pronounced in peak sales seasons: it can be difficult to be mindful in the face of a 2 for 1 offer.

 

Alternative Approaches to Black Friday
So how will you approach Black Friday? At the other end of the consumer spectrum, you could choose to buy nothing. Many would argue that the best way to be sustainable is to consume nothing at all. Instead of celebrating Black Friday, you could participate in Buy Nothing Day, signing up to go 24 hours without buying anything. If this proves too much of a challenge, organisers suggest that if you must shop, try to support local, independent brands.

I would further this advice with some suggestions of other ways to consume fashion sustainably this holiday season. Discussions with participants on sustainable approaches to fashion buying, as well as a review of the literature, offered some of the following ideas:

  • Buy only what you need, love, and know that you will wear
  • Shop secondhand as it gives an item of clothing a new lease on life
  • Consider renting a holiday party outfit. Instead of buying a new outfit to wear once, renting allows you to have a new look for every party whilst also extending the longevity of existing clothing items.
  • Make a shopping list to reduce impulse purchasing and mindless consumption.
  • Check out Ethical Hour’s Twitter campaign #Shopethicalinstead for ethical and sustainable gift ideas. Many of these items are made with environmental and social sustainability at their core.

Black Friday sales season will never be green, but not spending or spending purposefully may be a step in the right direction.

Header image by John Keogh under licence CC BY-NC 2.0

 

 

Remembering Malcolm McIntosh

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📥  Business and society, Sustainability

 

On Saturday 18th November, friends and family gathered to remember and give thanks for the life and work of Malcolm McIntosh. Malcolm was a leading writer and thinker in the business and society field, and a Senior Visiting Fellow at the University of Bath. Here, Andrew Crane pays tribute to a much missed friend and colleague. 

 

Friends and family gather to remember Malcolm at the Tate Modern

When I first met Malcolm, he rather alarmed me. Now, when I say I met him, what I really mean is that I bought his book on corporate citizenship – this one – way back in the late 1990s when I was a newly minted PhD student and Malcolm was – well, I will come to that in a minute; Malcolm has never been easy to pigeonhole.

So it would be several years later that I actually got to meet Malcolm in person and later again that we became friends. But, in that first intellectual meeting between me the reader and Malcolm the author I was not sure I actually liked him all that much. I was at the time one of those academics who was – as Malcolm would always disparagingly describe us – rather too preoccupied with obscure scholarly journals that no one ever actually read.

But here was a book that ignored all that academic baggage and captured for the first time the messy and exciting new world of corporate responsibility that was emerging at the time. Like much of Malcolm’s work, it was an exploration of real life practice – of the problems and solutions that were being experimented with by companies at the time – and it was filled with practical, good advice on how to be a more responsible company.

So of course, upstart wannabe intellectual that I was – I hated it. I found it too hopeful and not nearly academic enough for my liking. Where was the criticism? The theory? The intellectual posturing?!

But here it is, fresh off my bookshelf. I still have it some 20 years later. And for many years I actually used it exactly as it was intended – with MBA students and executives who were looking for answers and examples rather than the abstract theory that I had to offer from my own work. Malcolm, along with his co-authors, provided a rich source of inspiration and good ideas.

It is something that his work has continued to provide, right up to his latest book, In Search of the Good Society. In it, you can find some of the best health advice you can get, along with insights on art, prosperity and political economy among other things.

Malcolm's last book, In Search of the Good Society, published by Routledge

It is quite a mix. But as I mentioned, Malcolm has always been rather hard to pin down. Of course, that is probably exactly how he always wanted it to be, too.

When this earlier book came out, he was listed on the jacket as “an independent teacher, writer and consultant”. Now that probably isn’t a bad description for his whole career. Even when he had a formal position – as a Professor, as a Centre Director, as a Special Advisor to the UN – he was just as independent as when he was officially “independent”.

Malcolm, as anyone who knew him soon realized, always had his very own way of doing things. And it never looked too much like everyone else’s way of doing things.  He always crossed-boundaries between academia and practice and he had little time for academic disciplines or departments. His latest book, for example, is so wonderfully ambitious in its scope – part travelogue, part art appreciation, part health memoir – that it is almost impossible to categorize.

So University Vice Chancellors would typically either love or hate him, or very often both at the same time. Other academics also didn’t always fully appreciate him, but those that did, turned to him again and again for inspiration and a healthy dose of straight talking. Students naturally gravitated to him because he was so full of new ideas. And practitioners were often drawn to him because he understood them but also challenged them in ways that no one else did.

And I personally found him constantly invigorating. I asked Malcolm many times over the years to give classes to my students, to speak at conferences or examine the theses of my PhD students – and most recently, to join us as a Senior Visiting Fellow at the University of Bath. But I never really knew what I was going to get. That, of course, was a great part of the appeal with Malcolm. He was always so alive with learning and new insights wherever and however he would find them. You could never predict which direction he would head in next.

So, my own relationship with Malcom – our friendship over the 15 years that have passed once we did eventually bump into one another – has always been a source of fun and intellectual stimulation. If I ran into him at a conference whether in London or New York or KL or Cape Town I would naturally seek him out. He would of course have just flown in from somewhere else and have tales to tell aplenty of his travels. He never, ever, seemed to get bored or tired of visiting and learning from other places. And of course, he would have that twinkle in his eye, and that great hearty laugh, as he unwrapped another little nugget of worldly knowledge – or he unravelled another of life’s ironies – or he castigated (but always with such humour) the continued failings of us all to get to grips with the problems of the world.

Because, at the heart of it all, Malcolm always, always, always had an unending drive to make the world a better place. His work, really, was a means to an end. He was an unstoppable optimist, ever believing that things could one day be better, and that knowledge, love and understanding were the keys to getting us there. He was constantly planning something new, building institutions, writing books, launching new initiatives, and hacking his own path through the status quo. And it was such a pleasure and an honour to be swept up in all that with him.

Memories of Malcolm

So what can I say except that, like many people, I will – I am – missing him terribly and the planet will be a poorer place without him. Right up to the last he was planning the next thing, ready to fire off another book to complete his trilogy. Sadly, it was not to be this time. But he has left us a wonderful repository of knowledge and insight. And in his time here – whether through his work or simply the way he chose to lead his life to the absolute fullest – he helped move us all a little bit closer to the better world, to the good society, that he wanted for all of us.

 

 

 

Tackling climate change at the University of Bath

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📥  Environment, Sustainability

 

The Bonn Climate Conference is drawing to a close, with world leaders calling for strong action to implement the 2015 Paris deal. As a university, there are three main areas where we can have an impact on sustainability and climate change: through our own policies and behaviour; through teaching; and through research. Previously our MSc students have written about the impact of business ethics teaching on their attitude to future employment, while others have discussed their research on sustainable consumption, environmental regulation and waste reduction. In this piece, the University’s Energy & Environment Manager, Peter Phelps, discusses the policies and plans that shape our institution’s impact on the environment.

 

Cutting our carbon footprint

The University of Bath was the very first UK university to set carbon reduction targets back in 2003, and our 2010 Carbon Plan was held up as an exemplar for the sector by the Carbon Trust. We are now preparing our latest plan, which must respond to the Clean Growth Strategy recently launched by the Department for Business, Energy & Industrial Strategy. This sets out the government’s approach to implementing the next phase of UK strategy under the Climate Change Act (2008) across areas such as power generation, industrial efficiency, green finance, domestic efficiency and transport. It particularly highlights the key role of the higher education sector in leading by example. The strategy includes new carbon reduction targets for the whole public sector, of 30% by 2020/21 against 2009/10 levels. Additionally, mandatory reporting and the potential for extra funding for efficiency improvements have been outlined.

