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The false beliefs of CSR

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By Fabrice Bonnifet

· 11 min read

What if we stopped pretending to want to change things? The effects of global warming and the mass extinction of biodiversity are now manifesting themselves all over the planet with unprecedented intensity. While we know that climate disasters will increase in frequency and severity long after anthropogenic GHG emissions have ended, can we continue to believe the fables of a development model that denies planetary limits? Let us ask ourselves the question sincerely.

CSR (Corporate Social Responsibility) will fail if it does not break its complicity with the old precepts of the single economic thought that unfortunately still prevails in business and management schools, in the political world and in companies that have not still really taken into account the issues and the need to transform in order to adapt to them. The climate emergency requires that we no longer create value by simply doing a little less harm! It requires that the creation of value participate in the preservation of living conditions on the planet. We are very far from it. In other words: the maximisation of the economic pillar of sustainable development can no longer compensate for the predation of the other two pillars, the environmental and the social.

It should be remembered that originally corporate CSR strategies were born in response to the increase in imposed or voluntary regulation: the famous "soft law". But let's be objective, did these obligations allow the radical changes expected? Europe and France in particular are regularly cited among the providers of some of the strictest standards, laws and regulations in the world. For some observers, short-sighted, these requirements are moreover so "demanding" that they undermine the competitiveness of the companies of the old continent and even the freedom to undertake.

And yet, like Grouchy's army, let us dare to say that regulation is not enough and always arrives late! As long as it is not fully aligned with biophysics, there will be nothing to wait on that side to start believing in a change of model. Take the example of CO2, we know that its direct or indirect production is ecocidal in the very short term now (less than 5 years of CO2 emissions at the current rate to remain below 1.5 ° C according to the IPCC), or what regulation limits CO2 emissions for each of the business sectors beyond the capacity of natural carbon sinks? None. Instead, companies are asked to count their emissions and possibly to embark on decarbonisation trajectories. Getting involved without specifying the means or even giving up is part of Gascons' promise and measuring anything without a will to act has never made progress.

A regulation up to the stakes implies making (yes, doing!). Pass laws that prohibit the unacceptable within a time horizon set by science and not the sole will of men. The obligation to establish extra-financial reporting, however material it may be, is anecdotal in the face of the urgent need to take concrete action for the climate and the collapse of biodiversity. And yet it consumes a large part of our bandwidth which should instead be mainly devoted to changing business models. But at the point where we are, it's not even the debate anymore. The question is do we want to continue to live in peace, meet the vital needs of all and flourish as unique individuals in symbiosis with the other species of the living world? If so, let go of our beliefs. We, directors of sustainable development (SD), must be the spearhead of this exercise of disallowance that we must imperatively carry in our respective structures and beyond in civil society. Otherwise, what are we used for?

Let us review the false beliefs of the first generation CSR which prevents us from seeing the economic collapse that will accompany the collapse of the living, despite the successive stimulus plans and other fit for 55 - which in their configuration only creates demand for more wasted resources. Let us recognise that the ecological and meteorological cataclysms, perfectly modelled in the latest IPCC report - and the preceding ones demonstrate our lack of understanding of the essential. Note that the scientists were right.

False Belief 1: CSR allows companies to balance sustainability while making more money

The supporters of more responsible capitalism would like to believe it so badly, but it is wrong. And we, SD directors, a few years ago, wanted to believe in it too. It was, for some of us, a way of getting the topic into the boards, forcing decision makers to take it seriously. But let's face it: in the current system, the more a company masters greenwashing to continue polluting, the more it relocates its production to countries that are complacent from the point of view of human rights and environmental law, the more it “legally evades” the tax authorities by playing with ambiguities and the lack of harmonisation of financial and fiscal rules, the more money it earns, the more efficient it will be and the more effective its lobbying will be to block any desire for progress. Even today the negative externalities of companies cost nothing, nature returning no bill for the unreasonable but legal plundering of its resources and the fines for the gross deviations of the most cynical companies are so insignificant that the risk of doing wrong despite the effects on the image will always be more profitable than that of doing well.

No: implementing a CSR strategy compatible with planetary limits is above all life insurance, not a guarantee of over-profitability. Because no, integrating natural and human capital into its economic model will not be without consequences on its profitability. A "coup" marketing is still possible for virtuous and avant-garde companies, but in the medium term, the advantage will be, at best, to take market share from less virtuous companies, at least, to keep its "license. to operate ”. In the same vein, all the green bonds, the “green funds” supposed to group together activities beneficial for the environment or the social or the Impact Investing which relies on investments made with the aim of generating, in addition to financial performance, a positive and measurable social and environmental impact are far from keeping their promises. In reality, as long as shareholders and institutional investors demand the same returns as those provided by traditional finance, the mechanisms of these devices, ultimately ultra-classic in their constitution but cleverly repainted in green, will only be mirages of larks.

False Belief 2: CSR promotes the emergence of green growth

This is the most common belief among those who still believe in Santa Claus. Usually you stop believing in it around 7 years old, but in this area you can die still believing it! In any case, this is the main source of many fundraisers, and, more seriously, of the current "green" stimulus policies. Because indefinitely increasing GDP while polluting less, which is the definition of green growth, is just impossible. The concept is based on the famous decoupling which in fact can occur for a short period when a very polluting energy resource (for example coal) essential to support the economy is replaced by another which is less polluting (eg. gas or even renewable energies). But on a planet finite in resources, infinite growth is impossible - and here it is, even a child under the age of 7 can figure it out. In fact, by improving the pollution "delta" by reducing the consumption of energy or raw materials, acquisition costs are mechanically reduced, making products and solutions accessible to even more customers. What we gain in intensity we lose in volume. Fatally, any one-off decoupling ends in recoupling, if the logic of no-limit is not called into question.

