A quick plunge into top global trends

The newly elected President of France, Emmanuel Macron, has been telling those working on climate change and related innovation in the United States to move to Europe, in particular to France (here), stating “We want innovative people, we want people working on climate change, energy, renewables and new technology.”

In spite of dramatic and highly disappointing indicators of climate change policy change in the United States, opportunities for companies to help solve this global challenge and the other 23 issues identified by the BSL Gap Frame research have never been so diverse, or even so compelling.  But it is not easy to break down the complexity of our volatile, uncertain, complex and ambiguous world into manageable chunks. Let’s look at some of the main trends currently emerging from that complexity and their relevance for business, and also for business students: a quick round up of things to note:

1.The globalization pressure valve: Always controversial, globalization is under pressure as never before. The dream of a liberal, multicultural shiny new world with no trade barriers and unparalleled social equity has simply not materialized. And it will not so long as the top 10% wealthiest on the planet own 90% of global wealth. This has led to severe social inequity pushing a new wave of populism and protectionism with looming trade lockdowns and even xenophobia. As with every new development, there are opportunities for some companies, whilst for others, it may spell impending disaster. On the plus side, what seems certain is that days may be over of companies charging into a community, building it up with the usual positive externalities such as jobs and infrastructure etc., only to switch locations at the drop of a hat…leaving serious negative social and environmental externalities in their wake. Companies are moving from seeking License to Operate (LTO) from local communities to seeking License to Grow (LTG). Strategy-makers in companies should take heed.

2.The SDG fanfare: The Sustainable Development Goals (SDGs) have entered the scene with aplomb yet corporate awareness has not moved substantially beyond senior executive level and, of course, Sustainability Departments. Widespread concrete and tangible commitment to the SDGs is still very far from a tipping point. Because of this, most companies are not yet actually building strategies around the SDGs, setting goals and objectives or building in SDG-friendly targets or metrics to their activities. For companies reading this, think about setting up a corporate learning program so that your executives can start identifying solutions and innovative ways of acting and reporting on your progress towards the SDGs. The opportunity is to start with the SDGs most material to your business.  Then, join key discussions and relevant fora to communicate your company’s contributions, gradually moving to position your company as a pioneer on the forefront of SDG action.

3.The 2 degree tipping point: Climate change is a highly mature sustainability issue – despite the hubris of deniers in the United States. This means that the urgency of addressing it is generally accepted. The question is ….how and how quickly can we go? According to the World Economic Forum, leaders of the world’s most high profile companies recognize climate change as the top global risk in terms of potential and substantial impact. Climate change is also a prominent undercurrent of the SDGs.   For companies, carbon disclosure is increasing rapidly. COP21 produced the hope of a tighter policy environment, long terms goals for global decarburization, and more investor interest in the issue. Participant governments recognized that they had to tackle it together. And then along came the US election. What a massive climate leadership shift in the last year! We are still seeing the new reality play out but who would have thought even two years ago that China would fashion itself as the new climate leader on the world stage?

4.The news is dead; long live the news: “Fake news” proliferation – with the most high profile being around the US election and the Trump administration – is swaying elections and public opinion as never before. Today, personal, institutional, and corporate reputations can be lost in a matter of minutes, even seconds. With billions of $US dollars tied up in their brands, concerned companies have started to put pressure on high tech companies to scrutinize the boundaries of their responsibility for content on sites such as Facebook. I remember school debates back in the day around whether, in must-win battles, “the pen is mightier than the sword”. Today, it appears that “social media is mightier than the bomb”.

5.Grow ’til you pop: The “shop ‘til you drop” mindset of the new millennium continues but on the web! Just how counterintuitive is it that economies are still so bent on growth when resources are so finite? Denying limits to growth is the “emperor’s new clothes” equivalent of modern times.  Everyone knows it is truly madness but no one wants to say it. Virtually no mainstream business leaders are questioning the growth paradigm for now. Hugely growing consumption, facilitated and enabled by emerging E-commerce opportunities, are great news for the Amazons and E-Bays of this world…..but they are also leading to vast environmental damage, with substantial social issues raising their ugly heads too. This is particularly so in emerging economies that lack infrastructure to absorb the massive waste (particularly plastics and Styrofoam) resulting from said consumption. These countries simply cannot keep up with the pace of their own waste.  Meanwhile social pressure has increased on companies to show that they can minimize their impacts everywhere. In this context, innovation hubs are emerging across the spectrum of business and industry to encourage more collaboration amongst technology start-ups, businesses, NGOs, governments, and academia. Why? To find creative and effective solutions to resource challenges and to tackle negative consequences of rapid growth.

