Toby Webb suggests ten lessons for large companies expanding their sustainability programmes into high-growth markets

Lesson one:  Corporate responsibility and sustainability issues are vastly different around the world.

This is true even in Europe. Ethical Corporation’s country briefing series shows just how different thinking, policy and expectations can be across Europe alone. There remain huge differences in priorities, for example, between richer, northern Europe and eastern and southern Europe, where many basic institutions remain under-resourced.

Outside the EU, India is as different from China as it is from the UK. Everything is local and culture counts, more than almost anything else.

Lesson two: Global principles with local implementation are the only way large companies can operate successfully and sustainably.

Flexibility for business is essential. The fine balance is between global principles and maintaining consistency with both corporate values and local expectations.

Lesson three: The world is more left-wing than the UK and US.

This is often hard to understand for UK companies, and particularly those from the US. Most democracies are much more like those of western Europe than they are the US. This means a very different set of expectations for the role of business in society. Most notable is the paradigm that the role of business is to serve social structures, not the other way around.

Lesson four: Governments are unpredictable on sustainability issues.

This is becoming clear to western companies. This does not just apply to sustainability issues. China, for example, rules by dictat, and companies had better get in line with the latest pay rise, transparency or five-year plan expectations, and fast.

Lesson five: Institutions as we know them often do not exist.

The importance of institutions is perhaps the most undervalued area within the field of global responsibility thinking. We take our essential institutions for granted, from environmental protection to child education, and often forget they have taken hundreds of years and vast wealth to develop. Expectations, particularly around behaviour, are partly governed by them. Yet by comparison they barely exist elsewhere. This has consequences, both for how companies are expected to behave, and how they might respond to play a role in filling this gap.

Lesson six: Stakeholders are unpredictable. Issues can escalate very quickly.

Myriad modern examples demonstrate this is true. Getting the government onside does not mean your project or investment is safe if stakeholder engagement is failing. Vedanta in India, Asia Energy in Bangladesh and Newmont in Peru are all cases that demonstrate how quickly stakeholder reactions can shut down big business operations. When stakeholder voices and protests hit government popularity or cause major social unrest, corporate influence wanes very quickly indeed.

Lesson seven: Culture counts. Local knowledge is essential.

An executive in London does not necessarily understand what people in Yorkshire are thinking. The same is true of your managers in emerging economies. Just because your office in the capital says it understands what’s happening in the regions does not simply make it so. Localised information is vital to understanding emerging stakeholder risk. Companies that forget this do so at their peril.

Lesson eight: Agendas are mixed, but skills, education and jobs are always number one.

If there is one common theme that unites disadvantaged stakeholders, it is the basics of life. This does not mean a philanthropic focus on giving to education projects will maximise societal contributions: it won’t. But it does mean corporate financial or lobbying influence can often be easily focused where it can have most impact. Partnerships with NGOs and measurement of the results will always make a greater difference than simply donating cash and hoping for the best.

Lesson nine: The greener agenda is understood and often consumers are less sceptical than in the west.

HSBC/Climate Group research in 2010 found that 57% of Chinese surveyed said climate change is the biggest issue they worry about. There is often a myth that stakeholders in emerging economies do not care about the environment. This is totally untrue. They are on the frontlines of pollution, water shortages and climate change. But they often have less capacity to act or influence. Don’t confuse awareness and perceived powerlessness. They are two very different things.

Lesson ten: Get ready for a bumpy road ahead. Global business = global complexity.

It’s clear the large companies, now developing global policies and targets, are just beginning to think about how these will play out on the worldwide stage of their operations and sourcing capabilities. One thing is very clear: there is a difficult path ahead, and only consistent research, awareness, monitoring and stakeholder engagement will assist firms to navigate their path to lower risk and greater opportunity in emerging and developing countries.

Toby Webb is founder and chairman of Ethical Corporation, and co-founder of Stakeholder Intelligence Ltd, a research, advisory and training firm. He blogs at http://tobywebb.blogspot.com/. www.stakeholderintel.com



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