Environmental and Social Management

Environmental and Social Management refers to the approach organizations take regarding their environmental and social impact.

Nowadays many companies are including corporate social responsibility, strategic shared value, and standardized reporting in their main processes. Some of them consider sustainability and the Sustainable Development Goals agenda part of their strategy.

A New Perspective

Teal principles will reinforce the organization to sustainability, because social and environmental impacts will be part of the daily life. From an Evolutionary-Teal perspective, it all starts with inner rightness.

As employees, we may have genuine concerns about the environment and the communities we work in. In Teal Organizations, power is decentralized; therefore, environmental and social initiatives can be initiated by passionate people joining forces from any place in the organization.

When we come from a place of wholeness, we feel compelled to do our share to heal our broken relationship with life in all its forms.

Teal tends to zero waste, zero toxicity, and zero impact on ecosystems

For now, initiatives such as B-Corps and Holacracy’s constitution provide interesting avenues for teal leadership.

Approaches to Environmental and Social Management have evolved over time from how can a resource be used or exploited to how can it be served.

Red organizations

The Red paradigm is based on social management via power. The organization is subject to nature and the environment, which might dictate tribal rhythms. Red sees the environment through the filter of the potential for use. What in the environment is open to be had, so that we may increase our ability to survive and prosper?

Amber organizations

In the Amber paradigm, organizations tend to be self-contained, standing apart from the outside world, and run by a hierarchy. Social priorities favor those with status based on birth, education, and gender. The environment is viewed as predictable and organisations seek ways to control it for their benefit, for example in irrigation projects.

With Amber, the first high cultures in the world emerged. The stable structures and long-term processes introduced brought unprecedented change to social structure and their potential.

Orange organizations

The goal-oriented organization of the Orange paradigm is focused on solving tangible problems. Growth is a consequence of successfully reaching your objectives, with a surplus of resources (profit). Not reaching objectives will over time, result in the organization dying. Thereis a belief that the strongest and best organizations will survive.

In Orange organizations, social and environmental efforts are usually focused on ensuring that legal obligations are met. This does not necessarily imply that Orange dismisses the value of these causes. It is rather that these organizations can only justify taking actions which benefit society and environment if these actions also contribute to the objectives of the organization. To Orange, such initiatives would otherwise need their own organization, with objectives that include those goals.

Some Orange organizations have embraced practices of Corporate Social Responsibility constructively. Some contributions have been remarkable. Orange organizations frequently use their CSR initiatives to support their brand image through marketing.

Green organizations

The Green paradigm considers the community (and by extension, the environment) as a stakeholder in the business. The pluralistic drive in Green means that it is important not only to be successful as an organization, but also to lift others up so that they also can be more successful.

Dialogue with stakeholders is part of green organizations and, at the time, one of the core issues in CSR strategies

The organization's mission is likely to include social responsibility. For example, Green organizations might work with suppliers in developing countries to maintain humane working conditions. They may focus on their carbon foot-print or strive to make products and packaging recyclable.

Teal organizations

Teal organizations see themselves as part of a living system. That includes not only the organization itself but also the environment around it. Therefore, Teal organizations often take action to improve also their surroundings:

  • Social and environmental responsibility arises from what is sensed to be “the right thing to do,” based on organizational values.
  • Significant steps are taken to reduce waste, toxicity, and other impacts on the biosphere.
  • New practices may spring from anywhere in the organization.
  • Cost need not be the prime determining factor.

As society as a whole shifts toward the Evolutionary-Teal paradigm, we may see more legal experiments along the line of Holacracy’s constitution and B-Corps. In the final chapter of his book, Laloux speculates about an even more profound change: Perhaps in a Teal society, we would no longer think in terms of ownership, but in terms of stewardship? Such a shift would have profound implications in terms of legal ownership of organizations. Only time will tell if and how such a scenario will play out.

In Practice

How environmental and social practices arise

Environmental and social practices arise from a sense of personal and corporate integrity.

The guiding question is: What is the right thing to do?

Initiative is distributed throughout the organization. Anyone can sense what is needed, and raise it.

