On the erroneous belief of understanding the arrival point of development

Are “developed countries” deluding others or themselves?


Ryan Murphy (2010): Eat Pray Love

Diligent students of Economics might wonder what a scene from a Julia Roberts movie and the Italian expression “dolce far niente” have to do with development. Having been an Economics student myself confronted with heavy loads of neoclassical and neoliberalism theory, I would like to shed some light on the coherence of the aforementioned from a new point of view.

When researching definitions of “development”, one encounters numerous versions with rather diverse quintessences. For the purpose of this blog post I would like to concentrate on the following interpretation by the G8 of development as “… a strong, dynamic, open and growing global economy“. This choice is not one taken out of agreement, but one that tries to focus on the pivotal assertion that still drives the development discussion today. It is a discussion that is dominated by only a few parties, namely the Western nations 1, and it is directed if not to a single pathway of development at least to a single arrival point: consumerism. Post-development thinkers, such as Wolfgang Sachs, refer to the 1949 inauguration speech of Harry S. Truman, 33rd President of the United States, as the corner stone of the first world hegemony in development. In this inauguration speech Truman proclaimed:

“[…] we must embark on a bold new program […] for the improvement and growth of underdeveloped areas. […] Their economic life is primitive and stagnant. […] Greater production is the key to prosperity and peace.”

By coining the term “underdeveloped areas”, Truman constructed a hierarchical system that imposed a materialistic Western lifestyle, an “American World Dream”, as the ultimate goal of development on the rest of the world. On the verge of the Cold War, it was a strategic move to demand allegiance of the decolonizing countries of the third world to the first world reinforcing its supremacy against the communist-socialist bloc. US economist W.W. Rostow argued in his 1960 “The Stages of Economic Growth: A Non-Communist Manifesto” that with the right development assistance of capital and technology all countries would eventually converge to the ultimate stage of development, “high mass consumption”, from which the USA had already emerged from.

Largely concealing the fact that this prevailing notion of development is socially constructed and is an ideological concept generating power for the first world, it has found its way into the syllabi of leading universities in the form of varying development theories and it has successfully been perpetuated from there on. As a response to the failure of “improving the life of the masses”, development policies shifted repeatedly during the last 60 years: from growth orientation over poverty alleviation towards the aggressive neo-liberal policies of the Washington Consensus 2 implemented by the Structural Adjustment Programmes by the World Bank and the International Monetary Fund (IMF) in the 1980s, when debt levels and aid-dependency spiked (Moyo, 2010, p. 20-21).

Despite the failure to advance development, it “… had achieved the status of a certainty in the social imaginary” (Escobar,1995, p.5) in such a way that even the opponents of capitalism looked for alternative ways to develop, rather than questioning the construct of development and its arrival point itself. This mistake is equally reflected in the different ways and the evolution of how development has been measured ranging from purely economic indices that depict economic growth (e.g. gross national income per capita, gross domestic product) or defining the percentage of people living below the poverty line 3 to multidimensional indicators of human development such as the New Human Development Index (2010) of the United Nations Development Programme (UNDP). The latter include factors such as life expectancy, birth rates, literacy, years of schooling and income, which again play into the hands of the already known development front runners. Despite the creation of hierarchies and the homogenisation of “under-developed countries”, I believe that the biggest mistake herein lies in the assumption to know the arrival point of development, which in turn leaves little necessity, but also little freedom for the front runners to change.

From a Western perspective, what assures us in the end that we objectively chose the right path to development? Based on national footprint data from the Global Footprint Network, Tim De Chant calculated that at least 4.1 worlds would be needed in order for 7 billion people to live an average American lifestyle 4. Luckily we only have one world. So, if the development myth of the last 60 years neither has worked nor has been proven to be a realistic vision for the entire world at all, has it brought any good for the countries that reached the “top of the ladder”?

