What Ethical Trading Initiative?

That was my immediate thought on reading a Guardian article assessing the impact of business on child rights following a live discussion session.

Developed by Unicef, the UN Global Compact and Save the Children, the children’s rights and business principles (the Principles) were designed to help companies incorporate child rights into their practices. With an increasing focus on the social and environmental impacts of business, we gathered a group of experts to discuss how businesses can make the shift from reactive to pro-active when supporting child rights.

As a social business with childcare reform as a primary objective, I might have commented were it possible.

Regrettably I’m blocked from commenting on the Guardian after commenting on an earlier article about ‘Creating Shared Value’ where ironically, I’d given the issue of childcare reform as an illustration of profit for a social purpose rather than what the article advocated, profit from a social purpose. Was it the author or the Guardian who didn’t want to engage?

When I first wrote, Changing Capitalism For People and Planet in 2011,  our founder Terry Hallman was still alive. I offered it first to the Guardian editors for social enterprise and sustainable business.  It ended up as an article for a McKinsey initiative the following year.

After his death, in Every Child Deserves a Loving Family, I’d described how his efforts had influenced goverment policy and led to a 40% increase in domestic adoptions. It had begun buy speaking out about neglect, in ‘Death Camps , For Children’

Just days ago, I was in conversation with a DTI representative on a social networking forum. I referred her to my report on ‘Social Enterprise in Ukraine‘ which revealed our interaction with both US and UK government agencies on our work.  It would reveal how Unicef had turned a wilful blind eye, USAID had no budget for “retarted children” and the British Council, working with USAID and corporate partners had been approached with our proposals and determined to set up a social enterprise project of their own.

I’ve also described how both Ukraine’s constitution and the International Covenanant on Economic Social and Cultural Rights compel us to act where there is harm being done to children and how business membership organisations like the British Ukrainian Society and Business in the Community, locked us out and aligned themselves with Ukraine’s moguls, in the vested interest of trade.

At the top of the festering pile the UK business and EU trade minister of the time, would be found.

So where in all of this does an Ethical Trading Initiative come in?  It is a club who’d have us as members?

Apparently yes, if I pay 900 quid.  And then what, read articles on how to suck eggs, or actually do something?

You’ll forgive me for seeing this as the puffery of a rostrum clinging elite, after a colleague and many children lost their lives,  when they couldn’t be found.

Replicate or Scale?

It might well be a strategy for planetary iinvasion.  Do I replicate the agreeable human form or just show up as my scaly self and hope to be loved for what’s inside.

But no, we’re talking about social enterprise.

I guess when we told them our mission was to “replicate localised people-centered economics on a global basis”  it must have sounded a bit on the scaly side, but we really meant no acquisition. Quite the converse in fact.

It was in fact about a business which invests its profit in stimulating a local economy and in our earlier work we’d referred to it as a Community Funding Enterprise.  The directors and shareholders just needed to amend the business articles to agree the core objective as a social purpose.

 

 

 

 

Profit for social purpose

The matter of using profit for a social purpose arose recently in the context of the Social Value Act. A conversation on the Social Enterprise Mark group. started by Anne Mountjoy who I correspended with directly about our own work in this area 5 years ago. I referred to “our services as a profit for social purpose business” aka people-centered economic development,  saying

“One of the reasons we migrated our social purpose to Ukraine is that at the time when we brought the P-CED profit for purpose model to the UK, there was absolutely no response from those advocacies that existed at the time. Even to the point of failing to get a reply from Baroness Thornton of the SEC in a letter delivered to her at the House of Lords.”

The Linked discussion on social investment is one of the many conversations I can’t participate in because this forun is one of those that will not approve my comment on the current conversation about social investment.  It was interesting to read what Pope Benedict wrote on this subject in his 2009 encyclical, ‘Caritas in Veritate’

‘This is not merely a matter of a “third sector”, but of a broad new composite reality embracing the private and public spheres, one which does not exclude profit, but instead considers it a means for achieving human and social ends. Whether such companies distribute dividends or not, whether their juridical structure corresponds to one or other of the established forms, becomes secondary in relation to their willingness to view profit as a means of achieving the goal of a more humane market and society’

‘Striving to meet the deepest moral needs of the person also has important and beneficial repercussions at the level of economics. The economy needs ethics in order to function correctly — not any ethics whatsoever, but an ethics which is people-centred.’ .

