November 24, 2013

Naomi Klein and Systemic Change

In the October 29, 2013 issue of the New Statesmen, Naomi Klein published the article “How science is telling us all to revolt”. She writes that more and more scientists are recognizing that continual growth and profit maximization, innate to capitalism, are encouraging climate destruction. They see civil disobedience as a powerful tool to fight for a system change.
I agree but at the same time I long for more positive alternatives and I see serious limits in the potential of civil disobedience and public protest.
Civil disobedience is extremely important and protest has been and will remain a vital form for people to express their grievances and formulate their demands. In order to create and test the alternatives and to build support at all levels of society, however, we need to look for additional channels, additional tools.
What could these tools look like? One way is to create a mechanism to measure to what extent corporations, non-profits and even government agencies work towards the common good. Let us citizens create a manifest of demands, a set of best practice against which companies and other organizations are measured. In an international, democratic process we can formulate this list of standards based on universal values found in the Geneva Convention and constitutions around the world. These include human dignity, cooperation, sustainability, social justice and democracy.
A company can then be put to the test. How do they measure up? Make the results public and understandable. Make it easy to compare the results of Costco and Whole Foods or Sacramento and Albany. By creating this clear set of standards companies know what is expected of them. They don’t have to fear that each year another set of standards will appear out of nowhere, forcing them to go through another expensive and time-consuming reorganization of internal processes.
With this kind of scorecard in their hands consumers can choose the more ethical product and further stakeholders can better judge the impact of a particular company.
Certainly this is a wildly different approach than civil disobedience. They both, however, share the goal of systemic change.
An international movement called the Economy for the Common Good has begun the journey of creating the value-based standards and has created a tool to measure companies and to hold them accountable to ethic, environmental and human rights principles.
Learn more at www.economy-for-the-common-good.org

October 26, 2013

Patagonia’s founder says the true bottom line is “doing good” 

Yvon Chouinard, the founder of the outdoor clothing company, Patagonia, wrote in his book "Our mission statement says nothing about making a profit. In fact Malinda and I consider our bottom line to be the amount of good that the business has accomplished over the year. [...] Our intent is to remain a closely held private company, so we can continue to focus on our bottom line, doing good." (Let My People Go Surfing, Yvon Chouinard, Penguin Books, 2006, p. 160, 164)

A new movement called the "Economy for the Common Good" has been gaining momentum in Europe and can help transform Chouinard's business principle into an instrument to encourage businesses across the globe to refocus towards doing good.

What is meant by "common" and by "good" within this context? Who belongs to the "common" and what is the "good"? The Economy for the Common Good (ECG) addresses these questions and has created a tool to help businesses across the globe live up to Chouinard’s ideal.

The stakeholder theory of business ethics provides us with an answer to the first part of the question: who belongs to "common"? Stakeholders are the various groups impacted by a company. It can be the customer who buys a product or the supplier of the material. A successful business looks after the needs of each stakeholder group. If the customer is not satisfied, the business will likely fail. At the same time, if the local community in which a business operates is adversely affected, it can also be detrimental to success. According to a more broad interpretation of the stakeholder model, the following five groups are impacted: suppliers, investors, employees/owners, customers/partners, and society/environment.

For the answer to the "good" part of the equation we simply need to turn to the constitutions found in most democratic societies. Certain values are enshrined in these constitutions and should be applied to the business world. In an open, democratic process the ECG has distilled these values into five areas: human dignity, cooperation, sustainability, justice and democracy/transparency.

Using these values as a guideline, businesses create a so-called Common Good Balance Sheet in which they measure their company’s impact in 17 different areas. These 17 indicators, clearly illustrated in the Common Good Matrix, range from ethical supply chain management to environmental impact to just income distribution.

Through a process of peer evaluation and/or external audit, a company produces a Common Good Report and receives points based on how they impact their stakeholders. The point system and the audits ensure the validity of the score and the resulting Common Good Balance Sheet gives an understandable, transparent, comprehensive picture of how well a company is serving the common good. The point system makes it possible for customers, investors, suppliers and the general public to immediately judge the social and environmental impact of large and small companies across all branches of business.

