Mary Martin tells Chris Seekings why a new approach to corporate social responsibility is needed to put local communities at the heart of decision-making
We are living in an era characterised by public distrust in governments and big business, with many still harbouring resentment towards those responsible for the 2008 financial crash. At the same time, expectations around the role that our leaders and corporations play in society have evolved amid growing environmental, social and geopolitical challenges.
Businesses are responding to public pressure with various social responsibility initiatives, but there is scepticism around their motivations and whether they will deliver real change. Dr Mary Martin, senior research fellow at the London School of Economics (LSE), believes a new approach is needed to put local communities at the heart of sustainable development.
Time to talk
Part of the problem with the current approach is that businesses often fail to appreciate the important role they play in the areas they operate in, often providing stability in times of dramatic upheaval. “Politicians come and go in as little as three years, but companies tend to be there for much longer,“ Dr Martin says. “They are invested in physical assets and are loath to abandon them, even when times are tough.“
Another advantage that large companies have over other actors is their ability to see problems at local, national and international levels. They are on the frontline and have a unique ability to connect the dots between the challenges facing local people and those being talked about in corporate boardrooms. “I see them as transmission vehicles for all different aspects of sustainable development,“ Dr Martin explains. “The challenge is to help companies make the most of their capacity, as some find it difficult to engage with local communities on a lasting and sustainable basis.“
Through her work at LSE's foreign policy think-tank LSE IDEAS, in collaboration with UN agencies, she has helped develop a new guidance framework for companies, local governments and communities to facilitate dialogue. It enables businesses to identify the opportunities of working with others, and the risks of failing to do so, which many still struggle to recognise. “This is about finding the common ground and a set of goals that are mutually beneficial for everyone – it is very much dialogue-based.“
The LSE's framework of Human Security Business Partnership (HSBP) aims to diffuse confrontational relationships between stakeholders. It starts with one actor proposing an issue, such as an environmental problem, new investment or infrastructure spending. They will set up one of these partnerships and the key people affected will meet to discuss what outcomes they want to see, and a shared vision will be agreed. “An independent facilitator will help with the process, the UN has taken on this role, but it could be a university or an NGO,“ Dr Martin says. “The framework sets out how you would measure progress, how to deal with a complaint, how to ensure continued dialogue and other related issues.“
This builds on the work of similar multi-stakeholder partnerships, but is unique in how context-driven it is, and how it attempts to find the middle ground between corporate philanthropy and profit. “We found that environmental standards and human rights are just seen as compliance by some businesses, while others believe in providing goods for communities. This partnership tries to enhance and respect interests in an equitable way so the merits of working together are obvious, which has never been done before.“
“Politicians come and go in as little as three years, but companies tend to be there for much longer“
Whole-of-society approach
The idea of creating private sector partnerships with local communities and governments was born out of work by the LSE for the European Commission looking at how to deliver some of the UN's Sustainable Development Goals (SDGs). It led to a concept known as the 'whole-of-society approach'. “This is about integrating all different actors in a holistic, intelligent way that is grounded in society so that solutions are seen as credible and are likely to last.“ However, Dr Martin is under no illusions about how hard it can be to create partnerships between diverse actors with very different perspectives.
A HSBP partnership is currently under way in Colombia, where the building of a hydroelectric dam has allegedly caused huge environmental problems. “The local community has no trust for the company undertaking that project at all – there is open hostility,“ she says. “There is often an active history of confrontation and distrust.“ Work is also under way to create partnerships with companies in Liberia, Turkey and the Balkans, working in mining and agricultural sectors.
“I am not pretending that this is an easy process, but these partnerships provide a set of informal, voluntary rules that actors commit to, and a process that identifies everyone who could be affected.“
They can also help businesses prioritise the SDGs according to their impact at a local level. “I think they see this dizzying array of different targets and are often very confused about which ones to pick,“ Dr Martin explains. “This partnership approach looks at very local challenges and possibilities, and translates those high-level, slightly abstract goals into concrete actions.“ Businesses that fail to adhere to agreed goals could lose their license to operate in certain regions, but there could be much greater and more far-reaching repercussions.
One SDG that businesses find especially hard to see any relevance in is goal 16, which is related to peace and justice. The LSE's work on these HSBPs has had a particular focus in conflict zones, which are often seen by businesses as having no connection to their operations. “They think of Syria, Iraq or Yemen and say 'we don't work in these areas', but the reality is that part of their supply or value chain certainly does.“ Dr Martin has just finished writing a book called Corporate Peace, which highlights the role that big businesses can play in helping to prevent outbreaks of conflict. “What we see with these interstate or civil wars is that they spread and become internationalised,“ she says. “They start at an intensely local level but have global and regional effects, with many external actors getting involved.“
Military interventions and development aid often fail to offer a clear resolution. There is now a 60% relapse rate within five years after a peace process is agreed, according to the UN, while the average humanitarian crisis lasts more than nine years, compared to five years in 2014. “Single or staggered approaches, such as military intervention or sending judges for technical expertise, I don't think is enough or functional any more.“
The parameters of conflict have also become much broader, encompassing humanitarian needs, organised crime, political and ethnic tensions, poor governance and difficulties with rule of law. The human security element of HSBP partnerships is concerned with ensuring people are physically safe in their environments and have access to basic needs such as clean water, food and shelter. Dr Martin says corporate social responsibility can play a leading role in global peace by ensuring local communities have access to these basic needs. “Local problems are the force behind international instability if you think about how problems are exported out through migration, terrorism and organised crime,“ she says. “This is a key feature of our fragile world, and so the local context in which companies operate is very important.“
“With 19th-century capitalists in Britain there was a kind of corporate philanthropy that we have moved away from, particularly in the 1970s and 1980s“
A global challenge
This disconnect between big business and local communities is an issue that is being felt worldwide. Recent research from Edelman – the world's largest public relations firm – found that the majority of people globally do not trust corporations, government or the media. In addition, more than half of citizens believe that capitalism is doing more harm than good in its current form. This has coincided with various political flashpoints, including Brexit, the election of Donald Trump, the Five Star movement in Italy and the gilets jaunes protests in France. “You can't say that human security stops at villages in Africa or parts of Asia, it is universal, and is also about a sense of dignity and being able to make decisions that affect your own life,“ Dr Martin explains. “These partnerships are a recipe that can be used in the West as much as developing countries.“
She believes “hyper-drived capitalism“ is responsible for many of society's ills, moving further and further away from local people and failing to recognise that this is not in companies' interests. “It has not always been that way – if you think back, with 19th-century capitalists in Britain there was a kind of corporate philanthropy that we have moved away from, particularly in the 1970s and 1980s.“ There is an argument that the 2008 financial crash might not have happened if companies had been more interested in local communities, and that the fallout would not have been so great. Corporate social responsibility is taking on a new level of importance, and big companies are realising they need a social purpose.
“I think we are starting to move back more to how things were, and attitudes are changing as businesses see how their actions have wider implications,“ Dr Martin says. “This has taken on a new urgency with the financial crash and growing environmental concerns. Our partnerships are about re-establishing trust and helping businesses become part of the fabric of society again.“
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