Professor Wayne Visser

Michael Organ: “Like many Meaningful Impact listeners, I had a fox hole moment that led me to a purpose-driven career. Today’s guest, Professor Wayne Visser, also had such a life-changing experience. In his case though, a fox hole moment occurred just a few years ago, after already three decades of making a difference. Here’s what happened to Professor Visser.”

Professor Visser: “I was with my family in Sodwana Bay in South Africa. We went swimming there. And sort of took in our stride the sign on the beach that said beware of sharks, crocodiles and hippopotamuses. But kind of also ignored the sign that said beware of riptides. My wife and I got dragged out to sea. (It) really felt like we very nearly drowned and luckily made it back to shore.”

Michael Organ: ”Experienced ocean swimmers, Professor Visser and his wife swam diagonally across the strong undertow current, battling fatigue to save their lives. Later, Professor Visser reflected on the experience.”

Professor Visser: “It was just one of those moments of refocusing again and saying, ‘Look, you can’t take life for granted. And so let’s keep purpose-driven in everything that that we do.”

Michael Organ: “Professor Visser is a Fellow and Head Program Instructor at the University of Cambridge Institute for Sustainability Leadership. He is also a part-time Visiting Professor at Antwerp Management School’s Sustainable Transformation Lab, which he founded. Dr. Visser has published 44 books on corporate responsibility and sustainability, and has presented that work via more than 600 keynote speeches, lectures, courses and workshops in over 50 countries. Previously, Dr. Visser was Director of Sustainability Services for the global consulting firm KPMG.

On today’s master-class episode of Meaningful Impact, Professor Visser will share his advice and anecdotes on how CSR can reduce risk.”

Environmental Sustainability, Social Responsibility, and Governance (ESG)

Michael Organ: “Governance –– the ‘G’ of ‘ESG’ –– obviously reduces risk, as you would expect from Governance reporting, accountability, and oversight. The same cannot be said, however, when trying to make a broad generalization about the impact of the other elements of ESG; that is, the ‘E’ (Environmental sustainability) and the ‘S’ (Social responsibility) – at least when the evaluation is based on stock market performance.”

Professor Visser: “There are many funds that get screened on ESG criteria now. As to whether they outperform the market: If I put my academic hat on, I think the research is completely mixed. But one of the interesting things that the finance sector has done is in framing sustainability is including the ‘G’ – the governance piece – because there has for many years been good data to suggest that a well-governed company performs better financially. So, they’ve sort of tagged on the societal and the environmental.”

Michael Organ: “That conflation obscures causation. There could be much to learn by isolating the factors. So, rather than cover the obvious benefits of governance, today’s episode of Meaningful Impact will focus instead on instances where specific types of environmental and social responsibility can, in fact, reduce a company’s financial risk. We’ll start with environmental sustainability.”

Environmental Sustainability

Professor Visser: “There are all kinds of risks that come with not doing sustainability well. You can lose support from your stakeholders. At the worst end, that might include people boycotting or protesting against your company or your products.

In the case of suppliers as well, or value chains, it can be a very real, a very physical risk that you simply are undermining the basis of your business. Whether that’s mining or farming, so many of our products go back to that source. And if you get that wrong – if you’re an electronics company and you find yourself embroiled in conflict minerals and militias and so on: that can be very bad for your company, whether or not you believe in sustainability.

Just before this podcast, I was speaking to the Head of Biodiversity and Nature for one of the largest fashion companies in the world. Why are they doing it? Because they realize that there’s a risk to not doing it. I mean they are dependent on natural resources and on functioning ecosystems.”

Michael Organ: “I would imagine that it’s not just activist groups and conscientious customers who care about sustainability and ethical sourcing of materials.”

Professor Visser: “Here we have very, very good data. I mean there are just so many surveys and pieces of research that have been done that do show that people who are working for a company that is engaging in societal or sustainability efforts are more loyal, more productive, more likely to recommend the company, less likely to take leave and so on. It’s very, very direct, the benefits there.”

Corporate Volunteering

Michael Organ: “The link between staff retention and meaningful experiences from corporate volunteering is intuitive. But what about the impact of corporate volunteering on reducing risk?”

Professor Visser: “Well, I remember, for example, helping to deliver a program for HSBC, one of the largest banks in the world. This was for young up-and-coming future leaders. They basically had to spend time in a forest, volunteering in a very profound way – out of their comfort zone. That was part of making them a more sensitive leader.