Screen Shot 2016-01-11 at 23.06.47

Source: Illustration © 2012 Tim De Chant, Data from Global Footprint Network

Aristotle firstly described that happiness (eudaimonia 5) is the ultimate end for all human activities and all activities are therefore only means to pursuing happiness, not ends in themselves. It is enticing to assume that if there could possibly be a universal goal for development, it could only be the pursuit of happiness. Despite the fact that the Unites States had already recognised precisely this as an inalienable right in their Declaration of Independence in 1776, it took over 200 years for happiness to take center stage in the broader discourse about development. In 2006, the New Economics Foundation introduced the Happy Planet Index (HPI), which measures “the extent to which countries deliver long, happy, sustainable lives for the people that live in them”. Four years later, the UN Sustainable Development Solutions Network followed with the first World Happiness Report (2012). Attempting to measure happiness on a global scale, six factors are being used: GDP per capita, healthy years of life expectancy, social support, trust, perceived freedom to make life decisions, and generosity. Critics of the past approaches to development might favour this new course and feel vindicated by the fact that the report highlighted the circumstance that “despite strong economic growth” happiness had stagnated in the USA since the 1950s (Helliwell & Layard & Sachs, 2012, p.61). It would be hypocritical, however, to incautiously declare happiness as the new panacea for development and it might result in making the same mistake this post is trying to highlight in the first place. The following should explain how the newest debate of development is still caught up in its initial mistake.

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Source: Happy Planet Index, Map for Experienced Well-Being 6

The initial development debate described high mass consumption as the arrival point of development and with it a set of policies was created by first world countries that allowed for interventions in “poorer countries” that were seldom altruistic. In contrast, the theoretical beauty of defining happiness as the ultimate arrival point of development is that happiness in its philosophical sense is something utterly subjective, a self- determined measure of achieving what one wants in life — whatever that be and by whatever means this can be achieved. But it seems rather naive to believe that the concept of happiness is not strongly subject to ideological contextualisation and that we actually open up the way to a freely open discussion about “development”. I dare to raise the question whether the attempt to measure happiness using constructed proxies such as generosity destroys the exact justification of the pursuit of happiness as the only universally favourable concept of development: subjectivity. Does it not declare the “status of certainty” 7 of just another constructed arrival point of development despite being barely less ideologically biased than the previous development agendas? Is the pursuit of happiness a new “wolf in sheep’s clothing” to perpetuate the hegemony of a few countries?

To refer back to the introduction of this article, I believe that in many Western cultures we are indoctrinated that happiness is achieved by increased economic productivity, efficiency and consumerism. Forced onto society with the help of vast quantities of advertisement, this absolutely fails the liberal definition of happiness, but helps to ensure the economic system from within. By making happiness measurable and comparable, the only thing we achieve is giving a new name to an old strategy.

In the first World Happiness Report of 2012, American Economist Jeffrey Sachs successfully describes the phenomenon of “the ills of modern life” (Helliwell & Layard & Sachs, 2012, p. 3-4) such as obesity, smoking, diabetes and depression and calls them “disorders of development”. The subsequent report in 2013 promisingly even devoted a whole chapter to mental illness “as the main cause of unhappiness”, but I believe that it disappointed in two facts: Firstly, the report states that “…the large majority of persons with a mental disorder reside in low- and middle-income countries of the world” (Helliwell & Layard & Sachs, 2013, p. 41). However, the report then follows with data from the World Health Survey describing depression rates by groups of countries showing the following results: high-income countries 7.1%, upper middle-income 7.6%, lower middle- income 6.4% and low-income 6.0%. It seems that the initial statement is therefore not coherent with the findings of this study, but tries to reinforce the economic hierarchy constructed at the historical beginning of the development debate. My statement should in no way question the existence of equal importance of mental illnesses in the “developing countries”, but rather suggest a perceptual bias in the interpretation. Secondly and most importantly though, the World Happiness Report 2013 defines risk factors for mental illness such as loneliness, bereavement or a low self-esteem. Despite briefly explaining the problem of under-treatment of mental illnesses and introducing effective ways for treatment, the report does not question at all what causes or favours the risk factors of mental illness to originate or to increase. I believe that the World Happiness Report capitulates to the past development approach and does not reflect sufficiently on the possible influence of systemic errors in the contribution to mental illnesses and therefore reduced happiness.

Like other development approaches before, the pursuit of happiness in the ascribed way is looking for remedies to problems that are caused by a system that the approach itself tries to uphold, because dealing with the actual cause of the problem would most likely require a change in that same system. The initial movie scene from “Eat, Pray, Love” should surely not be used as a serious reference, but it puts in a nutshell what from a societal point of view is starting to be recognised in different movements: We live in a world where happiness is imposed to come from economic wealth and in which technology helps us to become more and more efficient and time saving in what we do. But instead of directing this newly achieved time towards things that essentially would make us happy, we use the time to become even more productive and more busy. Sadly, “dolce far niente”, the sweetness of doing nothing, became socially unacceptable in many contexts.

