The New PR

The New PR
Meet today’s communication needs through five successful

keys that replace ‘spin’ with transparency and unlock the full
potential of your sustainability program.
by John Friedman
Made possible by:

T H E F I V E K E Y S
Table of Contents
Table of Contents.....................................................................................i
Introduction ........................................................................................... 1
Evolution Becomes Revolution.................................................................. 5
Five “Keys” to Unlock a Successful Sustainability Program........................... 7
Key 1: Alignment with your Core Business Model (why). .........................8
Key 2: Integrate Sustainability into Day-to-Day Operations (how).......... 10
Key 3: Employee Engagement and Empowerment (who) ...................... 14
Key 4: Tangible (local) Benefits (where).............................................. 21
Key 5: Maximize Stakeholder Engagement (what) ................................ 23
What’s In a Name?................................................................................ 27
Sustainability as a Business Strategy....................................................... 29
Business Benefits of Sustainability .......................................................... 34
The Forces Encouraging Sustainability as a Business Model ...................... 40
The Complicating Factors....................................................................... 44
The Time is Right.................................................................................. 48
Maximizing Your Program ...................................................................... 51
Acknowledgements ............................................................................... 57
About the Author .................................................................................. 57
i
Introduction
“All progress is initiated by challenging current conceptions, and executed by

supplanting existing institutions.” ― George Bernard Shaw
W
hat happens when you combine a genuine corporate
commitment to being an exemplary corporate citizen with the
lessons learned over 20 years of public relations and corporate
communications? For me, I watched a transformation as an ancillary
program to “maximize” the charitable giving program for a Fortune 500
company evolved and grew into an integrated program that demonstrated
value to finance/accounting, human resources, community and government
relations and ultimately was integrated into the primary branding for the
company to better demonstrate the company’s commitments to its
stakeholders. In short, it changed the way we communicated with our
stakeholders – changing everything from employee communications to
community outreach and shareholder and government relations.
Beginning in 2000, I had the distinct honor to lead a team of professionals

that was tasked with building a program based on Lafarge North America’s
established corporate commitments to environmental, social and economic
progress that would not only motivate employees, but would actively engage
stakeholders and provide a greater return on our investment. In the process,
the program went from being an ‘added value’ to being integrated into a
wide array of company outreach efforts that facilitated recruitment,
community support for operations, government relations activities,
shareholder outreach and more. In less than three years we redefined how
the company was presented and perceived by its customers, the
communities in which it operated, employees, officials and other opinion
leaders.
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As the program evolved it became apparent that we were changing the way
that the company communicated. Rather than speaking ‘to’ the various
constituencies through established statements and prepared press releases,
we were developing and engaging in a real dialogue. We embraced
transparency as a more effective way reach out to those who were integral
to the company’s continued success. At the same time, the principles of
transparency served us well when we were faced with the occasional
unfavorable events. When we had problems or “bad” news, we proactively
reached out to our employees, regulators and the public – directly and
through the media. This helped to further enhance the image of the
company as well. I call this transformation the “new” public relations.
The “new” PR included opening up, and

We were changing
letting the public in through open
the way that the
houses, plant tours, presentations and
company
regular meetings with local opinion
communicated …
leaders, civic associations and the
developing and
creation of citizens' advisory committees
engaging in a real
as well as the more traditional media
dialogue.
outreach, press releases about local
good works, etc. We discovered that the public often viewed the tall fences
surrounding our facilities negatively but that, once we showed them the true
purpose (to maintain safety around industrial sites and quarries), the
perception began to change. With knowledge came a greater understanding.
It was not uncommon for people to express that they were pleasantly
surprised that the company was not “hiding” behind the gates and unwilling
to let them see what we were doing, but eager and proud of our operations.
The reasons for our success were that we recognized that the principles of
sustainability not only redefined the company as a ‘good’ citizen, but also
that the increasing stakeholder interest (demand) for corporate responsibility
provided an opportunity for us to become an more attractive neighbor,
employer, customer in addition to the preferred supplier compared with our
less socially-conscious competitors.
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At the same time we were fortunate that the company leadership recognized
that the goal of our efforts was to effectively engage stakeholders, and could
(and should) not be measured in column inches or minutes of airtime but
rather in direct business enhancements - good customer and supplier
relationships, reducing opposition to growth, enhancing speed to market,
fostering a favorable regulatory climate and requirements and enhancing
human resources ability to hire the best talent. These things are harder to
measure, but ultimately are the best way to demonstrate the value of our
efforts to the success and growth of the business and built buy-in for the
program as we went along.
Today, stakeholders are becoming more and more insistent that businesses
act in a manner that is socially responsible. In the United States this is
primarily focused on environmental impacts such as carbon emissions, use of
natural resources (such as wood, stone and water) and energy consumption.
A company that bases its culture and actions on sustainability is at a
strategic advantage with stakeholders who care about these issues because
when this culture redefines the company, PR can take advantage of this
“convenient truth.”
When Lafarge SA asked me to begin to teach colleagues throughout the

company how and why the program that I initiated for Lafarge North
America program was successful, I was able to identify five “keys” that
contributed to our success. And when we were less than successful it was
often attributable to not following all five. Over the years, I have refined the
principles to provide a general framework on how to build a successful
program and shared them with audiences around the world in presentations
and articles, on the Web and in person. In doing so, the “new PR” expanded
into a new way of communicating with our employees as well. I keep the
name, however because it reflects that reality that employees are not only as
internal constituents – they also represent the public and are an audience
that must be won over just as another other constituency. Arguably, failure
to make this commitment dooms any effort because, as we shall see,
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employees represent the core group and your most effective advocates,
when properly informed, included and engaged.
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1
Evolution Becomes Revolution
Transparency allows people to see who you really are;

‘spin’ tries to show them who you think they wish you were.
T
he changing information needs of both stakeholder and companies
are redefining the role of corporate communications departments
and professionals including community, shareholder, government,
and employee relations. Companies are recognizing that an increasingly
savvy – some would say cynical – audience is becoming more and more
discerning about messages that corporations are sending. The “new PR”
requires corporate communications professionals to modify their strategy,
and refine the structure and content of all manner of communications
vehicles including Web sites, annual reports, executive speeches and
presentations to include sustainability and to integrate those messages and
principles. Progressive companies have recognized the true power of the
Web and made the transition from using the Internet as a source of
information into a forum for dialogue; rather than attempting to stifle
criticism, they find the net provides them with an unparalleled opportunity to
tap into, and respond when appropriate, to what is being said about their
enterprise.
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The five principles or “keys” outlined in this book offer a framework for how
a program can be built, based on the model of answering “who”, “what”,
“where”, “how” and “why.” When all those elements are in place,
communications professionals do not need to present information “in its best
possible light” (or spin) but rather can focus their efforts toward
transparency and openness.
Successful business is increasingly relying on building and fostering open,

multi-stakeholder dialogue. Corporate communications professionals can use
their skills to articulate the organization’s environmental, social and economic
commitments to both internal and external stakeholders. This can be done
through standards or statements of expectations (such as ethics,
environmental, and safety policies). Working with and engaging with
community stakeholders offers insight into how to ensure that these policies
not only reflect community needs but also industry standards and any
statutory and regulatory requirements.
Working with stakeholders within the organization is also important, using

the employee (or internal) communications function to obtain the input and
gain the buy-in of tax, legal, human resources and other departments that
will benefit (and can offer important guidance) in the development of both
the policies and the messages explaining them.
Additionally, since asking or requiring companies to reveal their shortcomings

as part of the process requires the involvement of the legal department as
well as internal (and/or external) auditors. In order for the reporting to be
transparent and credible, auditors validate both the initial baselines as well
as subsequent results. And to avoid litigation, legal counsel must be obtained
to ensure that the messages do not put the organization at legal risk,
particularly in light of the sometimes highly charged and litigious atmosphere
that seems all too prevalent.
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2
Five “Keys” to Unlock a Successful
Sustainability Program
T
he five “keys” that I have developed over the last decade are
those elements that I believe are necessary to build a unlock the
true potential of sustainability as a business-supporting strategy.
They have been the basis for programs that I have recommended and
implemented for companies ranging from the Fortune 500 to small not-for-
profit organizations (seeking to partner with businesses) and those working
to implement sustainability, including my work with the Sustainable Business
Network of Washington (SB NOW). They have been well received by a
variety of audiences including business leaders, academics, students,
philanthropic organizations, government representatives, and other opinion
leaders.
They start with the premise that sustainability – ensuring the long term
viability of the company that is in keeping with the continued best-interests
of the environment, society and economic viability - is more than a form of
“strategic philanthropy” because when it is done effectively positions and
advances a business economically while providing positive impacts to the
social and environmental pillars as well. The keys follow a model for telling
an effective story – answering the age-old questions of who, what, where,
how and why. In many ways the “new PR” – restores the true meaning of
the phrase – relating to and with the public, rather than a narrower focus on
media relations.
It is important to note that the five elements are not in order of importance.
All are critical and a failure in any area results in a program that is less
effective, or even ineffective or counter-productive.
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Key 1: Alignment with your Core Business Model
(why).
Demonstrating the contribution that a company, its employees and
its products make to the community in which it operates clearly
supports the business strategy.
Successful businesses must be adept at determining market changes, trends

