Should the economy and businesses prioritize the betterment of society?

Good Business Rankings: Little Fire, Lots of Smoke!

Before embarking on the journey, please read our piece about business rankings, awards and certificates to familiarise yourself with the challenge.

are business rankings (any) good? (Click on the icon for pdf)

Milton Friedman's one-goal dictate - Profit! - leads to growing "collateral damage". To this day, inhumane conditions are being toiled in countries of the global South to drive down costs in the supply chain. The Federal Environment Agency reports that about half of the companies in the German Stock Index do not sufficiently integrate the risks of climate change into their corporate strategy.Also, the pay of many workers still does not meet a minimum wage that enables cultural and social participation.

Thus, the call to rethink organisations is growing louder. Companies should be aware of their social responsibility and act accordingly. In the meantime, there are numerous rankings, awards and certificates that select socially responsible and "good" companies. However, this rating industry is confusing. Is all this merely window dressing and "good washing"? To find out, we have systematically analysed the rating approaches. The result: what "good" means from the perspective of the rating industry and how it is measured is unfortunately not always good.

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stage 2: identification

Why is the world better off because this organisation is in it?

Learning Journey

In the second stage, we delve into the critical question whether the economy and business should inherently prioritize the betterment of society. We grapple with the complexity of balancing profit motives with broader societal purposes and challenge ourselves to envision the potential social value organizations could contribute to the world. We decide to see for ourselves and kickstart our practical investigation: drawing on frameworks from the Corporate Social Responsibility (CSR) movement, we establish criteria to evaluate potential candidates and identify three Candidate Good Organizations (CGO) through through desktop research. Simultaneously, we question the efficacy of CSR initiatives in fulfilling their promises.

Core Concepts (click icons to jump to discovery)

The Corporate Social Responsibility (CSR) Movement (4)

Critiques of capitalism and neoliberalism are not new. Why is business failing to address the problems?

Alternative Theories for a Responsible Economy (and Responsible Business) (5)

What defines a good economy, and what responsibilities should businesses have toward external stakeholders and society as a whole in such an economy?
What are the prerequisites for an organization to obtain a "license to operate"?

The Challenge to Measure Responsible Business (6)

What are the attempts to define and measure responsibility and sustainability? What are the problems with various existing frameworks?

What must business do more, better, and differently to become socially and ecologically responsible?

Based on all of the above, note down in your journal some personal reflections. What is your personal view? How will this shape your research to find responsible businesses?

chapter 2: should business be good?

Our Perspective On Core Concepts

"What really matters is that humans have no purpose. What we have is a role in an ecosystem. Being able to keep that ecosystem healthy means submitting ourselves to a whole life of being nested in a world that we affect and that affects us and our ability to play our role - not to figure out what we want." ― Carol Sanford

Businesses must become responsible

In our journey to understand the complexities of contemporary capitalism, one glaring truth emerges: businesses wield immense influence over the fabric of society. Contrary to the arguments of some (classical) economic theorists, the economy's legitimacy cannot be divorced from its social impact. As we confront the pressing challenges of our time, it becomes increasingly clear that businesses must shoulder their share of responsibility in fostering a just and prosperous society. This realization forms the bedrock of our inquiry: How can businesses leverage their power and resources to contribute positively to the well-being of communities and individuals, and the betterment of society?

Click on each concept heading to learn more...

Over the past fifty years, the Corporate Social Responsibility (CSR) movement has evolved significantly, tracing its origins to the emergence of broader social consciousness within the business community, especially in the wake of corporate practices increasingly considered unsustainable. Initially conceived as a response to mounting pressure for companies to address social and environmental concerns, CSR aimed increasingly to integrate broader ethical considerations into business operations. Key beliefs underlying the movement included the idea that businesses have a moral obligation to contribute to society beyond profit generation or customer benefit, and that incorporating responsible practices could enhance long-term sustainability. Proposals within the CSR framework encompassed a range of initiatives, from philanthropy and community engagement to environmental stewardship and ethical supply chain management. Some of the diverse demands are:

  • Human Development: Companies must support the personal and human development of employees and the community
  • Fair Employment and Labor Practices: Firms must prioritize equitable wages, safe working conditions, and the overall well-being of their employees.
  • Ethical Conduct: Companies are urged to operate with unwavering commitment to ethical behavior, treating employees, customers, suppliers, and stakeholders with fairness, respect, honesty, and integrity.
  • Transparency and Accountability: Companies should maintain transparency in their business practices, financial reporting, and governance. They are also held accountable for their actions.
  • Stakeholder Flourishing: Firms are expected to engage with a diverse range of stakeholders, including employees, customers, suppliers, and the broader community, in order to better understand their needs and concerns, and contribute to their flourishing
  • Supporting the Local Economy: Companies are encouraged to bolster the well-being of the communities they operate in by supporting local businesses, contributing to economic development, and creating employment opportunities.
  • Sustainability: Companies are entrusted with the responsibility of ensuring sustainable business practices that consider the long-term consequences of their operations on the environment, society, and future generations.
  • Societal Responsibility: Firms are called upon to actively engage in activities that advance the interests of society and the common good.

However, despite its noble intentions and widespread adoption by corporations globally, the CSR movement has faced substantial criticism. Critics argue that CSR often serves as a superficial veneer, masking underlying business practices that prioritize profit over social and environmental responsibility. Furthermore, the lack of standardized metrics for measuring CSR effectiveness has led to accusations of greenwashing and tokenism, undermining the movement's credibility. Ultimately, the success of CSR in driving meaningful social change remains a subject of contention, with many calling for more robust accountability mechanisms and a deeper commitment to ethical principles within the corporate sector.

Over the past fifty years, several alternative economic paradigms have emerged as critiques of traditional capitalism, each proposing unique approaches to address its inherent shortcomings. Among these alternatives are concepts such as socialism, democratic socialism, eco-socialism, Marxism, participatory economics, and various forms of anarchism. Socialism advocates for the collective ownership and democratic control of the means of production, aiming to eliminate economic inequality and promote social welfare. Democratic socialism combines elements of socialism with democratic political systems, seeking to achieve social justice through democratic means. Eco-socialism emphasizes the interdependence of social and ecological systems, advocating for sustainable development and environmental conservation within a socialist framework. Marxism offers a comprehensive critique of capitalism, emphasizing class struggle and the need for proletarian revolution to establish a classless society. Participatory economics proposes a decentralized, participatory economic system based on cooperative decision-making and equitable distribution of resources. Anarchist theories advocate for the abolition of hierarchical structures and centralized authority, promoting voluntary cooperation and self-governance.

In recent years, alternative economic concepts like Doughnut Economics and Degrowth have gained prominence as responses to the limitations of traditional capitalist models. Doughnut Economics, pioneered by Kate Raworth, proposes a framework that balances human needs with planetary boundaries, aiming to ensure that everyone has the resources needed for a good life within the ecological limits of the Earth. This approach has been adopted by cities like Amsterdam and Portland, which have integrated Doughnut Economics principles into their policymaking to prioritize social well-being and environmental sustainability. Degrowth challenges the notion of endless economic growth, advocating for a reduction in production and consumption to achieve a more equitable and sustainable society. Initiatives such as the Degrowth Movement in Europe and organizations like the Center for the Advancement of the Steady State Economy (CASSE) in the United States promote degrowth principles through research, advocacy, and grassroots activism. In addition, other alternative economic concepts such as Circularity and Wellbeing Economics have emerged to offer new pathways toward sustainability and social equity. Circularity promotes a regenerative approach to resource use, aiming to minimize waste and maximize the value of products and materials through recycling and reuse. Companies like Patagonia have embraced circularity by implementing take-back programs for their clothing, allowing customers to return worn-out garments for recycling into new products. Wellbeing Economics emphasizes the importance of prioritizing human well-being and quality of life over GDP growth. Bhutan's Gross National Happiness index, which measures societal progress based on holistic indicators like mental health and environmental conservation, serves as a prominent example of Wellbeing Economics in practice. These modern examples demonstrate the ongoing exploration and experimentation with alternative economic paradigms in response to the pressing challenges of our time.

