by Hazel Henderson
Now is the time of reckoning for all corporations trying to adapt to the new realities of the 21st century global marketplace. The earlier Industrial Revolution was based on fossil fuels, resource-intensive production methods and materialistic views of wealth and progress. All this is morphing into the Information Age and the cleaner, greener renewable resource technologies of the new Age of Light.
Adapting to all these changes is the challenge facing all corporations. At the same time they also face the challenge of the world’s newest superpower: global public opinion. Its power to make or break companies’ brands and reputations in today’s round-the-clock, global electronic marketplace now requires adapting to a new Age of Truth.
Many companies will fail the test, as they seek to “green-wash” their operations with advertising and public relations. Others try “blue-washing” by engaging the United Nations Global Compact’s ten principles of global corporate citizenship.
Such companies actual performance in walking their talk is now increasingly monitored by legions of civic organizations and auditing firms including SAInternational, of New York and London, SustainAbility and AccountAbility, both based in Europe and ASRIA of Hong Kong, as well as the global social, environmental and corporate ethical governance research of socially responsible investment firms and public pension funds. All are wary of
finding new Enrons, WorldComs, Parmalats, or Halliburtons lurking in their portfolios.
This monitoring of corporate ethics, integrity, their very missions and financial goals, as well as their commitments to addressing the world’s mounting problems keeps companies under scrutiny. Also in the cross-hairs of public opinion are corporate commitments to alleviating poverty, disease, environmental destruction and to help achieve the UN Millennium Development Goals.
US businessman Paul Hawken, also a corporate critic and co-author with Amory and Hunter Lovins of the best-seller, Natural Capitalism, as well as a promoter of Sweden’s Natural Step, recently launched an attack on the socially responsible mutual funds that fail to exclude “green-washing” corporations in their investment standards and portfolios.
Paul Hawken’s critique of some socially responsible investing (SRI) funds and their various standards for screening companies held in their portfolios is timely. This rapidly-growing segment of US and global capital markets needs such spurs to constantly upgrade its standards and criteria for measuring social, environmental and ethical performance of all companies. As the vanguard of the rising concerns of all investors over the corporate
and accounting scandals (those Enrons, Halliburtons, etc.) the socially responsible investing industry must continue to lead in setting ever higher standards for 21st century capital markets. I welcome the growing global debate over SRI, since higher ethical standards and performance on broader social and environmental criteria will determine the future of capitalism itself. Indeed this re-shaping of capitalism and corporations to conserve the environment while serving human needs and aspirations for equity justice, health, education, and the rights of all — will also affect humanity’s survival on this small planet. This is why I called for the UN Global Compact to spin off from the UN—to protect
the UN’s reputation from corporate backsliders.
Paul Hawken’s critique is only one aspect of this much larger question: can capitalism’s current model and its globalization of finance, markets, trade, privatization and currency regimes under its traditional assumptions continue without radical reform? My own work over the past 25 years has critiqued capitalism itself – in far deeper terms: its obsolescent
assumptions about human nature as driven only by greed and selfishness, its view of nature’s resources as exploitable, its ignoring of all other values in its pursuit of the conventional profitability Wall Street still demands and its myopia concerning the scientific realities of this new century.
Attacking only the emerging SRI segment of this still – dominant model of socially and environmentally destructive capitalism will obviously reinforce this entrenched model with its enormous power, lobbying clout and control of mass media. These forces of reactionary capitalism—whether on Wall Street, Frankfurt , London or Hong Kong— and companies in the old fossil-fueled, unsustainable industrial system, will welcome Paul Hawken with glee – as their newest spokesperson.
This is unfortunate, since we know from past experience how often perfectionism, utopianism and visionary zeal can drive out the good, just as the theoretical best can drive out the better. Incremental reforms such as SRI need the time and space to experiment. New norms and ethical criteria need to gain a foothold in these markets, as well as society and most important, in mass media.
For these very reasons, I founded Ethical Marketplace media as a global multimedia platform for raising the standards, benchmarks and ethical performance of all marketplace actors – through the power of information and mass media. Today, we live in “mediocracies” whatever our political systems. Media trumps politics, shapes culture, educates our children – for better or worse. Corporate advertising drives unsustainable consumerism and financial markets hooked on ever-rising GDP-growth and quarterly corporate profits. Ethical Marketplace’s new TV series is premiering in the USA in
early 2005 on selected PBS stations. Our global Editorial Board of the best SRI asset managers, research firms on all social, environmental and ethical criteria will assure the integrity of all our media: TV, radio, Internet, and print.
All companies featured in our content and seeking to underwrite or advertise on Ethical Marketplace programs will be screened by today’s highest SRI and other criteria of corporate governance and ethics. Our TV mini-series now in production covers the rapidly evolving debate on Reforming Global Financial Markets featuring Kenneth Rogoff, former Chief Economist of the International Monetary Fund, Sakiko Fukuda-Parr, of the
United Nation’s Human Development Report, and John Perkins, whose explosive Confessions of an Economic Hit Man exposes the need for top-to-bottom reform of the global economic system.
I have invited my friend, Paul Hawken to participate with me in a televised discussion on Ethical Marketplace mini-series. These cutting edge TV programs will first appear in Brazil, where licenses have been requested by a top rated financial TV show. I welcome the Report of the UNRISD Conference on Corporate Social Responsibility and those sponsored by the UN Global Compact.
Ethical Marketplace will cover all these reports and be the media platform to raise the bar on all the players now positioning themselves in the corporate social responsibility (CSR) and SRI sectors of these markets. Ethical Marketplace can become an alternative to Bloomberg and Reuters, also covering the emerging LOHAS (Lifestyles of Health and Sustainability) companies. Together, these three emerging “sustainability sectors” are the
best hope to engage the predominant financial sectors and those firms we all rightly criticizes for “green-washing” themselves falsely – using the SRI label, or the precious UN flag. Ethical Marketplace is an independent media platform that will keep such companies honest and reward those with superior ethical performance.
But let’s be honest. We are all human and fallible. Too often in history well-intentioned
utopianism has ushered in periods of fascism and totalitarian Puritanism. Ethical Marketplace provides roundtable debates from all sides in these new SRI-CSR-LOHAS- based Sustainability Sectors. We will recognize steps forward: from incremental to continuous improvement to the bold radical social innovations such as Brazil’s BOVESPA and its new Social Stock Exchange – an electronic market board offering social returns to all market players wishing to invest in non-profit civic organizations addressing Brazil’s social and environmental goals. Ethical Marketplace will also use and track the evolution of all the new metrics, indicators, and scorecards of human progress beyond GNP/GDP growth – toward sustainability and a more equitable quality of life for all humanity.
HAZEL HENDERSON, author of Beyond Globalization, created with the Calvert
Group, The Calvert-Henderson Quality of Life Indicators.