It’s hard to resist profit

Sirpa Juutinen’s essay begins by describing a shift she had watched happen. Corporate social responsibility “was once considered to be a phenomenon outside business, but this is no longer the case.” As director of corporate social responsibility services at PricewaterhouseCoopers Oy, she was reporting from inside the change rather than predicting it.

Then the thought experiment that gave the section its title, and which she states more precisely than the section introduction does:

“What, as a company CEO, would you do if incorporating sustainable development into your core business would triple one day’s sales as a consequence of you agreeing to spend a part of the profit on combating climate change while lowering your costs? It is hard to resist the profit.”

Sirpa Juutinen, PricewaterhouseCoopers Oy

The full version has three conditions the shortened one drops: sales triple, some profit is spent on climate action, and costs fall. Stacked like that the answer is trivial. The essay’s interest is not the hypothetical but the real mechanism it points at.

Carrotmob

That mechanism was a consumer movement using Facebook, MySpace, Twitter and similar networks to concentrate purchasing on a single day at a company that had agreed to spend part of the takings responsibly. “Whereas previously consumer and non-governmental organisations have resorted to the stick, responsibility is now being encouraged with the carrot.”

Juutinen is enthusiastic in a way that dates the essay pleasantly. She notes that the social networks young people favour make good global platforms for spreading ideas, then asks: “And why shouldn’t we middle-aged women join in, since someone has come up with such a brilliant idea? Shouldn’t the same idea also be introduced into sprightly pensioners’ own networks?”

Her structural reading is sharper than her enthusiasm suggests. The important elements, she writes, are online networks, rapid information flow, the ability to mobilise globally when needed, and rewarding positive action. The company gets cash flow and a positive brand image.

And she identifies the flaw: it decays. “So that cash flow doesn’t dry up after one good act, companies need to continually sense weak signals of change in customers’ and their interest groups’ expectations.” A single campaign buys a single day. Only a company that keeps reading what its stakeholders expect converts that into anything durable.

Her own caveat

Unusually for a consultancy contribution, the essay declines to oversell. This way of acting “may not solve the global challenges of sustainable development, but it sends a fascinating signal nevertheless.”

That is a more modest claim than the section framing around it, which presents profit-aligned sustainability as close to a general solution. Juutinen is describing a signal.

What became of both

Carrotmob itself did not last. It ran campaigns, attracted attention, and wound down without becoming an institution.

The pattern outlived the organisation completely. Coordinated consumer action organised through social platforms became a permanent feature of corporate reputation risk, operating far more often as the stick than the carrot she hoped would replace it. And the “weak signals” reading she recommended was formalised into something she would recognise: sustainability reporting standards, assurance services and disclosure regimes made stakeholder expectation a measured, audited quantity rather than something a chief executive senses.

Her own firm’s line of business grew accordingly, which the essay does not mention.

Where the argument struggles in aviation

The section built around this essay assumes the profitable move and the sustainable move eventually coincide. Aviation is the awkward test, because for most of the period since 2008 the cheapest fuel remained the most polluting one, and the industry’s decarbonisation route depends on fuels that cost more than the kerosene they replace.

Juutinen’s conditions require costs to fall. In aviation they rise. That does not make her observation about responsibility moving inside the business wrong, and it did move. It means the carrot she described works better in sectors where the two curves point the same way.

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