Despite growing as an organisation, we have cut our carbon footprint over the last ten years: taking growth into account we have cut our emissions per student or per building floor area by a third. Typically, many energy efficiency improvements are ‘behind the scenes’. We constantly work to improve building efficiency by enhancing controls to reduce consumption. We have reduced water use through improved leak detection and usage monitoring. Other hidden improvements include increasing our self-generation of power through our ‘mini power stations’ whereby we produce 8% of our own electricity on campus and recycle the waste heat.

Smart meters and controls are increasingly in the news as these make their way into people’s homes – we have been at the forefront of this for several years with our automated network of 2000 smart meters. We use this data and our sophisticated controls to respond to national grid shortages to minimise our peak electricity costs, and deliver a targeted approach to energy management.

A more visible example of our investment is the £1 million we have invested in LED lighting in the last year. The Library, for example, has had all lights on Levels Two to Five replaced by the latest high-efficiency LED lighting with sophisticated automatic controls. This has cut lighting costs by 70%, reduced maintenance costs significantly and transformed the appearance of the whole building. Our lighting systems are state of the art with all lights, switches and sensors controlled by data networks. This control network has grown to be the largest such system in Europe; installed in fifty-five university buildings the Estates team are able to control over 30,000 devices from a single location.

We bring best practice into our approach to designing and procuring new buildings, and set challenging targets for our architects. We’ve also doubled our solar panel capacity, and our campus now operates with a 100% renewable energy supply.

Cutting carbon in this way also saves money – we are saving around £1.5m every year on utility bills due to our improvements - and this is against a backdrop of expected future increases in electricity costs of around 40% in the next few years.

 

Solar panels on the Chancellor's Building, University of Bath campus. Image by Nic Delves-Broughton

Recycling

As well as focusing on how we can reduce energy use, we have schemes to tackle the other “Rs” – reuse and recycle. Our recycling rates have increased from 36% to 54% in two years, and we are the first UK university to introduce large scale coffee cup recycling. We have installed 25 coffee cup recycling bins around campus, giving staff and students the opportunity to recycle all disposable coffee cups. The cups are taken to a recycling facility in Cornwall where they are made into items such as pens and pencils. The scheme, along with the promotion of reusable cups and containers, has the potential to divert over 650,000 disposable cups per year from the general waste stream.

In the last couple of years, we have launched an end of term waste scheme. Last summer, the University collected 27 tonnes of ‘end of term’ unwanted food, clothing, crockery and appliances. These were donated to charity, raising over £22,000 for the British Heart Foundation and making a significant dent in the amount of items sent to landfill.

Student action

We run the award-winning ‘Student Switch Off’ and ‘Leave No Trace’ campaigns in our student residences and hospitality outlets. Our students are increasingly aware of the environmental impacts of not only their own activities, but also the practices of the University, as evidenced by the latest SU Top 10. This states that “when students graduate they want to be ethically concerned citizens alongside their academic achievements…We hope to work to a more sustainable University by examining our environmental practices and finding key initiatives that can be adopted to make a more green university...”

As discussed in an earlier post, it is students who are leading the way in incorporating awareness of public impact into their private decisions.

 

Conclusions

We have managed to cut our carbon impact as an organisation despite growing significantly, but this has been a real challenge. Perhaps we haven’t always been as ambitious as we could have been; perhaps there are echoes of this in the UK’s performance as a country, and also in our own behaviours as individuals. The challenge for the country, the University, and all of us, will be to respond to these internal and external pressures, and to plan for the future in a suitably ambitious way.

Read our latest Energy & Environment report in full

 

Header image of University of Bath campus by Nic Delves Broughton

 

Six tips for making interdisciplinary research work

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📥  Business and society, Research, Sustainability

 

Interdisciplinary work holds lots of promise for business and society research, but it is also highly challenging. Sarah Glozer, Deputy Director of the Centre of Business, Organisations and Society, summarises the advice from our recent event about how to make it work in practice.

 

As universities, journals and funding bodies call for greater interdisciplinarity in our research, we brought an international group of academics together last night to debate one key question: how do we make interdisciplinary research work in the context of business and society research? Over food, drinks and a good dose of speed networking, we debated the challenges and opportunities of interdisciplinarity. Here are our top six tips for success.

 

1. Keep it practical. The best way to galvanise interdisciplinary interest around an issue is to get your hands dirty. See the issues first hand and focus on a specific problem or challenge with real-world impact. Trying to artificially force researchers together from different disciplines and expecting to see ‘something new’, risks getting stuck in the weeds. Get out there, find your common problem, and take it from there. This is about making it matter and developing problem-based teams.

 

2. Look for the easy wins. It is arguably easier to make novel contributions and have more meaningful impact in interdisciplinary teams. Knowing your respective subjects so well, it is easy to identify gaps when you start comparing across disciplines. We are trained to have deep areas of specialism, so let’s exploit these. Issues of business and society cannot be dealt with by each of us on our own, and so think about what skills you can bring to the table and don’t be afraid to make broad assertions early on to establish common ground.

 

3. Speak the same language. In interdisciplinary research, it is important to really integrate the scope of the work across the team, not just pay lip service to ‘collaboration’. Make sure that all parties are involved from the get go to avoid being perceived as convenient ‘add-ons’ and make sure to generate a shared package of work. This is about identifying capabilities (and points of disconnect) from the outset, and being transparent. This might even involve going back to basics… What’s the point? Why do we need an interdisciplinary perspective here? What’s the added value?

 

4. Set a goal. Interdisciplinarity requires a change in mindset. We need to be open minded and define a shared goal. In business, the goal of collaborative efforts is making money. In academia, what is the goal? More importantly, in business and society research who are our key stakeholders? Yes, we want to solve problems, yes, we want to generate good scholarship, but is there more to the project than this? An aligned goal and a joint framing of questions sets the core focus and breaks down silos.

 

5. Build relationships. We need to learn from each other and so we should base teams not just on skills, but also attitude. Interdisciplinarity teaches us to be tolerant, but most importantly, we learned last night that the best projects are those where we establish healthy ways of working. Let’s enjoy this. Interdisciplinary research can be exciting and stimulating. If it’s a pleasure, we are learning. And if we are learning, we are likely breaking new ground. The successful teams are those that embrace ignorance and aren’t afraid to get out of their comfort zone. It is easier to do this with researchers you can call friends, or where there is mutual respect for one another’s work.

 

6. Break the mould. Let’s be clear about the challenges. This isn’t easy, particularly for early career academics. We need to create the right environment and recognise that we have different measures of output in different disciplines. Are we talking impact, funding or journal rankings, or all three as measures of success? Whilst we have the intention to be interdisciplinary, the system can sometimes stifle creativity. How do we get the gatekeepers to really buy into this? How can we work to break the mould for early academic leaders of tomorrow?

 

Prof Andy Crane, panellists and guests at CBOS Interdisciplinary event, held at No15 Great Pulteney. Photo by Sarah Glozer.

 

To round off the event, the panellists were asked for their final comments on the question, ‘What advice would you give to inspire interdisciplinarity in business and society research?’