Ultimately, I wonder if followers of movements that try to “slow down life” and reconnect it to real terms can teach us anything about development? The only fact that it can hopefully support is that the assumption to know a generalised ending point of development is an erroneous belief. Or did Rostow actually expect the emergence of a social group that would prefer to be modern traditionalists rather than pure modernists?

1  The “first world” or “the West” describes a group of capitalist countries aligned with the United States after World War II that were opposed to the “second world” communist-socialist countries states headed by the Union of Soviet Socialists Republic. Accordingly, the third world incorporated non-alined states.

2  The Washington Consensus are ten economic policy prescriptions developed by John Williamson that are used for the structural reform of countries in crisis.

3  In the EU the poverty line is defined as 60% of median income.

4  Highest ranked were the United Arab Emirates with an estimate of 5.4 worlds needed.

5  Aristotle described the concept of happiness in the Nicomachean Ethics.

6  Experienced well-being is assessed in the HPI using data from the Gallup World Poll, which asks respondents to imagine a ladder, where 0 represents the worst possible life and 10 the best possible life, and report the step of the ladder they feel they currently stand on.

7  Compare to Escobar, 1995.


References:

De Chant, T. (2012). If the world’s population lived like…. Available: http:// persquaremile.com/2012/08/08/if-the-worlds-population-lived-like/. Last accessed 5th January.

Escobar, A. (1995). Encountering Development: The making and unmaking of the third world. Princeton, New Jersey: Princeton University Press.

European Anti-Poverty Network. (n.d.). Poverty and Inequality in the European Union. Available: http://www.poverty.org.uk/summary/eapn.shtml. Last accessed 4th January 2016.

G8. (2001). G8: The Final Official Notice. Available: http://www.un.org/esa/ffd/themes/ g8-5.htm. Last accessed 3rd Jan, 2016.

Jefferson, T. (1776). The Declaration of Independence. Available: http://www.ushistory.org/ declaration/document/rough.htm. Last accessed 5th January.

Helliwell, J & Layard, R & Sachs, J (eds.). (2012). World Happiness Report. New York: The Earth Institute, Columbia University.

Helliwell, J & Layard, R & Sachs, J (eds.). (2013). World Happiness Report 2013. New York: UN Sustainable Development Solutions Network.

Helliwell, J & Layard, R & Sachs, J (eds.). (2015). World Happiness Report 2015. New York: Sustainable Development Solutions Network.

Moyo, D. (2010). Dead Aid: Why aid is not working and how there is another way for Africa. London: Penguin Books.

Rostow, W W. (1960). The Stages of Economic Growth: A Non-Communist Manifesto. 3rd ed. Cambridge: Cambridge University Press.

Sachs, W. (2010). The Development Dictionary: A Guide to Knowledge as Power. 2nd ed. London: Zed Books.

Taylor, C. (2006). Aristotle: Nicomachean Ethics: Books II-IV. Oxford: Oxford University Press.

The New Economics Foundation. (2006). The Happy Planet Index. Available: http://www.happyplanetindex.org. Last accessed 8th Jan 2016.

Todaro, M & Smith, S. (2012). Economic Development. 11th ed. Boston: Pearson Education.

Truman, H. (1949). Inaugural Address. Available: http://www.presidency.ucsb.edu/ws/? pid=13282. Last accessed 3rd Jan, 2016.


Sustainability and Social Responsibility Should Become the Norm

As a master student studying sustainable development and corporate social responsibility it is clear to me that sustainability is of utmost importance. I believe sustainable business should be the norm and that every company should have sustainable business practices incorporated within every department or actions of their company. In this post I want to focus on Small and medium enterprises. First of all  I want to explain what companies fall under small and medium enterprises. A micro company has less than 10 employees and has no more than 2 million turnover on the balance sheet. A small company consists of 10 to 50 employees and has no more than a 10 million turnover on the balance sheet. And a medium sized company has no more than 250 employees and a turnover of 50 million.

Before I explain the importance of sustainability and social responsibility for SME’s I want to go into why I believe it is vital for SME’s to become more sustainable and socially responsible. My reason is really quite simple, in my opinion it is vital because the majority of companies operating in the world are SME’s, which means that when these companies would all operate in social responsible and sustainable ways the impact would be enormous.

But unfortunately most SME’s link sustainable practices with extra costs and more time and effort and we all know that saying that more time is more money. If there is one thing I have learned during this masters course it is that sustainability is quite the contrary. I beppplieve sustainability is a unique selling point, a way to differentiate and reach competitors advantage.

