Professor Jem Bendell

notes from a strategist and educator on social and organisational change

Archive for April, 2009

Globalising Trusteeship

Posted by jembendell on April 12, 2009

Jem At Jallian Wala Bagh in April 2009

Jem Bendell visiting Jallian Wala Bagh in April 2009

On April 13th, ninety years ago, a British General ordered the firing on people peacefully protesting the repression of India. Mohandas K Gandhi was so moved by the massacre in Amritsar that he called for a special week to be observed every year – a Satyagraha Week. “Satya” means truth, “Graha” means both ‘involved in’ and ‘global’. Gandhi used satyagraha to describe a non-violent way of life, that does not participate in oppression wherever it occurs, and challenges it in non-violent ways. It became synonymous with India’s liberation movement.

Due to the work of Varsha Das and her colleagues at the Gandhi National Museum I was reminded of Gandhi’s teachings, and began re-reading what he said and did about life, politics and economics. As you probably are yourself, I was familiar with his famous phrases including that “we must be the change we want to see in the world’. But as I read on, I realised his views are very relevant to the current global economic crisis and the work I do on sustainable enterprise and finance.

The recent G20 failed to launch a deep reconsideration of the global economy, and some of its precepts, such as current concepts of property and a consumption-led economy. I suppose the pressures on the leaders for more-of-the-same were immense. But it has become clear that is up to us to begin a broader dialogue. Gandhi called for the Satyagraha Week to be one of fearless yet convivial dialogue about the truth of society and to redouble our efforts to live by that truth. Reading that affirmed some of the work I did this past year, with the Global Finance Initiative. After consultations with finance professionals and stakeholders in dozens of countries we concluded with a recommendation that dialogues on changes in financial systems are required that are:

  • Foundational, addressing profound questions about the purpose of the financial system and the principles that direct its actions;
  • Comprehensive, encompassing the connections between accounting systems, currencies, regulatory systems, economic structures and all parts of the financial system;
  • Inclusive, with processes reaching beyond traditional insiders, to engage responsible investors, multi-stakeholder groups working on finance issues, asset owners, labor, NGOs and critical academics, and be truly global;
  • Systemic, connecting financial stability to the real economy, social equity, and environmental sustainability.

This dialogue could be part of a global truth-seeking — a ‘Global Satyagraha’. Beyond his views on dialogue and truth-seeking, MK Gandhi’s views are relevant to the future of the global economy and our work on responsible enterprise and finance in at least four ways: economic equality, appropriate technology, self-reliance, and trusteeship.

Challenging both the caste system and negativity between religions, he promoted the equality of all peoples, which meant non discrimination in employment and economic affairs. He also believed that technology could be good if did needed work, but bad if it put people out of work. This philosophy led him to spend many hours working on the spinning wheel, a technology that was appropriate to the economic level of villagers across India at the time. Another important aspect of the spinning wheel was how it generated self-reliance. Gandhi spoke of ‘swadeshi’ or economic self-sufficiency, as the only way that India would achieve self-determination. He called on his country-people not to pay into the system of empire by buying foreign clothes. In our current context the implication here is not simply that we produce for ourselves, but that we seek to become independent of systems of exploitation for our own livelihoods and lifestyles.

Jem Bendell at site of MK Gandhi assasination, March 2009

Jem Bendell at site of MK Gandhi assasination, March 2009

These aspects of Gandhian economics are well documented and discussed. Like many business folk the world-over, many Indian executives do not see the relevance of these approaches to modern business, viewing them as anachronistic. Yet, in a resource-constrained and climate-threatened world, where hyper-inequality fuels violence, the need for principles and practices of equality, appropriateness and self-reliance to pervade business is clear.

What stunned me was the resonance of his views on ‘trusteeship’ with the latest thinking within the corporate responsibility movement. More of us have come to understand that we need to redesign the systems of corporate governance and finance in order to create more sustainable and responsible economies, and that business executives can and should engage in public policy debates to promote that redesign. In my latest book, I develop the concept of “capital democracy” to describe an economic system that responds to this understanding. I write:

Corporate Responsibility Movement, Bendell et al, March 2009

Corporate Responsibility Movement, Bendell et al, March 2009

“In a democratic society, property rights should only exist because people collectively decide to uphold them; they are not inalienable but are upheld by society as a matter of choice. Therefore, if society confers us the right of property, then we have obligations to that society. Today property rights have become so divorced from this democratic control that they are undermining other human rights. A reawakening to a basic principle is required: there can be no property right without property duties, or obligations. From such a principle, it should not be left up to the powerful to decide if they are responsible or not, or if they are carrying out their obligations or not. Instead, the focus shifts to the governance of capital by those who are affected by it” (Bendell, et al, 2009, Pg 33 to 34).