  •  “It’s about solving problems and changing the world. We have to be open to new perspectives.Adam Joinson, Professor of Information Systems, University of Bath

 

  • Listen, talk and form a gang. You can make a new field. Just look at the business ethics area which was formed from the interaction of moral philosophers and social scientists.Laura Spence, Professor of Business Ethics, Royal Holloway, University of London

 

  • Form educational systems across disciplines and learn from one another.Mette Morsing, Mistra Chair of Sustainable Markets and Scientific Director at Misum, Stockholm School of Economics

 

  • There are differences and diversity even within disciplines. Let’s recognise this and identify synergies. Don’t just focus on the lowest common denominator.Julie Barnett, Professor of Health Psychology, University of Bath

 

  •  “Impact, stimulation and let’s recognise power. What structures enable and constrain our activities?David Cooper, Professor in Accountancy, Alberta School of Business

 

Feature image by cactusbeetroot under CC BY-NC-2.0

 

Business schools still have work to do to prepare future managers for a "Better World"

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📥  Business and society, Education, Research

 

 

The latest rankings exercise from Corporate Knights aims to show how far business schools are incorporating sustainability into their research and teaching. While the results show that progress is being made, there are also questions around how business schools engage with such exercises, and whether we're getting a truly global view of business school practice. In this piece, Annie Snelson-Powell questions what such rankings exercises really tell us about how future managers are being educated in sustainable business practice. 

October 16th saw the publication of the 2017 Corporate Knights Better World MBA ranking. This exercise provides an annual assessment of sustainability at all full-time MBA programmes that choose to opt into the Corporate Knights process of evaluation, and also includes the top Financial Times (FT) Global MBA programmes.

These global business schools are evaluated via a methodology which involves three key criteria: the presence of core courses on sustainability in the MBA curriculum; school affiliation with related institutes and centres; and the faculty’s research as gauged by the volume of related publications and citations.

The Corporate Knights report reminds us that the role of business schools in educating future leaders is particularly crucial as it’s these new managers who will shape how all types of organisations address sustainability through their decisions and actions.  The report suggests that both society and the business school sector may often fail to sufficiently recognise their responsibilities and opportunities offered by the United Nations Sustainable Development Goals.

As scholars, we also question the actions and motivations of organisations in their approach to sustainability, including a critical concern for how business schools are addressing their responsibilities.  We look to activities at the most prestigious business schools in particular, since their actions serve to define and redefine what an ideal business school should do and hence eventually influence behaviour in the sector overall.  Our earlier research on UK business schools found that while some business schools were failing to implement sustainability, there were also examples of meaningful activity from many schools including the most prestigious.

These findings are echoed in this world-wide evaluation which shows that the six most highly ranked MBA programmes in the world all feature in the Better World MBA ranking this year.  In fact, of the 40 MBA programmes included in the Corporate Knights' list, 18 are also rated as top FT MBAs.  This link between prestige and sustainability is heartening and serves to indicate that we might expect an upward curve in the uptake of sustainability in the MBA as other business schools across the sector follow suit.

However, before we become too complacent about this important progress, questions remain.  Is this uptake of sustainability also reflecting the expertise of the prestigious business schools in becoming ever-more savvy at performing well in the whole suite of games relating to accreditations, rankings and evaluation?  Now that AMBA and other accreditation bodies stipulate that attention must be paid to sustainability, are these business schools merely delivering the minimum required to maintain their status and memberships?  Is signalling an interest in sustainability another means to sway stakeholders without fulsomely addressing some of the profound and inherent tensions faced by business theories and practice, such as the pursuit of maximum short-term profit versus a longer term sustainable means of doing business that respects the environment and society?

Looking more carefully at the MBA curriculum itself, arguably the most direct of the Corporate Knights' measures of the education a future leader will receive, eight of the top 40 Better World MBAs had only one or no core dedicated course on sustainability.  A previous post by our Sustainability & Management MSc students eloquently argues that this kind of education is a fundamental for all business students.  Even at these exemplar “greenest” schools, which should provide the best sustainability education for future managers, there is clearly still more that can be achieved.

Furthermore, this list of the greenest schools is a stark reminder of the over-emphasis on Western perspectives when it comes to thinking about sustainability and management education in general.  These rankings reveal that large geographic blind-spots remain in our assessment of sustainability in MBA programmes.  Of the 40 featured in the Better World MBA list, 39 are from North America, Australia or Europe.  That these regions alone can determine what an MBA for a better world should look like is doubtful.  We should explore how business schools in Africa, Asia and elsewhere in the world are viewing sustainability and seek to understand whether non-Western schools see any benefit in participating in this kind of assessment.  While progress has been made, there is still work to do in establishing a truly global understanding of what constitutes an MBA for a better world.

 

Image by H.Koppdelaney

 

Overseas anti-slavery initiatives flourish, but domestic governance gaps persist

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📥  Business and society, Modern slavery, Policy, Research, Supply chains

 

UK-based companies are ramping up efforts to combat slavery in their overseas supply chains. But according to Andrew Crane and Genevieve LeBaron, companies also need to be working harder to address the severe labour exploitation taking place at home.

 

The passage of the UK 2015 Modern Slavery Act has prompted companies to be more open about their efforts to combat forced labour in global supply chains. To date, hundreds of companies have published modern slavery statements as required by the Act. These statements depict the problem of forced labour as a hidden and illegal practice that is seeping into complex overseas supply chains, in spite of companies’ extensive efforts to protect human rights. Companies describe their efforts to prevent and address forced labour and human trafficking through the use of ethical auditing, certification schemes, supplier codes of conduct, awareness-raising and the installation of responsible sourcing managers. This is centred on vulnerable and faraway workers, such as in the Thai fishing industry or the Bangladeshi garments sector.

There is without doubt value in company efforts to combat forced labour in supply chains operating in countries where national regulatory enforcement of labour standards is weak. Seldom acknowledged, however, is the fact that the problem is not exclusive to developing countries in the global south, but is also prevalent in developed countries in the north, including the UK.

As we document in our research published in the journal Regulation & Governance, regulatory and enforcement gaps surround the use of forced labour in global supply chains as well as supply chains located within UK borders. Problems such as the weak enforcement of labour law, poor oversight over labour providers and limited transparency in labour supply chains – combined with immigration laws that render migrant workers vulnerable to forced labour – mean that forced labour continues to thrive in UK-based industries.

Many companies source from domestic supply chains in which forced labour is known to be a problem. These include the food, construction, garment and household goods industries, as well as those linked to services such as car washes and cleaning. Yet, companies reporting on their anti-slavery efforts rarely mention these UK-based supply chains or their vulnerable workforces, choosing instead to focus on workers in their sourcing networks overseas – instead of the presumably easier option of fighting forced labour at home.

This blind spot may stem from the assumption that the UK government is already handling the problem of forced labour within its borders, so companies do not need to. However, as highlighted in our research, design flaws in public regulatory initiatives and poor enforcement mean that regulatory gaps frequently referred to as ‘decent work deficits’ in the developing world could also occur in the UK.

The risk of forced labour in UK supply chains was acknowledged by department store chain John Lewis in its 2016-2017 Human Rights and Modern Slavery Report, following the high-profile 2016 conviction of one of its UK bed suppliers Kozee Sleep for exploiting a ‘slave workforce’ to make beds sold in John Lewis stores. The company report notes that UK workers are at risk of slavery, due to “informal recruitment in seasonal supply chains” and the “lack of scrutiny of labour providers”. However, it is not clear how exactly the company plans to address these risks.

The Kozee Sleep case also underscores the shortcomings of company initiatives to monitor labour and social standards. According to several newspaper reports, Kozee Sleep passed an ‘ethical’ audit just weeks before it got busted for forced labour. As The Independent reported, “ethical audits by a series of firms including John Lewis, Next, and Dunelm Mill failed to spot their supplier was employing foreign workers for less than £2 a day”. If ethical audits cannot detect forced labour in the UK, how effective are these tools abroad, where audit cheating and corruption are documented to be widespread?