Let me explain why, sustainability and social responsibility revolves around three pillars, people, planet and profit. This means that profit is an equally important part to sustainability as saving the environment and thinking about society the people.

So because of this misconception about sustainability and social responsibility in SME’s I want to dedicate this post to convince people in doubt that these practices are in fact good for the business. So why can a company make profit out of being sustainable?

To begin with energy/water savings alone can save a company a lot of money and these are just simple actions which every company can start doing right away.

Now let me explain my second and maybe most important argument next. One of the most crucial goals for an operating SME is to build a strong brand image and reputation. Not only is it an essential component in increasing market share, the following example will show how it increases profit. According to a recent Nielson study 2/3 of consumers would pay more for products or services from companies that are committed to sustainability and social responsibility. May I add that the future looks even more promising considering that this percentage increases substantially when focusing on millennials, the future consumers.

My final argument would be this… Eventually all companies will be forced to transition towards a more sustainable business model, either because recourses will be depleted or the majority of the population will no longer support the business practices of old. So companies that are prepared and transition early will have the upper-hand.

Now that I have given three compelling arguments as to why it is crucial I think it is important to say that the most important reason should be willingness. There should be a will to change the world for the better by each person and each company run by people. Sustainability and social responsibility should no longer be discussed as a strategy or as something to transition to it should become the norm. In my ideal scenario we live in a circular economy in which all business practices are socially responsible and sustainability is no longer talked about but its everyday life for every person around the world.

Yours truly,

Tim Wierks

 

 

 

 


Let your people go surfing

Can we feel fulfilled at work? How flexible working hours and spaces impacts on the company´s results?

Whether managing a business or having a SME or big company, flexible approach of work life make stakeholders’ engagements stronger, revenues higher, and leisure-moments better.

As the owner of the clothing company Patagonia Yvon Chouinard writes on his book “Let my people go surfing”, the key of having the perfect balance between working hours and leisure time is making your people “go in the same direction”. Not only he believes it, but also with 2016 revenues (almost $750M), he has shown that hiring independent people who is very self-motivated and just communicating them where the company is going, allows people work better. Besides, taking decision by consensus and not by compromise, or empowering and respecting worker´s desires, allow him “live more”.

 

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This company as so many others B Corporations, show us that when PASION + COHERENCE are together, impacts are higher. As the certification looks for, respecting the environment and the social values are two issues that concern a big segment of the consumers. So as we respect this values, they will keep on choosing us. Besides, nowadays we cannot say anymore that we “didn´t knew”. With all the technologies, information access and connectivity of a big portion of our world, we have already seen what we should do and how we should do it to make better impacts not only in our control circle, but also in our influence environment.

Taking values as respect, empathy and active listening at the moment of being in charge of a department, or creating an enterprise, will make our projects arrive to a good port. We can generate the environment where we would like to remain or want our employee’s remain for a long period of time. Although we have to be aware that is not for everyone. There are companies trying to evolve to some new and more flexible working space models or schedules, not taking into account the employees well-being and the way they feel comfortable at the working moment. So, asking how they would feel more engage with the company, what are their need, and what the expect from the enterprise might be the first step to make this changes.

But, as a young, nature-passionate and social-empathic worker, I agree that creating working spaces more relax, with the possibility of contact with nature and light, and also with flexible schedule following the employees needs, will make better and more working-leisure balance environments. And as people is happier, the entire business goes further.

At the end, best waves are not coming back next Monday at 8am, so let the employees go surfing when the best waves are coming and make your company run better.


Coworking spaces, collaboration is the new trend!

 

Coworking spaces can be seen as a perfect mix of the best of working in an office/“corporate job” and the best of being an entrepreneur. In one hand you get to have a community to support you and a place to work, and on the other hand you have the opportunity to work in what you are really passionate about.

This movement started in 2005 in San Francisco and apparently a lot of startups, SMEs, freelancers and remote workers shared the same feeling/necessity because nowadays this community has quadruple in the last four years, in 2015 over 1 billion was invested in this industry, and nowadays there are more than 10,000 spaces around the world.

Coworking spaces are not only Wi-Fi, laptops and people working in independent things, this spaces have the purpose to gather and connect people that have similar interests and create a network of global collaboration.

There is a Coworking Manifesto that had been signed by members of more than 2,300 working spaces. In this document there is a global code of conduct and values that “must” be follow. As an overall concept coworking is quite related to sustainability, both of them have a global vision of the 3Ps (people, planet, profit).

