"You could say: 'the big corporations still have a long way to go' - but it’s about the transition as whole and how that process needs to be managed and organised"
Prof.dr. Rob van Tulder is an international political economist and professor of International Business-Society Management at Erasmus University’s Rotterdam School of Management (RSM). He conducts research in a number of areas including the degree to which multinationals are engaged in Corporate Social Responsibility. The MOOC ‘Driving Business Towards The SDGs’ developed by Van Tulder and his colleagues received an Excellence Award from the United Nations’ Sustainable Development Solutions Network. According to Van Tulder: "Sustainable production is a priority at many multinational companies. SDG12 is increasingly becoming a regular management issue."
"It’s no longer a question of if you’re going to adopt sustainable practices. The question now is how, who you are going to do it with and when," said Rob van Tulder earlier, during the launch of the Better Business Scan. This is an app developed by RSM in collaboration with the digital platform DuurzaamBedrijfsleven. Within 15 minutes, the app gives a business insight into its performance in terms of sustainable production, as well as the challenges it faces.
How is the business sector doing when it comes to SDG12?
"Our research shows that if we look at what 81 international “Global 500” companies consider to be important, SDG12 is ranked in 4th place out of 17 SDGs. SDG12 has been embraced by many businesses. However: there are still challenges when it comes to actually implementing it. At the same time, the intent to embrace it makes sense due to the strategic importance of a properly organised chain of producers and consumers."
But we still have a long way to go?
"From a legal perspective you could say these are just empty promises, there are usually no enforceable regulations. But from a management perspective you could also say that change begins with intent, and if done effectively, this intent could have even more of an impact than legislation. In my book Getting All The Motives Right (2018), I try to identify which motives businesses need to take on board to develop strategies that point in the right direction. There are barriers in the way, but none of these barriers is insurmountable. They require new business models, new mission statements and new types of collaboration.
So it’s obvious why businesses ‘have a long way to go’. If C&A wanted to make its entire chain sustainable, it would also have to convert the thousands of garment workshops across the world they do business with to more sustainable practices. These are massive challenges and that’s why I don’t think it’s fair to say 'big corporations still have a long way to go'. The research I’m doing shows that you’ve got a problem if you’re a business that hasn’t embraced SDG12. As a company, you’re putting yourself in a vulnerable position. For example, you – and rightfully so – open yourself up to strong criticism from society if child labour is discovered in your chain and you haven’t given any thought how you would deal with this problem in the long-term.”
Is it mostly about image?
"No, it’s really about the business model used by companies. Research shows us that large corporations who superficially work on SDGs just to improve their image are in a weak position. While image is important, so is supply quality, attracting long-term investors and other similar types of factors. You also increasingly get a competitive advantage if you embrace SDG12. While the purchasing behaviour of consumers is primarily influenced by low prices, governments are becoming more critical. They want to work with companies that demonstrate a commitment to SDGs, and government purchasing policy is a massive market. And another reason that is slowly but surely becoming clearer: if European companies want to compete with large Chinese companies, for example, they should avoid trying to outdo them by offering low prices. They can’t win that battle. The smart thing to do would be to pursue a policy of better prices for suppliers, which would improve the performance of the chain. Or come up with better features so the product is more attractive to customers.”
"If C&A wanted to make its entire chain sustainable, it would also have to convert the thousands of garment workshops across the world they do business with to more sustainable practices. These are massive challenges"
What’s the scope of this ‘transition’?
“Suppliers, customers and partners are also part of the chain and they also have to be made sustainable – in an ecological, social and economic sense. My research on this subject is on a global scale. I look at ways we can develop new, innovative business models and chain models.
Here’s an example: Unilever works with 40,000 small tea growers in Sri Lanka. If they want to make this chain sustainable in the long term, this would entail fewer farmers who would grow tea. These farmers would work more efficiently, and there would be better working conditions, or the entire community would benefit. In a business sense this is relevant to the sustainability agenda, but it presents a very complex challenge in social terms. How do you deal with the farmers who ‘lose out’ due to this transition? How do you arrange for a social safety net, for example, for the farmers you no longer do business with?”
Do you have an optimistic view of the future?
"The SDG agenda is positive and it has come at an especially opportune time, if you look at the major challenges we are facing as a society. The stated objectives of the SDGs are positive and as far as I’m concerned, they have nothing to do with ideology or politics. Instead, they are pragmatically worded objectives that no one would object to. And they can be achieved using what we refer to as ‘multi-stakeholder engagement’. I’m not someone who tends to stand on the sidelines.
One of the most important SDG principles is ‘partnering’, working together. Government, businesses, NGOs, and knowledge institutions are expected to work together and contribute to resolving the challenge: how are we going to make this happen?”
As a scholar, what is your role here?
“For all of these transition issues, one of our roles as a university is to conduct fundamental research. In addition to this, we also do what is called 'collaborative action research'. That involves working with different parties to come up with better business models and measuring whether we’re moving in the right direction. When it comes to SDG12, part of the wheel still needs to be invented. I’m the Academic Director of the Partnerships Resource Centre which works with various parties such as businesses (such as Philips and Unilever), government agencies (the Ministry of Foreign Affairs), and civil society organisations (such as Solidaridad and the World Wide Fund for Nature) and other knowledge institutions.”
Could you provide an example of your research?
"Right now, for example, we’re conducting research in the southern Philippines, in a war zone. In this area, you can see that by sustainably producing bananas, a local banana company has a positive effect on the conflict raging there. They want to make the chain sustainable, get the community involved, and there are more employment opportunities. Farmers are paid more and at the same time, they look after the rainforest. The initial reasons for the war are in part due to the same factors: the ecological system is dying, there are high rates of poverty and unemployment among young people - these are the actual causes of conflict. In the past, competing companies used another model: Japanese and American companies pursued a policy of paying the lowest wages possible, without any consideration for the natural environment. That approach is partly responsible for this conflict. We’re seeing that this banana company has managed to make a significant positive impact thanks to its sustainable approach. There are multiple motivating dimensions at play here: as a researcher I sat in on a presentation in the middle of the jungle. A presenter from the corporation presented a slideshow with the SDGs and said, ‘we endorse this and we want to be a part of it'. This is a great example of how a business with a pragmatic business model can offer a solution for a much larger societal issue. This experience is encouraging and inspirational, and hopefully it helps universities to focus more on research that’s relevant to society."