The Common Good Balance Sheet is a 2nd generation corporate social responsibility (CSR) instrument, designed to encourage companies to move away from the goal of profit maximization and towards “doing good”.

Learn more at www.economy-for-the-common-good.org

- Gus Hagelberg

July 13, 2013

An Activist for the Common Good

Without seeming pretentious I can safely call myself an “Activist for the Common Good”. Certainly I’m not the only one out there who proclaims to carry such a title. I bet there’s a bunch of us out there unbeknownst to each other. To tell the truth, I don’t even have a badge or a membership card proving my status. I am the real McCoy, though, and here’s why.
I am a volunteer and activist for the movement “Economy for the Common Good”. Wow! Cool, huh. Bet you’re jealous. Sure there are peace activists out there, human rights activists, environmental activists. They’re are all over the place. But have you ever met a Common Good activist before?
OK, as they say in German “Spass beiseite” which translates roughly to “let us now place the fun part aside and get down to some serious business”. For about 6 months now I’ve been involved in this Common Good thing and I think it’s pretty cool. Why? Well for one I like working for the Common Good. You might say “no shit”, don’t we all? My answer is, sure. That’s the second fun part about it. There’s a ton of support out there and when I tell people about it they mostly say something like “that sounds like a groovy idea”.
The goal of the movement is to put the public good, the environment and human dignity at the forefront of all economic activity and thus replacing the mantra of profit maximization with all of its disastrous consequences. Business and the public sector must work toward bettering the lives of humans across the planet, protecting the environmental, improving social justice and promoting democracy. Again, some may think “no brainer, dude”. That’s what we all want. But how do we get there? How can we convince CEO’s that short-term profit and shareholder value are not where its at?
One way is to mobilize the people, create issue campaigns, pressure politicians or fight for legislative change. While these activities are extremely important and can be effective, we want to go a different path. We want to change the system from within. We want to start a process of reevaluating what is really important for business owners, for employees, for civil servants and for all stakeholders in general.
Am I going to be happy and motivated working for a company that is chiefly interested in maximizing their profits, growing ever larger and wiping out competition? Is that what the Generation Y is looking for? Asking pointed questions about one’s own company can set off a transformative, powerful process. Questions like these need to be asked:
  • Is our supply chain environmentally and ethically sound?
  • Do we examine social and ecological aspects when choosing financial services?
  • Are the products we produce serving humankind or the environment?
  • What is the income disparity within our company?
  • What are we doing to discourage discrimination?
The Economy for the Common Good (ECG) has developed a system of value indicators used to measure a company’s performance. Is a company democratically organized? Are all employees paid a living wage? Is there gender equality and is the environment being protected?
Each of the 17 indicators has a maximum score and taken together add up to a maximum of 1000 points. With this simple, clear, understandable information, public officials, customers, clients and other stakeholders can immediately judge the performance of individual companies. Although an ECG report is mandatory, this “score card” makes it feasible for people to judge business behavior. Other tools for judging a companies social and environmental behavior require only a report and it is totally unrealistic to expect consumers to read reports before choosing which product to buy.
On the one hand, the ECG gives consumers and other stakeholders a tool to better judge the ethical, environmental and human rights standards being upheld by a particular company. On the other hand, the ECG provides companies with a tool to improve internal organizational issues, employee motivation, quality, and long-term stability. Moreover, it gives companies the ability to communicate to their customers exactly which steps they are taking to become a Common Good Business.
In the end, that is what has motivated me to become actively involved in this international, grass-roots movement for humane and sustainable economy. A network of local support groups is growing day by day. If there is not a group in your area already then you can start your own. Check out our website for more information at www.economy-for-the-common-good.org.
Gus Hagelberg
July, 2013
Tübingen, Germany