and expectations. They cannot be in such a rush to embrace the “new” trend
that they abandon their fundamental and core purposes.
Businesses must be prudent when it comes to social responsibility efforts,

and not rush headlong into activities or partnerships that are not aligned
with their long-term interests because that, quite simply, is bad business. For
any program to be valuable to a business, it must further the goals of that
company.
Companies can reconcile their desire to be socially responsible with their

need to collaborate with reasonable stakeholders that are supportive of their
business model - whether they are individuals or organizations. At the same
time, a lesson can be learned when it comes to stakeholder individuals and
organizations that may have a core purpose that is counter to the business.
When it appears that this element is being violated, it is understandable that

the public would view the arrangement skeptically as either a failure of
strategic thinking (allowing a Trojan horse into its corporate offices) or as
appeasement in an attempt to defray criticism. It is natural, for example,
that people question why McDonalds - an organization that owes the selling
of meat and chicken products to be consumed by people for its success -
would allow representation on its board of directors by People for the Ethical
Treatment of Animals. There is a basic and fundamental contradiction
between the business model and an organization that states as one of its
core values that it is a “simple principle that animals are not ours to eat.” It
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hardly seems strategic to believe that PETA will be satisfied with improving
the living conditions for animals destined for the slaughterhouse.
In this attempt to be socially responsible, it appears that McDonalds is doing

so in a manner that is in direct opposition to its core business. On its face,
this raises questions. And stakeholders from employees to shareholders in
are right to question the arrangement. And McDonalds should not only be
ready to answer those questions, a more effective approach would be to
publicly explain the relationship. As of this writing, the company has not
effectively communicated the strategy behind this seeming contradiction,
leaving themselves vulnerable.
In contrast, the partnership that we began in North America between

Lafarge SA and Habitat for Humanity International is on its face a natural fit.
Lafarge’s business is relies on the sale of cement, concrete, crushed stone
and gypsum wallboard products. Making the linkage between these products
“materials for building our world” and Habitat’s mission to provide “decent,
affordable housing” supports the business by demonstrating the company’s
commitment to providing building products. It further connects those
products to their social impact – they build a better world. It is important to
note that the program was created as a “model” for operations to follow; it
was not required that they partner with Habitat. Rather, what was required
was that any efforts follow the principles that it exemplified. Naturally, as a
ready-made program many voluntarily signed on, eventually growing the
program to over 20 countries in less than five years.
It is important to recognize that a company need not be large or to make a

huge commitment of resources and time. When an automobile dealer lends
vehicles for a community parade or allows the graduating high school class
to borrow a truck on which to build their float for the homecoming game, the
company does just as effective a job at demonstrates its commitment to the
community and the value of its products or services. When a sporting goods
store donates team jerseys for the softball team – it does the same thing.
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Key 2: Integrate Sustainability into Day-to-Day
Operations (how)
Most employees understand and act in their own personal and professional
best interests most of the time. There is a natural inclination, therefore, to
avoid the expense (in effort and money) for any program that does not
provide an favorable impact to them. This can include the psychological “lift”
people feel from doing good and knowing that their company supports those
efforts. On a daily basis, however when company and personal bottom lines
are equated – such as through performance incentive programs – employees
will tend to focus on programs that appear to offer fiscal return in favor of
those that do not provide them with positive rewards. But employees
understand the importance of maintaining environmental standards if the
company is to stay in business. Employees understand that routine
maintenance of equipment keeps it operating. And certainly employees
understand and appreciate investment in equipment and programs that
improve their safety and well being.
From a Vision to a Culture (building an internal constituency)

For sustainability to be integrated into a business model, it must be
compatible not just on the theoretical level, but also practically on a day-to-
day basis. Asking people to engage in behavior that is seen as incompatible
with their regular duties is a recipe for failure. For this reason, the human
resources department is a key partner when building the program.
Incentives and rewards must be aligned with the desired actions and
outcomes in sustainability, just as they are for other more traditional
business objectives. Including the sustainability program efforts in
recruitment materials helps attract those who would fit with the culture, and
encourages like-minded individuals to apply.
Identify and build on “quick hit” benefits

Sustainability programs are not just long range efforts. In fact, they can
facilitate and provide short term benefits. There are tax advantages that can
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be realized associated with in-kind contributions. There are often local, state
and national tax incentives for targeted programs; such as environmental
mitigation or programs that assist the elderly, the infirm or infants.
Risk Management
Another benefit is in the area of risk management. In addition to its moral
obligation to do everything in its power to keep its employees safe, a
company also reduces costs associated with insurance premiums and
lawsuits (in the event of an accident). A reputation for safety will also
encourage more safety conscious applicants. The result is a company culture
of safety, watching out for the well being of others and refusing to cut
corners on safety programs. That, in turn results in safer working conditions
and practices.
The Value of Partnerships – Building Credibility

Social marketing and co-branding opportunities allow for a company to take
advantage of an established philanthropic organization’s credibility. In
exchange, the company helps that organization fulfill its mission.
Partnerships such as these often require negotiation and active
management, but the investment is often worth the effort. A 1999 Cone
Roper corporate citizenship study found that almost 9 out of ten Americans
(88 percent) expect companies to address social issues, and almost the same
number (87 percent) want to know what those companies are doing. Eighty
three (83) percent have a positive image of companies that engage in social
activities and 65 percent would switch to a company that supports worthy
causes. Clearly social marketing is a powerful mechanism to differentiate a
company and companies such as Ben & Jerry’s, Home Depot and Chic-Fil-A
have demonstrated that being a values-based company can have strategic
advantages, a fact that is not lost on the next generation of business
leaders.
Values-based Companies are Winning the War for Talent

In October 2006 NetImpact released a survey of MBA students that showed
strong support for sustainability. Eighty-one (81) percent believe businesses
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should work toward the betterment of society. Eighty-nine (89) percent said
business professionals should take social and environmental impacts into
account when making business decisions and six out of ten (60) percent
believe CSR makes good business sense and leads to profits.
More important from a human resources perspective, seventy-nine (79)

percent indicated they would seek employment that is socially responsible in
the course of their careers, and 59% said they would do so immediately
following business school. Clearly then having a commitment to sustainability
can be advantageous for recruitment efforts by making the company a
preferred employer.
Lafarge North America found that the partnership with Habitat for Humanity
was a valuable tool for engaging employees at all levels. Quite simply, they
embraced it fully. It made them feel good about their company, the products
that they were making and their individual contribution. Employees at the
regional office outside Atlanta, GA not only used their vacation time to
volunteer at builds, they even started a vacation “pool” so that others could
participate. Realizing the potential, human resources and marketing
departments around the country began to include messages about the
partnership at trade shows, recruitment fairs and in corporate profiles. New
hires reported that the partnership was one of the things that attracted them
to the company. Marketing seized on the opportunity to hold product
demonstrations on Habitat job sites, inviting their best customers to join
them. This not only built a home for a deserving family, it also built a sense
of partnership between Lafarge and its customers. It also allowed for new
products to be demonstrated in field situations, resulting in sales.
All this while receiving favorable recognition in the local media and
impressing opinion leaders in the local community, as well as handy do-it-
yourselfers who were also on the Habitat build site and got to experience the
products and the company commitment at the same time.
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Longer-term Benefits
Sustainability programs are naturally more associated with long-term
thinking and results. The benefits include such valuable (but hard to
quantify) elements such as corporate reputation and image. A positive image
can have an impact on reducing barriers to entry and growth in a market
and encourages customers. When Lafarge wanted to establish a presence in
Anniston, Alabama, local employees put together a plan to use the
company’s partnership with Habitat for Humanity to introduce the company
to the market – by donating materials, expertise and volunteer labor to build
houses for the needy. That required a temporary, provisional permit to
operate a concrete batch plant. After the houses were built the company
found no opposition to continuing and expanding its operations in the area.
Perhaps recognizing the power of sustainability to build not only the external
brand but the internal culture as well, a strong majority of the MBA students
(78 percent) surveyed by NetImpact think that sustainability should be
integrated into the MBA core curriculum.
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Key 3: Employee Engagement and Empowerment
(who)
“All politics is local.” ― Tip O’Neil
When we developed the program for Lafarge North America, we created a

framework for and to encourage strategic decision-making at the local level.
This was based on the fundamental notion that local people are closest to
the community and therefore have the greatest awareness of – as well as
stake in – local impacts. For this reason the national partnership with Habitat
for Humanity served as a “turnkey” example that operations could implement
or model their own program based on its demonstration of a value-adding
program. It also took advantage of the fact that homelessness and poverty
housing are a social issue that transcends location. In fact, the year we
launched the program, homelessness was the second highest concern
nationally in the United States (crime was first) according to a Cone Roper
survey. Other geographically diverse companies may seek to develop
regional efforts based on local concerns. And increasingly issues like global
warming, CO2 reduction, energy cost/consumption are issues that provide
the basis for widespread programs.
Many operations evaluated their local needs and developed programs of their
own, using the same criteria that reflect the five keys. In Canmore, Alberta
the local desire to provide habitat for endangered species such as wolves
and bears led to the formation of the “Predator Preservation Project” to
protect these animals. Once again the company used its products and
engaged employees with the necessary skills to build over and underpasses
that allowed the animals to cross major highways. This program was
successful because it followed the five principles, most notably addressing a
primary local stakeholder concern through the unique commitment and
capacity of the company (which includes the know-how of its employees) to
make a difference.
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In Davenport Iowa, the Lafarge cement plant adopted a portion of the

