Jeffrey Swartz's White Paper
All the 2006 Principal Voices are submitting a White Paper to the Web site, explaining their views at length.
Jeffrey Swartz, president and CEO of footwear and clothing company Timberland, which has a long-established policy of community work and social responsibility, argues that business has deep obligations to the wider world, which must be met in terms of outcomes, not just intentions.
Twenty years ago, it was legitimate to ask whether business had a role in building civic society. Until that time, business was pretty clearly defined as a legal construct -- not a neighbor, not a citizen. And who could argue with thought leaders like Nobel Prize-winning economist Milton Friedman, who declared that the business of business was to create a return for shareholders, period?
Who could argue? A small group of pioneers who believed, with conviction and passion, that Friedman's thinking was flawed. They dared to think more broadly and worked hard to re-frame the definition of corporate responsibility to include the notion of business's voluntary commitment to commerce and justice.
The pioneers debunked Friedman's assertion and posed a radical, more powerful one: that the marketplace and the civic square are linkable. That collaborating across the boundaries that exist in civic society can be creative, generative and absolutely necessary work.
They argued that, by inviting the engine of commerce to fit inside the chassis of justice, business could bring free-market strength to bear. We could feed children and work on climate control. We could create social value without compromising on expectations of financial performance.
And we have. Twenty years later, business has largely stopped viewing corporate social responsibility as a means of compliance and started embracing it as an opportunity to develop relationships based on shared passion and mission rather than transaction, to have an impact and influence on public policy, to do good in a world that is in desperate need of good.
When Timberland first began offering employees paid time off to volunteer in their communities 15 years ago, it was a foreign concept; we were virtually the only Fortune 1000 company in America at the time offering such a program.
Today, corporate volunteerism is at an all-time high. It used to be that companies would reluctantly report on their corporate responsibility efforts only if under great duress. Today, more than 50% of the global 250 firms publish some sort of corporate social responsibility report every year.
So we're serving our communities and we're reporting on our efforts: we've come a long way. However, for all the good we're doing, it's not good enough. Twenty years ago there were children going to bed hungry in America. How can it be that 20 years later, in an era of widespread corporate volunteerism, more children are going to bed hungry? How is it possible, for all the efforts we've made, that climate change is a more radical reality today than it was 20 years ago? Why are educational outcomes in the city -- any city -- worse than they were 20 years ago?
We've become really good at delivering linear improvements in the fabric of social problem-solving, but the problems are accelerating faster than the solutions we posture.
When Timberland first started to get serious about our commitment to the environment, we did it in a linear, thoughtful way. We partnered with smart environmental organizations, we had people tell us what we were doing wrong, we started recycling, we changed out our light bulbs. Linear improvements are good, but they're not going to save the world. What might save the world are innovative solutions, deeper commitments and greater investments.
When we'd finished changing out our light bulbs, we built a 400kW solar panel installation, one of the 50 largest in the world, at one of our distribution centers. We realized -- with the help of those smart environmental partners -- that this one initiative could yield tangible, sustainable outcomes: an annual reduction in our greenhouse gas emissions of 480,000 pounds, less dependence on our already over-stressed power grid, and lower energy bills.
In business, we don't get paid for linear improvements or good intentions; we get paid for outcomes. And we need to start thinking about our performance as corporate citizens in the same terms. To deliver linear refinements instead of tangible outcomes -- and to expect them to solve the problems that plague our environment and our communities -- isn't just ineffective, it's irresponsible.
As the saying goes, "if nothing happens, nothing happens." The way to get beyond linear solutions and back to the business of building civic society is by constantly, continuously applying pressure-- to ourselves, to our peers -- to innovate, to meet expectations, to imagine new solutions.
We should be proud of the hard-won place business has in the civic square, but we should also recognize our obligation to continue to earn it. That means viewing corporate social responsibility not as a one-time commitment or as an elective, but as a constant, critical element of our work -- one that we pursue with as much passion and persistence as we do our bottom line.
What do you think?