Values before profit

Teal organizations strive to manage environmental and social practices ahead of profits. As AES said in a public hearing: “If the company perceives a conflict between ... values and profits, it will try to adhere to its values - even if doing so might result in diminished profits or foregone opportunities”.

Organization and environment are interdependent

The metaphor of a Teal organization as a living organism, with its own purpose and intent, extends to the environment. Both organization and the environment it lives in are considered to be part of a living system. As such, the organization is dependent on its environment and the social structures that affect it. That is, the organization cannot thrive without a healthy environment.

Teal organizations therefore often take a systemic approach to improve the environment or social structures in which the organization is active, especially when that environment is necessary to achieve the purpose of the organization.

Sustainability before short term gains

The theme of sustainability which is common in other Teal practices is also prominent in the area of environmental and social management. Teal insists on a long-term sustainable approach to delivering value. One of the reasons is that Teal feels that exploitation of life itself for short-term financial gain is immoral. Putting future potential of purpose at risk is considered reckless and the wrong thing to do.

Teal often takes proactive measures to improve the environment and social aspects of its surroundings for the long term - in order to increase sustainability of purpose ― even if there may not be payoffs in the immediate term.

Distributed initiatives

Power is decentralized: passionate people can initiate activity from anywhere in the organization.

When Patagonia moved its warehouse to Reno, four employees noticed that most of Nevada’s wild land was not protected wilderness. They sparked an initiative that resulted in 1.2 million acres of wilderness being protected.

Integrated into the business

Teal organizations do not (normally) have separate units for Corporate Social Responsibility. Buurtzorg adds new services in response to emerging social needs sensed by nurses, e.g. to help Alzheimer’s patients handle domestic chores.

Frequently Asked Questions

Encourage conversations that allow employees to raise their concerns. Create an environment that champions new practices. Social and environmental initiatives emerge when these values are aligned with the purpose of the organization.

Via the advice process, initiatives can be assessed for fit with values and evolutionary purpose first. Other criteria might include impact, urgency and affordability.

Self-management works to balance spending in line with values and purpose. Employees’ own integrity and sense of self-censorship work together to ensure that spending is in alignment. Just as Teal organizations do not measure accountability according to multiple bottom lines, self-management guides spending within business capacity. Teal organizations sense and respond. Budgets are used to make decisions; not to control variances.

Concrete cases for inspiration

Via the advice process, AES employees initiate environmental and social initiatives.

For AES, environmental and social initiatives start with inner rightness. Here is how AES expressed it in a public filing with the U.S. Securities and Exchange Commission when it offered stock to the public: "An important element of AES is its commitment to four major 'shared' values [1]. If the company perceives a conflict between these values and profits, it will try to adhere to its values ― even if doing so might result in diminished profits or foregone opportunities. Moreover, the Company seeks to adhere to these values not as a means to achieve economic success, but because adherence is a worthwhile goal in and of itself."

AES planted millions of trees to offset carbon emissions. This idea came from an employee in in Los Angeles, not the senior team. Initially there was no budget for this. Using the advice process, she built support for the money AES should put into tree planting. [2]

At Buurtzorg, social initiatives emerge from the interaction with the communities they serve.

One example is the creation of a unit called “Buurtdienst” (“neighborhood services”), which helps people like Alzheimer’s patients to handle domestic chores. Working with the same structure of small, self-organizing teams as in the nursing division, this project has grown to 750 employees in two years.

The organization was also approached by youth workers. In 2012, the first two teams of “Buurtzorg Jong” (“Buurtzorg Young”) started working with neglected or delinquent children. Social workers, educators and nurses work together with children and their families in their homes, and in collaboration with police, schools, and family doctors. They hope to overcome the fragmented and costly way that social services are traditionally delivered [3]

Environmental and social initiatives can start anywhere in the organization. To their surprise, they have found alignment to values may not undermine financial performance―indeed, quite the contrary.

