Professor Jem Bendell

notes from a strategist and educator on social and organisational change

Archive for August, 2011

Will Swiss Economic Ideology Harm Global Health and Humanitarian Efforts?

Posted by jembendell on August 18, 2011

The Swiss franc has increased 30% against the US dollar and 20% against the Euro since last year. The pain felt by Swiss businesses is being well documented. But less well documented is the effect of this currency imbalance on international efforts to promote health, peace, human rights, and humanitarian action. Switzerland is home to many international organisations, including United Nations agencies and international charities. Many have their assets and grants denominated in US dollars or currencies other than the Swiss franc, yet their fixed costs of buildings and staff are in the extremely overvalued Swiss francs. Consequently their budgets are being ravaged by the currency imbalance, leading to mass redundancies and the cutting of various programmes, at key organisations for world affairs, such as the World Health Organisation to the International Labour Organisation. Those with seniority in such organisation are more able to hold on to their jobs, so the harder-working and far less well-paid staff are often the first ones to be shown the door. Although there need to be efficiencies found in international organisations, a sinking-ship mentality is not the way to achieve it.

The current efforts to reduce the value of the Swiss franc, by the Swiss National Bank, are reported by the Financial Times to have completely failed. Their tactics have been to increase the volume of Swiss francs, and slash interest rates. Yet as the international financial markets are spooked and want to buy Swiss francs, banks are simply buying up the excess francs. Not only is this causing a problem for Swiss businesses, it is creating a massive future risk for the Swiss economy when one day people decide they don’t need to hold so many francs. In addition, in efforts to keep the Swiss franc down, the government’s debt is spiralling. That will be compounded by recent commitments to spend billions in bail outs to suffering businesses. Such bail outs will be open for mishandling and corruption and propping up inefficient companies – especially if they are spent quickly enough to have any effect. But worse, these bail outs are like a sticking plaster for a haemorrhaging wound, as systemic solutions are required. If we compare prices across the border, the Swiss franc might even be 100% overvalued already, and the Western monetary crisis is only beginning its latest phase. This is no momentary problem. Imagination beyond old ideologies is required for systemic solutions.

The answer is so simple. The Swiss government could impose a currency transactions tax on any purchase of Swiss francs or assets/instruments denominated in Swiss francs. This transaction tax would reduce the demand for Swiss francs, and generate revenues for the Swiss government. These new revenues could be used to pay down the wholly unnecessary new Swiss government debt, and finance a new emergency international cooperation fund. That fund could issue core-budget grants to Swiss-based non profit organisations and international agencies for them to maintain or increase their employment of non-senior staff. In terms of the UN, this would mean staff below P-3 level. Such staff spend a greater percentage of their wages on local businesses than more senior staff, who invest it abroad, or drive over the border to get cheaper goods, services and property in the Eurozone. Targetted action like this would maintain a key element of the Swiss economy and society, and its contribution to the world.

The arguments against a currency transactions tax have always been vacuous, ideologically driven and about protecting short term profits. Its not workable? Tell that to countries like Brazil who have had a transaction tax for years. It will dent confidence in the economy? Well what do we mean by economy? The current market for the franc? That needs denting! The longer term prospects for the economy require effective denting right now. Given that leading Eurozone nations want to impose a similar tax in future, this is a great opportunity for Switzerland to lead the way. There are strong business arguments for a currency transactions tax, due to the effect on cooling volatility, and strong government reasons, by making up for falling tax revenues. We documented these issues in a report for the Swiss charity Bread for All, yet we found bankers and top government officials wedded to an unthinking belief in no new policy innovations to harness financial markets for the productive economy, public finances or common good.

