Ethical Practices Provide the Foundation for the Development of Trust in Business: Bob Pojasek, Sustainability Leader at Shaw E&I Group

MUMBAI (IndiaCSR): Bob. Pojasek, Ph.D. is a client program manager – sustainability leader at Shaw Environmental and Infrastructure Group , a division of  The Shaw Group (a publicly-traded company based in Baton Rouge, Louisiana, USA). In this role, Bob is responsible for managing a range of sustainability management services for mid-sized and larger clients with corporate social responsibility and sustainability programs. Bob has been active in management consulting for nearly 40 years, helping senior corporate managers understand, plan and implement mainstream sustainability programs.

In an exclusive interview with Rusen Kumar and Harsha Mukherjee of INDIACSR,  Bob. Pojasek shared his views on various aspect on sustainability, CSR, best framework in CSR, global trends in sustainability, role of ethical practices in achieving business sustainability and lastly he recommended success mantras for CSR.

Bob. Pojasek says, “Ethical practices provide the foundation for the development of trust in business.  Ethical practices are usually outlined in a code of conduct.  This code of conduct needs to be a key element of any business and must meet the requirements of all customers and be extended to all contractors and suppliers.  There needs to be training and awareness programs to improve the conformance to these codes by the organizations using them.”

Here is the edited transcript of the interview.

Enjoy the interview:

Welcome to INDIACSR, Could you please introduce yourself and your involvement in Shaw Group?

I am Robert Pojasek.  I work for Shaw Environmental and Infrastructure Group , a division of  The Shaw Group (a publicly-traded company based in Baton Rouge, Louisiana, USA).  I am creating the internal sustainability program for our Boston office.  In addition to helping us “walk the walk,” I provide management consulting services to large companies seeking to better manage their sustainability/CSR programs and to help their supply chains do the same.

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Could you brief us about  Shaw Group’s Vision, mission and objectives as well as background?

Information on Shaw can be found on its website:  http://www.shawgrp.com/about/overview .You can get a lot of information on Shaw from its Securities and Exchange Commission Form 10-K report:  http://ir.shawgrp.com/phoenix.zhtml?c=61066&p=irol-sec

What are the sustainability projects initiated by you at Shaw Group?

The kinds of projects that I work on fall into several categories:

Developing integrated management systems to establish, implement and maintain a sustainability /CSR program – this helps organize the program and makes it easier to make the business case based on the results;

Development of sustainability management systems for supply chains to improve the value creation of the entire supply chain;

Use of performance frameworks (e.g., India Peacock Award and EFQM  (European Foundation for Quality Management) framework) to develop quantitative leading indicators that will drive the Global Reporting Initiative’s (GRI) sustainability results (lagging indicators) over the long term.

What is the present focus of your research at Harvard?

Besides my work at Shaw, I serve as an Adjunct professor at Harvard University.  I teach a distance learning course entitled “Strategies for Sustainability Management.” http://www.extension.harvard.edu/courses/strategies-sustainability-management . It is offered in the spring semester (January 2013).  I also serve as the thesis director for the Masters’ degree candidates conducting research on sustainability topics.  Much of my research centers on creating what stock markets refer to as a “looking forward” perspective on sustainability/CSR with the use of quantitative leading indicators that will drive the lagging GRI indicators over the long term.

What is the importance of the leading indicators & how many companies are implementing?

The GRI G3.1 reporting guidance focuses on sustainability results (lagging indicators).  Results are merely the outcome of performance, but do not measure performance directly.  To do this, an organization needs to use the quantitative leading indicators found in the EFQM performance framework. 

http://www.sixdc.com/globalcn/files/Global%20Business%20Excellence%20Snapshot%20Guide.pdf (I will also attach a paper written by a student based on research on this topic).  Similar frameworks are used in 70 countries, including India.  EFQM that 30,000 companies in Europe are using their performance framework.  Unfortunately, the sustainability/CSR professionals in these companies have failed to use them in their programs.  This is also true in the US.

Brief us about the activities of The International Society of Sustainability Professionals (ISSP)

The ISSP is a professional association consisting mainly of sustainability professionals in the consulting industry and SMEs. ( http://www.sustainabilityprofessionals.org/  ) I am on their Board of Directors.  The Corporate Responsibility Officers Association is also a professional association that consists mostly of CR officers of larger companies. (http://www.croassociation.org  ) I am the Chair of the Executive Board that operates the association.

Which is the best framework in Corporate Social Responsibility according to you in today’s date?