Mississippi River and conducted annual efforts to clean the river and to keep
in clear of debris and trash. The river was a fundamental part of the plant’s
transportation strategy and the importance of the river to the plant’s
economic viability was clear.
At the same time, employees could bring their unique skills and talents to
the project. Welders managed to dismantle and remove a sunken barge that
had been an eyesore on the riverfront for decades in a manner of weeks,
demonstrating the value of their skills and dedication.
In many locations in Canada where Lafarge had quarries, large trucks and
loaders were used to clear snow (and transport it to inactive sections of the
quarry). This transformed the large construction vehicles from noisy
“monsters” into good corporate citizens and again, allowed the employees to
showcase their individual skills as well as their dedication.
The most fundamental reason for empowering employees and engaging

them in sustainability programs is the same reason local employees are the
best at dealing with customers, communities, regulators, etc. Employees are
closest to the community of stakeholders because they are community
stakeholders with the unique perspective of knowing the needs of both the
community and the company. When Lafarge North America attempted to
locate a manufacturing and distribution facility on Wall Street near the port
of Vancouver, the market analysis seemed very favorable. The strategic
planning department at headquarters reported on the ease of transportation
and the closeness to the market. What they did not count on what a three-
year history of the local community successful fighting and arguing against
development on the land. The company was surprised to discover that their
plan to build a children’s park adjacent to the facility did not satisfy the local
community. This argues strongly in favor of building the community presence
and getting to know the community before major time, effort and
expenditures are committed.
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Empowering employees is critical because they can help define how the
program is implemented by identifying local issues, opinion leaders, and
opportunities. But an even more valuable role is that they are closest to, and
therefore able to identify, the impediments whether they be cultural,
religious or rooted in the existing official and unofficial power structures. If
Wal-Mart wants to win the battle for hearts and minds, for example, they
won't do it with fuel efficiency; they'll do it by actively engaging their
employees and treating them as the heart of their success. And they would
do well to realize that when employees are happy and satisfied, the pro-
union arguments won't have any traction with the public, or employees.
In his book Moral Capitalism Steven Young, global executive director of the
Caux Roundtable stresses the critical importance of developing programs
that are mindful and respectful of the local indigenous cultures that may be
ill equipped to “fight back” against a more technologically advanced one.
“The culture that follows upon successful economic growth is

a global one, rooted in American consumerism ... that
subverts traditional elites and values. Global business is the
carrier of this culture, responding to consumer demands. It
is legitimate for business to deliver what people want, but at
the same time business should take care that local cultures
are not permanently asphyxiated.”
In the deployment of its power, business has a responsibility

to moderate its impact on those communities, which can
hardly protect themselves against the intrusions.”
Employees at the local level not only represent and offer insight into the local
culture, but they often can serve as “ambassadors” – helping the company to
understand what the community needs and wants (and what it does not
want) and helping to explain the benevolent intention of the company to the
community.
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Michael F. Curran, Chairman and CEO, Willbros Group Inc. agrees that a
company cannot merely impose the standards from its home country. “Doing
the right thing involves having your people listen to and talk with the local
communities about their real needs and striking a balance.”1
Align Incentives with Desired Culture

Getting employees to embrace a vision requires commitment, consistency
and a willingness to review processes and procedures to ensure that they
provide recognition and incentive for the desired behaviors. That means the
leader must be willing to challenge everything in order to ensure that the
business practices and cultural expectations are in congruence.
At all levels of the organization, employees need to be included if they are to

be expected to act in ways that support the overall corporate objectives.
Sustainability or socially responsible practices remain strong motivator but
only if employees are empowered and rewarded for behaviors that are
aligned with these values. Human Resources policies and programs must
support the vision, including hiring practices, reward, and recognition and
incentive programs.
Jack Welch considered successful employees who engaged in behaviors that

were out of alignment with the corporate vision and culture to be the most
dangerous. Employees (customers and stakeholders) who see people
rewarded naturally emulate those behaviors and believe that those actions
are the reason that the person is successful. When this happens, it is fair to
say that they have been elevated to the level of ‘maximum damage.’ As
difficult as it may be to punish or reprimand employees who contribute to
the bottom line, their negative example is powerful. If, for example, a
manager consistently reaches production targets but does so by repeatedly
violating safety procedures employees – and other stakeholders – will see
this as a powerful example of what the company “really” stands for and the
commitment to safety will be seen as lip service.
1
“Global citizens: business leaders discuss corporate responsibility on the global stage” NYSE Magazine,
August/September 2006
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Much has been made about the spectacular collapse of companies such as
Enron and WorldComm pointing out that each had well-written and widely
disseminated policies governing corporate ethics and were lauded as leaders
in social responsibility. It is clear that malfeasance and criminal behavior
became the norm in these extreme cases, it is notable that the initial turn
from entrepreneurial to illegal behavior can be traced to an overwhelming
emphasis on short-term results and making the quarterly targets through
increasingly creative and ultimately criminal accounting. In these cases, the
articulated culture and the desired culture were at odds. And the result was
catastrophic.
Empower Employees
One of the best ways to empower employees is to allow them to use their
unique expertise in making the contribution. Allowing employees to use their
skills also helps demonstrate the value that the company brings to the
community. When backhoe and loader operators from a heavy industrial
facility take to the streets to remove snow, the operators take pride in
knowing their skills are providing unique value to the community. When a
dentist volunteers his time at a local retirement community, the skills that he
brings combine with his commitment to the community to demonstrate the
value his practice brings – and it allows employees to do good and reminds
them of the value their skills bring – and it encourages others to patronize
that practice.
Empowered employees that feel good about the work that they are doing
and the contribution that their company makes to society are more likely to
be productive. A culture of sustainability encourages people to see their work
in the greater context. So employees who work in a rock quarry know that
they are not just blasting and breaking stone, they are building homes in
which people live, hospitals in which their children will be born and schools
where those children will be educated. They are helping to build the road
that will carry those people from place to place. In short, they are making a
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contribution without which the quality of life that we enjoy would be

impossible.
Build Buy-in at All Levels

Corporate leaders recognize that for a program to be successful, employees
much take ownership of it at all levels. Just as safety, environmental
stewardship and sound financial practices are considered everyone’s
responsibility, these programs can impact and therefore bring benefits to
many aspects of a business beyond communications and risk management.
Strategic planning departments can benefit by (and are hampered when they
neglect) the need to understand community opinions regarding the impact of
proposed changes. If a company is integrated into the community, reaction
to proposed actions can be anticipated and included in planning (including
budgets and timelines). Companies that have engaged local community
stakeholders are less likely to be surprised by community opposition, and
have an opportunity to work with the community to work through the issues.
As a company develops its environmental, safety and ethics policies, it

should not do so in isolation. Benchmarking against other companies in the
same industry will provide a good understanding of the current state of
affairs. Looking to other businesses can provide a greater understanding of
what the standard for businesses is in general. Likewise, companies do well
to review community standards – what does the local community expect
from businesses? This not only helps better define the standard, it has the
additional value of helping the company to be attractive to an employee pool
that is drawn from the local community. Employees have a personal
incentive to work for a company that is protective of their health, safety,
their homes and their community at large.
Budgeting must take into consideration realistic expectations of both the

time and cost associated with engaging the community. These estimates are
facilitated by a good relationship with the community, including regulators.
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This can help a company accurately budget for anticipated expenses and
revenues (including timing).
Lastly, human resources departments have discovered that prospective

employees prefer to work for (and with) companies that the feel share their
values – especially those that reflect the community concerns and issues.
Certainly the idea that people would seek out a safer, financially sound
employer is not hard to imagine.
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Key 4: Tangible (local) Benefits (where)
With exceptions such as relief after the Indian Ocean tsunami and other
disasters that draw international attention and concern, for the most part,
people like to see the benefit in their own community. Impacts such as
employment opportunities, contributions to tax revenues and bringing
needed goods and services to the community are easily understood and
appreciated. At the same time, noise of production and vehicular traffic are
easily recognized local consequences.
A benefit of a sustainability program is that it reports and offers information

on the wider breadth of impacts. Effective programs do not offer theoretical
impacts, but rather transparently report the impacts that are measurable and
follow agreed upon standards. Those standards must be agreed upon and
deemed as both meaningful and fair by both the company and its
stakeholders.
Transparency
reveals the “hidden
truths”, including COST
SAVINGS
IMPROVE
LIVES
both recognized and EMISSIONS EMPLOYEES