 “We believe that society is facing unprecedented economic, environmental, social and cultural challenges. We also believe that new innovations are the key to turning these challenges into opportunities to improve our communities and our planet.”

This movement gives power to individuals and small business by connecting them and giving them a new vision of what collaboration means. Coworking is adding value to small enterprises by gathering talented people and helping them to expand their personal and professional network. One of the many benefits is that people that works in this spaces is more productive and motivated than when they were working by themselves or in other places.

According to GCUC (Global Coworking Unconference Conference) people in coworking spaces is 84% are more engaged & motivated, 80% turn to other members for help o guidance and 89% is happier.

Besides the space design plays a key role. The spaces should be flexible (for groups or individuals), should inspire collaboration, have recreational places where people can interact, private rooms and areas to have meetings. Essentially it needs to be a place where people get inspired, always giving the option to adapt to the way people work.

I believe coworking spaces are changing the way we work, people is realizing that if we work under the right conditions we increase our productivity and we are happier. These new spaces help startups and SMEs feel part of something bigger, a place where they can find support, funds, workshops, and networking = collaboration.

coworking-1


Are Small companies the Big change the world needs?

Sustainable development goals set by countries for 2030 are finding some difficulties. Some people do not think that that they will be able to meet the deadlines and even worst, there are no visible changes in the core drivers for big companies to meet these targets. This puts us all at risk of having to face an increasingly pessimistic and cynical society that maybe tried to change, but never got too far.

In a way it is understandable, thingsthe_baby_boss-2017-animated-movie-861 change faster
and faster with every upcoming trimester, and we constantly see how “the future” catches many organizations with their pants down. The generalized feeling is of uncertainty and falling behind, for every step we take seems to precede the necessary appearance of some new information, technology or discipline that makes us feel we took a bad decision.

Nevertheless, we need businesses to get on board of carbon reduction and social awareness; despite what many of us would like, money is still the main driver for progress and research. But how? Who is going to ask Nestle to ensure that his supply chain does not include child labour? Do they even want to do it, and most importantly, is it possible?

Allow me to be a bit theoretical and divide the companies into three groups. Some organize in a socially responsible way, others behave responsibly without being aware of it and others utilize corporate social responsibility to improve their image.

The first group takes social responsibility as a fundamental part of their strategy. They share their social compromise with the rest of the civil society, searching for self and external control mechanisms to achieve it.

There are also organizations with a structural policy that meet corporate responsibility’s standards in their economic, social and ecological impact or through the consideration of all stakeholders when taking strategic decisions. Usually these companies achieve social responsibility in great measure, although they never fully articulate it into the entire organization, mostly because they are not aware of what it is.

descargaFinally, there are many businesses that fundament their strategy on the exclusive vision of the stakeholder. They confine social responsibility to a department (usually communications or CSR), but rarely involve their executives in their activities and do not include CR into their overall strategy, unless public pressure drives them to do so.

 
Now, considering that most big multinationals belong to this third group, we should ask ourselves if it is reasonable to ask them to change in a short period of time. We should push them to be better, yes. However, we cannot do that without considering what their core values where to this day. Big businesses are changing, and hopefully one-day sustainability will be imprinted into their DNA, same way efficiency and profit is today.

Until then, we need to start looking at small, flexible enterprises that have values and characteristics that are compatible with the SDGs. For, to this day, only they have the power to become an integral motor for change in the short-term.

 

 


Adapt or die

In this current panorama of constant changes there is only one stable statement: adapt or die.

It is scientifically proven that the human being is more productive when he is happy, motivated at work and, ultimately, engaged with the goal pursued. That´s why more and more companies are changing from the traditional ways of business to a more horizontal concept.

This new concept alludes not only  the flat structure of the hierarchy of a company itself, but also in the most literal meaning of the word, through the trendy open spaces where the employees move around in bicycles and can´t hide themselves behind a Ping-Pong table.

The business model run by antonomasia by a white man from the privacy of his solitary office has evolved to a panorama where many other agents have a relevant role. To the displeasure of Mr. Trump, minority groups that have been in the shadow of the action in the economic panorama are now occupying positions that until relatively recently were unthinkable.

To be more concrete, woman are definitely in a turning point in history where day by day we are closer to equality, and although the road ahead is long, every day we proclaim equality we are stronger and we will be closer to an ideal dreamed by our predecessors.