6…and grow ’til you drop: Obesity, diabetes and other related medical risks have finally surpassed hunger as a global health crisis and issue. Furthermore, as emerging economies increasingly adopt meat-based diets, animal protein is under scrutiny for both its negative health impacts and the devastatingly huge carbon footprint of livestock rearing (a full 18%, and rising, of global greenhouse gas emissions). There is an opportunity for companies to focus on the inevitable fact that in the future we will all be eating much less meat, more vegetables, less sugar and less salt. Time to get creative with diets! Discussions around health care in the US show us that access to medicine is increasingly a developed world issue also, not just a developing world conundrum (where already some 2 billion people still lack access to medicine). These facts present opportunities for plenty of disruption. We will see the emergence of new business models to serve these massive markets.

7.The global transparency fishbowl: Despite pending deregulation in the US, financial disclosure expectations and regulations have actually increased substantially globally, and with this, transparency. And it is really good news is that investors are taking environmental and social criteria much more seriously than before.  Stock exchanges which long avoided public scrutiny on environmental and social risk are now under the investor spotlight to review disclosure requirements. In 2016, who knew that more than one out of 5 dollars under professional management in the US – yes the US, and that’s almost $9 trillion – was invested according to some kind of sustainability screening? Companies are under pressure to disclose sustainability risk data to shareholders and increasingly undergo stress tests.

8.The big shrink: Finally, as a message to business students, what is happening out there as your local supermarket store replaces people with machines (it happened me the other day, to my chagrin), is a worldwide phenomenon going “from farm to fork” (production to retail). As artificial intelligence and robotics irreversibly move into the mainstream across industries and sectors, we can say goodbye to the world of work, as we once know it! With the social consequences of these massive shifts is in mind, Finland is currently pilot testing the idea of providing universal baseline income (unconditional) in the expectation that automation will massively do away with jobs.  Other countries – such as Canada and Italy – are also testing the waters. Switzerland held a tentative referendum in 2016 but people were not yet ready to vote “yes”; too much of a mind bending change for conservative Switzerland. So what kind of job will YOU do in the future, students?  Make sure a robot cannot easily replicate it. Note that many initially risk averse firms are boldly outlining digital strategies and fostering the right skills and capabilities in their managers to embrace the business world of tomorrow. Soft and subtle human skills, ethics, values, imagination and conceptual intelligence re-enter the picture again as the greatest benefit humans can contribute to business of the future. This may be good news for sustainability.

Ionescu-AileenPICTURE-150x150Author: Dr. Aileen Ionescu-Somers

Active in thought leadership, consulting, applied research, teaching and supervising DBA candidates in sustainability & responsibility.

Responsible sourcing at Nestlé – BSL students learn first-hand about key elements of corporate sustainability

As all of us working in this field know, sustainability is highly complex, requiring an understanding of multiple disciplines, many of which rather technical. Additionally, there’s a big gap between theory and practice, especially when attempting to transform existing companies and systems that were not built with sustainability in mind.

In our case, after 5 classes of “Business Responsibility & Sustainability”, covering principles, natural and planetary boundaries, human dimensions, major programs like SDGs and MDGs, the role of businesses, stakeholder models and management, including role plays on how companies create conflict and how to resolve them – it was time to see how it all works in practice.

Early January, we were fortunate to be received by Dionys Forster (Sourcing specialist, department of corporate agriculture) and Diarmuid O’Connor (Global manager, agricultural raw materials) at the Nestlé HQ in Vevey.

Given the size and complexity of Nestlé (over 300k employees, 190 countries, thousand of brands and many more products), we had to focus, in the case of our visit on rural development and responsible sourcing of agricultural products, especially milk, cocoa, coffee. This of course means that many other topics with high sustainability relevance, such as processed food, added sugars, bottled water, palm oil, pesticides and many others, were not discussed during this visit.

What we saw and discussed was highly sophisticated, well designed and effectively implemented. Here are a few highlights:

  • Planetary boundaries and Terrestrial biodiversity were used to introduce the subject, similarly to how we started our own class two months ago.
  • Nestlé, with 1.7% world market share, is the biggest player in a highly distributed market, top 20 companies collectively accounting for only 9%. This means, to make a big difference, working with competitors is required.
  • Social media analysis reveals that people are concerned about food quality, climate change, packaging, animal welfare.
  • To make sourcing more responsible, Nestlé implemented Farmer Connect, directly sourcing from 760’000 farmers, ensuring almost total product traceability, offering training (400’000 farmers trained) and limiting price volatility (a major benefit for farmers, allowing them to better plan ahead).
  • A broad sustainable agriculture initiative (SAIN) aims to reduce waste and pollution, better use water, reduce greenhouse gases through technology dissemination, financial support for farmers, buying clubs, price stability, education, training, and advocacy.
  • RISE (Response-Inducing Sustainability Evaluation) is a questionnaire-based tool developed at the Bern University of Applied Sciences, rapidly identifying problem areas, allowing to better focus improvement efforts.
  • “Dairy for you” is an education program offering differentiated training for workers, specialists, managers, and graduates, by setting up a local institute or working with a local university.
  • At Nestlé Nutrition, baby food requires much lower limits of pesticide, lead, cadmium, mercury etc. residues – Nestlé applies the same (strictest) standards around the world, even in countries where not legally required.
  • In Ghana, to reach the majority of farmers who don’t read or write, a local theater play with characters representing good farmer / bad farmer is used to develop local community knowledge – and at the same time improve raw material quality and safety
  • A key issue in agriculture is succession – worldwide, the average farmer age is 60, in the US 65, in Japan 77; and specifically making farming attractive for the young generation. Nestlé has been working with many farmers for 2 or 3 generations, but the issue remains.

This reminds me of an excellent article published in the NYTimes “Don’t Let Your Children Grow Up to Be Farmers”, showing how the design of our food system, among many other issues, also makes farming unattractive for young generations.

Therefore we thank again Dionys Forster and Diarmuid O’Connor, not only for receiving us so well, but for doing so much to make sourcing more responsible.

Author: Sascha Nick, Associate Professor at BSL

Hacking for chocolate

“Chocothon” hits sweet spot of collaborative innovation in Ghana

Key question….what went on in Ghana last weekend that might have something to do with BSL’s vision and mission, and especially its three pillars of entrepreneurship, sustainability and responsible leadership in a context of collaborative learning?

The first Chocothon, that’s what! BSL has partnered with Google, the International Trade Center, the Future Food Institute, Crowdfooding and a host of other cool organizations to promote a “techno” focus on the sustainability and business threats around world cocoa supply. How? By holding a hackathon for chocolate (hence the term “Chocothon”). For those not yet in the know, a hackathon is an event, typically lasting a few days, in which groups of people meet to engage in collaborative computer programming. The idea of “hacking for chocolate” was born some two years ago at the Google Food Innovation Lab (where BSL partner and thought leader Dr. Aileen Ionescu-Somers is an expert participant). The first Chocothon in a series became reality in Accra, Ghana this weekend!

img_9925Threats…around chocolate? What? When you look at supermarket shop shelves today, it is hard to believe there is a problem. After all, we seem to have a plentiful supply of cheap, delicious chocolate treats. But don’t be fooled; our business system is overly short-term oriented. The economics barely work for now and benefit too few stakeholders. Long-term, if the crucial farmer producer of cocoa is not protected, then it’s a zero sum game. In other words, no supply = no business (so bad news for companies) = very expensive Easters, Christmases, Valentine’s days and Birthdays in the future (so terrible news for consumers).

Let’s focus on the challenges. Undercompensating farmers for quality cocoa ultimately leads to too low an income for farmers to bother staying in the business. It creates a rather vicious cycle: no money = low or no investment in new technologies, new trees or desperately needed training = increasingly lower yields and environmental degradation = lower quality cocoa = even less compensation. Then there are government policy threats, such as lack of knowledge and certainty about land rights and ownership leading to insecurity in land tenure. Macroeconomic issues such as inflation and defective exchange rate regimes also take their toll. So farmers in Ghana and Côte d’Ivoire and other cocoa producing countries are not only exiting cocoa farming and/or switching to other less challenging crops, but they do not want their children to stay in cocoa farming either.  Farming cocoa is a grueling task. If the economics do not work, it is even harder to make a business case to the increasingly literate children of farmers who, after all, may have other options.

So what does the Chocothon set out to do? Well, can the best of modern day high tech ingenuity contribute to resolving the problems around cocoa production? Can this be done in a context where illiteracy is widespread and access to Smartphones extremely limited? We agree…its a pretty tough call. But the technology landscape is changing rapidly. The Chocothon team figured that if we could get young Ghanaians excited about problems in their own country, through collaboration they could be empowered to focus their ingenuity on thinking forward and fixing them. After all, the problems we mention are man-made, so let’s get some man (and woman)-made solutions!

Need more convincing?  Well, if you get enough stakeholders together in one room with some hackers to work on a problem, you can literally start… hacking away at it.  So, for example, at the Chocothon, we invited government representatives to not only contribute their knowledge as “knowledge brokers” but to also raise awareness with them of the importance of increasing internet and Smart phone technology access, or of increasing institutional knowledge about land sizes, ownership and security. After all, knowing what you didn’t know makes for better decision-making. Looking forward, we can expect that young farmers in Ghana will be – as all young people are – ingenuous about assuring their own access to technology; every single trend in the world indicates that this is the case.