While these alternative paradigms offer compelling critiques of capitalism and propose innovative solutions to address social and environmental issues, their coherence, quality, and success vary considerably. Some have faced challenges in implementation due to political opposition, economic feasibility, or ideological differences, while others have gained traction in certain contexts but struggled to achieve widespread adoption.  

🗁 CoRE COncept 6: measurING CORPORATE CITIZENSHIP (right slide)

But how to measure responsible organisations? Assessing the sustainability of economies and organizations presents a significant challenge, largely due to the prevailing reliance on traditional metrics such as GDP and profit, which often fall short in capturing the full scope of societal and environmental impact. Proposals like the Stiglitz Report have highlighted the limitations of using GDP as a sole measure of economic well-being, emphasizing the need for broader societal indicators. However, implementing these alternative measures has proven to be a complex task, as it requires widespread adoption and consistent data collection.

By the same token, assessing sustainable business success is challenging, as effective measures across different industries and regions are lacking, and attempts to act sustainably are often crowded out by the persistence of a shareholder-centric economic paradigm. Today, many different sustainability standards and ratings are available to assess a business's environmental, social and ethical performance. These include Triple Bottom Line (TBL) Reporting, the Global Reporting Initiative (GRI) standards, Corporate Social Responsibility (CSR) Reports, ESG (Environmental, Social, and Governance) ratings, B Lab's B Impact Assessments, as well as certifications such as Fair Trade, Organic, and ISO standards.

The choice of indicators may vary depending on the specific context, but common indicators and requirements include:

PLANET (Environmental Performance):

  • Carbon emissions and energy efficiency
  • Water and resource use
  • Waste reduction and recycling
  • Biodiversity conservation
  • Sustainable sourcing and supply chain practices
PEOPLE (Social Impact):
  • Employee well-being, including health, safety, and job satisfaction
  • Diversity and inclusion
  • Community engagement and philanthropy
  • Stakeholder satisfaction and relations
  • Human rights compliance in the supply chain
GOVERNANCE (Ethical and Governance Practices):
  • Long-term value creation: Strategic vision and planning for the long term; Emphasis on creating value for all stakeholders, not just shareholders; Sustainable growth and competitive advantage; 
  • Ethical leadership and corporate culture
  • Governance and risk management
  • Anti-corruption and bribery measures
  • Transparency and disclosure
  • Demonstrated commitment to societal and environmental well-being
  • Legal and regulatory compliance
  • Social Responsibility and Impact Reporting: Reporting on sustainability initiatives and performance, Compliance with recognized ESG (Environmental, Social, Governance) standards, Alignment with international sustainability goals (e.g., Sustainable Development Goals)
One specific approach we have found appealing is based on the Economy for the Common Good (ECG). In the ECG framework, businesses are assessed based on a set of common good criteria, which evaluate their social and environmental contributions. Instead of focusing solely on financial profit, the ECG encourages businesses to calculate their Common Good Product (CGP) which assesses a company's positive and negative impacts on various societal and environmental aspects, such as human dignity, social justice, ecological sustainability, and democratic co-determination. Businesses are expected to transparently report their CGP and provide detailed information on how they meet the ECG's common good criteria. This reporting helps stakeholders assess the company's overall contribution to society. The ECG also encourages third-party audits of the common good reports to ensure credibility and transparency. Additionally, the ECG proposes integrating the CGP into the legal and regulatory framework, so that responsible businesses could receive legal benefits, such as tax breaks or easier access to capital, based on their positive CGP balance.

Of course, the ECG approach also faces important challenges, including the complexity and subjectivity of both the selection and the assessment of common good criteria, the absence of universal standards and auditing protocols, resistance to legal integration, the need for a fundamental shift away from profit maximization, the risk of greenwashing, and the requirement to motivate businesses to voluntarily adopt the framework. 