Although the reports provide some detail about the initiatives that companies are taking to prevent and address forced labour, they very seldom report on theeffectiveness of those efforts. For instance, when problems like the Kozee Sleep case are acknowledged, companies often respond by making vague references to training programs to help suppliers and service providers share good practice, or to generic ethical auditing programs. For instance, Tesco’s modern slavery statement describes the requirement for all of its UK suppliers to attend a one-day training on modern slavery that “offers a support network where challenges and good practice can be shared among peers and experts”. While this may be a valuable initiative, the company does not report on how effective this program is in actually addressing the pattern of forced labour that has by now been well-documented in UK agricultural supply chains. This makes it difficult to assess whether or not progress is being made.

Big business has a long way to go if it is serious about reducing its reliance on forced labour in the developing world. But the governance gaps surrounding forced labour in global supply chains are not the only ones to persist in the wake of the Modern Slavery Act’s passage. Companies looking to fight forced labour should start with their domestic supply chains, where they have high visibility, traceability and control as well as strong state resources that they could mobilise, if they really wanted to.

 

This article was originally published under a Creative Commons Licence by Beyond Trafficking and Slavery on the Open Democracy website. Beyond Trafficking and Slavery seeks to help those trying to understand forced labour, trafficking and slavery by combining the rigour of academic scholarship with the clarity of journalism. 

A more extensive version of this piece was recently published in the academic journal Regulation and Governance. For download options, please see the Wiley Online Library.

Image by Nick Saltmarsh

 

Global Climate Change Week - turning ideas into action

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📥  Environment, Sustainability

 

Today marks the start of Global Climate Change Week, which aims to encourage academic communities – including academics, students, and non-academic staff at universities – in all disciplines and countries to engage with each other, their communities, and policy makers on climate change action and solutions. In this piece, Aurelie Charles describes how the University of Bath is marking the week, and considers how students are leading the way in taking a multi-disciplinary, partnership approach to tackling climate change.

 

In October 2015, in the build-up towards the COP21 meetings in Paris, a group of staff members at the University of Bath organised themselves to take part in Global Climate Change Week (GCCW). GCCW is a global initiative taking place across universities worldwide to bring together staff, students, and local communities in order to raise knowledge and awareness of climate change. We started by inviting all students on campus, regardless of their field of study, to attend lectures around issues of sustainability. These lectures were already embedded in the university curriculum and spread across faculties from Chemical Engineering and Architecture, to Management and Social and Policy Sciences. Last year, numerous events took place in our arts centre, the Edge, across campus and in lecture theatres. Since GCCW started, a COP21 Implementation group has also been set up, bringing together academic and non-academic staff members to promote teaching and learning activities both across campus and in the university curriculum, supported by the Teaching Development Fund.

In this year’s GCCW, we are supporting an event led by Bath Sustainability Postgraduates, a group of Bath postgraduates who are leading the way in closing the gap between individual intention of climate action and actual behaviour. The event takes place on Wednesday 11th October in the Harvest area of the Edge from 11am to 3pm. The aim is to bring together students and staff in one-to-one discussions on how to reduce our daily carbon emissions. As part of this event, we will also be launching the first university wiki on sustainability. This will be used to gather together all relevant resources around sustainability on campus, with a database of units across faculties addressing sustainability issues, but also advertising events happening on campus during the year.

In effect, there is much more to come this year in terms of public engagement events and learning activities around sustainability on campus, and students are leading the way. The Students' Union is running its annual Go Green week in the last week of October, and other student-led groups such as Student Switch off, People and Planet, and our Green Champions are all feeding into the self-sustaining loop from individual awareness to public action.

Student leadership is inspiring and this is precisely the highlight of all these initiatives. With our support, students are preparing themselves for a sustainable future. They are going beyond subject-specific knowledge as they are not afraid to build bridges across disciplines in order to address our current major global challenge. Kostas Iatridis  recently wrote about the necessity of public-private partnership in order to address our environmental challenges, which echoes in many ways Mariana Mazzucato’s voice for such partnership to think about and to finance inclusive growth. Yet, our students are already wiring their brains to go beyond the public-private divide and beyond the mental barriers of disciplinary knowledge. They are already aware of the necessity to embrace the public impact in our daily private decisions.

Image by Garry Knight

 

Need versus beauty - how the "beauty premium" affects charitable giving

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📥  Charity, Giving, Philanthropy, Research

 

Even though people believe that donations should be allocated based on the neediness of charity recipients, the recently published paper by Cynthia Cryder (University of Washington, St Louis), Simona Botti (London Business School) and Yvetta Simonyan (University of Bath) documents a “charity beauty premium” - the tendency of donors to favour more beautiful, but less needy, beneficiaries. In this piece, Yvetta Simonyan considers the implications for charitable giving. 

 

A few years ago, an article in the New Yorker drew readers’ attention to the fact that animals in need of conservation receive unequal attention and support. Pandas, for example, are sometimes viewed as “charismatic megafauna,” attracting disproportionally more money and attention than other endangered animals. The British naturalist Christopher Packham even offered to “eat the last panda” if it would improve the chances of less attractive species receiving more support.

Donors’ tendency to help more attractive causes extends beyond the domain of animal conservation: only 4% of $350 billion donated in the United States in 2014, went directly supporting the most pressing human needs in the developing world. By comparison, universities attracted almost twice as much.

Yet, when we asked people what is the single most important factor that affects their charitable giving, 46% indicated neediness of donation recipients (the second most popular answer was the impact, which was mentioned by 8% of the respondents). In another study, when we asked participants to evaluate photos from a fundraising website on the dimensions of attractiveness and neediness, they rated more attractive people as less needy. Combined, these two findings suggest that people should give less to beautiful recipients. But while some prior research investigations support that proposition, others, including the aforementioned examples from industry, suggest that attractive people are more likely to receive help than unattractive ones.

 

Want versus should

We propose that this incongruence exists because donors simultaneously hold two distinct preferences: a want preference for beautiful recipients and a should preference for the needy. Previous research showed that people hold want preferences that are based on affect and, sometimes, linked with desire. On the other hand, should preferences that are reason-based, logical, and more easily justified. For example, when choosing movies, consumers may hold a want preference to watch a comedy and a should preference to watch a documentary. In our research context, beautiful recipients offer intuitive appeal and immediate satisfaction, whereas needy recipients fit with a reasoned priority to help the most desperate individuals.

 

Deliberative or intuitive giving

We propose that donors’ want preferences for beautiful recipients are most likely to emerge when they choose intuitively, whereas donors’ should preferences for needy recipients are most likely to develop when they choose deliberatively. Research in psychology recognises distinctions in cognitive functioning between two types of processing. “System 1” processing, or quick intuitive processing depends on effortless automatic associations and tends to favour affect-rich options. By contrast, “System 2” processing, or deliberative processing operates slowly and depends on logical reasoning. So, when donors decide intuitively, they are more likely to select beautiful recipients in line with their want preferences; when donors decide deliberatively, they are more likely to select needy recipients in line with their should preferences.

We conducted several studies to test our propositions and to find the conditions under which the charity beauty premium effect is attenuated. In line with our predictions, when we asked people if they would like to donate to one (or more) of eight animals kept at a British conservation centre, the four animals that were rated (in a separate study) as more attractive were given almost twice as much money as the other four species that were rated as less attractive. Similarly, when we asked the potential donors to support charities working in developing countries, people demonstrated a preference to sponsor more attractive children over needier ones. So, given these instinctive preferences, how can we increase the chances of needier beneficiaries receiving help?

Our findings showed that people donate more to needier donation recipients when they are asked to make a deliberative rather than an intuitive decision. We also found that decision-makers tend to make deliberative decisions when they choose on behalf of someone else or when they are asked to evaluate the neediness of beneficiaries before deciding whom to help. Finally, the charity beauty premium effect disappears when the donors have above-average levels of empathy towards the recipients.

