Defining the purpose of a corporation has both theoretical and practical implications. For several decades, the idea that corporations exist to maximize shareholder value has been paramount. Skepticism about that approach is growing, as noted by Martin Wolf in the Financial Times, but those seeking to instill broader definitions of corporate success, including corporate social responsibility and sustainability advocates, still face serious challenges to making their case.
Research from Yale professors George E. Newman and Ravi Dhar teases out one example of the paradox facing corporate leaders trying to advance these priorities: consumers question the quality of green products. "If a company intentionally made a product better for the environment, consumers believe the product's quality must have suffered," they write in the Journal of Consumer Research. Given this mindset, Mike Barry, director of sustainability at British retailer Marks & Spencer, writes in the Guardian, "[t]he circular economy needs to be presented to consumers as smarter, savvier, more aspirational, not wreathed in the language of sustainability."
Doubt about sustainability for sustainability's sake lingers within companies, according to Christine Bader '00, whose book The Evolution of a Corporate Idealist draws on interviews with some three dozen experts working on safer, more responsible, and more sustainable business practices as well as her own experiences at BP and a United Nations project on business practices. So the question arises: How can a leader effectively make the case for responsible practices within a large company?
At United States Business Council for Sustainable Development's Scale Up Conference at Yale SOM in June 2014, Bader recalled that Dave Stangis, head of CSR and sustainability at Campbell's Soup, told her, "We used to think we had to evangelize… That just doesn't work anymore." When Campbell's CEO wanted to design and implement the company's sustainability goals from the top down, Stangis suggested another approach, saying, "Give me some time to go sit with the function leaders and business heads and understand what they are paid to do, what they are measured on, so that we can frame how our work supports theirs." Listening and creating ownership in company goals, as well as the means to reach them, is core to making the case for sustainability, Bader said.
Bader also pointed to a key behavioral challenge facing sustainability professionals. "No one gets rewarded for something that doesn't happen. A lot of the work we do is preventative. But that's really hard to reward," she said. Corporations provide resources in the wake of an accident, but as years go by, "if you're really good at your job, nothing bad has happened and people start looking at your budget and headcount and saying, 'What are you doing here?'" Bader said.
One tool she offered to counter that drift from urgency: "bear witness." She underscored the impact of going to see the real work being done all along the supply chain—meeting factory workers in developing countries, for example. The realities of working conditions galvanize those seeking improvement. Bader described Laura Rubbo, senior director in the International Labor Standards department at Disney, bringing the company's CFO along on the tours of factories producing Disney-branded products in China. The unannounced visits to randomly selected factories showed a wide spectrum of performance. And that firsthand experience with the good and bad led to continued senior-level support for Rubbo's team's work.
"Very few people bear witness," Bader said. "From our cushy corporate offices, or cubicles, it can be easy to make decisions losing sight of the impacts that those decisions have on the people and communities at the tippy-toes of our supply chain."