Below you can also find a few blog posts that dive into our evolving thoughts around these concepts

Isn’t it funny that sustainability is on everybody’s lips these days, but environmental and societal degradation are occurring at unprecedented levels? And ain’t it curious that the planet is burning, but few people in (solar-powered!) corporate or political headquarters are sweating?
(6 min read)
4 - alternatives to capitalism
How Economic Science Lost Its Heart and Soul (…and What We Can Do About It)

Imagine a society where people interact with trust, solidarity and fraternity. Where welfare is not measured in terms of GDP, but lived in terms of public happiness. Where the economy is virtuous and markets aim at shared prosperity through mutual exchange and generous reciprocity. Where organisations are, first and foremost, positive agents of societal change — creating communities, not commodities. And where work is centred on the integral development of each person, not solely on products…
(9 min read)

Good Business Rankings: Little Fire, Lots of Smoke!
Good Business Rankings: Little Fire, Lots of Smoke!

Rankings, awards, certificates - there are numerous employer labels that distinguish companies as good employers. But much of it is "good washing", as an analysis by the Research Institute for Work and Working Environments at the University of St. Gallen shows.
(12 min read)

5 - measures
Fair or Foul: Good Companies or Good Impression Management?

More and more awards for "good companies" that focus on sustainability and social responsibility are entering the employer seal market. But do they live up to their claim of being "good"? We spoke with Prof. Dr. Antoinette Weibel from the University of St. Gallen about her analysis.
(4 min read)

Curious to read more about our ongoing inquiry? A good place to start is our blog with all recent leadership articles and posts.

““Efficiency turns out to mean measurable efficiency. Efficiency comes down to what you can measure and exploit. You can't measure love. You can't measure communityship. But, yeah, you can measure profit.” .” ― Henry Mintzberg

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Curious to watch more interviews? Jump to the Leaders for Humanity series for all our exciting interviews with some of the greatest minds of our time.

Materials marked in  dark purple  are foundational. Those flagged in light purple are for in-depth exploration.

Core Concept 4: Corporate Social Responsibility

Core Concept 4: Corporate Social Responsibility (CSR)

Please reflect for yourself: Critiques of capitalism and neoliberalism are not new. What is CSR all about and why is business failing to address the problems?

1) What is CSR (and Corporate Sustainability)?
2) What are the reasons why CSR is not working?
3) Can CSR work within a Capitalistic system? 

Corporate responsibility and sustainability tackle the relationship between business and society. However, the two fields of study have converged to become deeply entangled and blurred so that researchers from both research traditions now speak to the same business risks and opportunities. A field’s development is shaped by the clarity of its constructs and underlying assumptions; however, such clarity has eroded in responsibility and sustainability research. By tracing the development of these fields, we show that responsibility and sustainability were historically distinctive. Responsibility research took a normative position, railing against the amorality of business; sustainability research took a systems perspective, sounding the alarm of business-driven failures in natural systems. The convergence in responsibility and sustainability has not only confused constructs but has also vacated vast tracts of unexplored territory that can inform the relationship between business and society.

This perspectives article seeks to comment and reflect on my 1999 BAS article titled “Corporate Social Responsibility: Evolution of a Definitional Construct,” and subsequent writings addressing these same topics. First, perspectives on the 1950-1999 period are offered. Second, reflections on the 2000-2020 period are presented. Finally, thoughts about the future and the new normal for CSR are set forth. Hopefully, the observations presented will stimulate further thinking on this important concept. And, it will be interesting to all of us to see where the dust settles when the pandemic ends and organizations have had a chance to re-imagine or reset their missions, goals, and processes with respect to CSR.

Are corporate social responsibility (CSR) initiatives providing the societal good that they promise? After decades of CSR studies, we do not have an answer. In this review, we analyze progression of the CSR literature toward assessing the performance of CSR initiatives, identify factors that have limited the literature’s progress, and suggest a new approach to the study of CSR that can overcome these limits.

