Beyond CSR

CSR

In 1958, Theodore Levitt presented a confrontational discourse against Corporate Social Responsibility (CSR), alleging that the business of business is “making money, not sweet music” and that CSR breaks the rules of capitalism and free enterprise. Today, CSR must be brawled not because it undermined free enterprise, but precisely because it largely contributed to its reign with unprecedented empowering mechanisms. While CSR was initially intended to regulate the wild and uncontrolled growth of private corporation, it has (un)predictably nurtured the very foundations of unstoppable-growth-led capitalism. Here are a few arguments why we believe this is dangerous:

  • CSR is short-sighted: As opposed to long-term strategies, CSR actions and programs are often limited in scope and depth. Because they are mostly driven by short-term visibility and results, their impacts on society or the environment remain, at best, superficial: Shallow impact.
  • CSR as an instrument for branding and public relations: When CSR is used as a marketing and sales argument, which has been the case for several large corporations, the underlying operational strategies are developed towards satisfying the central goal of profit maximization. Thus, CSR is exploited as a communication and branding tool, often found under the auspices of the Chief Communication Manager, the goal of which being to simply reinvent the message that serves to sell the same old goods and services made with the same old value chains and production systems: No strategic revamping.
  • CSR as a competitive advantage: One of the most widely advanced arguments for CSR is creating a distinctive competitive advantage. However, unless this advantage is sustained in time, it will add little value, if any, to the firm. For a specific resource to be a source of sustained competitive advantage, it ought to be valuable, rare, inimitable and non-substitutable. CSR programs hastily engendered in corporate meetings are ordained to fail satisfying the four criteria simultaneously, thus questioning the real value to the firm –should that be the goal– of CSR: Not a source of competitive advantage.

CSR looked once attractive to various managerial levels of the firm. Today, the concept is gradually wearing off, calling into question our basic understanding of well-being within and outside business organizations. Some enthusiasts have urged towards thinking in terms of a corporate version of the more inclusive paradigm of sustainable development: Corporate Sustainability. Increasingly more business models and frameworks are being developed in this arena, disrupting everyday the way we think about and approach the social responsibility of business. It is probably hard time we moved beyond CSR.

Lessons learned from UNHCR Zakat fund

UNHCR (United Nations High Commissioner for Refugees) issued two months ago a landmark report on the potential of Zakat funds to alleviate the suffering of forcibly displaced people in OIC countries. The report aims at establishing the importance of giving Zakat to displaced people and at raising awareness of UNHCR’s role and aspirations in directing Zakat to its populations of concern.

In 2017, there were 68.5 million forcibly displaced persons globally, of which an estimated 40.8 million are Muslim. Unfortunately, conflicts and resulting displacements have led to a surge in poverty levels (SDG1), to a spike in malnutrition (SDG 2) and to the deterioration in the health and well-being of displaced populations (SDG3). Moreover, displaced refugees face educational barriers (SDG4) and are confronted with a lack of job opportunities in hosting countries (SDG8).

The UN has estimated the current Zakat given worldwide at $76 billion, which is modest in context of $1.7 trillion in wealth held by high net worth individuals in the Middle East, and separately, $2.5 trillion in assets held globally by the Islamic finance Industry. According to the UN, the global Zakat potential is around $356 billion.

75% of Zakat donations are commonly transferred directly from donor to recipient without the involvement of any Zakat collecting organizations. Hence, Zakat is an important source of philanthropic funds and Zakat industry has tremendous potential in addressing the funding requirements needed to achieve SDGs and humanitarian assistance programs, especially that refugees fall under at least four of the eight stipulations required by recipients of Zakat funds.

There are many lessons learned from the UNHCR zakat fund:

  • Adopting digital innovation: The UNHCR Zakat Fund recipients are registered and their iris scans are taken and used for cash distribution. Moreover, text messages are sent to beneficiary confirming that cash is available
  • Broadening the scope of collaboration across stakeholders: The Zakat fund is providing an important avenue for stakeholders (financial institutions, individuals, philanthropic organizations…) to direct their funds to address acute humanitarian needs
  • Improving the link between Zakat and humanitarian needs: The UNHCR zakat fund clarifies the link between Zakat and the most pressing humanitarian funding needs by relying on a transparent reporting and tracking system of Zakat funds destination
  • Leveraging effective distribution channels: If Zakat industry is to reach its full potential, partnerships with trustworthy organizations are a necessity. The involvement of leading organizations such as UNHCR in distributing funds enhances the impact of contributions, minimizes overhead allocations and improves efficiency

UNHCR zakat fund experience can be leveraged in addressing other social issues like education, economic empowerment and healthcare through specific zakat funds. More importantly, such initiatives can build synergies with impact investing funds in order to make zakat funds more sustainable and more focused on income generating activities for beneficiaries rather than on simple cash transfers.