As an agnostic, I’m reliably informed that it’s about “the authentic development of every person and of all humanity

I aligned very well with the business plan for people-centered economic development which was distrbuted to the social enterprise community in 2004 and said:

“Traditional capitalism is an insufficient economic model allowing monetary outcomes as the bottom line with little regard to social needs. Bottom line must be taken one step further by at least some companies, past profit, to people. How profits are used is equally as important as creation of profits. Where profits can be brought to bear by willing individuals and companies to social benefit, so much the better. Moreover, this activity must be recognized and supported at government policy level as a badly needed, essential, and entirely legitimate enterprise activity.”

The ‘profit for purpose’ business model as we concieved it, was distributed from 1996 onward free for others to use.

Now, this is what Lucy Findlay says in her blog on the matter of certification.

“So why not self-certify after all it’s quicker, cheaper and potentially more accessible?

Easy accessibility is its key downfall. It does not protect integrity, it is inconsistent and is open to self-interpretation and in the worst cases, abuse.

Having run the Social Enterprise Mark since the beginning, we have developed the criteria in partnership with the sector and have protected and owned these criteria fiercely. It is our experience that interpretation of the criteria is a technical job and not easily carried out by anyone. We are constantly learning about new forms of social enterprise and the way that they operate. Our Assessment Manual has taken years of work to develop and our certification panel has taken its job very seriously in developing those precedents which have been set.:”

Is it possible for one to “protect and own” what someone else has shared with you freely?

All that was available to us in terms of certification was ‘See What You Are Buying In To’ which has more recently been rebranded as ‘Profit through Ethics’. A costly exercise for a small business which brought no business at all, not even an enquiry. I also approached B Corps with a view to collaborate. They were unable to extend to our shores.

What we were attempting to “protect and own” was not a model but the sum of our investment and labours over many years. Protection not for our own benefit but for benefit of those in greatest need, as I’ve descrribed earlier.

By 2009, when Social Edge hosted the discussion about building the social economy, my colleague was battling for his own life and that of thousands of the most needy. He wrote about the need to protect IP for social benefit:

https://economics4humanity.wordpress.com/2012/10/02/do-we-need-ethics-in-social-investment/

It was he, who from the beginning, had warned about the risk from the unscrupulous and here we are today, with a suggestion that we are among the unscrupolous in not signing up with one of many organisations who declined our offer to collaborate.

This is not safeguarding or propagating the social economy it is brand building. Whether by means of excluding others from conversation or referring to anonymous defamation, to allude to some kind of malpractice, it is building of reputation and income at the expense of others and perhaps even at the expense of their lives.

Every Little Helps

Tesco’s corporate slogan provides immediate identification and yesterday, I discovered staff at my local store were supporting a charitable cause – by dressing up as superheroes in support of Cancer Research UK.

There is without doubt, a shift in business attitude toward support of the community.  In the past such a campaign might have been permitted to collect outside the door. Now it’s a dimension of doing business.

Because of my own involvement, I know also that Tesco has formed a partnership with Grameen Bank to create a social business. It will provide microfinance lending to some of the most impoverished regions of Scotland.

I run a social business which began with a microfinance initiative for impoverished people overseas. I also have cancer, leukaemia to be specific.

Thinking further about Tesco,  I was reminded that a few months ago I’d been without transport and taken a bus to the local town for a dental appointment. When it came to returning however, there was the prospect of more than two hours wait. I though – I’ll walk up to Tesco, there’s bound to be someone from the village I can hitch a left from. There was.

I began to ask – Is Tesco really helping ?

The primary focus of my own social business are children institutionalised because they’re considered imperfect and I was reminded recenty of an interview my colleague gave to a Canadian magazine before he died. He spoke of social business partnership saying:

“The funds will be directed to concluding a project in the Ukraine which involves funding the training of residents to develop social businesses. Included in this work is supporting children who have disabilities, many of whom have been left to die in secretive locations. P-CED is helping to move these children to safety and give them access to modern healthcare.”

Ironically as an American without health insurance, he died as a consequence of poverty.while I faced my own challenge and the despair of not being able to help him or the children he spoke of.

It isn’t easy to talk about cancer. Wanting on one hand not to reveal one’s vulnerability, while at the same time being in great need of social engagement – someone to talk to.

If I want to speak to someone in my village, I can go into town and find them in Tesco.

The greatest fear becomes  exposing oneself and seeing the trapped look  of someone saying that they ‘don’t have time’.

I did get to speak to Wonder Woman yesterday, advising her on the spinning technique (on TV we never saw how she spun back to being normal)  and then the part-time checkout girl. I asked why she and others weren’t in costume and learned that the staff had to buy their own. She couldn’t afford it from what she earned.