Corporate social responsibility (CSR) is failing at the very time it is emerging as a new discipline. This has implications not only for CSR itself, but also other disciplines wanting to understand the role of the private sector in the global political economy. This article highlights some of the evidence for this failure, but more significantly shows how it is rooted in an orthodoxy that the discipline has created but is unable to examine. As a result, CSR treats as ideationally and historically neutral particular concepts and practices that define what business’s relationship with wider society can mean. The article uses the perspectives of different social science disciplines to reveal the structural dimensions to CSR and some of their consequences. It proposes an alternative analytical framework for use by CSR and as an entry point for international relations and other disciplines wanting to understand the ways in which business shapes and responds to globalisation and influences the possibilities of contemporary society and governance.

A corporation is considered responsible when it attends to the evident conditions of some social or environmental problem. But imagine how much more responsible it would be to address the underlying cause of that problem? Finding a new way to recycle waste may be good, but helping to reduce the generation of that waste is better. Not good, however, is Coca-Cola’s promotion of exercise programs for obese children, because its own products are a significant cause of that obesity. This, like greenwashing—pretending to be environmentally friendly—borders on what we can call Corporate Social Irresponsibility, or CSI. Read more on corporate irresponsbility in this article by Henry Mintzberg.

Corporate social responsibility has become an important topic for both academics and practitioners. CSR typically stands for corporate responses to ethical, environmental and social issues. Whilst extant research has predominately focused on CSR in relation to external stakeholders and taking a macro-institutional and/or functionalist perspective, we provide a critical engagement with the interactions between CSR, employees and management control within organizations. Qualitative data gathered at two management consultancy firms demonstrate how CSR discourses and practices serve to construct an idealized image of a socially, ecologically and ethically responsible corporate self. In this way, CSR works as a form of aspirational control that ties employees’ aspirational identities and ethical conscience to the organization. The article discusses the implications of CSR concerning cynical distancing, ethical sealing and the space for politics and critique in corporations.

Climate change represents the grandest of challenges facing humanity. In the space of two centuries of industrial development, human civilization has changed the chemistry of the atmosphere and oceans, with devastating consequences. Business organizations are central to this challenge, in that they support the production of escalating greenhouse gas emissions but also offer innovative ways to decarbonize our economies. In this paper, we examine how businesses respond to climate change. Here the authors Wright and Nyberg develop a grounded model that explains how the revolutionary import of grand challenges is converted into the mundane and comfortable concerns of “business as usual.” We find that critique is the major driver of this process by continuously revealing the tensions between the demands of the grand challenge and business imperatives. Our paper contributes to the literature on business and the natural environment by identifying how and why corporate environmental initiatives deteriorate over time. More specifically, we highlight the policy limitations of a reliance on business and market responses to the climate crisis.

Core Concept 5: Alternative Theories for a Responsible Economy (& Responsible Business)

Core Concept 5: Alternative Theories for a Good Economy (and Responsible Business)

Please reflect: What are the most important theories that seek to improve Capitalism? How is a responsible business defined by these different models? What responsibilities should businesses have toward external stakeholders and society as a whole?

1) What are the alternative theories and models for corporate responsibility?
2) What is the role of responsible business in each of these alternatives?
3) What are the strengths and weaknesses of these models? 

In this article, we will outline the principles of stakeholder capitalism and describe how this view rejects problematic assumptions in the current narratives of capitalism. Traditional narratives of capitalism rely upon the assumptions of competition, limited resources, and a winner-take-all mentality as fundamental to business and economic activity. These approaches leave little room for ethical analysis, have a simplistic view of human beings, and focus on value-capture rather than value-creation. We argue these assumptions about capitalism are inadequate and leave four problems in their wake. We wish to reframe the narrative of capitalism around the reinforcing concepts of stakeholders coupled with value creation and trade. If we think about how a society can sustain a system of voluntary value creation and trade, then capitalism can once more become a useful concept.

Professor Dr. R. Edward Freeman (Darden Business School at Virginia University, USA) and Professor Dr. Stefan Schaltegger (Centre for Sustainability Management, Leuphana University Lüneburg) discuss foundations of stakeholder theory. Ed Freeman is the global thought leader and ‚guru‘ on stakeholder theory. He explains in this interview what has motivated him to enhance stakeholder theory, what development the theory has taken for the last decades, and why stakeholder theory cannot be assumed away from management. In addition, Ed Freeman provides practical clues for sustainability managers.

