Big Business Finally Listening to the Pioneers of Corporate Social Responsibility, says Seventh Generation CEO Hollender In a teleconference presentation to an audience of over 70 participants, Seventh Generation founder and CEO Jeffrey Hollender argued that Big Business is finally heeding the hue and cry of corporate social responsibility (CSR). As evidence, Hollender cited numerous financial studies connecting a corporation's fiscal success to its responsibility track record. One study by Morgan Stanley Capital International and Oekom Research showed that so-called responsible companies outperform their counterparts by 23%. Another conducted by Harvard Business School professor Lynn Sharp Paine analyzed 95 academic studies on the link between responsibility and results. Paine discovered that only four of the 95 found a negative relationship between social and financial performance, while 55 showed a positive correlation. Seventh Generation, a 16-year-old maker of non-toxic household products such as diapers, paper towels, and dish detergent, considers itself a leader in terms of pushing the CSR envelope. Hollender – author of a new book called What Matters Most: How a Small Group of Pioneers is Teaching Social Responsibility to Big Business, and Why Big Business is Listening – described Seventh Generation’s sustainability efforts, and also discussed how to “make the case” for CSR to large company executives – something he’s been doing for years as a speaker, author, CEO and nonprofit board member. Among his tips were: Cite the general statistics correlating CSR with strong fiscal performance. Target low-hanging fruit first by employing CSR where it’s most pragmatic for your company. If you’re a manufacturer, for example, channel efforts toward environmental, health and safety regulations. Stress the “60 Minutes” factor. Is there something – anything – about your company that could prove embarrassing if the television show “60 Minutes” were to expose it? Persuade senior management that it’s wisest to confront nagging issues before they fester. You can also sell CSR as a means to offset repercussions if the company ever does get caught red-handed. Find the points of peer pressure. You may be trying in vain to reach your CEO through the red tape of your own company. Why not try going outside your company? Most CEOs belong to peer groups of some sort, or interact with other CEOs regularly. If you can find a way to reach the entire peer group, you’ll be making progress. Hollender acknowledged that his company – which is privately held, and far from Fortune 2000 in size – has an easier time speaking out and taking action on CSR issues, since it is not subject to the whims and fiscal scrutiny that come with being public. (And Hollender would know – Seventh Generation was public between 1993 and 1999.) But he stressed that large public companies could learn a lot by studying Seventh Generation’s best practices. He outlined several of those practices, including: Performing “value screens” on new hires, such as incorporating ethics questions into the interviewing process. Hollender says that how well a candidate performs on the screening represents “50% of the hiring decision.” The HR department also makes sure to put CSR requisites into its job descriptions. Conducting rigorous “360 reviews” on all employees, and incentivizing employees to improve on their determined weaknesses. As an example, Hollender mentioned, “Seventh Generation has a leader who’s a terrible listener.” This leader’s poor listening was the top thing mentioned in his 360 reviews. Improving listening became his foremost Key Results Objective (KRO). Now the leader’s bonus depends on how well he’ll fare during quarterly evaluations of how much he’s done to attain this and other KROs. All Seventh Generation employees have KROs that are related to various CSR goals. Speaking out, even if doing so means criticizing other companies. Hollender has openly chastised corporations – even ones with strong CSR track records – if he believes they’re not doing enough. In What Matters Most, for example, he slams Starbucks for not disclosing (a) its pesticide usage; (b) the percentage of its sales that come from Free Trade coffee; (c) the loss of habitat its coffee seed planting has caused. Hollender also writes, “I’d like to see Patagonia, Stonyfield Farm and Aveda complete their first CSR reports.” At the TeleConvening, Hollender stressed that employees need to see their CEO speaking out, so that they, in turn, can feel brave enough to speak up for company values, even when those values compromise the company’s short-term fiscal health. He told a story about his own shipping clerk, who openly challenged Hollender’s decision to ship an order to an Albertson’s in Southern California, when (at the time) Albertson’s was in labor negotiations with the United Food and Commercial Workers (UFCW) union, and it had locked out its workers. The clerk believed supplying Albertson’s – and crossing picket lines in the process – would contradict Seventh Generation’s stated vision, mission, and values which include “social justice and compassion.” Members can view a full report of the entire TeleConvening. To learn about member TeleConvenings, click here.