Therefore, the idea of designing collaborative platforms to share farming equipment or expertise to increase quality of work and efficiency and thus productivity, is not a pipe dream.  To set up systems empowering farmers to demand and get the best prices on the market is not a hallucination either. To enable mobile direct payments to farmers – faster cashless money transactions – coupled with now fast developing services like mobile insurance or other business transactions for tools or fertilizers are totally feasible future options for Africa, as they have been for other countries. Micro-financing of farmer investments, even by crowd-sourcing funds from all the chocolate lovers out there might be another possibility. Creating training platforms, or indeed tools that help young farmers with assessing soil fertility, tree age, crop diseases…all this is possible today. We can also look at optimizing transportation platforms to allow for better transport of cocoa beans – a big headache for Ghanaian farmers today. Get it? Good!

So from Saturday to Sunday 20-21 January, 2017 a group of young and talented hackers – IT developers and social innovators – got together with other stakeholders at the Impact Hub n Accra, Ghana. Representatives and knowledge brokers joined from multiple organizations such as the Ghanaian government, Google, Barry Callebaut (Swiss B2B cocoa supplier), the International Trade Center and the Future Food Institute. The Chocathon team assigned the hackers to working groups and provided food, drinks, and even mattresses (yes!) for the all night hack.

img_9852-2The teams had a task of building up a prototype and uploading deliverables step by step during the hackathon. Sounds familiar? It is pretty much the techie version of what the students of BSL did by designing start-ups to tackle social issues during the last Gap-Frame week last December… Yes, this kind of collaborative learning is taking hold in more sectors than one! The Ghanaian Chocothon hackers get tempting prizes to encourage innovation and even conversion of their prototypes into working businesses, such as a co-working space for one year at the Impact Hub or for six months at ISpace, or indeed a cash prize.

Watch this space for the next blog about the Chocothon where we will tell you about some of the cool ideas the hackers came up with. This is the first of a series of Chocothons that will ultimately contribute to saving YOUR treasured chocolate from gradual extinction. Tune in to #chocothon hashtag to find out more. Even better…how about supporting our next Chocothon? Here is our crowd-funding site link:  https://www.crowdfooding.co.uk/deal/188/Chocothon

Why should you get involved? Because YOUR chocolate needs YOU!

Ionescu-AileenPICTURE-150x150Author: Dr. Aileen Ionescu-Somers

Active in thought leadership, consulting, applied research, teaching and supervising DBA candidates in sustainability & responsibility.

Competencies that count: Where are Responsible Leadership and Sustainability proficiency listed in the job descriptions?

Recently, and through different announcements, a number of large global corporations have made public their intention to remove University Degree requirements from (some of) their job descriptions and requirements. They argue that the correlation between holding a degree and being good for certain jobs is weak and too many good candidates are discarded because of this wrong filter. They plan to use new and innovative online tests that will do a better filter job according to them.

I look at this with interest as I have never been convinced that current degrees, and business degrees in particular, are representative of the important skills our future leaders need (and by leaders I mean leader in whatever position they hold, not only senior management). Among the many important skills future and current leaders need are responsible leadership and sustainability proficiency. Or not?

dr-katrin-muff-at-recol_fixed

My feeling is that if you ask the question directly to a hiring manager, they will certainly answer yes. At the same time, have you ever seen these two competencies in any job description? I am trying hard but, unless I come across some very specific job related to sustainability, I have seen no trace of the demand for these two important competencies. I am embarrassed by this. At Business School Lausanne, we have made a clear commitment to facilitate learning around sustainability and responsible leadership all across our program and courses. We design innovative pedagogy around these crucial competencies as we believe that there is no way the world will progress toward the UN Sustainable Development Goals unless new practices are embedded within any single next decision that business people are required to make. What is the next ingredient you will source for your product? Will you ship it by train, track, plane, boat? Will you ask for a local production? How much money will you allocate budget for personal development of your team? Will you invest in a social venture? Will you close an eye on your current polluting factory? Will you ask for innovation toward sustainable practices? Will you engage with all relevant stakeholder when making impactful decisions? And the list can go on and on forever. Almost every single decision business people are asked to make, presents a choice to go for more or less responsible and sustainable solution. Do you want your employees to be conscious of that option? Do you want them to be fluent with the consequences wrong decisions can lead to (and clearly not only financial)? This is a call for every job seeker to add where they stand with their responsible leadership and sustainability proficiency on their CV. This is a call for all hiring manager to make sure they make it clear they demand such competencies.