 

Implications for fundraisers

We do not know whether the individuals involved in decision-making on charitable giving felt any dissonance when making their choices, but we asked the study participants about their perceptions on how they want versus how they should donate. The responses indicate that, even though donors think they should give to needier beneficiaries, they want to give to more attractive recipients.

Interestingly, when the respondents make decisions deliberatively (that is, when charity beauty premium effect is diminished), they are less willing to donate in the future, suggesting that deliberation may act as a double-edged sword – improving the chances of needier recipient in the short term, but reducing the likelihood of future donations. Such evidence suggests that encouraging deliberative giving may benefit less beautiful, but needier recipients, who are competing with more attractive beneficiaries. However, for recurring calls for charitable donations, using more beautiful images instead of encouraging the donors to choose deliberatively may be more beneficial.

 

Image by Thomas Lasserre

 

 

Corporate environmental impact - why self regulation isn't enough

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📥  Business and society, Environment, Research

 

Globalisation, the demise of the state and rising stakeholder expectations have resulted in the proliferation of  a self-regulatory approach to managing corporate environmental impacts. Self-regulation is now a major feature of environmental protection and is largely synonymous with the management of corporate environmental responsibility. In this piece, Kostas Iatridis questions the wide belief that environmental self-regulation represents an effective means of addressing environmental challenges, and suggests this can be achieved only through a collaboration between public and private bodies.

 

The rise of self-regulation

The prevalence of neo-liberal economic views in running the economy, along with the transformation of our world into a global village, have promoted environmental self-regulation as an effective means of dealing with increasing environmental challenges. State regulation has been criticised as ineffective, non-flexible and costly. Instead, voluntary action has been used to advocate a market-fundamentalism that puts the workings of the market first. Environmental laws and institutions are expected to conform to the laws of the market in order not to restrain trade and economic profitability.

This shift towards market autonomy has resulted in new, prosperous markets. This in turn has facilitated the proliferation of voluntary self-regulatory tools for environmental protection (e.g. ISO 14001 and EMAS). Such tools have been endorsed by armies of consultants, policy makers, and auditors as a panacea to harmful environmental practice. Governments too have supported self-regulatory approaches as a means of facilitating corporate responsibility and some have even declared their incapacity in dealing with environmental issues.

Following the wide endorsement of self-regulatory tools, one might expect to find a positive relationship between their adoption and improvements in corporate environmental performance. Yet, studies have questioned the effectiveness of environmental self-regulation by suggesting that its adopters might not necessarily perform better than non-adopters. Critics highlight the commercial relationships formed between self-regulating firms and external auditors, as well as a lack of knowledge amongst auditors, as particularly problematic. They take the view that due to these issues, auditing mechanisms might not always be as robust as they should be, enabling firms to behave opportunistically and in their own interests.

Furthermore, the tendency of earlier studies to focus on firms’ motives for adopting such self-regulatory approaches, along with a belief that environmental certification is synonymous with improvements in environmental performance, have offered limited views on the real potential of self-regulation to reduce environmental impact.

 

Does self-regulation mean better environmental performance? 

It is only recently that discussions have moved towards the effectiveness of self-regulation in safeguarding environmental performance. Interesting views have emerged suggesting that the latter might depend on the institutional environment. In particular, it is suggested that stringent external environmental regulation might discourage firms from adopting environmental self-regulation in the first place. This is because, in such institutional contexts, the marginal gains in efficiency and strategic differentiation associated with environmental self-regulation are very small. In contrast, when firms operate in the weak institutional environments often found in developing countries, and seek to export to countries characterised by strong institutional regimes, they tend to adopt and substantively implement environmental self-regulation because of strong motivations to improve their internal efficiency.

These are important insights, making us think differently about environmental regulation. Self-regulation alone might not always serve the common interest, thus state regulation has a role to play. The times in which we live are challenging for governments, as globalisation has transformed many states into little more than transit stations in the world-wide trade of goods administered by multinational corporations. In many instances, states have lost the power to define the conditions that affect economic activities within their own territories. As a result, we have seen states retreating and, in the name of efficiency and cost cuts, passing more responsibilities over to the private sector. However, phasing out state regulation, as has been advocated by supporters of market autonomy, cannot ensure effective environmental protection. No single governance actor, private or public, has the independence, expertise or operational capacity to pursue effective environmental regulation. What is needed is cooperation between the public and private sectors.

 

Public-private cooperation

The big question is whether public governance actors have an appetite for taking this on. Recent developments, such as Trump’s decision to withdraw from Paris’ climate agreement, contrasted with Senate’s recent approval to fund the United Nations’ climate change body, not to mention Brexit as well as several geopolitical tensions, send contradictory messages and, in some instances, question whether environmental issues should even have a place on the international agenda.

To sustain the momentum of action for environmental protection, business leaders, academics, policy makers and civil society organisations need to acknowledge the questionable outcomes of environmental self-regulation and engage in discussions that promote collaboration. The recent crossing of the northern sea route without ice breakers signals the undisputable significance of environmental challenges and the necessity for finding the right mix of state and self-regulation to address them.

 

Image by Kris Krug

The scandal of food waste - will measuring more help us waste less?

📥  Uncategorised

 

 

We live in an age of paradox. On the one hand, over 795 million people around the world are under-nourished. On the other hand, issues associated with excess edible food waste are causing an environmental, social and economic crisis. In this piece, PhD student Mehrnaz Tajmir considers whether we need to take a different approach to measuring and therefore reducing food waste throughout the supply chain.

 

Levels of food waste

Reports have shown that over a third of the world’s food produce is never consumed, causing a staggering $400 billion loss per year for the global food supply chain. The edible food discarded by supermarkets and consumers in developed countries in a single year would exceed the amount required to end world hunger. Evidently, this issue will only worsen as the global population increases. In fact, estimates have shown that as the global middle class expands, by the year 2030, the financial losses of food waste will increase to up to $600 billion per year.

Environmentally, food waste is a great contributor to global warming due to its high quantities of greenhouse gas emissions (such as methane and carbon dioxide). The current global greenhouse gas (GHG) emissions caused by food waste in landfill is estimated at 3.3 billion metric tons,  or about 7% of the global emissions. To put this in perspective, the United Nations agency has stated that the amount of methane gas produced from the global food landfill is more than the cumulative GHG emissions of China and the United States.

The environmental toll of food waste is also reflected in water and land pollution. This is due to industry’s excessive use of fertilisers as well as deforestation for cattle grazing and farming. Food packaging, transportation and storage also contribute to carbon footprints of food production. This irreversible environmental damage will be costly for the planet as well as for humans if no action is taken to improve the current state of the food industry.

 

The role of supermarkets

Our research here at the University of Bath focuses on developed countries. We are looking at the main features of the food supply chain and more specifically, the causes of food waste in the UK. So far, we have found that within this complex system, major supermarkets are the focal point. They influence the way we buy and consume produce as well as having an impact downstream at farm level. However, despite their influential role, large supermarkets themselves are only directly responsible for less than 1% of food waste in the UK, claiming to be running more efficiently than even before. This is due to both internal and external strict policies regarding environmental footprint of waste and its social impacts. Hence, there is a general assumption that corporates have either achieved or are moving towards their optimum sustainable performance. The message is that the current level of waste generated by the supermarkets, taking into account the available technology, cannot be further reduced.

Conversely, in academia the study of waste from the operations and organisations perspective has shown certain trade-offs in the application of sustainable strategies. In other words, to gain economic advantage, corporates might overlook their social and environmental impacts. So, are the current waste strategies sufficient or is there more action still required? And how can corporates improve their non-avoidable waste across the entire supply chain?