It is a matter of fact that woman knows what has to be done in business, that’s what figures show in headlines such as “Woman-led companies perform three times better than the SP 500”. Our leadership style has definitely something to do with this results, softer and more diplomatic than men in general terms, our influence in business is different, and therefore results are different.

A less aggressive direction style might create a more relaxed space for employees to pursue the company´s goals in their own way, being more motivated to work which would lead to better results.

Because of the huge influence the board has on the rest of employees, is crucial that they show by example what they preach, so they can leave behind the “boss role” to take the “leader” place.

Because the feeling of belonging the employees perceive when engaged and aligned with their leaders is the greatest asset, at the time when this change in business began to throw dominoes, this trend became unstoppable.

Business owner working at desk


Complications of Communications

SME was a new piece of jargon for me as I entered into the Adaptive and Responsible Small Medium Enterprise (SME) module. I have learnt that they usually they have below 250 employees or an annual turnover which does not exceed 50 million euros.

In addition to learning this new terminology, I have been able to understand the importance of different communication methods within a business or company. I am studying the International Master on Sustainable Development and Corporate Social Responsibility (IMSD), which means I am particularly interested in the approaches available to align the core values of business with those of the employees and customers, and vice versa. Throughout the EOI school, we as the IMSD masters have made a name for ourselves as being “irritating” in trying to communicate our environmental and sustainability values to the rest of the school. On a recent university trip to China, It was noticed that a huge amount of food waste was being left on the tables after lunch in the Shanghai Jiao Tong University canteen, which in a country which a huge divide between rich and poor made me feel uncomfortable. In China, $32 Billion worth of food is thrown away annually in the form of food waste. (1) Why should we be able to waste so much food when other people are living below the poverty line? This lead to a request to the canteen staff to provide us with a bit less food each day so that we could consume everything and leave nothing to go to waste. The next day I was pleased to see less food on each of the traditional round Chinese tables, with enough to happily feed each of the 50 students travelling abroad. Unfortunately, this was not taken so well by the rest of the group. People complained that there was no longer enough to eat, and were subsequently asking, “why has the quantity of food reduced so dramatically?”. They quickly learnt that the IMSD were responsible and came to looking for answers…

Upon returning from China and starting the SME course, I have learnt some very valuable lessons, which apply to both SMEs and life in general, and if I had known the prior to the trip to Shanghai I would have acted in a different manner concerning the food waste.

Firstly, Identifying the stakeholders of an SME is crucial. Who will be impacted by your enterprise’s decisions and how could they react or challenge your business decisions; including employees, suppliers, shareholders, customers, environment, communities. Secondly, when striving to run a sustainable and socially responsible business making sure the stakeholders are engaged to your business values is a vital element. There are several ways of achieving this but I believe an open dialogue and communication is the first and most important step.

When trying to engage employees to the company’s values, it is important to understand what being sustainable means to them, and how it impacts their work life. Through open forums for discussion and debate on what employees expect from the company and how can both sides be satisfied through coherence of values, questionnaires on best practices, and an internal code of conduct outlining the expected sustainable methods required by the employees and methods of motivation.

values_

In my job prior to joining the EOI, I volunteered as an Environmental Champion, implementing the ISO 14001 standard throughout the company. This included reducing the consumption of energy across the site, simply requesting the individuals help the environment by turning off their computers at night, during lunch times and breaks didn’t have much of an impact. We therefore decided to increase the motivation of the employees with a competitive element. Installed in the building were devises measuring the electricity consumption by floor and quadrant on a daily, weekly and monthly basis. By publishing a weekly graphic of energy consumption levels in each area, it invoked the competitive nature of individuals and made a dramatic change to the energy reduction.

Furthermore, perhaps the most reliable way of guaranteeing employees are aligned to the company’s values is by hiring like-minded people. This can be achieved by specifying in the job descriptions the values and characteristics of the company which provides a clear purpose and direction for anyone applying to the role, and helps to filter for suitable candidates.

Going back to the case of food waste in China, if I had asked the other students why they were not eating all of the food provided we could have come to a solution which was beneficial for all stakeholders; asking for alternative options, or proving knives and forks to allow easier consumption of the Chinese meals.

References 

1 China Food Waste. World Watch. [Online] 2015. [Cited: 23 03 2017.] http://www.worldwatch.org/food-waste-and-recycling-china-growing-trend-1.

Figure 1:  https://thefinancialbrand.com/4437/credit-union-core-values/. 1


Should SMEs report?