In our current economy, we take materials from the Earth, make products from them, and eventually throw them away as waste – the process is linear. In a circular economy, by contrast, we stop waste being produced in the first place. What will it take to transform our throwaway economy into one where waste is eliminated, resources are circulated, and nature is regenerated?
The circular economy gives us the tools to tackle climate change and biodiversity loss together, while addressing important social needs.

What is Doughnut Economics? If the 21st century goal is to meet the needs of all people within the means of the living planet - in other words, get into the Doughnut - then how can humanity get there? Not with last century's economic thinking. Doughnut Economics proposes an economic mindset that's fit for our times. It's not a set of policies and institutions, but rather a way of thinking to bring about the regenerative and distributive dynamics that this century calls for. Drawing on insights from diverse schools of economic thought - including ecological, feminist, institutional, behavioural and complexity economics - it sets out seven ways to think like a 21st century economist in order to transform economies, local to global. The starting point of Doughnut Economics is to change the goal from endless GDP growth to thriving in the Doughnut. At the same time, see the big picture by recognising that the economy is embedded within, and dependent upon, society and the living world. Doughnut Economics recognises that human behaviour can be nurtured to be cooperative and caring, just as it can be competitive and individualistic.

After explaining the reasons why we must urgently reexamine the foundations of the market economy, the article goes on to illustrate the main differences between the civil market and capitalist market models. It then answers the question of why, in the last quarter of a century, the concept of the civil economy has reemerged as a topic of public debate and scientific research. In particular, it highlights the reasons why the fourth industrial revolution postulates a civil market if the risks involved with the advancement of transhumanism are to be avoided. The article ends with an invitation to transcend the contradictions of the culture of libertarian individualism.

There is a growing insight in the scientific community that most of the burning problems of our times cannot be resolved with the existing economic model. Nevertheless, when it comes to alternatives, only few comprehensive models are at hand. Some models focus on one core value neglected by the current model, such as the Blue Economy (Pauli), or on one principle connected to a core value, like the circular economy or the degrowth approach. Other concepts focus on economic structures beyond markets, such
as the commons, or on financial markets, e. g. local currencies. Furthermore, a lot of initiatives focus mainly on businesses such as the social and solidary economy or the B Corps movement, or on sustainable finance, without questioning the current system per se. The Economy for the Common Good offers a holistic rethinking of ’economy’, a corresponding model of economic policy, composed of 20 core elements, and with strong linkages to economic science and practice.

Regeneration has become a debated topic in organizational studies, yet its characteristics and distinctions from sustainability and circular business models remain unclear. This study aims to provide an initial framework for regenerative business models and differentiate them from sustainable or circular models. Employing literature reviews, six focus groups with international and indigenous participants, and comparisons with seminal articles on sustainable and circular models, this study finds that organizations with regenerative business models focus on planetary health and societal wellbeing. They create and deliver value at multiple stakeholder levels—including nature, societies, customers, suppliers and partners, shareholders and investors, and employees—through activities promoting regenerative leadership, co-creative partnerships with nature, and justice and fairness. Capturing value through multi-capital accounting, they aim for a net positive impact across all stakeholder levels. Regenerative business models share some design approaches with sustainable and circular models but differ in their main goals and systemic perspectives. Achieving regenerative business models requires strong and contested policy frameworks, including animal and nature rights and true pricing. Further research is needed to explore how organizations can incorporate intrinsic notions of value beyond capital and avoid new forms of greenwashing when adopting regeneration and net positive impact narratives.