The Mahatma’s view of trusteeship is the same, but elegant in its simplicity. It arises from an understanding that everything is owned by everyone, and wealth is owned by those who generate it. Thus the one who controls an asset is not an owner but a trustee, being given control of that asset by society. Gandhi wrote “I am inviting those people who consider themselves as owners today to act as trustees, i.e., owners, not in their own right, but owners in the right of those whom they have exploited.” In the Harijan paper his views on trusteeship of property were later documented to clarify “It does not recognize any right of private ownership of property except so far as it may be permitted by society for its own welfare” and “under State-regulated trusteeship, an individual will not be free to hold or use his wealth for selfish satisfaction or in disregard of the interests of society.” He also wrote that “for the present owners of wealth… they will be allowed to retain the stewardship of their possessions and to use their talent, to increase the wealth, not for their own sakes, but for the sake of the nation and, therefore, without exploitation.” All those years ago the Mahatma was proposing an economic system that many people are only beginning to conceive of today. If you have my book, I apologise for my prior ignorance of Gandhi’s trusteeship concept. If you don’t have it under your trusteeship yet, hey, it’s still worth reading!

Sangeeta Das of the Gandhi Smriti Museum revealed to me how some Indian industrialists supported many of Gandhi’s ideas and applied some to their own business. Upon reading the views of some current Indian business leaders I see the concepts of equality and trusteeship have informed their voluntary corporate responsibility efforts. However, I am left with a sense that the concept of trusteeship has much untapped potential as an economic system, codified into public policy and regulation. The current crisis demonstrates the need to globalise trusteeship, or capital democracy, as an approach that can be debated and interpreted into new principles and policies for economics, finance and enterprise. In addition it is clear that concepts of appropriate technology and self-reliance have much more to offer both to corporate strategy and public policy than currently the case. I wonder whether Indian business leaders could play a role in bringing this insight to the world.

The life of Gandhi is important not only for his views on economic systems but also on how to bring them into being. In my book I argue that the global challenges we face mean those of us who work to make business better must start thinking and planning like a movement. “The corporate responsibility movement is a loosely organised but sustained effort by individuals both inside and outside the private sector, who seek to use or change specific corporate practices, whole corporations, or entire systems of corporate activity, in accordance with their personal commitment to public goals and the expectations of wider society.” (Bendell, et al 2009, pg 24). As a movement leader, we could learn from Gandhi’s mastery of symbolic communication combined with personal authenticity, his embrace of both dialogue and direct action, his respect for people no matter the differences, and his demonstration that we must ourselves disengage with systems that uphold a lie. More of us can mobilise our networks and knowledge for transformative ends. And if it means changing our lives to be less economically dependent on the status quo, then that’s what we must do.

The recent violence from authorities against protesters and bystanders (and the truth) at the G20 is yet another reminder of the need to learn how to engage in a transformative non-violent movement that provides people diverse ways to participate while sucking energy out of violent systems. On the 90th anniversary of the hundreds who died in Jallianwala Bagh, we can remember how their memory inspired millions in the pursuit of truth and freedom.

I will be discussing some of these ideas in a webinar, online, and seminar in Geneva, called: “The Corporate Responsibility Movement: Where are we going and why?” Seminar: Thursday May 14, from 12.30 to 14.00 Swiss time, Uni Mail, 40 bd du Pont d’Arve, Geneva, room MR 150 (ground floor, opposite the cafeteria). Register: csr@unige.ch.  Webinar: Tuesday May 19, from 16:30 to 18:00 UK time, organised by CSR International. Venue is “online”. Register: clemence@csrinternational.org http://www.csrinternational.org/?p=273

The Corporate Responsibility Movement, Jem Bendell et al. March 2009 ISBN 978-1-906093-18-1
http://www.greenleaf-publishing.com/productdetail.kmod?productid=2767

Thx to Suzy, Satjiv, Inderpreet, Nandita, Varsha and Sangeeta for unwittingly guiding my serendipitous journey in India.