 

CSR and supply chains

We believe that incorporating principles of corporate social responsibility and sustainability into waste strategies could help to turn waste into value. If all actors in a supply chain took a shared responsibility for measurable waste throughout the chain, and aligned their metrics, it would be easier to identify where waste is happening and to take action to prevent it. As major players in the supply chain, supermarkets could impact the level of waste generation in the entire chain rather than focusing on the performance at shop level. Moreover, through lowering waste across the supply chain, we can also consider the optimisation of performance levels in much broader terms to incorporate environmental footprints, social impacts and economic savings.

Our research is at an early stage. However we hope to generate a case study to investigate the effects of corporate social responsibility in alignment of waste metrics between two organisations and its impact on waste reduction. Then using this we could simulate the data and estimate larger impacts on the network level.

The issue of food waste cannot be resolved with one solution as the supply chains and relationships involved are so complex. A collective effort is required to create more coordinated supply chains through implementation of sustainable practices between supply chain members. At the same time, organisations must continue to actively educate customers on ways to avoid food waste through more informative packaging and storage instruction. Then and only then can we move towards a greener future.

 

Mehrnaz Tajmir is a mechanical engineering graduate from the University of Bath. She is currently in the first year of her PhD at the University of Bath School of Management.

 

Image: US Department of Agriculture

 

Social Media: Risky (Research) Business?

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📥  Research

 

Social media present valuable opportunities for management researchers, but also risky terrain for publication in mainstream journals. As the British Academy of Management kicks off this week with a pre-workshop on this very topic, Dr Sarah Glozer reflects on the risk of social media research and considers how it might be overcome.

 

Social media researchers within management spend a large portion of their time thinking about the risk to knowing (and unknowing) participants when designing their studies. Whilst preventing harm towards research participants should always be a priority in academic research, I would like to present a different contention: why are we not thinking about researcher risk? In a world of rising academic publishing expectations, this article considers if social media settings present risky contexts for management researchers.

 

Why research social media?

Social media, defined as Internet-based applications that build on the interactional capacity of ‘Web 2.0’, are proliferating day by day. A recent estimate suggests that there are around 400 global social media platforms, and that around one-third of the world’s population are now active social media users. Consequently, academic interest in social media continues to soar across disciplines, as seen in recent papers published in Business and Society, and a special issue announced by the Journal of Business Ethics.

Social media, then, present valuable opportunities for conceptual, empirical, technical and methodological research. Yet, despite nearly two decades since the first social media sites came to fruition, research within and into social media is still a niche pursuit within mainstream management journals, particularly that of a qualitative nature.

 

What is risk?

It is widely appreciated that research should not pose any risk of harm to participants. Harm can be psychological (e.g. embarrassment), economic (e.g. loss of property) and at the worst, physical (e.g. threat to life). The risk of harm is greater when social media users’ privacy/anonymity is breached, or when the nature of the data being handled is ‘sensitive’ (e.g. related to health issues). It is argued that within any research project, the potential for risk/harm should be minimised and the benefit to research maximised, with accepted ethical procedures designed to protect participants and researchers from harm. But what does risk look like in a researcher capacity?

 

What is researcher risk?

Back in July, I co-organised an event at The University of Nottingham with Dr. Chris Carter on publishing social media research. The event brought together social media researchers from across fields of accounting, computer science, employment relations, information systems, marketing, management, communication studies/corporate social responsibility and psychology. Through our conversations, three types of researcher risk came to light:

  • Technical risk related to procedural difficulties with using social media technology to collect and analyse data. Researchers voiced difficulty in maintaining research projects in the face of fluid and evolving ‘live’ social media settings (research has a ‘shelf-life’) and frustrations when large volumes of data crashed software programmes and information was lost.

 

  • Social risk related to the personal consequences of researching social media. Here researchers discussed the challenge of spending many hours immersed in online fora to develop deep, emic insights (to the detriments of personal relationships) and the pain of observing ‘hate speech’ (or even being on the receiving end of this).

 

  • Professional risk related to the challenges of being identified as a social media researcher; still arguably a niche pursuit in mainstream management research. It was within this category that researchers shared difficulties in navigating the complex milieu of Institutional Ethics Review Boards, journal reviewer/editor comments, ethical guidelines and legal precedent in order to get social media research ‘out there’ and published.

 

It is on this latter point that the risk of being a social media researcher became clear: there was a general feeling that we still need to legitimise social media research within the broad management discipline.

 

How can we reduce researcher risk?

As identified in a forthcoming chapter by Dr. Rebecca Whiting and Dr. Katrina Pritchard, we are in a state of flux and uncertainty regarding digital ethics. This has a clear impact on how social media research is judged, particularly given that there is still little consensus on what constitutes best practice across disciplines and institutions. Turning to published research often only fuels this confusion with topics such as participant anonymity being handled very differently by various journals; some advocate anonymity, others do not.

So where does accountability lie in reducing researcher risk? We are hoping to bring together researchers, reviewers and editors within management to regularly discuss and debate these issues and to reduce the ‘risky’ business of publishing social media research. There are number of ways you can join the debate:

 

Image by Ian Clark

 

Careers in sustainable business - the Two Loops theory

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📥  Business and society, Education, Employers

 

As September approaches, our current Masters students look ahead to starting their careers and a new cohort begin their studies in Sustainability and Management.  Many of them will be considering whether and how they can make an impact on society and industry. In this piece, current MSc students Sanum Jain and Elliot Johnston use the Two Loops theory to consider where their work and fresh ideas can have the most impact and instigate the most change.

 

What is the Two Loops theory? 

The Two Loops theory, developed by the Berkana Institute, is all about change within our social and economic systems. According to the theory, socio-economic activity can be split into two ‘loops’. The first loop is the ‘incumbent loop’ - which represents the status quo, the way things have ‘successfully’ operated for decades. The second is the ‘disruptive loop’ which represents progressive change and alternative ways of doing business or operating in society.

The theory states that as the incumbent loop reaches its peak in output, ‘disruptors’ start considering more efficient and socially progressive ways of operating. Breakaway individuals look to invest in these ideas, taking intellectual and financial capital out of the first loop and starting to build up the second ‘disruptive loop’. The best way to visualise this is as two waves. As the incumbent wave crests and reaches peak economic output, the disruptive wave starts to build in its shadow.

 

 

Change in the energy industry

The concept of waves of progressive change is particularly relevant to sustainable development. Let’s use the energy sector, specifically fossil fuels and inefficient energy grid systems, as our representation for the first loop. We would argue that we currently sit on the downward curve of the first wave. While non-renewable fossil fuels are still our main source of energy, the threat they pose to our planet is increasingly recognised. At the peak of the coal, oil, and gas industries, pioneers began to experiment with alternatives - nuclear, wind, solar - beginning the disruptive second loop.

The viability of these new technologies has increased and before long the renewable energy industry - or the disruptive loop - will usurp the fossil fuel industry in terms of output. This threat to incumbent firms is already being felt. Large oil companies are making huge investments in renewables in a bid to survive society’s shift away from fossil fuels, as exemplified by Total’s acquisition of SunPower. Such acquisitions are an example of corporate movements beyond traditional CSR, which tends to focus on mitigation of the negative impacts ‘business as usual’. These forays into the disruptive renewable energy industry are representative of what incumbent firms need to do to stay relevant.

 

What does this mean for sustainability

The Two Loops theory does not only work on an economic, practical level.  We believe it should be seen as a representation of a prevailing narrative within business and society.

Seen through the lens of the Two Loops theory, incumbent firms own the concept of sustainability, but they approach it from an institutionalised position. Most firms engage in philanthropic activities for the sake of reputation gains and slowly adhere to the pressures of stakeholders to implement responsible business measures.