NB: This article was published on page 17 of IFN Volume 16 Issue 24 dated the 19th June 2019.

J’ai lu : Vers une économie à trois zéros (Zéro pauvreté, Zéro chômage & Zéro émission carbone) du Pr. Muhammad Yunus

L’économiste Muhammad Yunus, prix Nobel de la paix en 2006, commence son livre par la critique du système capitaliste qui en dépit de ses apports est la source de plusieurs externalités négatives notamment l’amplification des inégalités sociales et économiques ainsi que le dérèglement climatique. De ce fait, pour Muhammad Yunus, il est nécessaire de repenser le modèle capitaliste afin de réconcilier les intérêts personnels et collectifs.

Le véhicule mis en avant dans le livre pour repenser le modèle capitaliste est l’entreprise sociale. L’entreprise sociale est définie comme une étant une entreprise qui fonctionne exactement comme une entreprise normale mais qui se distingue par deux caractéristiques :

  • Le but premier de l’entreprise sociale est de résoudre un problème social ou environnemental
  • Contrairement aux organisations caritatives, une entreprise sociale génère des bénéfices et vise à être financièrement autonome. S’affranchir du besoin constant de lever des fonds (comme dans le cadre des organisations philanthropiques) permet aux entreprises sociales de réinvestir leurs bénéfices pour générer un impact durable.

Ainsi, ce type d’organisation, à cheval entre le business et la philanthropie, ne vise pas à enrichir les investisseurs mais à améliorer durablement la vie des gens et à rendre le monde meilleur.

Dans le livre, Muhammad Yunus présente plusieurs exemples d’entreprises sociales opérant par exemple dans les énergies renouvelables, le recyclage, l’eau et plus généralement la capacitation économique. Il insiste par ailleurs sur trois moteurs pour permettre à l’entreprise sociale de transformer le monde : Les jeunes, la technologie et la bonne gouvernance & les droits de l’Homme.

Au-delà des concepts très intéressants évoqués dans ce livre en relation avec l’entreprise sociale, je retiens personnellement trois conclusions :

  • Quel intérêt du savoir si nous ne l’appliquons pas pour améliorer la vie des gens ? Avant de fonder Grameen Bank (littéralement la banque du village) Pr. Yunus était un professeur d’économie à l’université de Chittagong au Bengladesh. Le déclic s’est produit quand il a remis en cause l’intérêt d’enseigner à ses étudiants des théories économiques alors que des villages avoisinants souffraient d’une extrême pauvreté et n’avaient aucun accès aux services financiers
  • Les défis économiques, sociaux et environnementaux que nous affrontons sont complexes, interdépendants et transfrontaliers. Puisque l’intervention des gouvernements n’est pas et ne sera jamais suffisante, il est plus que jamais nécessaire de mobiliser l’ensemble des parties prenantes pour relever les défis y compris les sociétés civiles et les entreprises (sociales et conventionnelles)
  • Comme le dit Muhammad Yunus dans son livre, si nous imaginons un monde idéal, il y a une chance qu’une partie de cet idéal soit réalisée.  Si nous n’imaginons rien, il y a très peu de chance que les choses changent !  Aussi évident cela puisse paraitre, l’espoir est non seulement une cure psychologique mais aussi une condition sine qua non pour espérer de nous en sortir un jour

Trump / Huawei : La Chine dans le viseur

Une intéressante émission sur France 5 pour comprendre le bras de fer commercial qui s’est transformé en guerre froide technologique entre la Chine et les Etats Unis.