Let a new purposeful market grow around jobs and competencies that count and will make the world a better place!

Author: Carlo GiardinettiActive in Program Development, Holacracy and directing the BBA, Masters and E/MBA programs Business 

African Handmade Shoes

African Handmade Shoes” is a start-up created by one young guy, Paul Burggraf, from Lugano in 2013.The company fairly employs thirty shoemakers from Cape Town, South Africa, to produce shoes (espadrilles) sold worldwide. It is an innovative project as well as a supportive business idea that creates a bridge between South Africa and Ticino, Switzerland.

The idea is very simple: producing handmade shoes in Africa and sell them online in Switzerland and worldwide. In addition, the project is characterized by an ethical attitude that provides fair wages and optimal operating conditions for the thirty artisans working in the Cape Town laboratory, differentiating it from other shoe manufacturers who exploit their workers through poor working conditions and with low wages. Nevertheless, “African Handmade Shoes” are fully aware of these problems and they are ready to make the difference.

In 2007, Paul Burggraf made his first of many trips to South Africa. Since then, he has fallen in love with South Africa – a colourful country, incredible, so full of potential.
The idea of “African Made Shoes” was born through meeting Arnold – a young South African craftsman who ran a small shoe shop. Paul was immediately interested and impressed by his work and his products. He realized there was serious potential for fashion export. Thus “African Handmade Shoes” was born.

student-blog

They started with a Facebook page collecting orders and received good feedback. They subsequently figured out the brilliance of their idea. They now have a thirty-man strong workshop in Cape Town, a website through which the product reaches around the world and a logistics base in Ticino: https://africanhandmadeshoes.com/.

The main sales channel is e-commerce, however, it is also possible to find temporary stores during festivals and events such as the “Locarno Film Festival” and so on. Currently there are a few stores in Ticino and Switzerland, it is even in the most prestigious Bahnhofstrasse in Zurich.

Transparency and fairness are very important; in spite of the few resources available,
social media has been key to make them known. Through these channels they have decided to completely document what was going on in the workshop of Cape Town. In short, the complete manufacturing process is documented for final consumers to see.
Pride in their craftsmanship, dignity and self-worth in their employees, respect for workers, earn a living wage, multicultural and happiness are values important for the brand. Workers are simply local people, they are friends and they are also neighbors.
Trusting workers is important to get maximum quality for the final product.
They have also helped to maintain a trade, that of the shoemaker, which globally is disappearing. Those who learn this profession with them can support themselves in the future. In the African social reality, in which education and apprenticeship training are lacking, giving people a future by learning a job is a huge added value.

Finally, they believe in African culture as well as the promotion and growth of the African economy. Therefore, the company is conducting a competition for local entrepreneurs called “Startaboom”: Three projects of local entrepreneurs are presented on the website of “African Handmade Shoes”. The public chooses what business will get financial support by voting on the website. The entrepreneur who receive the most votes will get the 10% of 2015 profit of “African Handmade Shoes” in order to help the project grow.

The success of “African handmade Shoes” is very simple: The colours and fabrics of these shoes make a product with a long cultural history, tradition known globally. Companies like these show us that business does not have to about profits only, but can be economically successful by helping to solve social problems and making people in Switzerland and South Africa proud of what they do.

Here a few links for more information:

Video presentation
Founder speech about local entrepreneurs (new start-up)
One of the three local entrepreneurs

Author: Riccardo Bonfitto, Master in International Business student, 2016

“Don’t Learn to Do, But Learn in Doing”

I was recently asked to speak at the Impact Hub Zurich’s event on the future of education: trends and opportunities. I am no educationalist but I am educator, so I decided to speak on what I was comfortable with, my own experience in teaching that I have worked out through trial and error over the last 10 years. I cut my teeth teaching in Singapore to Executive Masters students who would come in the evening for 3 hours of lecturing after a full day at work. They were understandably tired and so I peppered my lectures with as many case study examples as I could in order to demonstrate the real-life applications of corporate social responsibility and sustainable development, especially in a place and time when CSR and SD were still very much theoretical ideas and not a day to day reality.

And so to my current class of Masters students at BSL, I continue to try and make my lectures as relevant to real life as I can, knowing that business students need all the practical tools they can to be competitive when they head into the workplace.

This term I decided to use the theme of food and agriculture to discuss as many facets as possible of sustainability and business responsibility, and there is no shortage of material in this sector – from farming practices, (labour, pesticide use, GMOs, animal welfare), to processing (use of palm oil, high fructose corn syrup), transport (carbon footprint), marketing (obesity, fast food, veganism), to food distribution and scarcity.