Regeneration has become a debated topic in organizational studies, yet its characteristics and distinctions from sustainability and circular business models remain unclear. This study aims to provide an initial framework for regenerative business models and differentiate them from sustainable or circular models. Employing literature reviews, six focus groups with international and indigenous participants, and comparisons with seminal articles on sustainable and circular models, this study finds that organizations with regenerative business models focus on planetary health and societal wellbeing. They create and deliver value at multiple stakeholder levels—including nature, societies, customers, suppliers and partners, shareholders and investors, and employees—through activities promoting regenerative leadership, co-creative partnerships with nature, and justice and fairness. Capturing value through multi-capital accounting, they aim for a net positive impact across all stakeholder levels. Regenerative business models share some design approaches with sustainable and circular models but differ in their main goals and systemic perspectives. Achieving regenerative business models requires strong and contested policy frameworks, including animal and nature rights and true pricing. Further research is needed to explore how organizations can incorporate intrinsic notions of value beyond capital and avoid new forms of greenwashing when adopting regeneration and net positive impact narratives.

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Together with our engaged audience, we'll systematically explore the underlying premises, shed light on practical implications, and unveil the strengths and weaknesses of innovative approaches. Our discussions will span ethical principles, the role of institutions, and practical change strategies to make our economy a little bit better every day!

Whether you're a researcher or practitioner, these sessions promise valuable insights and inspiration for a collective new narrative. Join us throughout the series as we weave together the fundamentals for good economy, contributing to a thriving planet for all. Together, let's reinvent capitalism and guide businesses and leaders toward becoming a force for good!

Core Concept 6: The Challenge to Measure Responsible Business

Core Concept 6: The Challenge to Measure Responsible Business

Please reflect: What are the attempts to define and measure responsibility and sustainability? What are the problems with various existing frameworks?

1) How is social and economic impact of business measured? What are the better known measures and evaluative concepts?
2) What lessons can we learn from the frameworks Triple Bottom Line, ESG or B-Corps?
3) On that basis, how can we design a better way to qualify and select good organizations?

The Commission on the measurement of economic performance and social progress has been created at the beginning of 2008 on French government's initiative. Increasing concerns have been raised since a long time about the adequacy of current measures of economic performance, in particular those based on GDP figures. Moreover, there are broader concerns about the relevance of these figures as measures of societal well-being, as well as measures of economic, environmental, and social sustainability.

Sustainability standards are important governance tools for addressing social and environmental challenges. Yet, such tools are often criticized for being either too open-ended or too restrictive, thereby failing to contribute significantly to the development of sustainable practices. Both dimensions of the critique, however, miss the point. While all standards in principle combine elements of openness and closure, both of which are necessary to keep the sustainability agenda relevant and adaptive, sustainability standards often operate in contexts that favor closure. In this article, we draw on a research tradition that views communication as constitutive of organization to emphasize the significance of communicative mechanisms that stimulate organizational openness in the application of standards. With the notion of “license to critique,” we present a managerial philosophy designed to involve managers and employees, mobilize and develop their knowledge about sustainability and bring it forward for the benefit of both the organization and the environment.

The triple bottom line is a business concept that states firms should commit to measuring their social and environmental impact—in addition to their financial performance—rather than solely focusing on generating profit, or the standard “bottom line.

The sustainable finance transition is currently under way and as such, ESG metrics1 and ratings2 represent an increasingly important tool for integrating sustainability considerations into the investment process.

ESG is both extremely important and nothing special. It's extremely important because it's critical to long‐term value, and so any academic or practitioner should take it seriously, not just those with “ESG” in their research interests or job title. Thus, ESG doesn't need a specialized term, as that implies it's niche—considering long‐term factors isn't ESG investing; it's investing. It's nothing special since it's no better or worse than other intangible assets that create long‐term financial and social returns, such as management quality, corporate culture, and innovative capability. Companies shouldn't be praised more for improving their ESG performance than these other intangibles; investor engagement on ESG factors shouldn't be put on a pedestal compared to engagement on other value drivers. We want great companies, not just companies that are great at ESG. (article by Alex Edmans)

We provide the world's most widely used sustainability reporting standards, which cover topics that range from biodiversity to tax, waste to emissions, diversity and equality to health and safety. As such, GRI reporting is the enabler for transparency and dialogue between companies and their stakeholders.