I’ve done research on leadership itself – leadership for sustainability – especially through my Cambridge University links, but also with Antwerp management school. And we do find that one of the characteristics you need to build is systems thinking and also inclusive, emotionally-intelligent, stakeholder-oriented sensitivity.”

Michael Organ: “I would imagine there would also be a benefit in terms of inter-department collaboration.”

Professor Visser: “Yeah. Often volunteering is seen as a team-building exercise because one of the things it does is it breaks down silos. You will be meeting people from other departments, but also hopefully people from different levels of seniority. So, you might get an intern or a new recruit interacting with an executive. That’s also very healthy because you’re in a level playing field. You’re all dealing with the same challenge.”

Community Relationship Building

Michael Organ: “A previous episode of Meaningful Impact, called Making the Business Case for CSR, introduced the idea of the halo effect. You’ve had some real-world experience with that.”

Professor Visser: “I did some work for a chemicals company that actually made, among other things, explosives. Their factory was located very close to a community. It happened to be a low-income community. And they had sulfur stockpiles.

Sulfur is pretty inert in a solid form. And fairly harmless until it catches a light.

They had a sulfur fire. And the fumes were so toxic that some of the members of the community died. The recriminations were really fast and furious against that company.

And they realized that they hadn’t really built a relationship with that community.

So, after that fire, they set up community committees, had workshops, and really tried to listen to the needs of the community, tried to make some investments to improve their lives, and so on.

The result was that when they had the next crisis (it wasn’t a sulfur fire but a different crisis), they just found that the community was more willing to give them the benefit of the doubt.

And then I look at an alternative example: Some of the work that I did when I was running sustainability for KPMG was audits in Nigeria for one of the oil companies.

What became very, very clear was that the relationship with the community was so fraught with conflict, I mean, there was just no trust. In fact, it was worse than that. There was a real antagonism that had been building for years and years and years. There’s a long history there of environmental pollution, but also the execution of Ken Saro-Wiwa who was a human rights activist in Nigeria. One of the oil companies was implicated because they were very close to the government, and so on.

What’s the result of that? Well, not only if there’s a crisis is that community completely non-forgiving, but that community is actually causing crises. There’s a lot of pipeline sabotage that goes on.

For them, this is a way to in a way to exploit and to extract from the company. Because they do that in the hope, not only that it would damage the company, but that they might get compensation for having been negatively affected by that spill.

This was a few decades ago, but I’m still not sure that they’ve managed to repair that relationship even today.

Risk Register

Michael Organ: “I used to be a managing director at a public affairs firm. One of the services that we would provide to clients is something that we called a ‘Risk Register.’  We would brainstorm all of the potential risks of PR damage to a company. Then you would assign two kinds of probabilities: the likelihood that the potential risk will happen; multiplied by the likelihood that if it did happen that it would have a significant effect on the shareholder value of the company.

You would know which of these potential crises were worth addressing – in our case, with pre-planned communications.

But now I’m wondering, based on your comments, if this Risk Register could have another purpose.

Could a Risk Register be used to guide a company to engage in reputation-boosting activities which offer the best inoculation for the most concerning potential risks?

Professor Visser: “Yeah, I think that’s exactly the right approach. You look at where you’re most exposed, where the highest risks are, and then you proactively try to mitigate those upfront by building those relationships of trust.

Certainly, by the time the crisis happens, if you haven’t got those relationships, it’s too late. Your best prepared speeches and communications simply will be discounted.”

BP Deepwater Horizon Oil Spill

Professor Visser: “We saw this a little bit with the BP Deepwater Horizon explosion.”

Michael Organ: “On April 20th, 2010, the BP Deepwater Horizon oil rig exploded in the Gulf of Mexico.”

PBS Frontline: <explosion> then unintelligible.

National Geographic’s ‘Deepwater Horizon’ documentary: “The rig is blowing! The rig is blown!”

PBS Frontline: “Time 21 03 15 Greenwich Mean Time. The Deepwater Horizon on a fire.”

Michael Organ: “Eleven workers were killed.  17 more were injured. For the next 87 days, 134 million gallons of oil spilled into the Gulf, the largest such disaster in U.S. history.

Professor Visser: “It almost sank the company. The company lost 50% of its value in 50 days. That oil spill went on for three months, devastating for the environment, for the communities, fishing all along that coast, and so on.

But it was also an exercise in crisis response because their CEO at the time just had no connection to those that were affected.