To learn by doing, I asked my students to interview someone who had something, anything to do with the food sector and get their take on sustainability issues. It could be a restaurateur, it could be their uncle who likes cooking, a farmer, a winemaker, an eminent professor or their mate who likes eating…I look forwards to sharing some of these interviews with you which they have written up in blog form (of course, as the blog is another practical tool the students must master).

And how best for students to learn than to meet people who are “doing”, who can speak with confidence about their career paths and what it’s like to be at the coalface of an organisation. So we were privileged to have some time with Mr Diarmuid O’Connor (Global Agrimaterials Sourcing Manager at Nestlé Nutrition) who captivated us because he didn’t give us the blarney but told us what he did and why, and how sustainability made business sense and that he’d been working for over 20 years to support farmers in producing high quality materials for Nestlé.

I’m looking forwards to some more straight-talking guest speakers coming into the classroom over the coming weeks including Mme Isabelle Chevalley, conseillère nationale in the Swiss parliament who will speak to us about GMOs in Switzerland and Mr Sebastien Kulling who is working on a start-up in the food sector.

Prof. Marina CurranAuthor: Marina Martin Curran PhD,
Professor at BSL

Food and beverage industry kicks off the 2016 BSL-SAI Platform Master Class

It’s just a fact of life: we all have to eat and drink. That’s why our food – how it is produced and where it comes from – should also concern us all. Amongst the many challenges of the 21st century, one of the most considerable is ensuring the sustainability of food & beverage value chains. We need to continue to eat and drink healthily and safely, but without destroying the planet and communities from which we draw our very sustenance.

SharingquestionsSAIPlatform

Sustainable sourcing of agricultural raw materials is probably one of the most complex of sustainability challenges. Why? Because supply chains are themselves increasingly elongated and complex. We take this challenge seriously at BSL and want to play our part in unravelling the complexity and breaking it up into manageable parts. So much so, that we are proud to announce our learning partnership with the Sustainable Agriculture Initiative (SAI) Platform.  The SAI Platform is a consortium of some 80 of the world’s most prominent food and beverage companies. It facilitates sharing at pre-competitive level of knowledge and best practice to support the development and implementation of sustainable agriculture practices involving stakeholders throughout the food value chain. By partnering with SAI Platform, BSL can remain at the cutting edge of latest developments in sustainable sourcing of food & beverages. It can also link case studies and research projects jointly carried out with SAI Platform companies to BSL programs and overall thought leadership.

BSL’s Aileen Ionescu-Somers – herself a food and beverage industry strategy and sustainability expert – says

“I have been engaging with the SAI Platform since it was launched in 2002 by three major food & beverage companies: Unilever, Danone and Nestlé. Now, some 15 years later, SAI Platform has an impressive array of some 80 members. This partnership is a fantastic opportunity for BSL to focus on a highly relevant set of sustainability challenges and work on solutions to close the gaps.”

SAI_PlatformLearningDay1

Last week on 6 and 7 June, at BSL, the first BSL-SAI Platform Master Class on Building Sustainable Value Chains took place with the participation of senior sourcing executives from Nestlé, Mars, Arla Foods, UTZ, Coca-Cola, SGS and others….. In addition, expert contributions included high level executives from NGOs and international organizations such as The Forest Trust, WWF Spain, Fairtrasa, Solidaridad, the International Trade Center and The Rainforest Alliance. Stuart Orr, global head of freshwater stewardship for WWF International delivered a riveting keynote speech and pointed out:

“Agriculture uses a full 70% of available freshwater resources worldwide, dwarfing municipal (7%) and even industry (23%) uses!  But we must dispel the myth that seeking water efficiencies alone will solve the problem. This approach can even have negative consequences. Producers must move beyond local measurement and look at the bigger picture. We need broader evaluation incorporating community and basin impacts.”

Participants left BSL in high spirits. Here are a few of their parting remarks:

“Great Master Class: what a good experience! Many thanks for a very insightful and enjoyable couple of days!”

“Continue working on this participative and interactive class approach. It was really good!”

“Great course. I learned a lot. Lots of insights! The interaction with companies was very valuable. Nice to have a mix of NGOs and private sector. I would recommend to others. Thank you!”

“Very interesting 2 days, with a lot of new ideas to think about and definitely initiatives worth implementing.”

The BSL-SAI Platform Master Class will be run annually at BSL. Watch this space!

Ionescu-AileenPICTURE-150x150Author: Dr. Aileen Ionescu-Somers

Active in thought leadership, consulting, applied research, teaching and supervising DBA candidates in sustainability & responsibility.