Les points clés de la discussion sont comme suit :

  • La dominance technologique (numérique) est devenue primordiale. De plus en plus, elle va définir les rapports de force dans le 21 siècle
  • Le leadership chinois technologique est affirmé dans certaines spécialités comme l’intelligence artificielle. Cependant, bien qu’il soit possible que le géant mondial des télécoms Huawei dispose d’un plan B, pour l’instant, l’entreprise est très dépendante des applicatifs (Android) et des microprocesseurs américains
  • Au-delà de la rhétorique, les Etats Unis et la Chine sont mutuellement très interdépendants sur le plan commercial actuellement et savent que les deux vont souffrir en cas d’une rupture commerciale
  • Les États-Unis redoutent un espionnage technologique chinois et omettent de dire que les Etats Unis eux-mêmes n’hésitent pas à le faire (Exemple : NSA)
  • L’Europe, qui il y a une ou deux décennies, était un acteur influant dans les télécoms et les technologies informatiques est aujourd’hui reléguée au rang de spectateur. Les divisions actuelles sur l’Europe n’arrangent pas les choses  
  • La démarché de Trump s’explique notamment par prochaine l’échéance présidentielle américaine. Trump se porte plutôt bien dans les sondages actuellement avec une bonne croissance économique et un taux de chômage aux plus bas
  • Sur le plan militaire, la Chine a renforcé sa puissance notamment en niveau naval
  • Bien que ça ne soit pas apparent en façade, le pouvoir chinois n’est pas monolithique (Faucons de Pékin versus Colombes de Shanghai)

Lab-Grown Diamonds: A More Ethical Alternative?

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At a time where large manufacturers are being scrutinized for their ethical and socially responsible supply chains, some iconic industries seem to have transcended, so far, this global imperative. Wrapping the product with the magic of scarcity, authenticity and natural beauty of the gems, traditional diamond producers have sold romance alongside stones, to such a point that the romantic cloak concealed the necessary questions consumers ought to ask with respect to sourcing, supply chain and impact.

But today, things could change with alternative production processes: lab-grown diamonds. A California based startup coined the process to make authentic-like gems, selling at one third less price. The stones are created from a tiny cell that goes through a chain of transformation steps to grow into a fine, equally attractive final product. According to the inventors, a jeweler would be unable to distinguish between the naturally produced and the lab-grown gems.

What this means to the industry? Debatable feelings about what the “grown” diamonds mean to their consumers, correct. But most importantly, more clarity about the ethical, social and environmental conditions under which those gems were created. The entirely traceable production process gives now more legitimacy to grown diamonds and will inevitably trigger a serious debate about why we should continue purchasing the unique, scarce, magical…and questionable natural diamonds.

More info >> The Economist

“The Future is Now”

Image result for sustainable future

What will the future look like in five years? ten years? A Davos roundtable this January enlightened our minds on the unmistakable tipping points that will shape human history in the near future. For that, it was necessary to have multiple angle views from artists, activists, business people and politicians. In a nutshell, there are some core issues that will structure the depth and scope of the future. Continue reading ““The Future is Now””

“Sleepwalking” to the dead end?

Earth danger

« Is the world sleepwalking into a crisis?” This is how the 2019 Global Risk Report starts its summary of the global risks hovering over our planet as seen by chief economists at the World Economic Forum. And this is probably one of the most alarming yet truthful apologies we have ever been confronted with. Yet the stakes are high, at best. The report highlights that 60% of the global risks with both the highest likelihood and the highest impact are related to human-induced climate change. The remaining 40% most likely to hit are technological risks pertaining to cyber-security, data theft and fraud. Failing to mitigate those risks can present an inflection point in mankind’s history. Researchers have set the 2°C threshold for containable damage. Scientists claim that we have trespassed “planetary boundaries” and that we run short of time.

With the acceleration of industry 4.0 and the widening divide it creates between rich and poor countries, global inequality will be on a rise. Migration, poverty and exclusion increase public distrust, pushing for further populism and centroid policies.

But, it seems like there is a way out of this global trouble. And this way is exactly the opposite of what we’re seeing in protectionist regimes. Economists introduced the concept of Globalization 4.0 whereby transnational cooperation for planetary benefit overtakes the narrow view of national interests. In a scheme of an international shared vision, nations are called to join hands in collective action to create fair trade in a safe planet where human beings have equal chances of leading a decent life. Now, theory is good, and even strongly inspirational. But there is a big question which remains unanswered: “who gets their hands in first?” China, who claims its right to mass industrialization after a long era of economic faintness? Europe, who is divided between achieving the sustainability transition and safeguarding economic supremacy? Or the United States where the word ‘climate change’ is taboo in the Oval Office?

In this global geopolitical disorder where economic predation fuels political ambitions, the voices of weak stakeholders can have a weight. When political systems fail, consumers, scientists and business people must act as responsible individuals who owe a debt of gratitude to the planet. For neither false discourses nor disguised handshakes will stop the roar of the chaos ahead.