Posted in Academia and Research, Corporations, Counter-Globalization Movement, Lifeworth, My Life, Spirit?, Sustainable Development, Uncategorized | Tagged: | 3 Comments »

Deepening Luxury in Delhi

Posted by jembendell on April 4, 2009

Im just about to leave India after an amazing month. The International Herald Tribune conference last week was inspiring, and for me very affirming. Feedback from Christian Blanckaert, Laurent Claquin, Suzy Menkes and Anna Zegna, among others, about the impact of the report Deeper Luxury on their own work was wonderful to hear. Theyre all doing what they can to promote sustainable luxury. The transcript of my presentation follows. I was taking a bit of a risk, a Britisher going to India and leading an audience in a group reflection/meditation, but the reaction was positive (or those with a negative reaction were too polite to tell me!).

To follow up I wrote a piece in the local business paper, and an article in NYT and IHT mentions the talk.

Deeper Luxury, Presentation by Jem Bendell at the International Herald Tribune conference on Sustainable Luxury, Imperial Hotel, Delhi, India, March 26th 2009.

“Despite the difficulties, the choice of India and of sustainable luxury as the conference theme now has a feeling of serendipity about it, doesn’t it?

Since the IHT made their bold choice, we have seen dramatic events, both here and abroad. What does an economic collapse and a terrorist attack have to do with sustainable luxury? If sustainability is about how we live our lives and what we work for, then they are very relevant, because we must employ our best talents to make our world a better place, whatever our line of work.

India is probably the richest country in the world, in the truest sense of the word rich. Yet it is one beset by massive social and environmental challenges. Coming here to collectively imagine what luxury and sustainability might offer each other, is as important now as it ever was. So thank you IHT for organising what could be a watershed in the luxury industry, and perhaps, if we make it so, an important moment in the sustainability movement.

I’m here because of a report I produced in 2007 for the environmental group WWF. In Deeper Luxury, we mapped out the sustainability challenge and the reasons why luxury brands could do a lot more, ranked companies and provided some examples and tips, as well as a charter for responsible brand endorsement by celebrities. The report took off around the world. I even ended up in Tatler; a dubious indicator of success for an environmentalist. But today I wont go into the report. Instead I’ll say some things about the heart and the head of sustainable luxury management in light of rapid changes. I hope to allay any lingering doubts you may have about sustainability being the future of luxury, rather than just a passing fad.

At its most basic sustainability is about people being in harmony with nature, eachother and ourselves. As our societies have developed, our work and ways of living have had both a positive and negative impact on that harmony. You have likely heard that before. But right now I’d like us to take a moment to sense what restoring that harmony could feel like. You may find it helpful if you close your eyes for the next few moments.

So, now with you eyes shut, try to recall a moment when you think you won an argument, or clinched a deal, or got promoted. Think of how it felt.

Next, try to recall a moment when you were in nature, perhaps looking at a sunset, or where you completely lost yourself in the moment of something you enjoy doing. Try to taste that feeling.

Now contrast it with the first – the feeling generated within you when you won out on something.

Consider whether that first feeling is one of self-promotion – a worldly feeling, while the second feeling comes from your soul.

This is a reflection recommended to us by Anthony De Mello, a Jesuit priest who hailed from Mumbai, and integrated Eastern and Western philosophies.

He says the worldly feelings are not really natural. I quote “they were invented by your society and your culture to make you productive and to make you controllable. These feelings do not produce the nourishment and happiness that is produced when one contemplates nature or enjoys the company of one’s friends or one’s work. They were meant to provide thrills, excitement – and emptiness.”

He suggests we are weighed down by these worldly motivations for approval, popularity, and power. He is suggesting that, actually, less can be more, and “I” can become “we”. That is also a sustainability message. Because sustainability is not so much a challenge out there, but in here. It comes down to how conscious we are in our work. A sustainable luxury industry will flow from a sustainable luxury profession of people inspired by creating things and experiences that generate well-being for everyone involved, and restoring the biological diversity and balance of our planet.

Fear often holds us back from living and working in full consciousness. In our work on corporate responsibility in the luxury sector, there is a nagging fear that there is something fundamentally contradictory between luxury and sustainability. Some fear that we cant do that much, particularly given the current economic situation and the limited awareness of consumers in key growth markets.

One way to calm that fear, is to realise how greater social and environmental responsibility can often be a cost saver and a driver of innovation. That is what we sought to do in the WWF report. This morning I want to go further, and address four conundrums facing the industry that can hold us back from engaging fully, soulfully, in sustainability. So far I’ve only heard them expressed in quiet conversation by people who are aware of the challenge but not sure of how this sector can really deliver.