AND
RETIREES
unrecognized
PRODUCTS
CONSUMPTION WAGES TAXES

OF NATURAL AND
RESOURCES BENEFITS
impacts that every

company brings to
SHAREHOLDERS
PRODUCTS
IMPACTS PROFITS
RETURN
TANGIBLE
BENEFITS
a community (see VOLUNTEERS direct

impacts
indirect
impacts
total
impacts
diagram). This
DONATIONS
INTANGIBLE
BENEFITS
(COMMUNITY
SPIRIT)
includes, but is not

COMMUNITY
limited to the
GOODWILL
TOWARD
COMPANY
impacts from
operations,
products and
services that the company makes available as well as ancillary benefits from
employees’ contributions to the community. In many cases, if not all, the
21
community reaction regarding these issues can be anticipated, evaluated,
planned, budgeted and communicated as part of the regular business
process.
The need for transparency – being honest in both reporting the negative as
well as the positive impacts – is critical to build community support for an
enterprise. Being honest about issues prevent opposing groups and
organizations from using that information to argue against the company.
Companies demonstrate this kind of transparency without negative
repercussions when they announce that they are not going to meet quarterly
earnings, for example. This kind of reporting is expected and commonplace.
Companies are also comfortable announcing production delays and
problems. Negative news, when it is revealed willingly and explained, has a
less damaging impact that when it is hidden.
When companies ask their stakeholders to accept targets for improvements

in things such as emissions or accidents, it is important that they agree on
what the overall targets are, and how they will be defined, measured and
reported. It is not enough for a company to commit to poisoning a reduced
percentage of the population each year.
22
Key 5: Maximize Stakeholder Engagement (what)
One cannot expect people to change their personality; but it is reasonable to

ask them to change their behavior. Likewise, companies that have a genuine
commitment to sustainability can implement their programs in ways that add
value and more clearly demonstrate their commitment.
Accurately Define and Identify Stakeholders

Many businesses take a marketing approach to customers – selecting to
focus their efforts on the most profitable segments of their market. This is a
sound business strategy that companies usually come to when they realize
that customers are not all equivalent and that an unprofitable customer
fleeing to a competitor is not only an acceptable risk, but a circumstance that
may actually benefit the company.
Sustainability is a new strategy and, like market segmentation, what we may

be seeing today are companies in a desperate rush to be seen as ‘socially
responsible’ in fact trying to establish presence the same way some
companies grab for market share without questioning the profitability. This is
part of the natural learning curve for companies, particularly in the beginning
of their life cycle where economic need may supplant the necessary
confidence to take a longer-term view.
Just as companies eventually recognize that it may be better off ‘firing’ a

customer that costs time and resources that would better be invested
servicing more profitable and less demanding customers (or customer
segments) so too companies must be careful when they select the issues
and organizations with which to associate and partner.
Some attempt to determine the issues most of concern to their stakeholders,

and this is on its face a good strategy, provided the definition of ‘stakeholder’
reflects true stakeholders in the company’s success – including customers,
23
employers, communities, governments and suppliers who have a direct
impact by the company’s success.
Whole Foods Market CEO, Chairman and Co-founder John Mackey

demonstrates the alignment between sustainability and issues that matter to
customers and other stakeholders when he speaks publicly about the
superiority of natural and organic foods. As the leader of the world’s largest
natural foods emporium, he is speaking directly to like-minded people who
patronize his stores. When Mackey speaks out against biotechnology and
genetically engineered foods, it in fact can be seen as a combination of his
personal beliefs and values with a savvy business strategy to appeal to his
customers.
Those who argue that he is simply preying on the fears of the public in order
to sell more food should consider the accepted practice of auto
manufacturers who tout their vehicles’ crash test results.
The Lafarge partnership with Habitat for Humanity was built to satisfy all five
principles and is a fully realized program. The partnership does incur costs
(lost revenue and employee time spent volunteering) but it also supports the
business by showcasing the importance of the company’s products and the
unique skills and dedication of its employees. In fact, by accepting on
specification ‘seconds’ that would otherwise be waste or need to be recycled,
Habitat helps support the realities of production. Employees are involved in
every step of the program, from producing, delivery and installation the
donated materials. The benefit is as visible as the homes and as memorable
as the homeowners that the volunteers meet. And by volunteering side by
side with some of the company’s primary stakeholders (including customers
who are invited to help build, suppliers on whom the company relies, opinion
and community leaders with whom the company has relationship) the
company maximizes stakeholder engagement. In fact, as one plant manager
remarked “we donated $12,000 worth of product, sold $85,000 to our best
customer, the employees love us, and we’re on the front page of the local
newspaper as a great corporate citizen.”
24
Effectively Engage Stakeholders

True stakeholder engagement requires relationship building over time; in
order to build the necessary credibility and trust that are required. It also
means being active – and proactive – with your messages. Companies that
wish to be seen a certain way must not only act in a manner that is
compatible with their desired image, they must also communicate with their
stakeholders about their commitments, efforts, results and yes, even their
missteps, if they are to be credible.
Wal-Mart has a national partnership with the National Fish and Wildlife
Foundation. Through the “Acres for America” program, Wal-Mart has pledged
to conserve at least one acre of wildlife habitat for each acre the company
has, or will develop over the next ten years. Through this program at least
138,000 acres of land will be protected. But no matter how well intended,
because this program violates several of the five elements, it is not providing
Wal-Mart with the maximum strategic value. For example, it is largely
invisible to the local community, there is no linkage to the products and
services the company provides and, the average Wal-Mart associate is
unaware of it and does not personally participate.
The company would do well to promote the program locally with in-store
signage pointing out the corresponding land that has been set aside, ideally
either closest to the location in question, or most closely resembling it
ecologically.
Many of the products that Wal Mart provides to millions of customers around
the world are made with recycled plastics and even metals. The packaging
and store signage is often made with paper and cardboard that have been
recycled – and will be again. The company committed to only sell
‘sustainable’ farmed fish. These programs are not promoted, however, and it
is up to the consumer to find out about them.
25
Lastly, there are literally thousands of rolling portable billboards that could
become a showcase for the company’s sustainability programs much in the
same way U-haul trucks offer images of the many places around the country.
Similarly, a number of Lafarge mixer trucks bearing the Habitat for Humanity
logo and partnership information were deployed in locations that had
ongoing relationships with the charity. The opportunity to drive one of the
“habitrucks” was reserved for drivers with impeccable safety records and
naturally these were the trucks used for public events and open houses as
well.
Working with and in cooperation with a local community is necessary for any
company that wishes to enter, or grow in that community.
26
3
What’s In a Name?
W
hile the notion of corporate social responsibility or CSR as it is
often abbreviated may not sit well with those who view it as
nothing more than an attempt to reduce profits for the sake of
some often unspecified social good, it can also be viewed as a strategic
business response to an evolution in expectations of what it means to be a
corporate citizen that is being driven by globalization and the increasing
prevalence of information technology.
The use of the phrase “corporate social responsibility” also sounds

suspiciously like “socialism” and that phrase carries emotional baggage,
particularly in the United States of America. In fact, corporate responsibility
is really the next phase of an idea that is at the core of capitalism – that in
order to be successful, businesses must respond to the changing demands of
the marketplace. It is not to be confused with a system of government.
When one broadens the definition of “the market” beyond traditional

customers (and potential customers) and begins to include the stakeholders
that are necessary for corporate success, CR is really a reflection that
increasingly a corporation’s success relies on the reputation that it has
established among its customers, employees, suppliers, the community in
which it operates, shareholders and investors and government legislators
and regulators who are called upon to act when those stakeholders feel their
best interests are not being addressed.
Companies that wish to be successful must meet the needs of all of these
“customer” groups. Doing so in a manner that is strategic and adds value by
supporting the company’s business model is what corporate responsibility
27
should be. Without the strategic focus, it risks becoming what critics fear, a
“feel good” program that may reduce profitability and therefore hurts the
company and its stakeholders.
For these reasons, I prefer to use the term ‘sustainability.’ Sustainability was
defined by the World Commission on Environment and Development in 1987
as “meeting the needs of the present generation without compromising the
ability of future generations to meet their own needs.” It is important to note
that financial success is one of the needs of the current generation that
cannot be sacrificed or the business will not be around to provide for future
generations. At the same time, a business that is not a responsible steward
of its resources, for example, may reap tremendous profits in the short term
but discover that it has been short sighted in strategy.
John Elkington, title of SustainAbility LLC coined the term “triple bottom line”
to describe the need to measure business impacts in three broad categories
– economic, environmental and social. Managing each of these three
effectively provides an effective framework upon which to define, build and
measure a longer-term business model.
The concept of sustainability recognizes that these three exist in dynamic

tension and that the long-term dominance (or subservience) of one or more
pillars threatens the viability of the entire enterprise. Focusing exclusively on
the economic pillar (as is often the criticism of companies) to the exclusion
of the environment and a company can plunder natural resources until it no
longer can produce products. Similarly, ignoring the need for a successful
financial future is not practical.
28
4
Sustainability as a Business Strategy
B
usiness is a powerful force for driving both economic and social
gains. This can be seen from the benefits that generations have
come to take for granted in industrialized nations. For millions of
people around the world, capitalism has been a force for economic and social
advancement. People are living longer, healthier lives and enjoying the
prosperity that capitalism has helped to fuel.
In the 1980’s the emphasis seemed to shift, particularly under President

