Speaker 1: Hi folks, Alex here. Most corporations are in the business of making money, but there are many ways in which they can take responsibility for their social environmental impacts and there is much to gain by doing so. This is often called corporate social responsibility. In this video we're going to look at what we mean by corporate social responsibility, how good corporate citizens make a lot more profit, and we're going to look at three examples, Ikea, Starbucks, Patagonia, and see if we can figure out who's real and who's faking it. Okay, let's get drawing. On this channel we share tools for you to change the world, so subscribe if you're into that. This is why companies have to take corporate social responsibility seriously. This is a representation of all the major social environmental scandals Ikea was involved in worldwide between 1981 and 2006. These were about waste, dangerous chemical use, child labor, poor working conditions in factories, wood procurement, etc. And this is not because Ikea is worse than the others. If anything, it is probably one of the more decent corporate citizens out there. But any major corporation is under a lot of scrutiny. Add to that the fact that 40% of consumers seek purposeful brands and trust in brands to act in the best interest of society, 70% of Millennials listed their company's commitment to the community as an influence on their decision to work there, and 50% of Millennials said they would take a pay cut to find work that matches their values. CSR matters. Originally, corporate social responsibility was a self-regulated way for businesses to include philanthropic and charitable contributions in their organizational policies. With the emergence of environmental issues such as climate change, toxic substances, plastic pollution, etc., NGOs appeared as well as industry-wide, national, and international regulations, and social pressure became greater, forcing corporations to address and report on the way they were running their business. Nowadays, when businesses report on their CSR, it usually includes their business ethics, how much money they donate to charitable organizations, compliance with regulations, norms, standards, and labels, working conditions, how their business affects local communities where they work, the environment, their supply chain, and their carbon footprint. In other words, corporate social responsibility is about capturing opportunities and avoiding risks. According to Bob Wheeler's research, any company that embeds corporate social responsibility within its DNA can increase its profit dramatically, by 51% for small and medium businesses to 81% for a large corporation, mostly through these seven benefits. Increased revenue and market share due to better product and more customers. Reduced energy and waste expenses. Reduced materials expenses from dematerialization and substitution. See my video on circular economy for more details on this. Increased productivity and reduced turnover because people like working for a company that does good in the world. And reduce risks on talent management, brand image, compliance to regulations, customer demand, etc. There is the link in the description below if you want to find out more about that. Essentially, corporate social responsibility is now another word for corporate sustainability and it is just smart business. Let's look at a couple of examples of what companies do. When searching online for companies who were reputable for their CSR, I ran into Starbucks many times. So let's have a quick look at what they are doing. On the social front, they claim that their coffee is 98.6% ethically sourced, meaning fair trade, there is no mention of organic. That they trained 200,000 farmers and invested in farmer loans and emergency relief funds. Now, Starbucks has to do this because the business of coffee growing is at risk altogether due to farmers worldwide not having the financial means to adapt to climate change and the fluctuating price of coffee. In 2019, before the pandemic, 2.8% of the drinks were served in reusable cups. As an order of magnitude, this left more than 3 billion disposable cups going to the landfill. And the disposable cups are made of 10% post- consumer fiber. I personally don't call that leading in sustainability. In a trash audit performed by Greenpeace in 2019, Starbucks also ranked as the third most polluting company in Canada where I live. Another name that comes up often in the world of CSR is Patagonia. But in contrast, they acknowledge at the top of their sustainability web page that everything they make has an impact on the planet. On the environmental side, 64% of their materials are made from recycled fibers. And since 1996, 100% of the cotton they grow for their clothes is grown organically. On the social side, 82% of their line is fair trade certified zone, impacting more than 72,000 workers. They're also part of One Person for the Planet, providing support to environmental nonprofit organizations around the world. More importantly, Patagonia produces videos engaging their customers to buy less, demand more. As you can see, there can be a big gap between what two well-respected companies do when it comes to corporate social responsibility. Thousands of corporations have taken action to become a better corporate citizen because the risks of not doing it are too great and the benefits of doing it are huge. From Coca-Cola to Nike and even Exxon, they all want you to think that they are social environmentally responsible companies. But how do you figure out who is telling the truth? Well, to be honest, you have to educate yourself and use your own judgment to read between the lines of companies' slick marketing. For me, a good rule of thumb is to make sure that I look at both how companies make their profit, for example, what are the direct and indirect environmental impacts of their products and services, my video on the sustainability analysis of an iPhone can help, for example, and how do they treat their people and suppliers in the process, and secondly, how they spend their profit. Do they invest in their people, in sustainable innovation, or are they making their shareholders richer? As fellow YouTuber or Changing Climate explained in a recent video, the money donated to charities can be misleading and doesn't tend to address the root causes of our sustainability challenges. Finally, tools and frameworks like the ones I presented in previous videos can also be helpful to make up your own mind in a rigorous way. There is also a private certification of social and environmental performance of for-profit companies called B Corp. Companies get the certification by receiving a minimum score on the assessment and by integrating B Corp commitments into their governing documents. This will probably be the topic of another video. The good news is the companies that genuinely put their business at the service of the people and the planet get the goodwill of the marketplace and end up doing well by doing good. As

Speaker 2: Interface's late CEO put it, there is no amount of slick advertising at any cost that we could have done that would have created the goodwill that this effort

Speaker 1: has created. If you found this video useful and are wondering how you can help me make more, you can do this on Patreon. In a nutshell, you make a pledge that will apply to each new video I will post in the future and you get perks like your name in the credits, access to my drawings, a character drawn after you in the next video, etc. It helps me cover the production costs and stay independent. If you can't or don't want to, that's totally fine. You can always subscribe, give this video a like and share it with your friends and colleagues. Thank you to all the patrons who make these videos possible and thank you for watching.