In spite of all this ‘social’ activity it seems, we are so many at a distance from each other.

What’s your definition of social business?

This was the question I asked a business network 3 years ago.   As I’d observed,  the concept of social business advocated by Muhammad Yunus, of business with a primary social goal had been circulating since publication of his book on Creating a World Without Poverty  in 2007 and earlier in a presentation paper, which claimed ‘Social Business Entreprenuers are the Solution’

Let me first offer 3 broad definitions:  A social entrepreneur is someone who applies business solutions to a social problem and is supported by foundation grants and stipends. Social enterprise is a business which invests the majority of  its surplus in a social objective but may also be supported by grants.  Social business is a self-sustaining, non dividend distributing business with a primary social purpose.

In 2008, I started the Linkedin group on Social Business and For Benefit Corporations,  which was aligned with the Linkedin definition, though many of those self-ascribing this as a skill seemingly had no connection.

Another interpretation was developing however, that of social media business rather than social purpose business and IBM seemed to be in the driving seat.

Our founder who died in 2011 had an anecdote about IBM .  Apparently after he’d started to distribute his paper on business for social benefit in 1996, two guys from IBM showed up at the restaurant he frequented. They’d sought him out with the aim of deconstructing his work and discovered he was no pushover. Apparently he’d turned it around on them so severely, that one of them left in tears.

THINK IBM was not only a corporate slogan.  It also became an item of desk furniture in the 70s and 80s,  in case anyone thought outside their particular box, their mantra that ‘nobody got fired for buying IBM’

In his 1996 paper, Terry Hallman described how the dawning Information Age, presented an opportunity to share information and develop business and economics for the benefit of humanity, concluding:

Just changing the way business is done, if only by a few companies, can change the flow of wealth, ease and eliminate poverty, and leave us all with something better to worry about. Basic human needs such as food and shelter are fundamental human rights; there are more than enough resources available to go around–if we can just figure out how to share. It cannot be “Me first, mine first”; rather, “Me, too” is more the order of the day.

in 2008, asking “what is social enterprise?” he’d said:

“There is so far no commonly agreed definition. Is an enterprise social if it produces some sort of social benefit? If so, in that sense, many or indeed most traditional businesses for profit can be considered social enterprises. Business enterprises typically produce something of value for clients and customers, otherwise they would cease to exist as business enterprises. Earning thousands or millions of customers can by definition be considered social benefit. Social refers to groups of people, as contrasted with one person. If a company produces a product or service, it has to benefit a group of people sufficiently for them to use that product or service. Owners and stockholders benefit from financial profits gained by the enterprise. Stockholders range from individuals owning relatively large percentages of a company to ordinary pensioners relying on income from micro-investments into the company. Profits from almost any large public corporation are shared among wealthy individual stakeholders to humble, modest households who have holdings in the company through an array of mutual funds managed by government-regulated financial managers.”

Today, as if IBM has suddenly come round to realise that it’s not just about social media, an article in Fast Company magazine bears the headline ‘Move over Social Media: Here Comes Social Business.

It’s still about traditional capitalism, however and the maximisation of profit.

Id comment on the Fast Company article but the site tells me that I’m blocked from making a new comment. They’ve already realised that I differ greatly on this issue and the way to force their view is to control rather than share infomation. It takes me back  to a paragraph from the 1996 paper:

As Alvin Toffler predicted in Power Shift, where once violence and then wealth were dominant forms of power, information is now becoming the dominant power. Those nations with the greatest freedom of information and means of transmitting it have now become the most powerful and influential, and the strongest economically. Toffler also predicted the collapse of the Soviet Union would come about due primarily to its authoritarian control and limiting of information. Unfortunately for Russian citizens, this old habit has continued for them beyond the collapse of the former Soviet Union and will at the least make an interesting case study on the survivability of a once strong nation which still remains committed to limiting and controlling information.

My concerns  3 years ago,  that business with tradirtional profit maximising objectives would undermine the concept of social business are now being echoed within the EU where recently it was observed that:

“They rebranded themselves as social innovators and entrepreneurs because these are the new tags to get the ears and funding of Brussels. The Commission ended up opening the floor to every stakeholder claiming a place at the table.”

This is more than a little ironic since within the EU itself a group of  ‘experts’   described as GECES seem to have branded themselves  as arbitrators.  Their definitions,  EU Commissioner Barnier claims, have been made through ‘high level’ consultations  None appear to be idenfiable as practitioners  of social business however.

