Earth Summit workshop: Trust must be rebuilt
- September 2002
Building trust among business, government, and NGOs demands new approaches. Both business and government must change the way they operate in order to address the challenge of sustainable development effectively. This was one of the conclusions, which emerged from a workshop on trust and transparency held in Johannesburg during the Earth Summit.
Video highlights
The workshop entitled 'When Trust is Challenged: Dilemmas and Opportunities in Corporate Transparency' was co-ordinated by Novo Nordisk, Deloitte Touche Tohmatsu, and the University of Cambridge and attracted a wide range of high-profile representatives from the international business community and the NGO environment as well as government and academia.
The day began with panel presentations followed by a plenary discussion. On the panel were seven specially invited representatives of business, government, and the NGO community.
See their live presentations by clicking on their names below.
Moderator Tim O’Riordan, Professor of Environmental Sciences, University of East Anglia and UK Commissioner for Sustainable Development, opened the workshop with a presentation on the importance of trust and integrity in society. He predicted a fundamental change to the role of business over the next ten years and emphasised the need for personal commitment to the corporate responsibility agenda at an individual level.
Carsten Staur, State Secretary, Denmark, delivered the first panel presentation addressing the challenge and role of governments in relation to sustainable development. In particular, he emphasised the importance of partnerships between governments and businesses, describing as an example the Danish government’s participation in the World Diabetes Foundation recently established by Novo Nordisk.
Novo Nordisk’s Executive Vice President, Lise Kingo pointed to the necessity for new business models to replace existing models. Sustainable development, she argued, could not be tagged onto the present way of operating, but must be integrated into all business processes. Partnerships were one way of bridging the gap until new models had been found.
Craig Bennett, Friends of the Earth, called for regulation as the only viable means of making companies conduct their business in a sustainable and responsible manner. In particular, he called for a new framework entailing rights (for citizens), duties (for companies), and strict rules to ensure high standards of corporate behaviour.
Executive Vice President of Anglo American plc, Michael Spicer, gave examples of successful business investments and initiatives to further the sustainable development agenda. Pointing out that many current initiatives are led by business, he emphasised the merits of voluntarism, such as dynamism, innovation, and entrepreneurship, but also mentioned the risks involved for business and the challenge of meeting NGO demands.
Michael Brinch-Pedersen, Managing Partner, Nordic Partnership, WWF, discussed different aspects of trust, emphasising that trust cannot be bought but must be earned. Can citizens trust business with building the framework - or at least part of it - upon which they base their lives? Brinch-Pedersen’s answer was “yes”, but there is a need to look for leadership in business.
The global leader of Environment & Sustainability, Deloitte Touche Tohmatsu, Preben J. Soerensen, talked about the relation between trust and corporate behaviour, stressing that transparency and communication are key vehicles to gaining public trust. Sustainability reporting is one means to communicate and be transparent, but there are challenges in relation to future reporting frameworks and guidelines, stressed Mr. Soerensen. To be effective, sustainable development must be integrated into main business processes.
Rt Hon Rhodri Morgan, AM, First Minister, Welsh Assembly Government, spoke about the difficulty in regaining trust that has been lost, pointing to the general decline in public trust in authorities, scientists, etc. The new UK research centre for Business Relationships, Accountability, Sustainability, and Society (BRASS) based at the University of Cardiff is one forum, which he hoped may contribute to the rebuilding of trust between stakeholders in society.
The panel discussions were followed by a Questions & Answers session. Please note that the length of this video is 46 minutes. You can scroll to specific topics using the bar below the screen.
The concluding plenary discussion touched upon issues such as the role of the media and marketing departments; the perceived mismatch between companies’ branding and marketing and their actual sustainable development activities; green washing; and voluntary versus regulatory approaches to Triple Bottom Line reporting.
In the afternoon, delegates gathered in groups to discuss the issues of trust and transparency.
Summary: Shared values and accountability vital for trust building
The lack of transparency, accountability, and inclusivity, as well as unequal power relations, were seen as the main reasons for the breakdown in trust. In addition, the growing role and importance of values were seen to be central to the debate of building trust. Consistent and shared values need to be established as a pre-condition to building trust between partners. When personal, individual values are negated by behaviour required by corporate objectives, trust is undermined – both internally and externally.
These factors combine with fear of the increasing power of multinationals, the distrust created by past experiences, and the disappointments caused by unfulfilled promises and agreements on all sides. Ineffective and untruthful leadership combined with overblown marketing programmes, which distort facts in the interest of vested parties, complete the witches’ brew, and we find ourselves in an increasingly dysfunctional society incapable of trust. Yet relationships of trust are essential for people to work and live with others.
Solutions proposed by delegates first addressed the most obvious responses: adopting a more accountable business model by providing more power-sharing, greater openness, a heightened commitment to integrity, and especially inclusivity. “Accountability is the essential basis for building trust,” said Preben Sorensen, global partner for environment and sustainability at Deloitte Touche Tohmatsu. “It provides the foundation for needed change.”
Extending stakeholder interaction and partnerships
Moderator Tim O’Riordan, UK Commissioner for Sustainable Development, added that the next vital element was greater stakeholder participation at all levels. “That requires due deliberation as a vital ingredient in building trust and understanding. Stakeholders must genuinely believe that they can influence outcomes, that their views are heard and opinions listened to and that provision is made for their recommendations,” he said.
Lise Kingo, Executive Vice President at Novo Nordisk, stressed the need for this positive interaction with stakeholders. “Trust is gained by a willingness to deal with dilemmas,” she said. “And there is a need to redefine business models – just adding a bit of social responsibility and environmental concerns to initiatives and strategies already in place is no solution.”. With that, she introduced the concept of a fundamental change in doing business, with a greater emphasis placed on partnerships.
“Much time is required to build a dialogue and understand different viewpoints,” she said. “The challenge is learning how to talk and understand different viewpoints,” she continued, adding that trust is also reinforced when parties can accept that they will not agree on all issues, but can still find common ground to move forward.
Paradigm shift necessary
Delegates then considered the opportunities now available to those companies, which by their actions could show their accountability and thus their trustworthiness not only to partners and other stakeholders, but also to the investor community and the public at large. “The pressure from the capital market to pursue shareholder value at all costs has proved wrong,” pointed out O’Riordan. The failure has to a certain extent paralysed the investor community, but it provides unprecedented opportunities for companies to show that an accountable business makes a successful business.
Delegates agreed that a paradigm shift is needed. The old models and structures are sterile. Business needs to be assessed not only according to financial criteria, but also on wider issues, such as its contribution to wellbeing, livelihoods, environment, and social impact. Business itself needs to take action against those organisations that operate without conscience or scruples.
There was a level of consensus that what companies should do might well be imposed by regulatory frameworks, but how companies should do this should be left to the companies themselves to create innovative approaches. While some delegates called for strict regulations of corporate reporting, others felt that a voluntary approach allowed for the necessary development and innovations.