In my opinion, the best framework in Corporate Social Responsibility has a foundation of an integrated management system (starting with ISO 9001, ISO 14001 and OHSAS 18001) and adding portions of ISO 26000, ISO 50001, ISO 31000, and ISO 22301 to create a sustainability management system that works well for the organization.  The management system operates on the premise of:  say what you do; do what you say; do it effectively; and be able to prove it.  The sustainability management system provides the “what” for the sustainability program – it organizes it.  The EFQM 2010 Performance Framework (including the Framework for CSR and the Framework for Risk Management written with an MOU from the UN Global Compact) helps provide the “how” for the program through the creation of quantitative leading indicators that will drive the CSR results over the long term.  Shaw helps companies create a world class sustainability program using these internationally recognized programs.

Is the USA Government proactive on CSR? What are its key initiatives?

The US Government’s Security and Exchange Commission asks publicly traded companies to disclose operational, regulatory and reputational risks to the business. These companies must include the supply chain when they provide answers.  Sustainability/CSR programs are proactive ways to deal with these risks.  There is a Presidential Executive Order 13415 that orders governmental agencies to practice some elements of the environmental and energy components of sustainability. There is not a lot of governmental regulatory support for CSR/sustainability here in the US.  The American National Standards Institute voted against the ISO 26000 (social responsibility guidance standard).  We were one of only 5 countries voting against this standard.

Do the MSME engage in CSR activities in the USA. If yes predominantly in what ways?

SMEs are required to participate in the sustainability/CSR programs of their larger customers.  They receive scorecards that are used to rate their sustainability efforts. Walmart is a good example of this trend.  ISO started an initiative to help SMEs use management systems in a manner appropriate to their size. http://www.iso.org/iso/publications_and_e-products/checklists.htm#PUB100268The performance frameworks described in my previous answers have been used by SMEs. 

How do you see the evolution of CSR in future.

The evolution of CSR will be that the CSR programs are managed using integrated management systems as a foundation.  A sustainability management system can be created that meets the size and sector requirements of the organization using them. Customers will love the program since it will provide objective evidence of the CSR efforts. The CSR results will be driven by quantitative leading indicators – you need to have both to provide a “looking forward” perspective of the organization for the customers and investors. There will be much more coordination between the CSR personnel and the quality management personnel and other functional managers in the organization.  Governance will not be restricted to the Board of Directors but will pervade the entire organization. 

In your opinion, what are the most burning issues in business today?

The burning issue in business today is the volatility of the markets and constant change.  Companies need a good deal of agility to survive with all the ups and downs in the markets.  A company also needs to be innovative in order to maintain a preventive focus to the operational, regulatory and reputational risks that they face every day. ISO 22301 (business continuity standard) is a must for companies dealing with risks (ISO 31000) and wanting to gain the favor of their customers.  The performance frameworks will help companies both meet short term goals while meeting the longer term perspective necessary in sustainability/CSR.

Why are ethical business practices so important in today’s society?

Ethical practices provide the foundation for the development of trust in business.  Ethical practices are usually outlined in a code of conduct.  (see Australian Standard 8002). This code of conduct needs to be a key element of any business and must meet the requirements of all customers and be extended to all contractors and suppliers.  There needs to be training and awareness programs to improve the conformance to these codes by the organizations using them.

How will you define the business sustainability in the modern context?

Definition that I use:  “Sustainability is the capability of an organization to transparently manage its responsibilities for environmental stewardship, social well- being and economic prosperity over the long term while being held accountable to its stakeholders.”  Maintaining this practice requires total responsibility management in a way that we have had total quality management that is part of what every employee does every day. Management systems help with such a practice.

How do you see the industrialization in developing country like India in the coming 5 years?

India has been very progressive with the Golden Peacock Awards – http://www.goldenpeacockawards.com/  EFQM is also used in India:  http://www.cii-iq.in/events/QS_09/ppts/EFQM%20model%202010%20v3-India.pdf  There is also a performance award program in India:  http://www.cii.in/  Of course there is widespread use of management systems in India.  These elements can be integrated to help develop very strong CSR/sustainability programs both for the larger companies and their supply chains. Such a program would improve the competitiveness of Indian industry compared to China.

What are your success mantras and recommendations to combat the CSR challenges in the global market?

The CSR success mantras are:  Manage CSR with an SMS (integrated management system) as the foundation of the program. Drive the performance of that program with the EFQM performance framework and the Framework for CSR.  This will provide quantitative leading indicators that provide a looking forward perspective for the company and its supply chain.