Corporations, children and responsibility

Companies can be more alert on how various aspects of their operations impact children, writes Rajni Bakshi.


Corporations are now among the most powerful entities on earth. Children are the world's most vulnerable people. In what ways can corporations play a role in making the world safer and better for children?

This question was addressed at a conference on Corporate Social Responsibility hosted by the NGO Child Rights and You (CRY) in Mumbai last week. Discussions opened by taking stock of the grim global reality.

For instance, the World Economic Forum's recently released Global Risks Report 2013 has shown that "the world is more at risk as persistent economic weakness saps our ability to tackle environmental challenges". The report puts wealth gaps and severe income disparity at the top of its list of concerns. This is followed by -- unsustainable government debt, rising green house gas emissions and socio-economic trends which are derailing efforts to tackle climate change.

What the world economy is going through is not just a recession, said John Elkington in his keynote address at the conference. "Capitalism is going through a periodic rebooting process" according to Elkington, who is the British activist and entrepreneur who coined the term Triple Bottom Line and is widely regarded as the world's leading authority on corporate social responsibility (CSR) and sustainability related issues.

In 2015 the Millennium Development Goals, mandated by the United Nations, will be phased out. International negotiations are now on to decide what will replace the MDG and the focus is shifting from poverty to more wide ranging sustainable development goals. This is an opportunity to put children at the heart of both planning by governments and strategies by companies.

One way of moving in this direction, Elkington argued, is to challenge the idea made famous by the American economist Milton Friedman that those who challenge the free market lack faith in freedom itself. This is untrue, Elkington pointed out, because there is no really free market anywhere.

Similarly, Harsh Mariwala, chairman and MD of Marico, challenged the old free-market orthodoxy which claimed that "the business of business is business". Instead, Mariwala said: "The business of business is more than business. We must find win-win-win solutions".

For example, the several tragedies of shootings at schools and colleges in the US, several pension funds and institutional investors, notably Cerberus Capital Management and CalSTRS are putting pressure on retailers who sell weapons. The International Integrated Reporting Council has come up with a six dimensional version of capitalism. The conventional 3D version was about three kinds of assets financial, manufactured and human. The 6D model includes three more assets - Intellectual, Natural and Social.

The Breakthrough Capitalism Forum, held in London in May 2012, is another signal of change. At this forum representatives of leading global businesses explored and debated the pervasive view that the problems of the world economy are a consequence of systemic failures not just some cyclical dip. The term "Breakthrough Capitalism" now applies to efforts by investors, entrepreneurs & policy-makers to jointly drive creative solutions that deliver system-level change.

Likewise, Michael Porter's articulation of the concept of Shared Value is attracting more and more support. This concept essentially depends on fostering trust among stakeholders. The question is how to build trust?

There are no easy answers to this question but there is an increasing number of inspiring examples of companies that are aiming for a higher and higher degree of social and environmental responsibility.

For instance, Interface – an American company that makes flooring, has set itself the goal of having a zero ecological footprint by the year 2020. By creating closed loops of recycled materials this company has already managed to reduce its footprint very substantially. Elkington's view is that the future belongs to such "Zeronauts".

Similarly, Greenpeace's Detox Campaign is gathering support. This campaign, which was launched in 2011, aims to expose the direct links between global clothing brands, their suppliers and toxic water pollution around the world. The campaign includes extensive testing of branded garments for traces of hazardous chemicals.

This has led to various reports which Greenpeace says have "exposed the toxic truth behind our clothes." The call for pollution free fashion has already won support from some of the leading fashion designers, models and bloggers - who have signed the Detox Fashion Manifesto.

Some of the world's major apparel and footwear brands and retailers now host an entire website dedicated to Zero Discharge of Hazardous Chemicals. The objective of this network, says the website, is "to lead the apparel and footwear industry towards zero discharge of hazardous chemicals for all products across all pathways in our supply chains by 2020."

It is widely accepted now that any responsible company must ensure that there is no child labour employed in any part of its supply chain. But, as the discussions at the CRY conclave highlighted, the agenda of making child rights a reality requires action on many more fronts.

This can include efforts by companies to be more alert on how various aspects of their operations impact children. Thus all efforts to enhance the positive social and environmental impact of a company eventually improve the quality of life of children in different socio-economic groups. Many companies are also encouraging their employees to be more involved in social initiatives aimed at improving the lives of children.

It is in this context that the Child Rights Champion Awards, established by CRY this year, are vitally significant. These awards aim to honor those companies that are integrating child rights into both their business model and their social responsibility programs.

CRY's CSR conclave on January 11th ended with an awards ceremony where Hindustan Petroleum won the Golden Award while Procter and Gamble got the Silver Award, Aviva Life Insurance got the Bronze Award and GenPact India was given the special jury award.

It is now more widely acknowledged that business is a key element in search for solutions. As Elkington pointed out there are powerful imperatives taking us in this direction: "We are herd animals. The World Economic Forum risk report is giving a signal that herd has to move towards sustainability."

DISCLOSURE: The author is a trustee of CRY.