We could identify the second loop, which intends to represent an alternative, disruptive vision of how the world could be, as a developing system of innovative, mission-driven organisations and social entrepreneurs whose goal is to solve problems, bring change and benefit society.

Unlike the energy sector, the social endeavours of businesses are at an earlier stage of development, but change is coming. We have seen organisations emerge who represent a shift in the status quo.

Divine Chocolate, for example, is proving that employee owned cooperatives can shift a company’s focus towards a more positive impact for its stakeholders. We have also seen the introduction of Community Interest Companies (CICs), businesses with primarily social objectives whose surpluses are reinvested in the business or in the community, rather than distributed to shareholders. CICs help to protect the mission of smaller disruptive organisations and prevent any dilution of the integrity of the second loop.

 

Creating change in the workplace

What might this theory mean for us, as young people preparing to enter the workplace? Understanding and appreciating the potential for industries to work differently is something that will be key in instigating further change. Thinking about what these changes might look like could provide us with a different path as we start to navigate our professional journeys.

In the context of the Two Loops theory, we may have only considered the option of working for firms that make up incumbent loops. It is very easy to assume these firms will continue to operate in the way they always have, and during the early steps of our careers, maintaining the first loop may seem like the sensible option.

But, as the next wave of business professionals, we believe that it is imperative to look ahead at the future of careers, our industries, and society. We will have the opportunity to contribute to strategy, operational, and CSR efforts within the companies we work for. We will have the chance to act as change agents within these firms. This might lead us or those around us to head out and act as pioneers in new firms that start the next disruptive loop, or we may stick around to help the incumbent loop move closer towards the disruptive loop before it fades into insignificance,

We don’t know if the journey towards a truly sustainable world lies in this next disruptive loop, or the one after that. What we believe though, is that if progress is going to be made we should be using our education and newfound skills to take a risk and invest our careers into nurturing an alternative, progressive, disruptive system.

Image by Daniel Parks

 

 

Thriving in the cold - the challenge of sustainable development in the Arctic

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📥  Business and society, Environment

 

Despite the sometimes questionable reputation of the extractive industries, it's possible that mining can contribute to comprehensive sustainable development in the Arctic. Partnerships with host communities can create value for stakeholders and promote inclusive economic growth. In this post by Bath MBA graduate Pernille Moeller, we look at two very different mining projects and examine how their contrasting approaches affected the outcome of their bids.

 

To most, the Arctic offers a window into the effects of climate change - into what may be described as the trailer to the world’s slowest disaster movie. But the Arctic is about more than melting icecaps and polar bears. It is also home to large indigenous groups who are struggling with poverty and lack of economic opportunity.

Sustainability (as traditionally defined by the Brundtland Commission) is a two-legged beast. We need "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". In theory, economic growth, environmental protection, and social equality will promote each other in sustainable development, but practice can at times prove harder than theory. For the Arctic it may seem there is a certain trade-off between what we think of as international sustainability versus inter-generational justice.

As the world is slowly waking up to the fact that melting ice has real and massive consequences for the rest of the world, the knee-jerk reaction has been to conserve and protect the pristineness of the Arctic. We might define this as international sustainability, ie at least a few places are left untouched in the world.  However, conservation tends to only cater to the environmental aspect of sustainability. It rather conveniently forgets about the needs of the present, such as the need for a diversified economy to withstand the increasing pressures from climate change.

Greenland holds significant amounts of natural resources: oil, gas, iron, diamonds, rubies, zinc, hydropower. The list is long and large parts of the island are still only superficially mapped. Mining is likely to be the key that can unlock economic sustainability for the territory. To leverage this sizable potential, foreign expertise and capital is needed. High rewards are often linked to high (operational) risk, and the logistical challenges in Greenland are significant. Infrastructure is lacking at the most basic level: no two towns are linked by road and trained labour is scarce.

To succeed in this challenging, but potentially very rewarding market, requires a particular approach. A comparative analysis of two incoming companies indicates that this success is determined by  partnership, social capital and perhaps just something as simple as genuine respect.

The two companies in the analysis were both early to the market, but different in every other respect.  The first company, one of the world’s largest producers  of aluminum, proposed a £2 billion operation that  would take raw aluminum from Africa and ship it to Greenland. There it would make use of the plentiful cheap energy from hydropower for its highly energy-intensive refinement process. The second company had just one other smallish mine in Arctic Canada, their operational model depended on less than 100 people and their product (red rubies) was local and well-known.

On paper, the large multinational seemed so much more capable than the smaller company. It was the smaller company, however,  that successfully entered the market, while the multinational’s bid failed.  Both companies sought partnership, but did so in significantly different ways. The multinational went in with a state ambassador and negotiated hard for favourable conditions with politicians and high level officials. The smaller project also sought partnerships but on a much more local level.  Its  strongest advocate in the permit process became the small settlement which now hosts the mine. It also chose to establish a local office early in the process, which enhanced the perceived legitimacy of the project.

Close ties to government can be tricky, not least when you seek to extract natural resources in developing economies. There is risk of corruption, and the reputational risk from that may outweigh the initial benefits. Buy-in from local government certainly helped both projects, however it was the real partnership with the local settlement that secured the smaller company a steady supply of workers and the necessary licence to operate. Time, an essential component of social capital, was a vital ingredient.

Local rumour has it that when the first liaison team from the multinational arrived, there was a major storm. Delays meant a chief executive’s luggage had been lost. Local officials offered to help secure the gentleman a new outfit. However, he refused the offer, as he wasn't intending to stay long enough for a change of clothes to be needed. Looking back, that might have been the moment when everyone should have realised that this was not a partnership worth pursuing.

Extractive industries in highly fragile ecosystems are controversial. Most of us have an urge to protect what little pristine nature is left. However, blocking commercial investment may jeopardize sustainable development, because business – when done well – can be such a powerful tool for inclusive growth and poverty alleviation. This case study shows us how understanding the context in which one plans to operate is crucial to a successful bid. Early explorers to the Arctic learned the hard way how incredibly difficult it is to survive on one’s own in a harsh and unforgiving environment. That is still a relevant lesson for the explorers of today.

 

About the author
Pernille has spent the last decade working and living in Nuuk Greenland, focusing on issues relating to climate change, international cooperation and inclusive growth. She worked for the Government of Greenland for a number of years in roles including Head of Office for Climate and Energy. She currently runs a social enterprise in East London, also aimed at marrying inclusive growth and prosperity with environmental sustainability. Originally trained as a political scientist, she is a graduate of the Bath MBA.
Image: Construction of transmission cables near Qorlortorsuaq by Nukissiorfiit

 

How can NGOs become more credible watchdogs?

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📥  Charity, Giving, Policy

 

Non Governmental Organisations (NGOs) are indispensable watchdogs against corrupt practices and global challenges found in complex, modern societies. Yet sometimes, NGOs themselves can struggle to live up to the ambitious standards they demand of others, such as responsible advocacy, ethical fundraising, and meaningful participation of stakeholders. In this piece, Prize Fellow Stefan Hielscher and his co-authors Jan Winkin and Ingo Pies discuss their recently published research, which suggests that strengthening the rules of “fair competition” among NGOs is a promising avenue to increase their credibility.

 

Stereotyping by NGOs

With so many causes competing for attention from the public, it’s perhaps inevitable that NGOs may opt for shock tactics. Some controversial tactics can be very effective in raising public attention, gaining member support and securing funding, “Poverty pornography” provides a telling example. Critical observers invoke the term to describe the use of shocking but misleading imagery in NGOs’ fundraising campaigns, such as the notorious “potbellied child.” Critics claim such campaigns conceal the root causes of poverty, misdirect well-intentioned help, and violate the dignity of those in need. The website Rusty Radiator collects a variety of impressively frustrating examples, awarding the “fundraising video with the worst use of stereotypes” on an annual basis.

