Monday, 13 May 2013

Net positive - what's AI going to give back?

There's an argument that companies just out to maximise profit are seen "as built for another time", and that the debate has moved from businesses being "less bad, less rubbish, less evil" to becoming net positive contributors to society:
Today, businesses that pursue commercial interests without giving due consideration to the communities they're involved with are not competitively advantaged; ... and are well on their way to becoming socially irrelevant to customers… Brands such as BT, Coca Cola, Kingfisher, IKEA and Rio Tinto are seeking to go one step further than simply doing well by doing good. They are pioneering a new breed of sustainability strategy that doesn't just create shared value for society, but means they give back more than they take… Kingfisher and IKEA aim to create more forest than they use in product; Coca Cola aims to return as much water to nature as it uses in its products and their production; BT wants to help consumers cut carbon by at least three times the full carbon impact of its business by offering greener products.
We all know what Aggregate Industries takes - from the ground and from local communities - and how environmentally disrupting and polluting its business is, but what could it give back?

If AI thinks that giving back is screening a quarry with a few trees, hoping for the best when it comes to dust, noise and flooding, and then, if it cannot win permission for something more lucrative - or sell the void to someone who can, repair the damage in 10 maybe 50 years later, it needs to think again.

Quarries are seen as bad neighbours. In fact the worst neighbour, "beating casinos and power stations as most hated form of development". Why is this?

Could it be that quarry operators are seen as just taking and giving nothing back, and then reneging on promises they make about restoration? People might be prepared to accept a few years of aggravation, noise, dust and loss of amenity if they could believe the land would be restored - improved even - rather than ending up with incinerators, composting, landfill or the rest.

Until its demise, the Aggregates Levy Sustainability Fund provided a modicum of benefit to local communities affected by quarrying. Now there's nothing. So what could AI as a company give back? Is there anything at all?

Well it could commit to year-on-year increases in the use of secondary and recycled over primary aggregate. It could work through the mountains of china clay waste aggregates littered across South West England, before despoiling any more greenfield sites. It could keep restoration promises, and leave land measurably and demonstrably better than when it arrived. It could include the amount of land restored as an environmental business metric - alongside carbon, energy, water, etc. It could give land over for community use - land that has been restored or is no longer viable for quarrying. It could value that land, and record it as a donation in its annual report; call it compensation for what a community next to a quarry has had to endure.

Does any of that make business sense? Perhaps not, if the only metric by which a company is judged is profitability. But customers increasingly measure a company by its social and environmental footprint, as the moves by BT, IKEA and Rio Tinto demonstrate. 

AI will have heard these arguments many times before. At its 'Materiality Event' - a day encompassing "a series of workshops designed to identify and prioritise material issues for [AI]" - in London 2012 (with AI's CEO, managers and a variety of stakeholders present) AI was warned that it "needs to balance what it takes out of the environment and society by putting something back".

How much does AI currently put back? In the UK for 2011: 2 open days, 1474 hours recorded as community activities, and about £164k in donations. More than some companies, less than others, and nowhere near enough for its size or for a company that causes as much environmental damage. The donations amount to less than 0.02% of AI's UK turnover; that's less than 2p out of every £100 of sales or less than 5% of Holcim's CEO's "compensation" for 2012. Who needs compensating more - local communities affected by cement works and quarries, or the Gnomes of Zurich?