In hearing reassurances about the financial sustainability of brands and luxury groups we have been reminded of the strength of the Asian market. Their economies are still growing, middle classes expanding, and fashion consciousness rising. The difficulty I’ve been told about by some executives is that such consumers are not aware of social and environmental aspects of brands and don’t really care. In the past year, new market research points to a wave of environmental awareness sweeping through Asia.

Research done by some WPP agencies, found that Chinese consumers now see the environment as a higher priority than do their US and UK counterparts. 69 percent of the Chinese respondents said that they expected to spend more on environmentally friendly products in the coming year.

The graph on the screen is from the French agency IFOP, showing levels of concern assessed in June last year. It also shows emerging market consumers concerns are higher in Brazil, China and India. More unpacking and interrogating of the nature of this concern is required to gauge its relevance for corporate strategy, but it shows the awareness is now there.

Consumer awareness takes time to translate into consumer behaviour, because we cant chose what doesn’t exist, or behave differently when we are unclear about our options. As the connections are made between what we buy and the environment we live in, the commercial implications are huge. So it is time to empower the consumer with the right information and better choices. So the first conundrum is not so real.

At a global level some analysts say the world has lost almost half its wealth since September. The crisis is real and scary. As someone running a small consultancy, we have lost one major client already. My company also works on sustainable finance, and worked on a project which consulted with finance professionals in over dozen countries. The insight from this is that the current crisis is not something that will be “got through” before a return to “normal”. Instead, it marks a major shift in global power. At root it is a Western financial crisis. The impacts will not only be financial, but also cultural, impacting on the status of the West, and on consumer culture. The implications for luxury are therefore deeper than our immediate concerns about profit and loss.

Many of us here work in enterprises that are the very best at what we do, whether that’s watch making, boat building, resort management, and so on. The crafts themselves may be excellent, and the sincerity and quality discussed yesterday morning very real. But what groups us together in this room as “luxury” is not so much that excellence, but consumer perceptions of what “luxury” means and our need to understand how to continue to appeal to the consumer of “luxury” as much as the consumer of our particular product or service. If there ever was such a thing as a luxury industry, then it is now endangered, because of the economic situation. More people are thinking twice about any discretionary spending. They are questioning the true value of what they buy, and how it appears to others at a time of increasing hardship. The ability and motivation to buy what is, to some, unnecessarily expensive, will therefore decline. In such a context, luxury must become something meaningful and lasting, providing the most enduring products and experiences to consumers.

Therefore the economic crisis is ushering in a fundamental change in world power and consumer values that moves social and environmental excellence from an option to a category-defining dimension of luxury brands.

The social legitimacy of luxury becomes more challenging in situations of extreme inequality and absolute poverty. Within sustainability there is a principle of fairness and social equity. Some people consider that luxury involves excess, so it could never be moral while there is poverty. That’s quite a conundrum.

If you visit the Taj Mahal this weekend you will not be that far from the border with Madhya Pradesh. If you travel on, UNICEF says that in some villages 6 out of every 10 children you will see are malnourished, like these children, pictured a few months ago.

It’s natural to block out this other reality as we enjoy our own privilege. Because many of us dont know what to do about it.

The two world’s collided last week when the two Slumdog child actors from Mumbai’s slums fronted a fashion show. The success and subject matter of the Slumdog film has raised debates about poverty and child protection, and the role and responsibility of the creative industries, like film. One response to this situation is charity. Designers Ashima and Leena announced last week that a new Jai Ho Foundation will support children like Rubina and Azahruddin.

If done well, charity can help. But it rarely addresses root causes. In my 10 years as a consultant to the UN on development issues I have been constantly reminded of one thing. People with low incomes do not want our charity, but their dignity and opportunity – which basically means good education, a safe environment and decent work. Just like ourselves, no one appreciates pity. But solidarity and support is always welcome.

The economy of Madyha Pradesh has been booming but it doesnt trickle down well unless you have responsible businesses buying from responsible businesses. Therefore the best way to reduce inequality and poverty is for the products and services we make to provide decent work throughout the value chain.

To illustrate I’ll mention one breakthrough British luxury brand. For several years jeweller and anthropologist Pippa Small has been designing jewellery made by fair trade groups. Her range for Nicole Fahri’s store in New Bond Street is produced by a group of slum-dwellers in Nairobi using discarded brass and recycled glass. The product line is helping ensure the workers’ children go to school, has funded a crèche, is teaching them computing skills, and shows them how to run a business. Pippa believes the reason the Farhi range sells so well is, I quote, “because people feel good wearing jewellery that is doing some good, as opposed to exploiting people”. But she also notes that, I quote again, “buyers in big stores often don’t get it. They think that jewellery made in slums equals something horrible and dirty, rather than seeing that giving people skills offers them an opportunity to get out of there.”