Reagan in the US and Prime Minister Thatcher in the UK toward a more
economic-focused model. Principles like Total Quality Management that
taught “if you take care of the customer, the bottom line will take care of
itself” were seemingly abandoned to focus on driving value for shareholders.
The result was an almost obsession with quarterly earnings and year-over-
year stock performance. Unrealistic (and unsustainable) growth became the
expected norm. In the technology sector, stocks soared despite non-existent
earnings. Not to be outdone, unscrupulous business executives took
advantage of regulatory and clever accounting loopholes that crippled (and
in many cases destroyed) powerful companies in a spectacular fashion.
Overnight thousands lost their employment and savings. Shareholder value
evaporated and pensions that were tried to company stock ceased to exist.
The problem according as Noel Purcell, Group General Manager of

Stakeholder Communications for Wespac Banking Corporation told the 7th
National Business Leaders Forum on Sustainable Development in May 2006 is
that when self-interest and personal advantage are “elevated to the status of
core values as a result public trust in corporations goes out the window.”
29
European business leader Bertrand Collomb, chairman of construction
materials giant Lafarge SA for many years and now chairman of the World
Business Council on Sustainable Development, described the repercussions in
Global Agenda Magazine in 2003:
“One of the most noticeable results was a very one-dimensional view

of business, with considerable importance given to short-term value
creation as measured by immediate stock market performance.
The crisis of 2001-2002 showed the limits and the excesses of this
approach. Markets do not always give an accurate forecast of the
economic and business situation. Long-term shareholder value
requires a stakeholder approach.
This crisis, which we are still experiencing, highlights the

inconsistencies between short-term shareholder value and true
stakeholder value. It has made civil society and companies even
more aware that sustainable development is the only way for a
company to thrive in the long run. Companies have to take into
account their impact on the societies in which they operate and the
environment that surrounds them.”
Critics of CSR and sustainability often cite Nobel Prize winning economist
Milton Friedman’s famous maxim that “the social responsibility of business is
to make money.” Friedman famously stated: "There is one and only one
social responsibility of business – to use it resources and engage in activities
designed to increase its profits so long as it stays within the rules of the
game, which is to say, engages in open and free competition without
deception or fraud.”2
Many critics of the CSR movement have latched onto the notion that
Friedman was only referring to the “rules” in a legal sense when he wrote
2
Friedman, Milton: “The Social Responsibility of Business is to Increase its Profits” The New York
Times Magazine, September 13, 1970
30
this. Over the last three decades, however, history offers example after
example of companies that obeyed the legal parameters but neglected the
rules of the marketplace and have ceased to be viable. As the market
expectations change, companies must be prepared to respond. And
expectations of what it means to be a “good” corporate citizen have changed
so that companies must do more than simply meet existing customers’ needs
with a product over the short term. Increasingly long term financial success
requires business strategies that include good customer and supplier
relationships, reducing opposition to growth, enhancing speed to market,
fostering a favorable regulatory climate and requirements and maximizing
human resources. Sustainability programs, as outlined below accomplish
these tasks.
In addition, as Collomb makes clear, Friedman’s encouragement for

companies “to engage in activities designed to increase its profits” can be
viewed as a case for sustainability. A paper company that denudes all of the
forests in proximity to its processing facility, for example, will not be
profitable over the long term, especially if it must incur additional expenses
associated with transporting heavy raw materials a long distance to its plant.
However, by engaging in environmental stewardship activities such as
replanting and working to ensure a continuous viable supply of raw
materials, the company is actually maximizing its long-term profits. A similar
argument can be made for a company engaging in practices that make it the
employer of choice (facilitating recruitment and retention), a preferred
community partner (reducing expenses and increasing its ability to produce
and sell goods), etc.
Fortune Magazine acknowledged the mainstreaming of corporate

responsibility and sustainability in a cover story “Tearing Up the Jack Welch
Playbook” (July 14, 2006) the magazine that had named Jack Welch the
“manager of the century” as recently as 1999. The magazine argued that
business has evolved away from the model he used to drive GE to the
heights of success in the 1980’s and 90’s.
31
2006 Business Rules Fortune points out that Welch’s old rules
1: Old rule: Big dogs served companies well but that as realities
own the street.
have changed, business must evolve with
New rule: Agile is
best; being big can them. “The risk” the magazine explains “is
bite you.
applying old solutions to new problems.”
2: Old rule: Be No.1 or
No.2 in your market.
New rule: Find a
Almost exactly echoing Collomb’s comments
niche, create
something new. a few years earlier, the magazine questions
3: Old rule:
whether a company's near-term stock price -
Shareholders rule.
New rule: The and the quarterly earnings per share that
customer is king. This
drive it - really is best measure of success.
is really the old.
4: Old rule: Be lean and
mean.
The “new” rules for business, according to
New rule: Look out,
not in. Fortune are almost a textbook argument in
5: Old rule: Rank your
favor of sustainability. They advise that being
players; go with the
A's. responsive to market changes is more
New rule: Hire
important than dominating through size and
passionate people.
6: Old rule: Hire a market share. Larger companies must avoid
charismatic CEO.
the temptation to fall into the arrogance that
New rule: Hire a
courageous CEO. success sometimes breeds and never forget
7: Old rule: Admire my
that they must come to the market, and not
might.
New rule: Admire my the reverse.
soul.
Fortune, July 14, 2007
Lafarge used the phrase “a small, large company” in their vision statement to
describe the powerful combination of being large enough to marshal global
resources and yet small enough to be responsive to local needs. Interestingly
the vision was first created for one division of the company and focused on
meeting the needs of direct customers. Within a few years it had evolved
into the corporate vision, and the concept of treating “the community as
customer.”
32
The “new” rules return the emphasis to the customer from the shareholder.
Bringing back the old, fundamental rule of capitalism. Sustainable companies
define customers as the community of stakeholders who impact their
business, not just those who purchase their goods or services. And they also
are careful to identify who are not customers (or stakeholder) – those for
whom the success of the business is secondary, immaterial or contrary to
their agenda.
The “new” rules also focus on empowering employees and igniting their
passion for the company and making them part of its success. This ties in
with the importance of visionary and courageous leadership and the
importance of having a corporate “soul”.
33
5
Business Benefits of Sustainability
F
or anyone to accept the premise that social responsibility is a
business strategy, we must be able to define and quantify the
business benefits that can be derived from adopting this model.
This is so that success can be measured, just as with any business strategy.
License to Operate (speed to market)

In business, time is money and each delay in permitting, construction,
recruiting and training employees has an associated cost in lost revenue,
particularly in a competitive situation when the preferred company can use
the time advantage to establish itself in the market, cherry pick the local
talent pool and build relationships with customers and suppliers. A company
that has a positive reputation has an advantage. While the community may
not actively facilitate approval of a permit, community opposition often
results in substantial delays and requiring a greater investment of time and
money with contentious public hearings and town hall meetings at the
minimum to protesting and boycotting that adversely impact hiring and even
34
discourage customers. In short, the community needs to ‘buy’ you before

you get a chance to sell them anything.
Each day that a store remains vacant or a commercial lot lies undeveloped is
a day of lost sales revenue for the company. The community does not realize
the benefits of having those goods or services available, workers are denied
employment, and the community cannot collect sales and income taxes. A
diagram illustrating the some of the economic, environmental and social
impacts that a business can have on the community in which it operates can
be found on page 19, in the discussion of local benefits.
This is a lesson that some sometimes more clearly demonstrated by its

failure. "We recognize that we need a 'license' to operate in any community
that we enter,” says David Weidman, President and CEO, Celanse Corp.
“Some of those licenses have been lost because of social irresponsibility on
the part of some companies within our industry. So this license to operate
demands that we be actively involved in the community.3”
Whether you define it as enhanced goodwill or reduced opposition,

sustainability programs that position the company as a positive corporate
citizen can impact the speed with which the company enters or grows within
a market. A PR program that fosters trust by engaging the community
stakeholders is an essential element to building that dialogue.
Cost Reduction or Avoidance

Most businesses know the importance of investing in preventive maintenance
to keep equipment in good working order. In fact, these ‘expenses’ are not
considered optional. Those who do not invest in this manner are considered
foolish and viewed with contempt. But there are other, direct ways that
businesses can save money through a longer-term approach.
3
NYSE Magazine, August/September 2006
35
Market Opportunity/Advantage
Brand Reputation is arguably the most important asset a company has over
the long term. Jack Welch talked about ‘walking the talk’ but the concept
goes back to the very dawn of democracy and the concept of an empowered
populace. Socrates said that “the way to gain a good reputation is to
endeavor to be what you desire to appear.” It is important to note that he
acknowledges that people attribute values based on acting in accordance
with aspirations. In other words, people judge based on the impact of
actions, and not intentions. And it is unlikely that anyone (individual or
company) can truly achieve perfection. The best case is that when outlying
behavior or actions take place, they are more likely to be viewed as
aberrations rather than symptomatic of a greater and negative truth.
The lessons for corporations are clearly transferable. A company that is

viewed as a positive and favorable member of the community is likely to
have less opposition, and when – as is almost inevitable – a misstep does
occur; it is less likely to be perceived negatively. Like any other business
expense, a clear case can be made that “reputational” capital, is an
investment, built over time and as a long-term strategy.
In kind donations can be used to demonstrate the value of products to a

community, and the skills of employees showcased. Volunteering with a
group of valued customers helps build the relationship around the shared
value of helping the community and gives the customer the opportunity to
work with your company’s products and people. And, in fact, doing this
leverages a product demonstration into a public relations opportunity.
Employee Engagement
Beyond the “feel good” aspect that is often cited as one of the softer (less
business focused) benefits of sustainability, employee morale and culture are
linked to productivity, recruitment and retention.
One of the often-overlooked stakeholder groups is a company’s employees.