IUsed by more than 150,000 businesses, the B Impact Assessment is a digital tool that can help measure, manage, and improve positive impact performance for environment, communities, customers, suppliers, employees, and shareholders; receiving a minimum verified score of 80 points on the assessment is also the first step towards B Corp Certification.

But just as the ESG agenda and so-called stakeholder capitalism have begun to feel a backlash, the B Corp ecosystem is now under scrutiny. Many of the smaller companies who were early adopters of the standards are concerned about what they perceive as a focus on enlisting multinationals and trying to get them to be “less bad” rather than to be transformationally “good”. They have also raised questions about the credibility of B Lab, the certifying authority, setting in motion a battle for the heart and soul of the movement.

The Common Good Matrix is a model for the organizational development and evaluation of entrepreneurial as well as charitable activities. It assesses and scores the contribution to the common good. The values shown in the columns are those which promote successful relationships and a good life. The rows reflect the five stakeholder groups which an organization has most contact with. In the intersections between the values and the stakeholder groups, 20 common good themes describe and evaluate an organization’s contribution to the common good.

The Economy for the Common Good proposes a more ethical and sustainable society and organizations based on the common good concept. The study investigates entrepreneurs' reasons for joining the ECG movement and organizational changes introduced following the implementation of the ECG managerial system. Semistructured interviews were held with managers of nine Italian organizations belonging to the movement. Interviews were transcribed, and qualitative content analysis was performed using NVivo 12. Eleven nodes integrating 279 answer units were coded, addressing reasons for adhering, actions introduced, difficulties, overcoming strategies and enablers. The results suggest that ECG values and particularly Environmental Sustainability and Human Dignity are two main reasons to join the movement, that a Common Good Report is a valuable tool for the organizational analysis, that such analysis can be replicated with other ECG organizations, and that pursuing decent work conditions strengthens the adhesion to the ECG movement. The seven conceptual propositions highlight the congruence between the value structure of the organization and the values of the ECG, the congruence between the values held by proximal organizational stakeholders and the changes encouraged by ECG approach, and that rewards and recognition by the organizational stakeholders and society reinforce and maintain the adhesion path

An insightful critical blog by Alex Edmans pointing to an article about a linkage between profit and purpose. The article refers to a study of companies that ‘successfully achieved the dual goals of purpose and profit’. But as Alex points out, it never explains how the study measures either purpose or profit. Purpose is notoriously difficult to measure. Some studies measure whether a company has a purpose statement, but having a statement is meaningless; a company might say something but not deliver. Other studies measure whether companies think that purpose is important, which is again different from actual delivery. Others still measure quantitative outcomes, which miss qualitative elements: for example, demographic diversity bears almost no relation to diversity, equity, and inclusion. Find out more about how difficult it can be to understand whether publications offer credible insights or not, and whose interests they might serve.

We think that the climate challenge is so urgent that we should "Just Do It" - stop talking and start acting. But the trade-offs are real. There are social trade-offs between climate and economic development. There are financial trade-offs, as emitting companies earn higher, not lower, returns. My research ( shows that this isn't due to markets correctly pricing in carbon risk, but companies getting away with emissions due to the lack of government action. These returns may ultimately go to pensioners and savers. (By Alex Edmans)

Recommended Book Shelf

The Future of the Commons: Beyond Market Failure & Government Regulations

by Elinor Ostrom

A Circular Economy Handbook: How to Build a More Resilient, Competitive and Sustainable Business

by Catherine Weetman

Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business

by John Mackey, Rajendra Sisodia

Stakeholder Capitalism: A Global Economy that Works for Progress, People and Planet

Klaus Schwab

The Stiglitz Report: Reforming the International Monetary and Financial Systems in the Wake of the Global Crisis

by Joseph E. Stiglitz

The Integrated Reporting Movement: Meaning, Momentum, Motives, and Materiality

by Robert G. Eccles

The Triple Bottom Line

von Andrew Savitz

The End Of Corporate Social Responsibility

by Peter Fleming, Marc Jones













wellbeing economics


onwards and upwards!

Journey Map