SMEs play an important role in the dynamic of the world economy accounting for approximately 90% of business, specially in the developing countries where they represent up to 45% of total employment and 33% of the GDP. However, they just represented a 10% of the sustainability reports submitted to GRI Sustainability Disclosure Database. This clearly shows how lagging are the SMEs in public reporting practices and could also be a reflex of lack of internal good practices on this topic.

captura-de-pantalla-2017-03-23-a-las-11-28-49-p-mThere is then, a great opportunity to introduce the SMEs to the growing reporting trend occurring all over the world. Initially it could be a though work that requires compromise from different sectors (SMEs, multinational/big companies and third parties as GRI) in order to achieve the objective. But they have a big advantage and is their flexibility to adapt and incorporate new techniques and mythologies thanks to their size and less rigid processes and once the positive results are seen, more companie

It´s important to highlight the main benefits of the reporting process and the final publication of it, for both publics: internal and external.

External

  1. SMEs are suppliers of multinational companies which the majority are trend settlers in sustainability practices and also compromised to contribute to the achievement of the SDG, reason why, they are starting to expand their standards to their suppliers. Therefore, SMEs are demanded each time to have better practices in the three dimensions (environmental, social and economic) and show compromise and work towards the SDG.
  2. As well, by having a sustainability report, they can show their achievements/performance and compromises creating like this trust and positive reputation not only among potential clients but also among potential investors.
  3. This is also a useful tool to differentiate from competitors since, through the sustainably report, they can show a better performance which could be consider in the supplier´s selection process.

Internal

  1. Since most of this companies’ haven´t had a close contact to the ¨sustainability¨ concept, through the report they can start learning new useful concepts, adapt good practices and ideas from the sector leaders that might be a positive input for their business strategy and could make them start being closer to their stakeholders.
  2. The sustainability report is actually a very useful tool for management and performance monitoring. It is suppose to reflect and tell the companies’ challenges and achievements, therefore it presents KPI, goals, actual and future projects among others. Like this, directors, employees, clients and other stakeholders can have the information of the company in one document and like this evaluate it´s performance (strengths and opportunity areas) and the impact generated in their stakeholders with their activities. As well it allows, internally, to assign a responsible for each topic which will make employees be more compromise with the company objectives.
  3. The ideal situation is that all the employees (direct or indirectly) participate in the structure of the report. This involves the employees as stakeholders and like this help them to have a better understanding of the company and a sense of belonging.

Finally, the most important thing is that SMEs don´t feel afraid or distant to this good practice. On the contrary, the call is for them to look for the different international and local guides that exist in order to choose the one that suits them the most or just take useful information and apply it to their reality. This will contribute to structure in a coherent way the vision, mission, strategy, goals, KPI among other elements in order to be able to follow the company performance and show their results to the stakeholders feeling like this motivated to improve every time more.

 

Bibliography

https://www.globalreporting.org/information/news-and-press-center/Pages/Small-Business,-Big-Impact-Making-the-case-for-SME-Sustainability-Reporting.aspx

https://www.globalreporting.org/resourcelibrary/Small%20Business%20Big%20Impact%20Booklet%20Online.pdf

https://www.globalreporting.org/resourcelibrary/Ready-to-Report-SME-booklet-online.pdf

https://www.globalreporting.org/resourcelibrary/Small-Smart-Sustainable.pdf

 

 

 


The need for responsible SME’s

In the recent years, paying attention tot their social and environmental responsibility has become quite essential for almost all businesses. It started within specific sectors, where major disasters took place. Such as scandals surrounding child labor (Nike) and the collapse of Rana Plaza in Bangladesh for the textile industry. It was a wake-up call for the industry as a whole. Over 200 big brands such as H&M and C&A signed the Bangladesh Accord after this disaster. It is a five-year independent, legally binding agreement between global brands and retailers and trade unions designed to build a safe and healthy Bangladeshi Ready Made Garment (RMG) Industry.

As time passes, smaller enterprises (SME’s) are also looking at their social and environmental responsibilities. Among other things due to these type (Rana Plaza) of scandals that have attracted the public concern, the media and politicians and the evidence on climate change. There is a widespread demand for more responsible enterprises. It is not just about profit anymore. It is becoming more and more about the relationships between businesses and society. There is a growing demand for more transparency, accountability, engagement with society and moral and value-based businesses.  This phenomenon started with its focus on large (multinational corporations) but is shifting now as well towards small and medium sized companies. Big organizations may have a larger reach but SMEs have the advantage of being small and able to respond quickly and agile without the bureaucracy.