How to negotiate for Ethics in a Crisis: The Greenpeace-Nestlé case

In March 2010 food-giant Nestlé had to learn the hard way, how to (not) react to a hostile NGO attack: Greenpeace had released a video that made the link between palm oil used in Nestlé’s Billion-Dollar-Brand KitKat and the destruction of rain forests in Indonesia that kills Orangutans.

http://www.greenpeace.org/international/en/campaigns/climate-change/kitkat/

The video was shocking and went viral in no time. Nestlé’s first reaction was to prohibit Greenpeace to show the video on the internet. A bad move in the world of social media, because this even multiplied the interest in the video. This was probably even wanted by Greenpeace because consequently the campaign gained an unbelievable momentum: Internet users kept sharing the video and as a sign of solidarity even used the logo of the Greenpeace campaign (the KitKat brand logo modified into Killer) as their Facebook profile picture.

Of course, Nestlé did not actively kill orangutans, like the video suggested. The problem was created deep down in their supply chain. Palm oil is cultivated in South-East Asia and it is an ingredient of about 50% of all products that we buy on a daily basis: Shampoo, cookies, lipstick, ice-cream. It is virtually everywhere. It is cheap, it grows fast, it does not have a strong taste, it keeps chocolate solid at room temperature. One hectare of palm oil will give you six tons of oil. In comparison: one hectare of soy only generates a yield of one ton of oil. No wonder the world’s hunger for palm oil is ever increasing. Consequently, cultivators of palm oil actually do cut down rain forests in order to set up huge mono-cultural palm oil plantations, thereby destroying the habitat of orangutans. However, they also lift people out of poverty and build schools and hospitals. Palm oil and deforestation is a classical « wicked problem », i.e. it is complex, controversial, value driven, concerns many stakeholders and spans many domains (economic, social, political, legal, ethical). This is why such problems are very hard to solve.

In my class « Business Ethics and Negotiation » I confront my students with this case and then they need to figure out in a group work what had gone wrong in this case and develop a strategy for what Nestlé should do next. I ask them to imagine that they are the top-notch Ethics and CSR consultant and that they need to convince the Nestlé board.

This spring we had the great pleasure and privilege to actually receive the debriefing for the group work form the real-life world class CSR consultant who had helped Nestlé to cope with the KitKat crisis: Scott Poynton from The Forest Trust, a non-profit organization, that helps companies to improve their supply chains.

Guest-speaker Scott Poynton

Guest-speaker Scott Poynton

Scott is a hybrid between an activist and a consultant: He had realized that fighting deforestation and other sustainability disasters was more effective with companies than against them. Consequently, he became a “critical friend” to corporations in environmental trouble. Scott has helped some of the world’s leading companies to transform their supply chains for the better.

That made him the perfect mediator for Nestlé: He understood the problems multinationals have in keeping their supply chains out of trouble and he also is a trusted person at Greenpeace.

Scott shared with us that companies when being attacked by an NGO like Greenpeace often have trouble understanding the issues. This certainly was the case when Nestlé was attacked. The Nestlé top-management tried to explain to the Greenpeace spokesperson of the campaign on the phone that the company was doing a lot for the environment. Greenpeace campaigners know this kind of reaction and they usually react by saying: « They do not get it. They need more pain. » And they did get more pain, when Greenpeace campaigners dropped from the ceiling and unfolded banners during the Annual General Meeting.

This is why Scott’s first lesson for companies under NGO attack is to really understand what the issue is and what your responsibility is.

The Forest Trust helped Nestlé produce and implement « Responsible Sourcing Guidelines » with the objective to avoid sourcing palm oil that was linked to deforestation.

It turned out that many of my students’ good suggestions for change were too long-term to really help Nestlé out of the acute crises they faced: Reforestation, finding a substitute for palm oil are all good ideas, but they take too much time. Nestlé needed to get its valuable brand KitKat out of the negative headlines quickly and reach an agreement with Greenpeace that they would give them a break in the campaign.

In order to do this Scott’s second lesson is: Find common ground. This is easier said than done. The worlds and mind-sets of NGos and companies are often quite contrary. A company fighting to save the profits of very successful brands like KitKat notoriously have trouble seeing the ethical issue hidden somewhere in the product’s supply chain. At the same time, for NGO activists it is very hard to understand how you could not see it. This creates tensions. Then just throw in some pride and ego and the fact that in a corporation nobody wants to be blamed for these kinds of messes and you have an explosive mixture for a first negotiation meeting.

This is why, for Scott, one of the most important things (yes, this is lesson Nr. 3) in negotiating in heated situations is to start with the values of the persons involved. If you want to mediate between conflicting parties, you always need to genuinely believe that your negotiating partner is a reasonable, rational, and decent person. If you enter a sensitive negotiation already convinced that your counterpart is mean and evil, they will sense this instantly and the necessary basis of trust cannot even be started to be built.

