How might one empirically assess the contribution of business actions to peace?

This written discussion is part a new month-long Challenge with Indiana University around the question: “What role can business play in pursuit of peace?”  The Challenge consists an online programme of written articles and online discussions, available on the Challenge homepage.

 

Despite the fact that broad macroeconomic connections between business and peace have long been acknowledged more needs to be done.  This Challenge aims to deepen understanding around the role that business can play in peacekeeping, peace making, and peace building.

This discussion focuses on how one might empirically assess business actions and how such quantification might be valuable for businesses and society alike.  A one-hour live panel will take place on Wednesday 26 October from 10am ET / 3pm UK.

The discussion will focus on three questions:

 

  1. What are some of the options for empirically measuring the contribution of companies to peace?
  2. What are some of the issues involved in measuring the contribution of businesses to peace?
  3. Some argue that we should rank companies on their contribution to peace, or alternatively certify them against some standard.  Which might be better and should they be made public or used to inform internal management decisions?  What role should business play in developing these approaches?

 

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Regarding the first question, I believe there are many ways companies can contribute to peace. The most basic way is to just following the rules. By abiding to the laws and regulations, companies do not violate the public and peace will be made between the companies and the regulators. The second way is to apply some values which align with peace to the companies strategic objectives. This way, the main objective would still be likely to be profits, but the companies contribute some of its profits to organizations which promote peace. As an example, some companies provide discounts to military members, and also donate their profits to the military to promote global peace. Lastly, the most I can think of would be organizations whose main objective is to promote peach, such as the United States Institute of Peace.

Regarding the third questions, the current trends with companies can easily answer whether or not contribution to peace be made public or exclusive internally. Many companies took great corporate social responsibilities today. For example, Starbucks with their fair trade coffee beans, and Patagonia with their sweatshop-free labor practices. Companies are likely to promote their contributions to society as it would raise their image and attract more consumers. That is fair as the increased customers will be an important factor for other companies to also promote justice. Regarding the role they should play, I mentioned in my previous post that this can be achieved in three ways: by simply obeying the laws, support peace, and set the corporate target into mainly promoting peace.

Regarding to the second question, I couldn't agree more with Vijay Karmath and his idea which peace means differently towards different companies. Usually, a small firm wouldn't care much about developing its effort into maintaining the peace because of its limit resource. Nevertheless, a company will start to pay attentions in making this world a better place once it grows into a certain size. Generally it has two reasons to contribute to peace, one, company needs to build a good publicity; two, companies are looking for governmental supports, and certainly their contribution to the society will somehow win the trust of government officials because government is looking for the balance between the conflict and peace instead of eliminating all conflict-related projects. Overall, the final goal for a company is to generate more revenues that are less than what they spend, therefore, they might target at a different peaceful goal that is not directly related to its own benefits. For example, a company from diamond mining industry wouldn't stop to exploit diamond mines even though the general public is seeking for the stableness of the conflict area. Blood Diamond still exists today because people will never stop fighting for money. However, these big companies might put a lot of efforts in solving the poverty and hunger in these conflict areas, in which case their contribution to the peace is different from other companies.

I agree with you, Vijay. Many businesses have different views on peace. Therefore, it's hard to set up a standard to measure the contribution of businesses to peace. Furthermore, even if a standard had been established, it's hard to quantify the contribution of businesses to peace. For example, the company A donates $10000 to help poor people in the conflict zone. The company B Hired 200 employees in the conflict zone and paid each of them  $1000/month. Are their contributions equal? If the contributions are not equal, then which one is greater?  Those questions are difficult to answer because it is hard to quantify the contribution of businesses to peace.

Vijay Kamath said:

I am looking at the second question in the discussion, “What are some of the issues involved in measuring the contribution of businesses to peace?” One issue that arises is that many businesses have different views on peace. A business in the oil industry may view peace differently than a business in the clothing industry. Both businesses may think that they are contributing to peace, but their view on peace may not resonate with the public.

If a business wants to be environmentally friendly, there are many standards and examples that they can employ. However, the first question in the discussion also brings up another issue. Without having some kind of empirical measurement or benchmark that businesses can look at to view their contributions to peace, it is hard to know where they can start and what exactly a business should do.

Another point to consider is if a business is actually trying to contribute to peace. For example, if a business that produces plastic water bottles wants to be environmentally friendly, it may reduce the plastic needed to make the water bottle. On the other hand, by reducing the plastic needed to make water bottles, the business saves money by using less plastic per water bottle. The question then becomes, did the business have the intention to reduce costs in order to increase profits or was it to be environmentally friendly? This question will also come up when a business tries to contribute to peace. Do businesses actually want to contribute to peace or is their motivation to find a way to increase profits?

Speaking of the first question about options of measuring, people usually measure the contribution that a company devotes to the peace by how much money it donates, yet I assume such idea as a terrible misleading. However, I believe that putting the exact amount of money, writing down how it helps and how much people a company has helped on its website would be one way to measure the contribution of companies to peace. From my point of view, the measurement of the peace contribution should actually depend on the aspects such as the size of the company, the efficiency of its contribution, and the quality of its contribution. Let’s begin with some simple calculations. Which one donates more money, a company that donates one million dollars to fight poverty when it has an annual revenue of 10 billion dollars or a company that donates the same amount of money while it only has annual revenue of five hundred thousand dollars? It is true that more money could help more people, yet we should also be grateful to people who dedicates his/her life to contributing to the society. Meanwhile, the efficiency and quality of contribution to peace are important as well since these two factors will decide whether or not a company could use a limit resource to contribute to the peace.

I think both Victor and Alec made a valid point that by investing in poorer countries the firms are actually bringing peace to the countries. For the countries as a whole, these firms helps to improve their infrastructures and help to economically develop the countries. Individually, more citizens in these countries are employed and they can finally afford to provide for their families. GDP, spending and living standard would increase and these effects foster a positive cycle together with the macro economy. However, the only concern I may have is whether these firms are developing the countries or just exploiting favorable governmental policies as well as the cheap infrastructures and labors. If this is the case, despite some of the positive changes the companies may bring to the less developed countries, its is still very unethical. I think sometimes the firms should exercise equally and stop exploiting the venerable people in the poorer countries. One of the examples is simply paying the workers according to the national standard of that country. I think only when big companies are able to do this then they are helping in promoting peace in poorer regions.
 

Just checking in.  Hello to all! 

Welcome to the live segment of this discussion.  This is the third and final discussion in our Business and Peace Challenge.  You can find the previous ones here (on the why business might contribute to peace) and here (on practical examples and lessons).  This week we turn our attention to how the contribution of business actions on peace can be measured.  We're joined by a great panel.

Let me start by asking them to introduce themselves.

This is Tim Fort (again) from Indiana University

Hello to all!

And may I say, Phyllis is an awesome contributor to this field!  Great to dialogue with you!

Let's kick off with question 1:

Q1: What are some of the options for empirically measuring the contribution of companies to peace?

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