<div dir="ltr"><div class="gmail_default" style="font-size:large"><br></div><br><div class="gmail_quote"><div dir="ltr" class="gmail_attr">From: <b class="gmail_sendername" dir="auto">Nick Buxton</b> <span dir="auto"><<a href="mailto:nick@tni.org">nick@tni.org</a></span><br></div><div dir="ltr" class="gmail_attr"><br></div><div dir="ltr" class="gmail_attr">The link to it is here <a href="https://www.opendemocracy.net/en/oureconomy/has-era-ethical-corporation-arrived/" target="_blank">https://www.opendemocracy.net/en/oureconomy/has-era-ethical-corporation-arrived/</a>. <br></div><div dir="ltr" class="gmail_attr"><br></div><div dir="ltr" class="gmail_attr"><font size="6">Has the era of the ethical
corporation arrived?</font></div><div><font size="6">
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</font><p>The corporate world’s embrace of purpose may seem
commendable. But without any enforcement mechanisms, the
profit-motive will always win out.</p>
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<a href="https://www.opendemocracy.net/en/author/nick-buxton/" target="_blank">
Nick Buxton </a>
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<div> 19 December 2019 </div>
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<p><font size="+1">Profit is apparently no longer the goal for
corporations. Now, it’s all about ‘purpose’.</font></p>
<p><font size="+1">This last week, the corporate-led World
Economic Forum (WEF) proudly published its <a href="https://www.weforum.org/agenda/2019/12/davos-manifesto-2020-the-universal-purpose-of-a-company-in-the-fourth-industrial-revolution" target="_blank">Davos
Manifesto</a> in the Financial Times and Wall Street
Journal asserting a vision of ‘the universal purpose of a
company’. WEF’s founder <a href="https://www.weforum.org/agenda/2019/12/why-we-need-davos-manifesto-for-better-kind-of-capitalism/" target="_blank">Klaus
Schwab said</a> the manifesto offers ‘the best response to
today’s social and environmental challenges.’ The question
that must be asked though is: whose purpose is really
served? Will it mean a transformation of the corporation as
we know it, or might it instead be a strategy for increased
corporate control of policy and politics?</font></p>
<p><font size="+1">On the surface, the Davos Manifesto looks
commendable. It calls for corporations to treat customers
with dignity and respect, to respect human rights throughout
their supply chains, to act as a steward of the environment
for future generations and, most significantly, to measure
performance ‘not only on the return to shareholders, but
also on how it achieves its environmental, social and good
governance objectives.’ In this respect, the Davos Manifesto
is an advance on the ‘<a href="https://opportunity.businessroundtable.org/ourcommitment/" target="_blank">Statement
on the</a><a href="https://opportunity.businessroundtable.org/ourcommitment/" target="_blank">
Purpose of a Co</a><a href="https://opportunity.businessroundtable.org/ourcommitment/" target="_blank">rporation</a>’
issued in August by 181 CEOs in the US Business Roundtable
that made a vaguer commitment to generating ‘long term
value’ and acting ethically and sustainably.</font></p>
<p><font size="+1">The catch is that nowhere in either statement
is there a mention of enforcement mechanisms, legislation or
regulation to ensure companies abide by their commitments.
It is an entirely voluntary process that is completely
dependent on self-regulation, which does not challenge the
overriding profit-making purpose of corporations. In this
respect, it is an extension of the corporate social
responsibility trend, in which every Fortune 500 company
issues glowing reports where the PR is far better than the
practice. Time and time again, the profit-motive wins out
when it conflicts with any aspirational social or
environmental target. It could be seen when Volkswagen was
launching a ‘ThinkBlue’ campaign to “encourage eco-friendly
mobility” at the same time as paying its engineers to
deliberately trick California’s emissions testing system. Or
where Apple says it ‘care(s) deeply about the people who
build our products, and the planet we all share’ yet for
years has fought paying its taxes in Europe and makes phones
that are notoriously hard to repair.</font></p>
<p><font size="+1">However, it would be wrong to dismiss these
statements as merely another example of hypocritical
corporate propaganda, because the Davos Manifesto also
proposes a strong ‘quid pro quo’ for companies committing to
social responsibility, saying that companies must become
‘stakeholder(s) – together with governments and civil
society – of our global future.’ In other words, they argue
that corporations as ‘global citizens’ should be given a
bigger role in global governance – in taking decisions that
used to be the remit of governments and people.</font></p>
<p><font size="+1">This is not just conjecture. In 2010, WEF
finalized their ambitious project called the <a href="http://www3.weforum.org/docs/WEF_GRI_EverybodysBusiness_Report_2010.pdf" target="_blank">Global
Redesign Initiative</a>, (GRI), which proposed a
transition away from intergovernmental decision-making
towards a system of multistakeholder governance. This
proposes that issues of global importance should be resolved
by governments forming partnerships with corporations and a
few carefully selected civil society representatives. As
University of Massachusetts Senior Fellow Harris Gleckman
notes, it is attractive to corporations because it expands
the arenas where they can not just exert influence but
directly develop policy. And it is based entirely on an
opt-in, voluntaristic approach, avoiding any international
binding standards and regulations that might constrain
profits. Most importantly, it allows corporations to set the
parameters of the debate and to fend off the dangers of
regulatory policies proposed by politicians like Sanders,
Warren and Corbyn.</font></p>
<p><font size="+1">The multistakeholder model is already
infiltrating various arenas of global governance, such as
Scaling Up Nutrition (SUN) or the Global Alliance on
Vaccines. In August 2019, however, it received a major boost
with a little known <a href="https://weforum.ent.box.com/s/dj7x7z2fjxrox49farw5dfxfa1hfqw3h" target="_blank">partnership
agreement signed by the UN Secretary General and the World
Economic Forum</a>. This allows unprecedented access to
WEF staff to UN programmes, funds, and agencies, who in turn
commit to participate in WEF meetings. In the process, it
also distorts intergovernmentally negotiated and agreed
goals to fit with the business interests of WEF members. So
under financing, the agreement calls only for ‘build[ing] a
shared understanding of sustainable investing’ but not for
reducing banking induced instabilities and tax avoidance.
Worst of all, the partnership was not even discussed or
agreed with UN’s member states. A<a href="https://www.tni.org/en/article/hundreds-of-civil-society-organizations-worldwide-denounce-world-economic-forums-takeover-of" target="_blank">
letter protesting the partnership by 500 civil society
groups</a> has gone unanswered. </font></p>
<p><font size="+1">In the meantime, Klaus Schwab in announcing
the Davos Manifesto in advance of their 2020 summit <a href="https://www.weforum.org/agenda/2019/12/why-we-need-davos-manifesto-for-better-kind-of-capitalism/" target="_blank">says
that corporations need to “seize this moment</a> to ensure
that stakeholder capitalism remains the new dominant model”.</font></p>
<p><font size="+1">At a time when reactionary politicians are
promoting isolationist nationalist and reactionary measures,
any statement talking about global cooperation and more
ethical corporate conduct can sound attractive. However, if
it consolidates a model in which corporations exert more
power and influence and which further undermines popular
democracy, it will not resolve but rather fuel today’s
social and environmental crises. </font></p>
<p><font size="+1">Corporate power – whether it is the fossil
fuel firms driving the climate crisis or the tech firms
appropriating our data or the banks fueling the financial
crisis – are the reasons for today’s ‘social and
environmental challenges’. Turning to corporations for
solutions would serve little purpose than support their
unchanged desire for profit.</font></p>
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