While many companies talk about how their employees are their most
36
valuable assets but those that consider employees as integral partners in the
organization’s future and success recognize the power of true employee
engagement. Employees who are passionate about the company and its
products are the best advocates and can counteract threats to brand image
simply by talking to their neighbors and friends.
Robert Lawless, Chairman, President and CEO, McCormick & Co. Inc.
explains that “being socially responsible allows you to attract talent, because
good people will align with the company that really cares about employees
and communities. We link social responsibility to talent retention.”4
A failure to consider employees as vital in the organization’s overall success

can compromise a company’s competitive position. One company discovered
that employees who had not been informed of the corporate strategy of
maintaining a visible presence their market through the visible presence and
upkeep of idle equipment were unwittingly compromising the effort by
publicly complaining about the “stupid” manager forcing them to paint a
non-working production facility. This unintentional sabotage of the company
strategy demonstrates the importance of engaging employees in the strategy
and the power that they have to impact the success – or failure – of its
efforts.
This failure to include employees results in behavior that can damage

profitability directly. Poor morale can lead to passive sabotage in the form of
reduced productivity, shoddy workmanship and quality control and increased
absenteeism. At its worst, unhappy employees can and do engage in
behavior that deliberately hurts the company, such as an employee who
shares information about a corporate problem. This can result in damage to
corporate image, credibility and the bottom line ranging from lost sales to
increased costs due to fines and penalties.
4
Ibid
37
Seize the Innovation High Ground
Companies that are looking for ways to be more environmentally, socially
and economically responsible are driving innovations in products, services
and sourcing as well as financial acumen. In six years the number of hybrid
(gas-electric) passenger vehicles sold in the United States rose from 9,367 to
over 246,642 – a 2,533 percent increase - according to the Electric Drive
Transportation Association. Sales of compact fluorescents initially faltered
due to the color of the light emitted. Today’s bulb not only provide the same
light spectrum as classic incandescent bulbs, they use 75% or 80% less
electricity to do so – paying for themselves in about half a year in energy
savings. Recently Wal-Mart, the world’s largest retailer, announced plans to
sell one bulb to every consumer in its 100 million customers. Not only does
the planet benefit from the reduction in energy use, but companies like
General Electric that produce the bulbs also benefit from increased sales
(and reputation). Companies that are seen as innovative tend to attract
innovative employees, and the cycle accelerates. And that is good for
business.
In the area of reputation and brand management, companies that source

their products from supplier that engage in sustainable business practices
are protected from damage to their brand and reputation from issues such
as child labor and living wages. And they are helping prevent these practices
by providing a financial incentive – their business – for acting in a socially
responsible manner.
Gain Access to Investment Capital

One out of every nine dollars under professional management in the Unites
States in involved in socially responsible investing. That $2.16 trillion
represents a huge pool of money that is being invested in companies that
have been found to be sustainable.
When the world imposed economic sanctions against the Apartheid

government of South Africa, that nation lost access to capital. The Calvert
Group was the first mutual fund to leave South Africa when apartheid was
38
instituted but also the first to return after Nelson Mandela was elected and
asked the world to reinvest in the country. Businesses can find themselves in
the same situation.
From 1995 to 2003 assets involved in social investing have grown 40 percent
faster than all professionally managed investment assets in the U.S.
Investment portfolios involved in SRI grew by more than 240 percent from
1995 to 2003, compared with the 174 percent growth of the overall universe
of assets under professional management over the same time period.
39
6
The Forces Encouraging Sustainability as a
Business Model
Globalization
One hundred years after the first powered flight, the oceans are no longer impenetrable barriers
that keep people, ideas and information apart.
Today people travel more than ever before, and corporations often
outsource products and send workers to new locales. This leads to exposure
of both companies and individuals to differing practices and societal norms.
This invites natural comparisons, with the accompanying pressure for a
company to match benefits to the individual and the community that are
perceived as beneficial. Companies that wish to relocate employees may find
that those employees insist on negotiating for a combination of the “best”
benefits from both their “home country” and the “host country.” This in turn
exposes workers in the host country to the new practices and may put
pressure on that office to increase their offering to its local employees.
Knowledge of and insistence upon these ‘best of both worlds’ packages puts
pressure on the company and indeed business in general that results in
increased salaries, but also superior benefits such as vacation time, pensions
and profit sharing, health insurance and maternity leave. Sometimes by
their very existence in a community a company redefines the local
40
expectations as well – such as by making products that the indigenous

population may covet for themselves.
Information technology
Information is now shared at the speed of a mouse-click. News no longer
waits for the morning edition of the paper or the 11 PM broadcast. This has
fueled an ever-increasing appetite and a growing market for news – as
producers, editors, reporters and writers scramble to fill the increased
demand for information created by a 24-hour news cycle. It is important to
note that with few exceptions (such as entertainment and show business
reporting) nobody ever achieved ratings by filling a serious newscast with
“good” or “soft” news.
An obvious example of the power of the Internet to provide swift information

around the world is the September 11, 2001 terrorist attacks on New York
and Washington, DC. Within 15 minutes of the first plane striking the north
tower of the World Trade Center, Web traffic was up by 400% at VG Nett.
Within an hour, the Internet was literally grinding to a halt, as millions upon
millions of people tried to get to the news servers of Sky, BBC, CNN and
other large news providers. This demonstrates how the Internet works in
tandem with traditional media: The public may find out about an item of
news through another medium (radio, TV or even word-of-mouth), and then
logs on to the Internet to get the full picture of the situation.
Increasing Stakeholder Activism

The concurrent advent of information technology and globalization has
combined to not only increase the speed and availability of information, but
also a greater ease in the sharing of ideas and values. Together IT and
globalization are largely responsible for the rising interest in social
responsibility, and provide a powerful tool for companies, their stakeholder
and their critics alike to share information. The implication for media
relations/public relations professionals cannot be overstated because these
changes are not only impacting the mechanisms by and through which
information can be shared, but also transforming the content of the
41
messages being disseminated. Most dramatically, the messages must be in
alignment with observable actions around the globe.
Companies can no longer expect that information about overseas production

facilities and working conditions will remain confined to the local area.
Likewise, information about beneficial programs that a company, or its
competitors are using in one part of the world can lead to questions by
stakeholders from thousands of miles away. The result is increased scrutiny
and a progressively rising bar based on the ‘best in class’ in each industry.
While politicians and scientists debate the facts, the public is becoming
increasingly convinced and concerned about the environmental impact of
human activity. People see the flooding of New Orleans during Hurricane
Katrina, record heat-waves in Europe, satellite images of melting glaciers as
connected events based on a changing climate. These stakeholders are
looking at the environmental impacts of business with a critical eye.
This increasing stakeholder concern is leading to increasing expectations and

demands. An environmental program in Europe may give rise to questions
about why a company is not engaging in the practice universally. The
Lafarge cement plan in Exshaw, Canada was confronted with this at a
community meeting when they were asked why the company was not
offering to use the same pollution control technology that it had
implemented in Austria. Thanks to the Internet, the company was facing
community expectations that were substantially lower than Canadian and
provincial requirements.
42
The Linkage Between Economics and Politics is Becoming More

Widely Understood
As Thomas Friedman pointed out in The World Is Flat people are becoming
increasingly aware that their purchasing decisions are also political decisions.
Purchasing goods provides an economic incentive and positive reinforcement
of the existing social, political, environmental status quo in those items’
country of origin.
Therefore CR provides the opportunity – and some would argue the

obligation – to further issues such as human rights such as providing equal
opportunity, living wages and improved working conditions. It is quite
natural, however, that the governments, religious leaders, and economically
powerful in those counties would see the exact same actions as political
agenda that as an attempt to destabilize local governments, faiths and
society.
And this leads us to the forces that are impeding or complicating the
implementation of sustainability as a business strategy.
43
7
The Complicating Factors
Lack of Consensus on Standards

