Corporate leaders shone less brightly than they did last year, but our ethical leaders of 2008 show what can be achieved by individuals with vision

Our pick of ethical leaders of 2008 may make surprising reading. One striking aspect of the selection is that it contains very few business people. Indeed, the star name is a politician: US president-elect Barack Obama.

The selection by Ethical Corporation’s advisory board was not designed as a list or ranking. The idea was to highlight the individuals we believe have done most to further the cause of responsible business this year. The ethical leaders this year come from a range of fields: government, business and finance, civil society, science and academia. But they have much in common. Each has demonstrated vision, passion and an ability to influence the behaviour of others beyond their field, organisation or country.

So what does this year’s crop say about the current state of corporate responsibility? Three things. And not all of them are bad for those working in responsible business.

Bigger government

First, the choices show that governments are becoming more involved in setting the responsible business agenda, and are seen as having more influence over corporate behaviour than they did a year ago.

Second, major companies and brands have already made their big plays in the responsible business game. Having launched their major sustainability initiatives, often to great acclaim, it is getting harder for companies to impress in this area.

Third, ethically minded investors are starting to make their voices heard, pressurising companies to be well governed and aware of social and environmental matters.

Our choice of Obama reflects the fact that in tough economic times, society looks to strong leaders who can inspire confidence. This alone cannot solve the world’s financial and energy crises. But for simply vowing to set US climate and foreign policy on a more progressive course, Obama should make the world a better place for responsible businesses. Let’s hope that in 12 months’ time, after climate talks in Copenhagen, he still merits the title of ethical leader.

Our selection of the world’s most powerful politician also reflects a key lesson of this year: business needs government to keep markets working. This was rarely acknowledged before the credit crisis. Now those hoping that markets will do most to solve the world’s social and environmental problems are having to think again.

Expect business to turn to government for ever more support in 2009, often in the name of action to address climate change. The hoped-for bailout of US carmakers is a case in point. And governments may have to pick up the slack when corporate investment – for example in renewable energy projects – slows down. Companies will also become more compliance-minded than ever before, to avoid getting on the wrong side of regulators.

The absence of corporate figures from this year’s ethical leaders at first looks like a damning comment on the state of responsible business in 2008. You might think the choice reflects that companies are cutting back on sustainability efforts during the downturn. In fact, our advisory board feels that by now most big companies already understand what they must do to address social and environmental issues, have set out plans for achieving results in this area, and are now getting on with it. This is why we feel that amidst the global turmoil of 2008 our focus this year was better placed on leaders likely to influence the bigger picture.

2007 was a vintage year for big corporate environmental announcements: Marks & Spencer’s 100-point sustainability strategy, Plan A; and Wal-Mart’s giant strides to make its operations green. Company efforts this year have offered less stand-out proof that sustainability is going mainstream. But, quietly, the idea continues to build a broad base of support from business leaders. The selection of Richard Lambert, head of the UK’s largest business lobby, the CBI, reflects this.

Encouraging too was the number of ethically minded investors nominated this year. Institutional investors are already using the banking crisis to call for corporate governance reform at banks. And the UN Principles for Responsible Investment have started to gain traction, as their supporters seek to be more active. The case for considering social and environmental risks when investing, because it gives better returns, still needs to be made. And with investors nursing losses in the wake of the credit crisis, there has never been a better time for responsible investors to make it. Signs are that they are starting to.

Finally, what our pick of ethical leaders certainly shows is how the talent and dedication of people in responsible business continue to change the way that companies operate. Chris Wille of the Rainforest Alliance, John Ruggie of the UN, and Jessica Sansom of Innocent Drinks are all good examples. We could name more. Their successes this year give hope that the shift towards more sustainable companies will continue, in good economic times or bad.

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