Why is it such a crisis when the world wants to own your national currency? It should not have to be a crisis, indeed it could be a major opportunity for the Swiss people and the wider world who benefit from its role as a home for agencies of international cooperation. The only thing stopping this being an opportunity is the ideological blinkers of top bankers and politicians who are currently exhibiting zero creativity in transforming this situation from crisis to opportunity. Impose a transaction tax, to release Swiss business from the high franc, pay down the government debt, and fund a more dynamic international cooperation community. If such effective action isn’t taken, some citizens may start asking if the private ownership of 45% of the national bank by private banks like UBS in some way compromises its ability to take action in the public interest. And if such action isnt taken, we will see once again how economic ideologies in certain circles can harm the lives of poor and vulnerable people many thousands of miles away.

Professor Jem Bendell: http://www.twitter.com/jembendell

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Posted in Academia and Research, Corporations, Counter-Globalization Movement, Geneva, Reports, Sustainable Development, United Nations | Tagged: , , , | 2 Comments »

World’s First Sustainable Luxury Awards – A reason to Spring in Buenos Aires!

Posted by jembendell on August 12, 2011

I’m delighted to be helping curate the Sustainable Luxury Awards in Buenos Aires, November 4th, 2011. Its organised by the Center for Study of Sustainable Luxury (CSSL) and the Authentic Luxury Network.

Innovation in creating luxury goods and services that promote positive social and environmental outcomes is growing. To recognise and support the pioneers in sustainable luxury, new international awards are being launched in 2011. These inaugural awards will take place on November 4th in Buenos Aires, Argentina, and will help profile leading brands in Latin America, and beyond. If you would like to nominate a brand, provide support for the event, or request information on attending the awards, please email María Fernanda Tacchini . Nominations close at the end of August.

Awards will be made for the best sustainable luxury: clothing and accessory company, jewellery or watch company, tourism company (including hotels), transportation company (including cars), beauty company, breakthrough/innovative company, and best researcher. The members of the jury are: Dana Thomas (author of the New York Times bestseller Deluxe: How Luxury Lost Its Luster), María Eugenia Girón (author of Inside Luxury and former CEO of Carrera y Carrera), Renata Mutis Black (founder of Seven Bar Foundation which partners with luxury for social change); Ana Laura Torres (coordinator of the Sustainable Textile Center); Professor Jem Bendell (co-author of Deeper Luxury and consultant in sustainable luxury); Eduardo Escobedo (United Nations officer working on cosmetics and clothing for biodiversity conservation) and Summer Rayne Oakes (environmental model, author and entrepreneur).

The day before the Awards night, Dana Thomas, María Eugenia Girón and Jem Bendell will lecture on developments in sustainable luxury. Information will be given to those who register for the awards.

It should be a great and meaningful party.

For more information on the organisers, see http://www.lujosustentable.org

To connect with other professionals in sustainable luxury, see http://www.authenticluxury.net

Posted in Uncategorized | Tagged: | 4 Comments »

Fashionably Hated: on social change, media and the self

Posted by jembendell on August 6, 2011

I thought my mum and dad, and my colleagues’ family and friends, might be proud. It would be the 2nd time a report I co-wrote appeared in the Financial Times. The last one was Deeper Luxury, which 3 years ago helped kick off more engagement in CSR by some luxury brands. The new report is on jewellery, and the result of 18 months work, mostly pro bono by myself and my dedicated and inspirational colleague Ian Doyle. But I haven’t sent my relatives the FT link. The article patronised us, with arguments that our co-publishers Fair Jewelry Action have debunked point by point. Fortunately the report has been well-received in the industry press, with Diamonds.net doing a succinct overview.

When I read the FT article I was surprised. Surprised at how much I laughed! I thought I cared about being respected. We all do a bit, don’t we? But reading it seemed cathartic. For some years now, with my colleagues at Lifeworth Consulting, we have been trying to persuade some in the industry to be more ambitious in their responsible enterprise goals. We have got somewhere with some brands, but mostly its the start ups who get it and they don’t have funds to pay for our help. Managers from the big brands, however, often depress me with their fancy lunches, seminars and excuses. We offered this study for free to help those in larger firms who really want to lead, and we got trashed.