CR suffers through a lack of consensus in definition not only globally and
within organizations but sometimes between organizations and their
stakeholders. The result can be confusion. For this reason engaging
stakeholders to better understand their expectations, rather than one-way
communication to them, is key. And it becomes crucial to properly identify
those individuals and groups who are true stakeholders – critical for the
success of your organization – since one cannot and should not attempt to
appeal to everyone.
Globally there is no consensus on what social responsibility is, or how it can

be defined across cultures and nationalities. For example, there are those
that believe that the obligation exists to give back once a certain level of
financial success has been attained. Others believe that true social
responsibility is a pathway to success. In the US, a capitalism-based culture
has favored the former model, while in European countries in particular the
later model reflects the more shared more socially conscious culture on that
continent.
There are many who believe that businesses have a moral obligation to
advance issues as human rights, gender equality, competitive wages, and
the like. This can be hugely problematic for many in lesser-developed or
non-Western counties that see may not welcome these new ideas and
morays. To them, companies that seek to import different values threaten to
destabilize their entire society – religious, politically and socially. And from
44
this perspective, these businesses, through the fault of their own best
intentions, are viewed with suspicion if not outright hostility.
A seemingly sensible strategy is one of falling back on regulatory compliance,

linking social responsibility goals and objectives to cultural competence; and
a desire to demonstrate respect for local cultures, customs and laws.
Following this model is not without its pitfalls, however. Companies have
found themselves facing outcry back home for engaging in practices
overseas that offend the sensibility of shareholder and customers in the
States.
This can lead to a troubling situation when a company genuinely believes it

self to be socially responsible yet finds itself suffering from criticism leveled
by its stakeholders. When there is this kind of disagreement between an
organization and its stakeholders over expectations, it becomes an
imperative to reconcile. The shift can happen with stunning swiftness and
many companies find themselves ill prepared when the perception changes.
Wal-Mart, the world's largest retailer and currently #2 on the Fortune 500
list, enjoyed status as one of the world’s most admired companies for years.
However, it has recently been subject to strong criticism for its wages and
employee benefits (both of which are well within industry norms) for not
doing more to advance these issues. This despite an impressive focus on
environmental sustainability; including the use of fuel-efficient trucks,
working to reduce waste in both packaging and garbage and pledging to
become energy neutral.
Not surprisingly, there are efforts underway to quantify sustainability efforts

and promote global standards. Groups such as the Global Reporting Initiative
(GRI), a large multi-stakeholder network of thousands of experts in dozens
of countries worldwide, has developed a popular, but not universally set of
guidelines. In 2006, in response to criticism that their standards had set the
bar too high for all but those companies with well-established sustainability
programs, GRI released a set of guidelines for organizations that were
45
starting out. With this, GRI may have taken the necessary steps toward a
tiered approach that rewards commitments and practices as well as results.
But until a set of standards emerges there will always be disconnects and
confusion. Companies would do well to ensure that their practices conform
to local laws and regulations and engage proactively in stakeholder dialogue
to ensure that they are keeping abreast and helping to manage stakeholder
expectations.
As companies strive to define their own standards, transparency becomes

the name of the game, as stakeholders who are brought into the process
that defines company policies, commitments, practices and goals. The
company must set benchmarks and then hold themselves to those standards
– reporting and announcing their actual results publicly.
Corporate Structures
CR activities combine elements of strategic planning, human resources,
environmental, legal, communications and a host of other functions. It is
especially difficult to develop a program that provides value to all these
various functions unless the organization is structured to facilitate, and
encourages cross-functional efforts.
Effective CR programs require local implementation of corporate-wide ideals.

It is particularly difficult to coordinate in larger organizations that take pride
in their corporate culture of decentralized decision-making. CR also has no
obvious home within traditional corporate structures. When the function
exists as a separate entity, it may report to the CEO or Chief Operating
Officer. It is common to place CR within the legal/risk management
functions.
Because of the strong need for stakeholder dialogue, and to ensure that local
concerns are addressed, CR is sometimes housed in corporate
communications departments. Corporate communications departments often
are called upon to craft messages to both internal and external audiences,
46
have ready access to corporate leadership and are responsible for managing
the company’s public image.
Companies that wish to have credible stakeholder communications must

recognize a fundamental change back to the true meaning of the words
‘public’ and ‘relations.’ Relating to and with the public (external stakeholders)
requires open and honest communications; with an implied compact
between company and stakeholders that the company will eschew hyperbole
and rhetoric provided the community is open to working with the company
to work through (not around) issues.
Incentive and Reward Programs Based on Short-term Results

A close relative of the structural impediments to implementing a strategic CR
program is the fact that incentive and reward programs are often aligned
with financial performance on a monthly, quarterly and annual basis and do
not take into consideration the value of long-term strategic approaches.
Managers receive incentive bonuses based on strong quarterly returns may
be passively being discouraged from engaging in environmental or
community programs that can be viewed as a cost.
Culture of ‘Instant Gratification’

Americans are traditionally viewed as impatient and many have commented
on the seeming obsession with ‘instant gratification.’ The concept of delayed
gratification is a difficult one for a society that values fast food, ‘the fast
buck’ and in which the trappings of wealth are paraded nightly in the media.
The five elements of a successful sustainability program provide a model and

proven framework that helps address all of these issues.
47
8
The Time is Right
M
any, including this author, believe that forward-thinking
companies will integrate sustainability goals into their
business models and will use their visions of sustainability to
help define revenue-generating strategies.
As globalization continues, the expectation from suppliers and customers

around the world will continue to drive the market. Despite the gains over
many decades, anyone who advocates that business has “done enough” or
“come far enough” is fundamentally arguing against keeping abreast of and
meeting changing customer expectations, an argument that is anti-capitalist.
The principle that the “customer is always right” means that businesses must
respond (and meet) what customers want and expect.
When a majority of customers believe and care enough to “vote with their
dollars” by patronizing companies that make a commitment (such as to
reduce green-house gasses) then the successful companies will be those
who do so, investing pennies today to be in business tomorrow. Rather than
spending on PR campaigns and political contributions, those companies
would do better to invest in clean technologies. Tax advantages encourage
these investments – helping to support the economic pillar. And doing so
without regulatory pressure likewise enhances their corporate image and
brand reputation.
Companies that have a genuine commitment to sustainability can implement

their programs in ways that add value and more clearly demonstrate their
commitment. They do so by making sustainability issues part of their
strategies by using the triple-bottom-line approach. Stakeholder response to
business decisions is anticipated, evaluated, planned, budgeted and
48
communicated as part of the regular business process. By developing

effective “who we are” messages, businesses connect with the right partners
and customers.
Bertrand Collomb goes as far to say in his Global Agenda piece that he
believes European-based companies have a natural advantage based on that
continent’s shared more socially-conscious culture. In short, he postulates
that it may be easier to become a capitalistic moralist than a moral capitalist.
He concedes that this position may overlook the cultural advantage of
American companies; innovation, responsiveness to changing market
conditions and expectations and an entrepreneurial spirit that all derive from
a society based on capitalism.
There is quite some evidence that this shift is already taking place. Many
corporations have realized that they cannot regain the lost public trust
through traditional public relations techniques such as glossy brochures, and
slick video news releases. Half (50 percent) of business leaders say
companies frequently handle social and political challenges through the
media and public relations, but 65 percent consider this to be an ineffective
strategy. Three out of four (75 percent) report that their business lobbies
government and regulators in response to challenges but 48 percent regard
this tactic as ineffective. The vast majority (84 percent) favors a business
strategy that combines high returns to shareholders with "contributions to
the broader public good.”5
In addition, the public is becoming more cynical and less believing of

corporate (and government) messages.
One third of Americans, for example, believe that the government is covering
up aspects of the 9/11 attacks and questions the manner in which the World
Trade Center buildings collapsed. Movies such as Independence Day included
realistic scenes of the destructions of landmark buildings such as the White
5
McKinsey Quarterly, March 2006
49
House, clearly demonstrating the ability of moviemakers to simulate such
events. As a result, news footage of that day is met with genuine skepticism,
around the world. In contrast, few question the reality behind the blurry,
handheld videos of the Asian Tsunami from 2004. We have lost credibility as
we have gained the ability to fake it so well.
Companies should take note as well, because the same phenomenon applies.
In 2007, PSB Green Brands research found that eight out of every ten
Americas believe that it is important to buy from ‘green’ companies. But
Ipsos Reid research the same year reveals that seven out of ten either
‘strongly’ or ‘somewhat’ agree that when companies describe a product as
“green” it is really a nothing more than a marketing tactic. Clearly, a
company that can demonstrate the sincerity of its commitment would have a
strategic advantage, with eight out of ten buyers.
As a result of changing expectations of stakeholders, traditional public

relations functions are being redefined – away from “spin” and toward
“transparency,” with companies being more open about their aspirations and
their efforts to achieve them; including acknowledging their shortcomings.
Socrates would be proud.
50
Maximize Your Program

1. Identify those areas that Purpose: Narrows your focus to
matter to your stakeholders those constituencies that are
important – and those that may be
less important – for your business or
effort to please
Employees
Customers
Communities
Regulators/legislators
Investors
Purpose: Provides a hierarchy of issues based on

true constituent concerns
Environmental Global warming (CO2, etc.)