Scott’s stories show very nicely that if you want to negotiate for issues around ethics and sustainability, you cannot use the standard “I win – you lose” approach to negotiation. In this approach, we only divide the cake and try to get the biggest piece of it. This does not work, when you are dealing with “wicked problems”. In these cases, concentrating on positions only leads to impasse, misunderstandings, blaming, and zero-sum games that nobody can win.

If you want to successfully negotiate conflicts around wicked problems, you need to concentrate on interests and try to create a larger cake for all parties involved. Nestlé was not interested in deforesting Indonesia and killing orangutans. They are interested in having a well functioning supply chain for good quality palm oil. In order to find out the interests of the other party, you have to stay open and not judge the other side. You have to ask the right questions to understand them, listen carefully and then you can find common ground.

Thank you, Scott, for bringing to life what my students have learned in theory and negotiation role plays in class in a way that they will remember every time they will eat a KitKat.

Prof.-Bettina-PalazzoDr. Bettina Palazzo
Professor at BSL

Jeff Yokoyama: Surf dude turned Fashion Revolutionary

Jeff Yokoyama operates a small shop called the “Yokishop” in Newport beach, California. Jeff has been designing and selling clothing made from recycled materials for a long time. He has also in the past had several successful clothing companies including Maui & Sons and Pirate Surf.

Jeff has been expanding his efforts to create a supply chain for recycled clothing. Since 2009 he has had a partnership with the athletics department of USC (University of Southern California) and UCLA (University of California, Los Angeles). Jeff initiated this in reaction to how he saw his daughter, who played volleyball in college, received new athletic clothing items every year which she would later throw out.

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Americans send 10.5 million tons of clothing to landfills every year. Jeff’s experience in the apparel sector made him reflect on how he treated people and what he truly valued, he states when speaking to the Surftorialist (2014): “The moment I knew I was out of it was when I came home and I had everything. I had the right bachelor pad, the right car, the right music, everything was right. The right clothes all lined up in the closet, the right suits, everything. And I then decided that all of this didn’t mean anything. I bawled my eyes out that night. I said ‘I don’t need any of this’”.

Shirt with recycled upside down Levi pocket from Yoki’s GARDEN LEVIS clothing line. There is an abundance of Levi’s in American landfills. He uses this clothing line to show that cool things can be made from old stuff.

Jeff made a transition from the “cool/hip” look (Maui & Sons, Pirate Surf) to a more specific niche of creating clothing from recycled materials. The motto for the Yokishop is: “Design different. Make different. Sell different”.

Now Jeff buys used athletic clothing by the pound from USC and pays a 15% royalty fee for every repurposed item of theirs he sells. He only pays $2 out of pocket to make a $200 sweater. Ethically it could be challenged that the price he sets for his clothing items makes his message is anything but anti-consumerist. However it can more accurately be said that his profit margin is necessary considering that he is an independent shop owner, who hires 5 people. His clothes are not all 100% recycled, he also gets newly manufactured t-shirts from a factory in California.

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Jeff Yokoyama at work in the Yokishop. by: Michel Light

Jeff Yokoyama has a story which highlights the fundamental factors for personal change. Change in regards to turning words and deeds into concrete actions. He learned from his personal struggles, such as the bankruptcy of Maui & Sons. A more fulfilled life requires doing something that truly helps the world and others, so while he is not running an $18 million business as before, his work is more enriching. He is showing just how cool you can make old and used clothes.

Author: Siale Comissario, Master in International Business, class of 2015-16

What do Sustainability, Inclusion and Organisational Transformation have to do with Leadership?

Hint:

BSL professors have taken a long hard look at leadership and sustainability and have a strong vision of what is needed to make transformative organizational change a real buzz and not just a string of jargon. We know it won’t be easy, it involves mindset, culture and habits. We know that even when all these important elements are taken into consideration the hurdle of willingness and the resilience to push through the discomfort of uncertainty in order to sustain the change, remains.

There are courageous leaders working throughout industry to make this happen and BSL is looking to bring a selection of these people together to dialogue, share insights and learn how we each are contributing to make this happen. May 10th 2016, we’ve invited 30 companies to bring their know-how to the table. BSL brings its own secret sauces; our grass roots expertise, millennials’ insights and a fervent desire to convene a conversation that honors those who are willing to create change.

If you are running a team, a department or company and would like to receive information on the outcomes or reserve a place at the table on a second courageous leadership conversations in June contact: Mary.Mayenfisch@bsl-lausanne.ch.

Author: Nadene Canning, BSL Professor

Nadene Canning