I was pleased to find out last night that there are some similar innovations occuring in the high end fashion sector here in India. The brand Bombay Electric are working with WomenWeave, to source materials from women working in villages, so that high end fashion can promote social development.

So we need not ignore. We need not feel guilty. Neither actually helps. Instead, the conundrum can be resolved if luxury comes to embody a fullness of our ability to live in solidarity with everyone we influence. Its ambitious. But are luxury brands not always ambitious?

The last conundrum I’ll explore here is sustainable consumption. Luxury brands are promoting consumerism in countries at a time when we need to reduce consumption in order to avert a climate catastrophe.

We only have one planet don’t we. Yet some aspire to live as if we have 5. If everyone lived like Americans we would need 5 planets of biological resources to support us. But it’s not simply a Western binge. Estimates put Malaysia at 4 planet lifestyles, Dubai at 10. Some research suggests the Indian middle classes now have a carbon footprint higher than the average Briton. The impacts are profound. For thousands of years the river Ganges has been revered. The Himalayan glacier that feeds it is shrinking by 40 meters a year, meaning it could disappear altogether in 20 years, and with it the Ganges in the dry season. Water is precious, to some it can be sacred. The shirts on our backs each took a few thousand litres of water to create. If we cherished them more, we would use less water. As well as less energy and other resources. To cut carbon emissions we have to reduce our consumption of resources. We only have about 10 years to transform our development so we don’t tip the world into catastrophic climate change. If you don’t believe it, you’ve been living in a bubble, and need to read your Herald Tribune.

Some of us are here to work out how better to sell Western brands into this highly complex market. Key to that is promoting a consumer fashion culture in a country where style traditions are centuries old and slow to change. Yet we know our world can’t cope with another billion embracing unbridled consumerism and a throwaway society. It would be an epic tragedy for some of our brightest minds to work on that, at a time when we need their talent to create a sustainable future.

What’s the answer? Become the best. Offer the best environmental option. Luxury brands have the margin and mandate to create the most environmentally friendly products and services. Yesterday Anna Zegna gave you some real examples, as will Stella in a moment. The great thing about luxury brands is that the way consumers relate to them actually prefigures the way we need consumers to relate to all their products. To look after them, to repair them, to see them as becoming vintage not garbage.

So let’s not be pale green, seeking to reduce our environmental impact a little to protect our reputation. That would be understandable, but it wouldn’t be real luxury. Instead, lets seek to create products and services that are actually environmentally restorative. So that by buying them people help the environment. One example is the UN’s Biotrade initiative, which is working with brands to develop skins and other products that create new revenues to pay for the conservation of species and their ecosystems.

Once we have created environmentally restorative products and services, then lets integrate that into the marketing and advertising of them in new markets, to help guide that wave of environmental awareness into more beneficial environmental behaviours. We have the power to shape aspirations and can use it wisely.

My intention in addressing these issues has been to release possible blockages to you being in flow in your your work and life. Because sustainability must start with us.

I am here because I believe that luxury can lead, not lag, in the transition to a fair and sustainable world. Its designers, entrepreneurs and executives can become part of what I term in my new book, The Corporate Responsibility Movement – A movement that is pursuing a transition to a fair and sustainable economy through new approaches to enterprise.

Together with the luxury brands Timothy Han and EcoBoudoir, as well as the UN Biotrade initiative, and luxury marketing expert Marco Bevolo, we are creating an association to support this transition. The Authentic Luxury Association gives you the opportunity to become an expert in the strategic importance of social and environmental excellence, as well as its operational implications. Already over 200 luxury professionals have joined our online network, which you can find at authenticluxury.net

We need not be confounded by this time of global stress, but work towards a new form of luxury that embodies what is personally, socially and environmentally the best of human creativity. The reflection from the late Anthony de Mello helps us see that at this time of strife, our world needs from us simply what we need for ourselves: o be authentic, soulful and purposeful. So thank you, for being, simply, you.”

IF YOU WOULD LIKE TO DISCUSS THE IDEAS HERE, OR ENGAGE, PLEASE VISIT WWW.AUTHENTICLUXURY.NET

Links to the video of the talk will be posted there.

Posted in ALN, Corporations, Lifeworth, Spirit?, Sustainable Development, Talks, WWF | Tagged: | 2 Comments »