Big Business & Corporate Social Responsibility

Five Reasons the Coffee Industry Needs CSR Programs

Are big corporations singularly focused on profitability with little social conscience? Cynicism exists when it comes to big business and corporate social responsibility.  Large corporations should be welcomed to the table for discussions if we are to create a sustainable coffee industry. Some of our favorite brands are being folded into publically-traded companies. The coffee industry, like many others, is consolidating.

As I sat in Professor Jane Nelson’s CSR class at the Harvard Kennedy School last spring, my eyes were opened to the challenges major corporations face.  I learned the complexity in building a credible CSR program; it’s not as simple as you may think.  My favorite diagram showed a multitude of stakeholders, with consumers being a primary force.  Not-for-profits, researchers, and academics must provide awareness to social, economic, and environmental ills. Others stakeholders must signal business to act including governments, financial advisors, CSR professionals, hedge funds, and many more.

Business must then develop a credible program as it considers all risk factors both socially and economically. Basically we need consumers, financial markets, and many other stakeholders to push towards the need for CSR.  We are fortunate that stakeholders in coffee are pushing more and more towards CSR and sustainability.

[blockquote align=”center” cite=”Adam Smith, Scottish Economist 1723-1790″]Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.[/blockquote]

While many may question the motives of big corporations and their commitment to CSR, here’s why we should not give up:

1.) Big Impact

We need the power of big business to help solve supply chain inequities, climate change, and other huge challenges.  Big corporations have the capacity to foster change. Many do, and we tend to overlook their positive actions. Large corporations can engage large financial institutions, for example a World Bank organization. The International Finance Corporation (IFC), a private sector financer, considers social and environmental impact as part of its engagement with clients. Linking big corporations with financial institutions that offer tools, support, and data to assist in implementation of social programs has merit and can move the needle on responsible business.  Several coffee companies are engaged in programs with the IFC.

2.) Coalitions Can Work

Relax a little on gaining a competitive edge and find ways to collaborate. A pre-competitive coalition can take on systematic social and environmental challenges.  Alignments must offer meaningful and necessary change, not collaboration for the sake of collaborating.  Special interest groups may be challenging for large corporate engagement.  Special interest groups tend to have a narrow focus around specific and important issues; large corporations operate in a much more comprehensive environment, where a narrow focus in a particular area of social responsibility may not be feasible in comparison to a broad-scale approach.

3.) Patience Pays Off

It takes time and effort to change course.  Systems are in place to receive the intended outcome and any change requires new systems and time for team members to come onboard.  Change can happen over time.  Unlike with small companies, where small changes may have little to no impact, small changes in large corporations can have much greater impact in the short term.  Change necessitates longer lead times for implementation.  Slow and steady movement in the right direction yields incredible impact.

[blockquote align=”center”]At the end of the day, we’re all just people. Responsible thinking people work for big corporations.[/blockquote]

4.) Responsible Thinking People Work for Big Corporations

Often we think of corporations as big heartless profit-seeking monsters without any sense of social conscience. Smart and talented individuals work for corporations and seek to engage in socially responsible actions.  A small group of individuals within a large organization can be effective change agents.

5.) Stakeholder Demands

While coffee farmers may be among the first to communicate the need for responsible business, it takes many more voices and activities to join the conversation before change takes place. While there are many challenges with every system, there are still actions that show the need for responsible change in our industry. We need engagement by governments, financial markets, national coffee boards, special interest groups, and others. Often we are too close to our own issues to step back and realize the challenges others face.

In summary, we need big business because no one entity can make the necessary changes. We are a part of a supply chain that’s connected in a way that operates at its best when we are all engaged around common themes.  Our challenges are interlocked.

In addition to Jane Nelson’s class, a personal business experience helped in shaping my opinion about big corporations and CSR.  Success was possible due to patience and willingness for individuals with common interest to develop solutions.  As a result, we’ve experienced not only a business relationship, but insight and appreciation between a small and large corporation focused around responsible business.  Positive outcomes resonate throughout the entire supply chain.

Phyllis Johnson is the Co-founder and President of BD Imports, and has sourced coffees for some of the most notable coffee companies, as well as hospitality brands in the US. She is dedicated to promoting sustainability and responsible sourcing throughout the global coffee community with emphasis on empowering women in coffee supply chains. Phyllis is a keynote speaker and consultant to organizations including the United Nations, International Trade Centre, Economist Intelligence Unit, and board member, National Coffee Association. She graduated from the University of Arkansas with a Bachelor of Science degree in Microbiology and, most recently, from the Harvard Kennedy School with a Master’s degree in Public Administration.  She is recipient of many awards on the subject of women’s economic empowerment including the 2015 Barbara Jordan’s Women’s Leadership Award from the Harvard Kennedy School Women in Public Policy Program.