In 2011, I included the description and history  of our P-CED business model in an application for the EU sponsored  social business competition in Naples.

Aside from definitions, there’s also the concept of forward investment in an  EU Social Entreprenuership Fund (EUSEF), a concept proposed in our 1996 white paper, our 2004 business plan and more relevantly, the  proposal for microeconomic development and social enterprise, I submitted to the EU Citizens Consultation in 2008.

Commissioner Barnier claims, in spite of our own transparency,  that he was not aware of our work, that these concept have evolved in the last decade from various sources.  He cannot seem to offer any example.   A year on from his suggestion of  “a fruitful collaboration on these matter in the future”  there is no indication that this can ever be expected.

Does George Monbiot want people-centered economics?

I wondered, seeing this video for the first time today:

It seemed to resonate with people-centered economics.

“Dealing with poverty is nothing new. The question became ‘how does poverty still exist in a world with sufficient resources for a decent quality of life for everyone?’ The answer was that we have yet to develop any economic system capable redistributing finite resources in a way that everyone has at minimum enough for a decent life: food, decent housing, transportation, clothing, health care, and education. The problem has not been lack of resources, but adequate distribution of resources. Capitalism is the most powerful economic engine ever devised, yet it came up short with its classical, inherent profit-motive as being presumed to be the driving force. Under that presumption, all is good in the name of profit became the prevailing winds of international economies — thereby giving carte blanche to the notion that greed is good because it is what has driven capitalism. The 1996 paper merely took exception with the assumption that personal profit, greed, and the desire to amass as much money and property on a personal level as possible are inherent and therefore necessary aspects of any capitalist endeavour. While it is in fact very normal for that to be the case, it simply does not follow that it must be the case.”

Predistrbution and living wages

Now imagine if the resources to create this kind of video were available to activists and practitioners.

Changing capitalism for people and planet

Novartis: Is ‘creating shared value’ a sham ?

There’s good reason for me to consider Novartis as a business with some social benefit.  Going back to 1999 they’d come to my assistance when I’d sought help for a woman in Russia with a diabetic complication who was at risk of losing a leg.

Through their offices in Italy, they’s shipped 6 months supply to Lyubov in Novosibirsk at no cost to either of us and the following year, she’d written to me overjoyed at breaking her leg. Her joy was founded  in having a leg to break rather than it being amputated a year earlier.

A decade later , my own life became dependent on Novartis  and their products. First Gleevec and now Tasigna, both treatments for chronic myeloid leukeamia.

In February last year, as the N.I.C.E approved Tasniga as an NHS treatment I was reading a Polly Tonybee article while sitting in the waiting room of the Edward Jenner unit at GRH.  The article revealed how many of these treatments were set their price tag just below the N.I.C.E threshold

A dew weeks later, the Guardian would publish an article which endorsed the social commitment Novartis was making under the banner of Creating Shared Value, which advocates the application of business to solve social problems.

For me, this is a matter of considerable interest, since we’d been one of the pioneers of business with a primary social purpose,  as I’d described in my own article on ‘Changing Capitalism for People and Planet‘   I’d offered it to the Guardian sustainable business editor in 2011.

A couple of years before diagnosis, I’d had the opportunity to visit Novartis near Warrington when Serco, one of the customers for the software which creates our own revenue invited me to meet with Novartis staff.  An invitation which ended up as an expense, since our product was not entirely what was wanted.

A few months after the Novartis article, the author then suggested that corporations could profit by solving social problems and to me this underlined the difference between the ‘shared value’ concept and that of a social purpose business.   The gist of my comment on this article was that the latter was about deploying profit for social purpose rather than creating profit from a social purpose.    I cited the example of our strategy paper from 5 years earlier proposing a business strategy with the primary focus of childcare reform – removing all Ukraine’s children from insititutional neglect

As one may see, this  comment was deleted and I’ve since been blocked from further comment, which led me to ask if Mark Kramer or perhaps the Guardian is afraid of open conversation.  The experience brought to mind the words of Kipling:

If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build’em up with worn-out tools;

Commenting recently on the diplomatic spat that began just before Christmas,  with Russia’s orphans taking the role of the proverbial football, I desctibe how this actually was something my colleague gave his life to, as one of around 50 million Americans for whom health insurance is unaffordable.

Novartis may well be doing some good for humanity, but it comes at considerable cost to the taxpayer who foots the NHS bill for treatment which costs more than my total income. As the NHS shifts increasingly toward privatisation, it may well place those whose life depends on this level of expenditure in the same position as my American colleague.