Granted, poverty porn is an extreme example. But it is the case that NGOs are sometimes tempted to simplify messages, thereby misrepresenting complex issues, and this may result in the root causes of the problem being misunderstood. For example, recent research reveals serious inconsistencies in advocacy positions related to the global food crisis in 2008. Before the food crisis, NGOs claimed that low food prices would promote poverty and hunger in rural areas in developing countries. After the food crisis, however, the very same NGOs claimed that high food prices cause hunger and poverty in urban areas in developing countries.

 

NGOs and responsible advocacy

To address challenges to their accountability and strengthen their credibility, in 2008 the international NGO elite founded “Accountable Now” (AN). Responsible advocacy is one of 12 agreed-upon accountability standards, and includes fact checks and clear procedures for advocacy positions. A complaints handling mechanism was designed to give stakeholders a voice to critique misrepresented interests or other questionable advocacy practices. A 2016 survey by AN of members and non-members however, revealed sobering results. NGOs seem to fare quite poorly in “stakeholder responsiveness” and “responsible advocacy.” Only about 10% of NGOs responded to complaints raised by AN’s evaluation team in a blind test, and many NGOs lacked robust fact checks and clear procedures to adopt or exit advocacy positions.

 

How competition affects NGO behaviour

Why is it that even member NGOs struggle to comply with AN’s standards? Our research suggests that NGOs operate in a highly competitive environment, all seeking funding, members and media attention. All these are necessary, but scare resources, and the competition for these can impede responsible advocacy.

NGOs are facing a “social dilemma” here. They can either choose the easy option and seek out attention without worrying too much about potential negative side-effects, or present a measured view which incorporates the best available knowledge on a controversial issue. The danger is that by taking the easy option, other NGOs will follow suit to secure their piece of the pie. As a result, the whole third sector’s reputation and credibility as a promotor of social change is put at risk.

 

Creating an enabling environment for responsible advocacy

Can we expect NGOs to refrain from this kind of race-to-the-bottom competition, and to engage in responsible advocacy on a voluntary basis? While some international “giant” NGOs may have the resources to take the moral high ground, some smaller NGOs are facing much stronger threats to their survival. For some of them, every successful fundraising campaign counts. Some NGOs will be able do the right thing only if the organisational benefits outweigh the associated costs. They will need to be sure that their competitors for public attention will follow suit in responsible advocacy.

This is why Accountable Now is such an important initiative. NGOs need to establish their own regulatory framework to raise standards for the whole sector. Within the AN’s NGO community, some voices are demanding stronger leadership to make this happen. Others are looking more towards external monitoring.

Our research has found that to be effective, both strategies need be designed so as to create a more enabling environment for NGOs and therefore to improve the cost-benefit balance. Effective monitoring of stereotyping campaigns requires graduated “reputational sanctions,” for example by raising public awareness of bad examples. Conversely, AN could reward best practice with public attention, by, for example, awarding prizes for responsible advocacy to leading NGOs.

There are no ready made solutions for these issues. It is important for NGOs, though, to acknowledge that they are not spared from the adverse impact of competition just because they are siding with the weak, the marginalized, the neglected and the poor. The insight of economics also applies here: good intentions need be supported by appropriate incentives, to do the right thing and to do things right.

 

Image by Howard Lake

Careers in sustainable business: risk consulting in financial services

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📥  Business and society, Education, Employers

 

In the first in our series on careers in sustainable business, University of Bath alumnus Joe Hill of FTI Consulting speaks with current MSc students Elliot Johnston and Sanum Jain about how he helps firms tackle the ethical challenges of the financial services industry.

Hi Joe, thanks for taking the time to talk to us. Could you tell us a little bit about what you’re doing now?

I’m a consultant in FTI Consulting's Financial Services team. We work with financial institutions of all shapes and sizes, from multinational global investment banks to small wealth management firms in London - there’s a whole spectrum.

We tend to help firms in four areas that are relevant to sustainable practices in financial services. These are: governance, financial crime (prevention rather than participation) regulation, and conduct.

Generally, we help clients to manage their regulatory risk and their reputational risk. Within the perspective of sustainability both of those are crucial, because in financial services it’s all about people’s confidence in the system. People need to have access to financial services, and they need to have confidence in those services. The industry’s lifeblood is people’s trust in these institutions that trade on their behalf.

 

Did your education at the University of Bath play a part in your desire to pursue a career in the sustainability-related parts of financial services performance or was that career goal something you found earlier?

Well, I studied politics and international relations at undergraduate level, and the global governance and accountability module I sat at Bath pointed me towards the space between politics and business as a place I’d like to explore professionally. When FTI came calling after I had graduated, the opportunity offered a perfect marriage of my interests. In that regard, taking part in the global governance and accountability course was important and quite pivotal in leading me toward this profession. It offered something that the rest of my Masters degree didn’t: a focus on the importance of ethical and sustainable corporate performance.

Interestingly though, now I’m in London I’ve found that sustainability is considered an essential part of financial services performance. This is partly due to the proximity of the 2008 crisis as well as the stringent regulation that is now prevalent. While I was at Bath, the reputation of the financial services industry was at its nadir, and this was an issue that was openly discussed on the course. My classmates brought a range of cultural and contextual ideas into the discussion from a sustainability perspective. Such diverse thinking has been crucial in driving sustainability up the financial services agenda, with increasing international collaboration over issues such as money-laundering and tax evasion.

 

You’ve mentioned the damage the financial crisis did to the financial services industry eight years ago. Is the industry still recovering from that damage? And what do you think are the biggest challenges faced by the industry now?

In a post-2008 world, there’s still a big rebuilding job to be done after faith in the industry was shattered. Financial services play an absolutely vital role in everyday lives which means the industry simply can’t afford to keep getting this stuff wrong. Opportunities in the ethical and regulatory space within the industry have opened up since the 2008 crisis and many firms have stepped up to try and rebuild faith in the industry. One of the most immediate challenges in the industry is addressing the disparity between a firm’s espoused culture and the actions of its employees. There is also the wider challenge of ensuring equal access to financial services.

Access to financial services is a sustainability issue that is not easily solved. Everybody should have access to financial services. Sadly, in reality, it can sometimes be difficult for people both in the developing world and even here in the UK to have access.

Ultimately, financial services should be available to everyone, easily accessible and act as a safeguard to ensure that our economic system works effectively. However, lots of different factors continue to play a part in the ability of financial services to achieve these goals. Things like whether people have valid documentation, which isn’t always as straightforward as it sounds, or whether regulations actually discourage banks from taking on certain individuals because they’re deemed to be riskier customers. You can end up in a situation where those on lower incomes are struggling to gain access to proper financial services, yet they are the people who would benefit the most.

 

How does all of this effect what you do at FTI?

While at its heart what FTI's Financial Services team does is management consulting, we know that the issues we’re working on have a wider societal importance. We know that the consequences of the City getting things wrong are pretty severe, which everyone saw play out after 2008, so it is nice to be working on something and knowing that it has a positive impact. The interesting thing about financial services, I guess, is that it had to “switch on” more quickly to the fact that operating in a way that benefits society actually goes hand in hand with being profitable, perhaps more so than in other industries. As we’ve seen with the LIBOR and PPI scandals for example, behaving badly means fines and remedial costs which can have a big impact on bottom line performance.

In terms of the systemic importance of what we do, sustainability and its importance is really integral to everybody who works here. Hopefully that will become more of a factor now because firms are judged so heavily on their sustainability credentials these days. That can only be a good thing.

 

Image by Ken Teegardin