The Macau Institute for Corporate Social Responsibility (CSR) in Greater China held their first forum as reported in the Times this week.
While the main focus was on the recently introduced regulatory regimes in Hong Kong and the evolution of CSR in China over nearly 20 years to which listed companies need to comply, mandated CSR is neither the beginning nor the end of the responsibilities that companies and other entities have to their communities and environments.
The recent focus on CSR and sustainability are positive movements: sustainability is about minimising harm, and preferably about stopping the harm altogether. It is about companies meeting the needs of today without compromising the future. But the sustainability movement is also an acknowledgement that what we are doing is damaging, and we are being pressured to find better models of business because the existing ones create too many externalities – costs to people, communities and the environment – caused by producing and consuming the way we do. Natural systems are now beyond their capacity to absorb what humanity pumps into it.
Among the discussions on mitigation and minimisation at the forum I presented a higher order aspirational message of regeneration. Why sustain what we are currently doing within the same paradigm, just trying to minimize external costs, when the alternative can be businesses and communities which thrive? Like regenerative agricultural practices that harness natural processes and systems, growing stronger, more resilient, more nutrient-dense food and livestock, while sequestering meaningful amounts of carbon, economies and businesses can shift to systems of production that can regenerate local and global ecologies. As the Economist, Kate Raworth, of the Doughnut Economics fame, has said, “We need to move from economies that need to grow, whether or not it makes us thrive, towards economies that make us thrive, whether or not they grow.”
Scientists have warned of the natural feedback loops for decades (i.e., sea-level rise, severe weather events, droughts, bio-diversity loss, bush fires as are currently burning out of control in the eastern states of Australia), but now the average person is seeing and responding to them. The sorts of protests like the Student Strikes led by Greta Thunberg, mutually supported and strengthen by the UN Action Summit held in September, and the more radical and disruptive groups like the Extinction Rebellion are calling out unsustainable practices. The global citizen movement is against waste and destruction of natural systems on which life on earth depends.
The average company has been very slow to accept its part in the global ecology of things, although some are realizing they have responsibilities to their local communities. So, globally, Environmental, Social and Governance standards are being introduced. Of course, choosing to shift to sustainable business practices because they are mandated is a step over a low bar but if these regulations serve to nudge companies that would otherwise not act, they have merit.
Companies risk losing legitimacy in the community, or their license to operate, in both the social and regulatory sense if they don’t comply. It is no coincidence that we are seeing a higher uptake of sustainable practices and CSR by the gaming concessionaires leading up to the uncertainties of 2022.
When reading the Public Relations blurbs on CSR, I look for leadership, not commitments to Sustainable Development Goals (SDG) or adherence to government guidelines or green award criteria on sustainability because these baseline ideas are already lagging responses to concerns, problems, tragic events and difficult lives, let alone emerging ones.
Leaders in sustainability don’t wait to be told what to do. Their focus is not on mitigation but on regeneration: Not on liquidating the current common and community assets to a lesser extent, but on investing in all forms of capital for the future: human capital, institutional relationships, financial capital, their customers, their suppliers (all along the value chain, including waste management), social capital (community), and environmental capital (what it extracts and returns to nature).
Regenerating all forms of capital is true sustainability.