I recall the enlightened perspective of Chris Marsden when he worked at BP in the 1990s: “if Greenpeace didn’t exist Id have to invent it.” Not that we are Greenpeace – our report is far too boring, as its for industry and focuses on giving specific advice on business strategy. I suppose for every Chris Marsden there are a thousand corporate cogs. There are many proud cowards in luxury brand management.

A lesson I see for myself and anyone who works in social change within a professional context is to never confuse being respectful with being respected. To respect others and hear them out, understand their situation, is key, but to worry about being respected is imprisoning. We need more people in social change who don’t give a xxxx about being disliked and will risk their own situations to seek and then live by their unfolding truths. Its this sense of liberation that made we want to share experience here. Its important because there are now so many events of the eco-chattering classes about how to achieve systemic change, from Tallberg to Davos and beyond. By giving the mic to those with status they perpetuate the idea that those having a high status role have an insight rather than an affliction, and that calling for bigger changes is a means of change rather a way to let off steam by blaming others and situations before returning to normal life. Instead, we have to risk our acceptability, our respectability, our livelihoods, and the expectations of our families, in our daily lives at work, if we are to really explore how we can create systemic change.

But the FT article also made me realise something about journalism today. Real investigative journalism is disappearing from the mainstream press. I don’t mean the kind of illegal snooping on people to get gossip to print in tabloids, that has caused a lot of trouble in the UK just recently. I mean proper investigative journalism where issues of public importance are looked at in detail. Nick Davies did that at the Guardian to expose the phone hacking scandal, so it still exists, but is rare. The system of mainstream journalism, where owners want profits, desire happy (luxury brand) advertisers, and journalists need access to brands, and to pump out stories quickly to develop their online traffic for new ad revenue, means that the time and resources for investigative reporting have been crushed. Research has even found that many (mostly freelance) fashion journalists are also on the payrolls of PR firms and individual brands.

In that context its tough for a fashion journalist like Vanessa Friedman to write about our 58 page study one minute, and speculate on the Duchess of Cambridge’s dresses the next. The absence of investigative journalism is so accepted now that journalists can even complain about others not investigating enough, such as Vanessa complaining we didnt investigate further about Burmese rubies, without spotting the irony. Why don’t the journalists look into it?

INSEAD Professor Mark Lee Hunter told me the other day that investigative journalism is so undermined by the economics of media right now that non-traditional journalists, from bloggers and NGOs, will have to develop the skills of investigative reporting if we are to maintain some effective public discourse. He has produced a handbook with UNESCO to help. Perhaps hybrid models of media, where mainstream publications work with investigative bloggers, helping to guide and ensure their approach and credibility, will be one way of coping. What Jo Confino and colleagues are doing at Guardian Sustainable Business could be one indicator of such a situation. Other publishers may prefer to pretend they have it all under control and can produce credible articles without resources. Such pride will eventually turn them into PR agents’ megaphones.

These changes are bigger than any one person. Some may get all self-righteous about individuals at News of the World. But rather than single out individuals, we need to push for reforms in media ownership rules, so that there is diversity of owners as well as organisational types, with not-for-profit and community media having important roles to play.

We all get influenced by our colleagues and the day to day work. For instance, at Lifeworth Consulting, our desire to be helpful to people leading change in the industry may have blinded us somewhat. Rather than further investigating the issue of Burmese rubies, which was not our aim, or within our capability, when we found evidence that the EU embargo might be being broken, we should have referred this particular matter to law enforcement. Therefore I have started making the relevant enquiries about which parts of law enforcement should be informed.

So on reflection it is good that Vanessa Friedman paid the report some attention, despite the flaws we see in her article. I’m told the key thing in fashion journalism is you must not be ignored. In the rough and tumble of somewhat gossipy and cutting reporting: what doesn’t kill you… makes you more fashionable. So my real regret is that Vanessa didn’t speculate on what suit I might be wearing at my next speech.

If you are in the industry, or write about it, please read our report ‘Uplifting The Earth: The Ethical Performance of Luxury Jewellery Brands’

Posted in Academia and Research, Corporations, Lifeworth, Media, Reports, Sustainable Development | Tagged: , , , | Leave a Comment »