Energy use
Impact on ecosystems
Noise / dust
Pollution
Waste products
Social Crime
Diseases [i.e. HIV/AIDS,
cancer, etc.]
Equal opportunity / rights
Health insurance / benefits
Housing/ homelessness
Impact on local
economy/quality of life
Immigration
Labor relations / Unions
Work / life balance
Economic Ethics and favorable business
practices
Financial acumen
Job creation / opportunities
Local sourcing
Regulatory compliance
Customize this form to reflect what you hear from your stakeholders through
public meetings and surveys. You may want to ask them to rank their
concerns. Do not limit what you ask your constituents by what you think
your priorities are or should be.
51
Next, determine your ability to have a direct impact on each of the concerns
identified by your stakeholders.
2a. Identify those areas for Purpose: Purpose: Identify those

which your company is well worthy causes or issues that are
positioned to have a direct within your scope or business model
impact – and those that are not.
Employees
Customers
Communities
Investors
Energy use
Noise / dust
Pollution
Waste products
Social Crime
Diseases (specify) [i.e.
HIV/AIDS, cancer, etc.]
Impact on local
Immigration
Work / life balance
practices
Financial acumen
Local sourcing
52
Your suppliers and customers may be able to make a difference in areas

beyond the areas you can directly impact. This information can lead to
partnering opportunities and can provide guidance about issues that your
stakeholders may be eager for you to address – or opportunities to build
goodwill by using your corporate influence (such as only purchasing from
companies that adhere to certain standards).
2b. Identify those areas for Purpose: Identify impacts within

which your company can your value chain that your
have an indirect impact enterprise can influence
Employees
Customers
Communities
Investors
Energy use
Noise / dust
Pollution
Waste products
Social Crime
Diseases (specify) [i.e.
HIV/AIDS, cancer, etc.]
Impact on local
Immigration
Work / life balance
practices
Financial acumen
Local sourcing
53
Determine how and if your company has existing capacities to address the
issues, paying particular attention to whether employees have specific skills
that could be brought to bear.
3. Inventory Your Existing Purpose: Determine which areas

Efforts and Capacities your company is already actively
(including employee skills) pursuing, and in which it can claim
leadership
Opportunity to lead efforts by defining standards/setting benchmark
Company wide efforts underway
Engaging as an industry (i.e. through trade associations)
Local efforts *
Energy use
Noise / dust
Pollution
Waste products
Social Crime
Diseases (specify) [i.e. HIV/AIDS,
cancer, etc.]
Impact on local economy/quality
of life
Immigration
Work / life balance

practices
Financial acumen
Job opportunities
Local sourcing
* Where local efforts coincide across geographic regions and product

divisions, look for opportunities to create greater synergies within the
company and partnership opportunities.
54
4. Rank and Set Priorities
Stakeholder Engagement
based on the Five Principles
Employee Engagement
Direct (+2) or Indirect

Supports the Business
Compatible with Daily

Score:
+ 2 = strong favorable
+1 = favorable
(+1) Benefits
0 = neither favorable or unfavorable
Operations
- 1 = is not favorable
- 2 = is counter/has negative impact
Model
Total
Environmental
Global warming (CO2, etc.)
Energy use
Noise / dust
Pollution
Waste products
Social
Crime
Diseases (specify):
[___________________________]
Impact on local economy/quality of
life
Immigration
Work / life balance
Economic
Ethics and favorable business
practices
Financial acumen
Job opportunities
Local sourcing
55
5. Make a Plan
Create Your SWOT (Strengths, Weaknesses, Opportunities, Threats)
chart/analysis using the information from the first four charts.
STRENGTHS WEAKNESSES
• 8 points or higher on • Identified as stakeholder
worksheet 4 interest (worksheet 1)
• Identified as ‘opportunity to • Identified as having a direct
lead efforts by defining impact on the issue (worksheet
standards/setting benchmark” 2a)
(worksheet 3) • Items earning 4 points or fewer,
• Identified as being able to and/or with -2 in any category
impact directly and indirectly (worksheet 4)
(worksheet 2) • If you are not able to lead or
contribute to effort (worksheet
3)
OPPORTUNITIES THREATS
• 5 - 7 points (worksheet 4) • Items which an incompatibility
• Identified as ‘opportunity to (-1 or -2) has been noted in
lead efforts by defining highlighted boxes (worksheet 4)
standards/setting benchmark”, • Items for which you have a
‘national partnerships” or “local direct (worksheet 2a) and/or
partnerships” (worksheet 3) indirect impact (worksheet 2b)
• Identified as being able to
impact directly and indirectly
(worksheet 2)
Presenting this analysis to decision makers can help them to understand the
strategic nature of your requests, and may provide a sense of urgency to
address threats before they materialize.
56
Acknowledgements
This book would never have been possible without the support and
encouragement of many people, including Matt Russell, Rich Lanza, Ed
Grefe, Andrew Foos, Brian Hawkinson, Mike Mielke, Cindy Cox Roman, Lee
Boyle, Susan Nickbarg, Steven Young, Jed Ipsen, Bertrand Collomb, Alain
Guillen, Ross Larsen, Pamela Kraft, Millard and Linda Fuller, and, my wife,
Karen.
About the Author
John Friedman is an international expert on sustainability and

communications with over 20 years’ experience building successful programs
for both corporate and not-for-profit organizations. Friedman is a highly
regarded and sought after speaker and author on sustainability and
corporate responsibility.
He serves on the Board of Directors of the Sustainable Business Network of

Washington (SB NOW), a not-for-profit organization dedicated to promoting
and advancing sustainable businesses in and around the nation’s capital
(“the capital of capitalism”).
© 2008
John Friedman
703 | 405-0200
As this handbook makes clear, adhering to the principles of sustainability is the best way to
promote social responsibility. Therefore, it is being ‘published’ in electronic format to adhere to
the principles of sustainability. Please consider the environmental impact if you do print it, and
print it on recycled (post-consumer) paper using soy inks.
57

The New PR

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The New PR

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The New PR

Meet today’s communication needs through five successful

Made possible by:

Evolution Becomes Revolution.................................................................. 5

Five “Keys” to Unlock a Successful Sustainability Program........................... 7

Key 1: Alignment with your Core Business Model (why). .........................8

Key 2: Integrate Sustainability into Day-to-Day Operations (how).......... 10

Key 3: Employee Engagement and Empowerment (who) ...................... 14

Key 4: Tangible (local) Benefits (where).............................................. 21

Key 5: Maximize Stakeholder Engagement (what) ................................ 23

Sustainability as a Business Strategy....................................................... 29

Business Benefits of Sustainability .......................................................... 34

The Forces Encouraging Sustainability as a Business Model ...................... 40

The Complicating Factors....................................................................... 44

The Time is Right.................................................................................. 48

Maximizing Your Program ...................................................................... 51

About the Author .................................................................................. 57

“All progress is initiated by challenging current conceptions, and executed by

Beginning in 2000, I had the distinct honor to lead a team of professionals

The “new” PR included opening up, and

When Lafarge SA asked me to begin to teach colleagues throughout the

Transparency allows people to see who you really are;

Successful business is increasingly relying on building and fostering open,

Working with stakeholders within the organization is also important, using

Additionally, since asking or requiring companies to reveal their shortcomings

Successful businesses must be adept at determining market changes, trends

Businesses must be prudent when it comes to social responsibility efforts,

Companies can reconcile their desire to be socially responsible with their

When it appears that this element is being violated, it is understandable that

In this attempt to be socially responsible, it appears that McDonalds is doing

In contrast, the partnership that we began in North America between

It is important to recognize that a company need not be large or to make a

From a Vision to a Culture (building an internal constituency)

Identify and build on “quick hit” benefits

The Value of Partnerships – Building Credibility

Values-based Companies are Winning the War for Talent

More important from a human resources perspective, seventy-nine (79)

“All politics is local.” ― Tip O’Neil

When we developed the program for Lafarge North America, we created a

In Davenport Iowa, the Lafarge cement plant adopted a portion of the

The most fundamental reason for empowering employees and engaging

“The culture that follows upon successful economic growth is

In the deployment of its power, business has a responsibility

Align Incentives with Desired Culture

At all levels of the organization, employees need to be included if they are to

Jack Welch considered successful employees who engaged in behaviors that

contribution without which the quality of life that we enjoy would be

Build Buy-in at All Levels

As a company develops its environmental, safety and ethics policies, it

Budgeting must take into consideration realistic expectations of both the

Lastly, human resources departments have discovered that prospective

Key 4: Tangible (local) Benefits (where)

A benefit of a sustainability program is that it reports and offers information

both recognized and EMISSIONS EMPLOYEES

CONSUMPTION WAGES TAXES

impacts that every

a community (see VOLUNTEERS direct

includes, but is not

When companies ask their stakeholders to accept targets for improvements

Key 5: Maximize Stakeholder Engagement (what)

One cannot expect people to change their personality; but it is reasonable to

Accurately Define and Identify Stakeholders

Sustainability is a new strategy and, like market segmentation, what we may

Just as companies eventually recognize that it may be better off ‘firing’ a