Corporate Social Responsibility Captures Attention of Owen and World Beyond
by Yvonne Parsons Poindexter | photography by Daniel DuBois
Six hundred and forty-nine miles southwest of Nashville, in the green-hilled town of McKinney, Texas, a state-of-the-art wind turbine rises 146 feet in the air. Its three immense blades spin gracefully atop the tower, turning, turning again, even when the wind hardly blows. The turbine generates enough clean electricity to power hundreds of lights below. An environmentalist’s dream machine? Maybe. But the real beauty of the powerful turbine is its placement: The energy-saving, emission-reducing turbine towers high above Wal-Mart.
PHOTO: Christopher Jones, MBA’07, Karin Thul, MBA’07, Jeff Gowdy, MBA’06, Julie Sinton, MBA’07, and others in the Owen community pull together to make Owen’s 2007 Net Impact Conference next fall a standout. Net Impact is an international organization whose goal is to use the power of business to make a positive net social, environmental, and economic impact. The conference is expected to attract more than 2,000 students and professionals.
The opening of Wal-Mart’s “experimental” Super Center in McKinney last summer was big news, but the event probably raised fewer eyebrows at Vanderbilt’s Owen Graduate School of Management than it did in most venues. Way before Wal-Mart’s green-leaning headlines hit the Wall Street Journal and the New York Times, Owen students were already talking seriously about corporate social responsibility (CSR). And when Wal-Mart’s CEO Lee Scott announced last September that the retailer was pioneering a zero-waste, renewable energy program, many Owen students had already benefited from a behind-the-scenes look at the company’s plans.
Not only are more Owen students today interested in taking courses involving corporate social responsibility, they are benefiting from the executives the school brings to campus to talk about the value of CSR to their corporations. And more are also participating in the school’s chapter of Net Impact, an international organization “whose mission is to improve the world by growing and strengthening a network of leaders who use the power of business to make a positive net social, environment, and economic impact,” according to the Web site.
Owen’s chapter is poised to make CSR even more integral to the Vanderbilt B-school experience. Thanks to the vision of Jeff Gowdy, MBA ’06, second-year students Karin Thul, Chris Jones, Julie Sinton, and others, Owen is busy planning to host Net Impact’s 2007 annual conference next fall.
Landing the conference is a coup for Vanderbilt. Previous conferences held at Harvard, Stanford, Columbia, Yale, and Northwestern, among others, lured speakers including former vice president Al Gore, Starbuck’s Orin Smith, and Barry Salzburg of Deloitte & Touche USA. Organizers at Owen expect about 2,000 students and professionals will attend the October event.
“It will help put us on the map of schools that take corporate social responsibility seriously,” says Mark A. Cohen, Owen’s Justin Potter Professor of American Competitive Enterprise and a leading expert on the enforcement of environmental regulations. “Who cares about that? Prospective recruiters and prospective students, to name two groups,” adds Cohen.
Corporations as Citizens
The timing of the conference may be particularly opportune for boosting the school’s visibility, as Net Impact’s mission has never been more relevant to or as embraced by corporate America as it is now.
“A decade ago, corporate social responsibility was a trendy idea promoted by quirky entrepreneurial companies like Ben & Jerry’s Ice Cream,” states material from a seminar on CSR sponsored last spring by the American Enterprise Institute for Public Policy Research (AEI).
At that conference, Cohen was among the internationally acclaimed group of speakers debating the significance of Wal-Mart’s unprecedented foray into green business practices.
The debate may rage on about Wal-Mart, but signs suggest that CSR is growing increasingly relevant in a business world shaped by globalization, technology, and social and environmental concerns that are intricately linked to firms’ financial bottom lines. A majority of the 250 biggest companies in the world issue separate reports on corporate responsibility—52 percent in 2005 compared with 45 percent in 2002— according to the KPMG International Survey of Corporate Responsibility Reporting in 2005. The survey also notes that CSR reporting has evolved from purely environmental reporting to sustainability reporting, defined as including social, ethical, environmental, and economic concerns.
Definitions of “corporate social responsibility” still vary—and some companies carry the banner in thinly veiled efforts to repair bruised public images—but by most estimates the movement to get corporations to think more holistically has evolved into something with staying power.
Corporate social responsibility encourages businesses to consider the triple bottom line: the impact they have economically, socially, and environmentally, explains Frank Dixon, formerly the managing director of research of Innovest, an internationally recognized investment research and advisory firm specializing in analyzing companies’ performance on environmental, social, and strategic governance issues.
While corporations struggle to “do the right thing,” attending more seriously to the triple bottom line, it would be naïve to say that the change of policies at places such as Wal-Mart are driven solely by a sudden greening of CEOs’ hearts, says Dixon, who consults with Wal-Mart and has spoken at Owen on a number of occasions.
“Activist efforts probably were one factor in Wal-Mart’s decision to adopt an aggressive sustainability strategy,” he allows.