Patagonia embraced reduction of their environmental foot-print ― even at the risk of negative impact to the bottom line. Yvon Chouinard, Patagonia’s founder, gives this example:

"In the mid-nineties, we decided to change the packaging of our thermal underwear. We were using a thick, wraparound cardboard header inside a heavy Ziploc plastic bag... For the heavier-weight expedition underwear, we decided to go without any packaging at all and hang them up like regular clothing... For the underwear made of lighter-weight material, we just rolled them up and put a rubber band around them. We were warned to be prepared for a 30 percent cut in sales... we were competing with companies...extremely competitive with their packaging... We did it anyway because it was the right thing to do. The first year this practice kept twelve tons of material from being shipped around the world... and being dumped into landfills... it saved the company $150,000 in unnecessary packaging... (and) brought us a 25 percent increase in thermal underwear sales. Since they weren’t hidden away in a package and had to be displayed like the regular clothing, people could feel the material and appreciate the quality. And since they were displayed like the other clothes, we were forced to make our underwear look like regular clothing, to the point that now most Capilene underwear tops can be worn as a regular shirt, fulfilling our goal of making clothes that are multifunctional."

Most strikingly, Patagonia resolved in the summer of 1994 to replace all conventionally grown cotton with organic cotton... The raw material cost three times more, and the cotton product line was reduced from 91 styles to 66. It was a big risk. And yet Patagonia felt there was no alternative... cotton fields that covered only three percent of the world’s farmland were responsible for 10 percent of the worldwide use of pesticide and 25 percent of the use of insecticides. Against all expectations, Patagonia’s organic cotton program turned out to be financially beneficial. More importantly, it has convinced others in the industry to follow suit.

When the company moved its warehouse from California to Nevada, many colleagues moved too. Some realized that Nevada has lots of wild country and federal land, but very little of it was protected as wilderness. Four employees took the initiative. They got support from company leaders in the form of salries and facilities. They built a broad coalition, went to Washington, and lobbied. As a result, 1.2 million acres of wilderness were protected. [4]

Connecting rural craftsmanship to global markets

Jaipur Rugs brings rural craftsmanship to global markets via handmade carpets. It is a family business based in Jaipur, and offers hand-knotted and woven rugs made using traditional art forms. The founder, Mr. Nand Kishore Chaudhary, created a business model which provides a livelihood for the artisans at their doorstep. This changed the standard practice of involving middlemen to work with artisan communities.

For more insight, please see the following articles from the founder:

A mission-driven enterprise

After being certified as a “B Corp” or Benefit Corporation in 2015, Camif chose to open a new era and become a pioneer “mission-driven enterprise” in France which means that by law:

  • The purpose of the company, called its “mission,” is defined and inscribed in legal statutes.
  • A form of commitment: the statutes formally commit the shareholders, and are accompanied by conditions to be met in order to abolish or modify the mission (generally obtaining 2/3 votes of each class of shares).
  • Control mechanisms associated with the mission, through the implementation of a reporting system, the rights of shareholders and third parties (or stakeholders*), as well as adapted governance mechanisms, accompany this legal system and ensure its control.

A concrete consequence of this commitment to mission is the boycott of Black Friday. Camif.fr closed its site on Nov. 24, 2017 for the first time to raise awareness of responsible consumption. An invitation is made to each one this day to make a step aside, to take distance on the habits of overconsumption. And to take times to think about adopting new behaviors like recycling, reusing.

With La Place https://www.camif.fr/laplace/, Camif proposes alternatives to overconsumption and aims to promote local products. La Place is a platform that brings together all the players in the responsible economy, repair, recycling or the social and solidarity economy.

(*) consumers, employees, suppliers, shareholders, local stakeholders

Related Topics

    Notes and references

    1. one of which is Social Responsibility, which triggered AES’s decision to plant trees ↩︎

    2. Source: Laloux, Frederic. Reinventing Organizations. Nelson Parker (2014), pages 160-172 ↩︎

    3. Source: Laloux, Frederic. Reinventing Organizations. Nelson Parker (2014), page 207 ↩︎

    4. Source: Laloux, Frederic. Reinventing Organizations. Nelson Parker (2014), pages 160-172 ↩︎