The view from Davos - Part one: Global corporate citizenship in 2008

Last week, I attended the World Economic Forum in Davos. This is the first of four blogs with my reflections and predictions on how the debates will be taken forward in 2008. (for the other blogs, visit 'ODI on... Davos 2008')

The main theme I came away with from Davos this year was this: in 2005, business was being called on to deliver for poverty reduction and the MDGs; in 2008, a new culture of global corporate citizenship is taking hold, manifest in large numbers of practical and well-funded partnerships, which are delivering money, physical resources, expertise and political capital to health, education, food security, humanitarian relief and climate change mitigation. It is important not to be naïve, of course, but there is something important happening.

Companies are really working at partnerships, and it’s not just about philanthropy. They are rolling out higher standards for themselves. They are insisting that their suppliers meet social responsibility standards. They are benchmarking against each other on things like carbon and water saving. They are engaging in policy dialogue. And they are doing this for all sorts of reasons. Quite often they are alarmed by threats to their business, for example water shortages or climate change. Sometimes, they are looking for reputation and acceptance, what Michael Warner calls the ‘licence to operate’. Very often, also, they talk about this as essential for staff recruitment and retention: CEOs say that potential recruits quiz them in detail about their social positioning before accepting a job. Good citizenship has become an essential differentiator for both recruitment and sales. Bill Gates did a big speech on this, labelled ‘creative capitalism’, which may be a useful reference (see press release).

Klaus Schwab (who invented and runs the WEF) has a piece in Foreign Affairs which distinguishes five elements of corporate global citizenship: corporate governance, corporate philanthropy, corporate social entrepreneurship, and corporate global citizenship (which is about getting institutions and policies right at global level). The WEF has a Global Corporate Citizenship Initiative and lists close to two dozen public-private partnership initiatives – all led, it is worth saying, by chairs or CEOs. ODI has been involved in some – financing, humanitarian, water; and we are beginning to engage with others (chronic hunger, biofuels, climate change (especially adaptation), possibly health). I should think ODI’s ongoing work on a Good for Development Label would be of interest here, as well.

Of course, there are issues. Some things get onto the agenda and some don’t; some solutions are regarded as acceptable and some are not. You don’t find many companies working in Eastern Congo, or advocating large-scale asset redistribution. What is interesting is that there are now many specialist NGOs working with companies and tracking what they do: some of the ones I talked to were Accountability (Simon Zadek), Sustainability (John Elkington), Business for Social Responsibility (Aaron Cramer), and the Harvard Corporate Social Responsibility Initiative (Jane Nelson). Many of these earn substantial revenues through training and strategic consultancy on things like citizenship metrics – a tricky balancing act in a potential minefield of conflicts of interest.

Practically, engagement with corporates is becoming central to aid agencies. UNICEF and WFP are said to be especially good. WFP has a really strong group of corporate backers, led by TNT, who have abandoned all other sponsorship. They provide a ‘tent’ at Davos, a temporary warehouse structure, which has become a popular meeting space, but have also done many practical things, like help WFP to reduce its warehousing costs around the world by 8%.

It is still hard to fund think-tanks, though. I went to a philanthropic round-table, with George Soros and senior people from Gates and the Clinton Initiative. Soros has funded think-tanks through the Open Society Institute, but the others basically are not (yet), and were taken to task for this. Clinton, in particular, is very focused on delivering material support and his 5-minute video for Davos about the importance of philanthropy was a master-class in communication. He told the story of visiting a camp for tsunami victims and meeting the husband and wife who led the camp, along with their child, one of the most beautiful children he had ever met, he said. When he complimented the parents, they said yes, and until the tsunami, the boy had nine brothers and sisters, all of whom had died. There wasn’t a dry eye in the house. Communication is all about stories.