Still, big corporations’ efforts to be more socially responsible go beyond risk management. In effect, the business world is rebalancing itself, say Dixon and others.
Corporations are learning that it can be bad business to focus solely on shareholder value—and that external changes, from greenhouse gases to the world’s burgeoning population—have a huge impact.
“Companies are part of a larger system, and they can’t prosper if the larger system doesn’t prosper as well,” says Dixon.
“Business is in a dominating position as never before,” agrees Bart Victor, Owen’s Cal Turner Professor of Moral Leadership. “Corporations—in contrast to government, activists, and religion—have the greatest power to influence social realities and the environment. Business is a mechanism, an institution, that carries our hope and expectations for creating freedom in the world,” he adds, commenting on business’ role in grappling with the likes of poverty and social oppression. Though the verdict’s out on how businesses will live up to such immense responsibilities, “it’s exciting to be a part of it.” As B-schools adapt, changes are likely to be driven in part by students preparing for business’ new social and environmental realities.
Case in point: This fall, Victor launched a new one-credit class titled the Business and Poverty Project. The new offering, created through student initiative, will expand Owen’s options for students interested in social entrepreneurship and microfinance. “Students wanted us to address the fact that 80 percent of the world earns less than $1,500 a year,” he explains.
Student interest in microfinance springs in part from the success of Vanderbilt alumnus Muhammad Yunus, PhD’72, founder of the Grameen Bank of Bangladesh, and 2006 winner of the Nobel Prize. The bank makes small loans to expand business in the interest of alleviating poverty. Yunus’ “micro-credit” concept is now being practiced in 58 countries. The United States alone has over 500 Grameen spin-offs, some battling poverty successfully in places like Chicago.
Changing the World
The Net Impact conference is another example of students’ interests taking the lead in bringing new thinking about corporate social responsibility to Owen. The Net Impact event will push Owen even more into the vanguard of schools capable of educating students about corporate citizens’ new roles, says Gowdy, whose decision to attend Vanderbilt turned in part on the school’s enviable inclusion in a ranking of business schools’ success in integrating social and environmental issues into the curriculum. (Owen was listed by the Aspen Institute/World Resources Institute in 2001 as having significant activity in teaching social conscience.)
Net Impact’s goal—using the power of business to make a positive net social, environmental, and economic impact—meshes well with the goals of Gowdy and other members of Owen’s Net Impact chapter, some 40 members strong. Gowdy as a student completed an internship with the New York City-based consulting firm GreenOrder, and today he’s embarked on a CSR-focused career as a consultant offering “profitable environmental and socially responsible solutions” for businesses and nonprofit organizations.
After losing the 2006 conference to the Kellogg School of Management at Northwestern University, Gowdy set his sights on winning the 2007 event and building student awareness of Net Impact, and more than doubled the chapter’s membership.
“I hope the upcoming conference will affect every student in a positive way,” he says. Organizers hope the conference—and future club activities—will charge the school in a way that themes of corporate social responsibility seep even more deeply into the business school’s curriculum.
Teaching Tomorrow’s Leaders
Owen and Vanderbilt already offer a number of CSR-related opportunities. Owen students now participate in two Leadership in Practice (LeaP) seminars while in school. The school kicked off the series for incoming students last year with a two-day seminar on ethics in the fall, followed by a two-day session on corporate social responsibility in the spring.
Through the series, Owen continues to bring multidisciplinary leadership-related business issues to students, Cohen says. Students entering Owen this year took part in seminars on the same topics during orientation. Among the guest speakers was Bernie Marcus, co-founder of The Home Depot. (See related article on page seven.)
Students opting for an environmental management emphasis also benefit by taking courses outside of Owen. Vanderbilt University Law School’s Mike Vandenbergh, for example, teaches Environmental Law, and the arrival of University Distinguished Professor W. Kip Viscusi from Harvard Law School this past spring could pave the way for a new offering in environmental economics.
The Vanderbilt Center for Environmental Management Studies, a joint initiative of Owen, the School of Engineering, and the Law School, opens up more options to environmentally minded students by promoting and developing alliances among industry, government, and academia. In addition to courses such as co-director’s Mark Abkowitz’s Reliability and Risk Case Studies, VCEMS promotes and helps fund faculty research and brings leadership summits to Vanderbilt.
Owen also partners with the School of Law in CSR-related offerings. Cohen coordinates with the Law School, for example, for his Private Environmental Law and Voluntary Overcompliance course.
Speakers and sessions are not yet known for Owen’s Net Impact conference, but student planners are being ambitious. Special tracts within the conference will focus on corporate social responsibility as it relates to the health care and music industries, reports Thul. “We’re hoping this event pushes Owen onto the national stage,” she says. “We’re already doing at lot at Owen regarding CSR—and we’re hoping the conference makes people take notice.”
Originally published in Vanderbilt Business Magazine (Fall 2006)