Love Brand: creating companies worth existing

Love brand is something essential nowadays when we talk about enterprises and marketing. It  allows us to rescue a brand or to totally redefined the concept and change how customers and employees value them.

To reach this Love brand zone it is needed to reach the common point between society values, personal values and company values. But even more important is talk about love brand related with adaptive and responsible SMEs due to the fact that something that all the companies are trying to achieve is this love brand or love mark

When we are talking about love brand we are talking about that enterprises that create passion within their employees and clients, that kind of enterprises that knows how to really engage with their stakeholders. A company that is not only socially responsible but also their values are shared by their employees and consumers. That is why the term of love brand catch my attention at class, I think that is a wonderful strategy to connect people and to involve people with SMEs, especially with adaptive and responsible SMEs that can have a positive impact in society as well as create consciousness and awareness. SMEs with purpose and shared values will be the ones with possibilities of becoming in a love brand.

It is not only about making promises but also about delivering that promises, it means providing coherent services and behaviours. It is about providing trustful and transparent information about what are you doing, mixing passion and coherence.

Wonderful examples of this love brand feeling are:

lush

As we saw in class Lush is a natural and handmade cosmetics enterprise that have become in a powerful love brand for their consumers and as well for their employees. Their employees are voluntarily involved in campaigns for the reduction of packaging , ending naked on the street trying to defend this concept. In this case Lush is not an SME as well as already a large company, but this is a wonderful example about how we can really try to create this love brand concept in adaptive and responsible SMEs.

love-brand-co
Another example I recently discover a small enterprise called: Love brand & Co, it is an enterprise based in UK and Barbados, that sell summer luxury clothes and they support the protection and sustainable conservation of forgotten species and their diminishing habitat, to help save them from extinction in the wild destining the 5% of the revenues, especially with elephants. Nowadays this small enterprise is starting to make people feel interested about them and people is starting to feel passionate about them for their values and messages. Nowadays they support 3 charities: Elephant Family, The David Sh eldrick Wildlife rust and Tusk Trust.

Their message is: “We are saving elephants, one pair of swimming trunks at a time.” – Oliver Tomalin, Founder

At the end what really catch me was this:“Nothing happens in isolation. It is not  “just” about our personal values but their interaction with other entities we operate with personal values as well as the company values”

Love brand in SMEs (small and medium enterprises) can be the tool of the future in terms of engaging people and make them aware about the importance of being responsible, adaptive and social and environmental friendly.


Using SMEs as a Force for Good

I believe SMEs (small and medium enterprises) are uniquely positioned to identify issues that have a negative impact on today’s society, and are able to use business in order to address those issues as a force for good.  This is the sentiment behind B-Corps, and the size and foundations of SMEs give them the motivation and flexibility to pursue this sentiment.   According to the 2016 Edelman Trust Barometer, 80% of people agree that “companies can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates”.  This proves there is a want and a need for companies to use business as a force for good.

Many times, SMEs are founded on personal desires to do the right thing.  For example, the company Swell, which makes fashionable yet durable water bottles, was created because the owner wanted to “rid the world of plastic bottles” – a bold statement, but one that could truly lead to a positive environmental impact.  This was the owner Sarah Kauss’s personal desire that also benefited society, but she is also able to make a profit; in 2016, the company generated $50 Million in sales.  The small size of Sarah’s company (22 employees) allows her to constantly adapt to changing needs in society, and to always be innovating new products for her customers.

When it comes to benefiting society, Swell has been able to create partnerships with NGOs such as UNICEF USA to respond to current needs in vulnerable societies regarding clean water and water management.  One of Swell’s programs which looks beyond vulnerable societies and addresses the nation’s environmental well-being, is the partnership with American Forests, as Forests are an integral component to providing clean water.  The Swell design team created a fashionable water bottle with a wood-like décor, and every time one of these “wood” bottles are purchased, Swell plants a tree to combat deforestation which helps preserve our water supply.


afwater-bottle

I believe that as we continue to face environmental challenges related to climate change, SMEs will be a core force in combatting these challenges.  Smart SMEs will identify these challenges as opportunities, and create businesses that will benefit society, all while making a profit.  After founding a company on a personal desire to combat these environmental challenges, SMEs will likely also be able to take advantage of tax benefits or subsidies if their product aligns with government legislation regarding the environment.  The small sizes of SMEs can allow them to be adapt, to be mobile, and to quickly respond to challenges, which is important when many of these environmental challenges are becoming increasingly global.



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