No CSR in the service of green growth is a crude hoax still defended by people imprisoned by their economic certainty at best and their cynicism at worst. But we, CSR managers, have a duty to denounce this fraud. Above all, we need a planned and democratic reduction in production and consumption in rich countries, so as to reduce environmental pressures and social inequalities, while improving the quality of life for as many people as possible.

False Belief 3: CSR is a driver of technological innovation

The little sister of decoupling, technological innovation is the argument of those who rationally defend in the name of progress issues related to sustainable development. And it is true that many technologies save time, energy, resources, money ... compatible with improving well-being, but whose well-being exactly? Of those who already have too much or those who keep emerging? What real value can technology have when it is not inclusive or useful for the common good? While the collapse of climate and life will reach irreversibility thresholds in the current century, what is the usefulness of a technology that does not take into account the risks associated with the rebound effect? This perverse effect which can be observed in almost all areas and which shows that any technological improvement improves its efficiency and therefore the basis of its availability, which undoubtedly leads to an absolute increase in the consumption of resources and energy compared to prior technology. Machines, cars, planes, buildings ... of the latest generations consume less, but as there is more and more ... 5G consumes less, but as there is more and more data traffic ...

No, techno-solutionism in the service of CSR will not allow us to maintain the consumerist and resource-expensive wanderings of our lifestyles completely disconnected from the essential: the preservation of living things. So we, the sustainable development managers, should not allow CSR to serve only material progress. Real progress is not that.

We need a planned economy of scarcity and sobriety which consists in capturing our consumption of energy and resources, then each year to use human genius and a fair inclusive technology to always do better - this is that is to say with less and less resources and energy in absolute terms with a view to benefiting as many people as possible!

False Belief 4: CSR makes it possible to better manage the sustainability of the company

Extra-financial reporting in its current conception is the demonstration of the most inefficient system bureaucracy can produce. Green taxonomy, a standardised classification designed to assess the sustainability of the economic activities that emit the most GHGs in the European Union, according to different well-codified levels, being as such and to date the pinnacle of useless technocracy. In the best case, there are improvement objectives in relation to the associated indicators and sometimes even executive compensation depends on the achievement of a few of these objectives. A priori, these ways of counting negative externalities go in the right direction. But mostly these indicators are only used to feed databases and CSR reports which so far have not served to put companies on the path to sustainability. Real CSR professionals know this very well.

No, extra-financial reporting is far from sufficient to lead a change of course that is really useful for the economy in the service of the preservation of the common good. Let’s open our eyes, the environment and the social are still and always the adjustment variables of the economy. The beautiful story of claiming that sustainable development is based on a balance between the economy, the social and the environment is a major sham. At the first "gusts of wind" in the company, the economic criterion is always privileged because the shareholder grumbles very quickly while nature is silent and tolerant, but not for very long. It is urgent to deploy multi-capital accounting in companies with a view to strong and uncompromising sustainability.

False Belief 5: CSR promotes carbon neutrality

Announcing carbon neutrality in 10, 20 or 30 years has become a very popular fad, whether for governments or companies, but what is this type of commitment worth? Do their authors really understand the meaning? Let us simply remember that announcing that you want to be carbon neutral at the company level is nonsense, which already shows a lack of understanding of the problem. There is only one possible neutrality, that of the planet, which must balance global CO2 emissions with natural carbon sinks. A company cannot therefore be carbon neutral but modestly contribute to planetary carbon neutrality. And for this, its carbon budget must be substantially equal to 0. 0, because the planet does not have the means to digest the CO2 emissions from the combustion of fossil fuels in addition to other emissions relating to the functioning of ecosystems.

Knowing the perfect correlation between the CO2 emissions that always precede GDP growth, it should be hard to believe that in the next 30 years, humanity will manage to divide its GHG emissions by 3, while at the same time continuing to increase GDP by even 1 point per year. It is either elementary incompetence or outright cynicism to pretend to believe this lie.

No, CSR does not promote carbon neutrality, especially when the associated announcements only concern direct emissions from companies and the company's economic model remains broadly the same. Note that the companies that make this type of announcement are all very optimistic about their growth in their markets, without having reviewed their models or even often already drastically reduced their emissions, which in no way prevents them from resorting to compensation. At this stage of buffoonery, we border on swindling when we take the time to understand that the indirect emissions of these companies represent, in the vast majority of cases, the bulk of their pollution.

What CSR must promote in order to move towards net zero emissions is primarily to work on transforming economic models towards a perma-circular approach by gradually abandoning the linear approach. In short, truly sincere business leaders who are aware of planetary limits must resolutely build their cash flow generation on the sale of the uses of their solutions by eco-designing their products with a view to maximum sustainability based on reuse. It is the economy of functionality taken to its climax that will reduce CO2 emissions.

Now we, the sustainability / CSR directors, have a mission. Stop saying what people want to hear, but do the right thing. That is, participating in the transformation of the business from the inside out. For that, we only have our courage and our sincerity, which it seems triumphs over everything, accept the prospect. When faced with false beliefs, there is only one answer: the truth. And to restore it, there is only one solution: training.

This article is a translated version of "Les fausses croyances de la RSE". Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy & Sustainability writers, their opinions do not necessarily represent those of illuminem.

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