It wasn’t so much about what was said, but how it was said. Having an ability to be empathetic in times of crisis is a real skill and something that can probably be learned. It doesn’t always come naturally. Some people can do it easily. Others really have to work at it, but unless you come across as genuinely concerned, the message itself gets ignored.”

Michael Organ: “Two weeks after the explosion, British Petroleum CEO Tony Hayward accepted responsibility for cleaning-up the oil but blamed others, telling NBC News that, quote, ‘Well, it wasn’t our accident’ and quote: “The drilling rig was a Transocean drilling rig. It was their rig and their equipment that failed, run by their people and their processes.’

A month after the explosion, while oil was still leaking uncontrolled, Hayward tried to downplay the impact of the disaster, telling Sky News that the environmental damage would be, quote, ‘very, very, modest’. Listen for yourself. Here is then BP CEO Tony Hayward:

BP CEO Tony Hayward: “Everything that we can see at the moment suggests that the overall environmental impact of this will be very, very modest.’

Professor Visser: “The company culture was not credibly seen as one that cared for people, because they’d gone through a decade of cost cutting. Sadly, it was under their previous CEO, but their incumbent CEO kind of paid the price for that.”

Michael Organ: “When a narrative of corporate irresponsibility already exists in people’s minds, they may ‘see’ patterns that reinforce their beliefs, like this retrospective report from PBS Frontline.”

PBS Frontline: “Internal documents show that BP engineers were debating how to cut costs on a project that was already way over budget… They were cutting corners on an operations side trying to get by with less. BP bypassed a key test, called a cement bond log. BP saved more than $100,000. BP cut the number of centralizers used to secure and plug the well. This saved over a million. BP also chose to remove heavy drilling mud that was helping keep gas underground. Instead, replacing it with lighter seawater, saving millions more.”

Michael Organ: “Ultimately, BP spent at least $71 billion on remediation efforts following the Deepwater Horizon oil spill. Much of that money was allocated to doing the right things including supporting the affected communities – which makes this next audio clip especially ironic.

What you’re about to hear is Tony Hayward talking to business students at Stanford University prior to the Deepwater Horizon oil spill. As the incoming CEO, Hayward outlined what he intended to change at BP. To be fair, Hayward did discuss plans for BP to re-commit to safety and bolster operational expertise. But, during that same talk, pre-Gulf disaster, the CEO also identified what he perceived to be another problem at BP.”

BP CEO Tony Hayward: “We had too many people that were working to save the world. We sort of lost track of the fact that our primary purpose in life is to create value for shareholders.”

Michael Organ: “Mr. Hayward stepped down from his position as CEO six months after the BP Deepwater Horizon explosion.”

We’ll be right back.

Stakeholder Materiality Assessment

Michael Organ: “What is a Stakeholder Materiality Assessment?

Professor Visser: “That’s a bit of jargon, just to say: A structured process of listening to all of your stakeholders – to listen to which of the issues they care most about (either because there are issues that are having a big impact on them, or that you’re having a big impact as a company on those issues – and that’s affecting them).

That gives you half (of) the Stakeholder Materiality Matrix. The other half – a little bit like your risk approach – is how much could those issues impact the company’s performance.

You end up with a set of issues which are prioritized because they are high importance for the stakeholders and high impact for the company.

Michael Organ: “Okay, let’s suppose that the Stakeholder Materiality Assessment is done. How do I use the findings to reduce risk?

Professor Visser: “So if you if you decide that, having done that stakeholder consultation and prioritization of issues, that the top three issues are climate change, inclusion in the workforce, and tackling inequality – something like that – if those are the issues, then then you need to find the causes or the charities or the projects that align to those strategic issues.

The point is that they’re not issues you’ve dreamt-up. Or just based on who’s asking for your money. They’re aligned to the material issues for the company based on listening to the stakeholders.

I’ve done work with AXA, which is one of the largest European insurance companies. They have massive volunteering programs, big charity walks, things like that. They often link to health. It’s one of their biggest issues. They’re in the business of insuring health.”

‘Positive Lobbying’ (for CSR) to Level the Playing Field

Michael Organ: “How do lobbyists leverage their companies CSR activities to influence policy makers and regulators?”

Professor Visser: ”By and large, companies have engaged in negative lobbying; have tried to influence policymakers to have less legislation on social and environmental issues.

