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In
the 60s, it was fostered by protestors. In the 70s by a need to align
with social norms. But since it reemerged in the 90s, corporate
responsibility (CR) has undergone a paradigm shift. Previously reactive
and tactical, CR now is a strategic priority.
“What once was
set in motion by external factors is now put forward by CEOs
themselves,” says Steve Olson, director of Robinson’s Center for Ethics
and Corporate Responsibility, who attributes the shift to “a
fundamental change in the landscape.” Why the change? Evidence across a
broad range of industries demonstrates that CR not only minimizes and
mitigates harm but also creates opportunities for competitive advantage.
By way of illustration Olson cites Georgia’s carpet manufacturing
industry, which faced its darkest hour in 1995. The water utility of
the city of Dalton – known as “the carpet capital of the world” – was
charged with felony violations of the Clean Water Act for falsifying
records about wastewater discharge from carpet mills. “The Department
of Justice basically said to the industry, either clean up your act or
we’ll shut you down.”
What sounded prohibitively expensive
turned out to be the reverse. To meet the ultimatum, carpet
manufacturers combed through their operations and identified previously
unknown inefficiencies. Over the next decade, they reduced their water
use by more than 150 percent. In 1983 it took more than 21 gallons of
water to produce one square yard of carpet. In 2008 it took just over
eight gallons. “Every gallon saved also saves on energy and treatment
costs, which goes straight to the bottom line,” Olson says.
Since
1994 Atlanta-based Interface, Inc, the world’s largest maker of carpet
tiles, has saved more than $400 million in profit by wringing out waste
it didn’t know it had. Interface’s North American carpet tile business
is now more than 50 percent mass and energy efficient. “Considering
that the average American company is only about 13 percent efficient –
meaning that 87 percent of all energy and material expended to produce
goods and services is waste – the business case for corporate
responsibility is incontrovertible,” says Olson.
“Georgia’s
carpet industry is a shining example of the transformational power of
corporate responsibility as a catalyst for innovation,” says Olson.
“When I take my students to a arpet mill, their jaws hit the
floor. Time after time they can’t believe what they’re seeing.”
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