Redefining Today’s Business Landscape: A Q&A With David Vidal, Corporate Sustainability Thought Leader
March 12, 2013
David J. Vidal, a leading expert on the role of business in society, has over the course of a forty-year career served as a senior fellow with the Conference Board Initiative on Sustainability, as vice president at the Council on Foreign Relations, as assistant vice president at Continental Insurance, and as director of public affairs for the Partnership for New York City, a CEO-led civic, housing, and education group. Vidal also is active in industry leadership activities as a member of the judge's panel of the CERES-ACCA Sustainability Reporting Awards, the Newsweek/Daily Beast Green Rankings Advisory Panel, the Giving USA Advisory Council on Methodology, and the U.S. Advisory Council of the Global Reporting Initiative (GRI).
Recently, Michael Seltzer, distinguished lecturer at the Baruch College School of Public Affairs and a frequent contributor to PhilanTopic, spoke with Vidal about the corporate sustainability landscape.
Philanthropy News Digest: Corporate engagement in society appears to be in tremendous flux, partly as a result of greater demands for corporate accountability. From your vantage point, what's going on in CEO suites?
David Vidal: The corporate contributions function has been overtaken by the broader business social accountability movement. Forward-looking business leaders are concerned today with a growing array of stakeholders and publics. Yesterday's focus on solely producing shareholder value is no longer sufficient. If you open a corporate annual report today, you will more often see a letter from the CEO addressed to shareholders and stakeholders.
PND: Has the terminology that businesses use also changed?
DV: Definitely. When I ran a corporate contributions program, the term corporate social responsibility was just emerging. In the last twenty years, that phrase was supplanted by global corporate citizenship. Today, many corporate leaders use the word sustainability to encompass the broader array of relationships that businesses now engage in. What's needed now are new business models based on equitable and sustainable growth.
PND: How did we get to this point?
DV: In 1987, the Bruntland Commission introduced the term sustainable development into public global discourse. Three years later, the Intergovernmental Panel on Climate Change released its first assessment report. Around the same time, we also began to see an explosion in both the numbers and scope of civil society actors. That was quite apparent at the United Nations Conference on the Environment and Development -- the so-called "Earth Summit" -- which was held in Rio de Janiero in 1992. Subsequently, in 1997, the World Bank held a conference dedicated to global corporate citizenship. Meanwhile, in 1992, in the United States, Business for Social Responsibility, a global network that today comprises nearly three hundred member companies, was created, and the United Nations launched its Global Compact in 1999.
Indeed, by the time Al Gore released his film An Inconvenient Truth in 2006, the dialogue in regards to sustainability and its benefits for society, business, customers, and the public had moved to an entirely new level. And that conversation continues to spread and deepen. At the UN Summit on the Millennium Development Goals in 2010, for example, a report titled Catalyzing Transformational Partnerships Between the United Nations and Business was issued by the Global Compact at the request of UN secretary-general Ban Ki-moon.
PND: Can you give us an example of a corporation that has traveled down this road?
DV: Unilever is an excellent illustration of what we are talking about. Its leadership knows it can only prosper if the societies and communities in which it operates benefit from its presence. In 2012, CEO Paul Polman went so far as to indicate that the company was in business for, and I quote, "the benefit of consumers, employees, suppliers and society at large" and to create long-term value "sustainably and equitably." To that end, the company has even stopped reporting profits on a quarterly basis. It was a focus on short-termism, after all, that got many businesses into trouble in the first place.
PND: Has Unilever been able to stick to its sustainability guns and demonstrate strong growth at the same time?
DV: According to its annual report for 2011, the company reported sales growth of 6.5 percent. And its share price on the Amsterdam Exchange index was up 14 percent for the year, making it the best-performing stock on the AEX.
PND: Is Unilever an exception?
DV: Clearly, it's a leader among its peers. But it is not alone in traveling down this road. I mean, today every Bloomberg terminal has a "sustainability" tab.
PND: So what's the next big thing in corporate sustainability?
DV: More businesses are endeavoring to foster large-scale systemic changes in areas such as food production, access to health care and education, and job creation. At the same time, they are spending time and money to learn about the complexity of global systems change and the challenges inherent in trying to bring about social change. Fortunately, all three sectors -- public, private, and corporate -- seem more inclined to engage in multi-stakeholder cooperation and are moving rapidly to adopt an all-hands-on-deck approach with respect to solving society's greatest problems. That's where the sweet spot is: when all three sectors work in unison.
-- Michael Seltzer