You, unfortunately, have had the contradiction where you’ll have a CSR or sustainability department advocating for all the things that we believe in – that are good for society and the environment — while another part of the company, usually the legal or the corporate affairs part, will be lobbying against legislation on those issues.

So, we have to be very careful and as transparent as possible about that negative lobbying.

And as much as possible, there shouldn’t be a contradiction between the goals of sustainability and responsibility and the lobbying activities of the company.

Positive Lobbying

But there is an opportunity for companies to get involved in positive lobbying, actually asking for more and better legislation on some of these issues.

Because, they might be values driven, they might say: ‘We really believe in this stuff. We’re investing in it and we don’t want to have first move a disadvantage, right? We don’t want to be the only ones investing in it. So, can you level-the-playing-field as regulators? Can you make sure that everyone has a minimum standard on these issues?’

I’ve experienced with a company where they had a lot of lead in their operations and asbestos. Over time, we learned that these are toxic and were getting out into the community. So, they recognized that this is a strategically important issue for them, because they believed in the health of the community.

They saw the legislation would come. They actively engaged with the legislators to say, ‘Firstly, can we make it come quicker to help us also to phase these things out? But can we make it so that it covers everybody and there’s a level playing field.’

So, then you have an opportunity to shape the legislation and that can save you a lot of expense.

We see this in the motor industry, for example with electric cars. A lot of companies are still paying Tesla billions of dollars because they can’t meet the emission reduction targets in Europe especially; California for some. They’re buying carbon credits from Tesla. Strategically, Tesla recognized a few things and just got ahead of that legislation. And they’re reaping the benefit now.

Michael Organ: ”When we return, Professor Visser answers the Big Question: Not the one I planned, but as it turns out, I got the answer I needed — maybe you will too.“

The Big Question

Michael Organ: ”The floor is yours. Is there anything that I have not yet asked you that you would like to comment on?”

Professor Visser: “No, but I will do something which I always do rather cheekily, especially on podcasts, but even in my presentations, which is to suggest that I end with a poem – which is something a little different.

It’s important because I’ve realized that you can’t rationalize your way to the to the changes, right? You have to get people’s hearts, and maybe even their spirits as well as their heads, if they’re going to come on the journey. So, poetry is just one of the ways that I do that.

OK, so this is a poem of mine called ‘Change the World.’

Change the World

Let’s change the world, let’s shift it
Let’s shake it and remake it
Let’s rearrange the pieces
The patterns in the maze
The reason for our days
In ways that make it better
In shades that make it brighter
That make the burden lighter
Because it’s shared, because we dared
To dream and then to sweat it
To make our mark and not regret it
Let’s plant a seed and humbly say:
I changed the world today!

Let’s change the world, let’s lift it
Let’s take it and awake it
Let’s challenge every leader
The citadels of power
The prisoners in the tower
The hour of need is upon us
It’s time to raise our voices
To stand up for our choices
Because it’s right, because we fight
For all that’s just and fair
For a planet we can share
Let’s join the cause and boldly say:
We’ll change the world today!

Let’s change the world, let’s love it
Let’s hold it and unfold it
Let’s redesign the future
The fate of Earth and sky
The existential why?
Let’s fly to where there’s hope
To where the world is greener
Where air and water’s cleaner
Because it’s smart to make a start
To fix what we have broken
Our children’s wish unspoken
Let’s be the ones who rise and say:
‘We changed the world today!

Michael Organ: ”That’s beautiful. And inspiring.

You’ve spent years studying corporate responsibility and teaching others. What has that meant for you?”

Professor Visser: “I do want to make a positive difference. I want to feel like I’ve not wasted my time here on earth.

I talk and I write a lot about hope because we live in a world that has many big challenges. A lot of the problems that I’ve been looking at for three-and-a-half decades continue to get worse rather than better. So, hope becomes a scarce commodity, right?

So how do you continue to work in this field without giving up or feeling overly anxious?  The only way to do that is by understanding how change works.

It turns out that change doesn’t happen in a linear, slow fashion.

It seems to not happen at all, and then it happens very quickly. Sometimes, that’s negative. Things break down. But, it can also be positive.

So, what I get out of it is this excitement of working or focusing on the solutions – and especially the innovations – that are on that exponential curve of reaching a tipping point and then ushering in change very quickly. Because that’s the antidote to that sense of hopelessness.

We have to understand that the world can change for the better very quickly, and that innovation and technology and science has a really, really powerful role to play here.