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Business is an unlikely hero: a force for good working to solve society's most pressing challenges, while boosting bottom line. This is social purpose at work. And it's a dynamic journey. Purpose 360 is a masterclass in unlocking the power of social purpose to ignite business and social impact. Host Carol Cone brings decades of social impact expertise and a 360-degree view of integrating social purpose into an organization into unfiltered conversations that illuminate today's big challenges and bigger ideas.
Carol Cone:
I'm Carol Cone, and welcome to Purpose 360, the podcast that unlocks the power of purpose to ignite business and social impact.
Joining me today on Purpose 360 is a returning guest, author and academic, Dr. Christopher Marquis, one of the world's leading experts in social responsibility. In September 2020, I had the joy of having a conversation with Christopher about his book Better Business: How the B Corporation is Remaking Capitalism. Well, in the following years, Christopher really dove even deeper to the practices of corporations around the globe. In his new book, it is in the beginning, the first part, it's actually a scathing exposé of how business leaders who are solemnly professing their dedication to principles of environmental and social justice.
Unfortunately, their actions betray an enduring commitment to the neoliberal idea of maximizing profit, e.g., let's maximize profit at all costs. Unfortunately, they're hiding behind what he calls the mirage of ESG and corporate social responsibility with corporations continuing to exploit, exploit the very resources and communities essential to their success.
But the book is not all gloom and doom because it turns then in its third section to who are the ripples of change, who are those companies that have new models, that have purpose at their center, and that they are truly making innovations and products and services and programs that are incredibly exciting. So there is bright light on the horizon in The Profiteers. This is going to be an amazing conversation. So welcome back to the show, Chris.
Christopher Marquis:
Great to be here. Looking forward to the discussion, Carol.
Carol Cone:
Oh, it's going to be wonderful. So for our listeners, I'd love you to talk a bit about your background and especially, Chris, because you're an academic, but early in your career, according to your bio, you worked in financial services at JPMorgan Chase, I saw that, and for six years or so, but then you made this tremendous shift.
Christopher Marquis:
Yeah, sure, Carol. It's great to be talking to you about this because, actually, when you were asking that, it really brought up some memories of when I was growing up and actually how some of those experiences may actually play a big role in my professional development. So I'm currently and have been for the last about 20 years a professor and I teach on sustainable business, social innovation at Cambridge University, and I've been here for about two years now. You and I met actually as my first job out of getting a PhD at Harvard Business School.
You and I worked on a number of things together there, one of which was on PNC Financial Services. I think the fact that banks have always in the United States typically been very focused on their communities and aimed to give back, actually had a very deep imprint on the work that I've subsequently done and my focus on business sustainability and responsibility.
Carol Cone:
So why do you love academia? Why did you switch from business to academia?
Christopher Marquis:
I think it's a profession. At least my experience has been that I've been able to have tremendous freedom to be entrepreneurial, to follow my interests, and to do what I want. There's no one telling me what I have to research, what I want to write, what I have to write about. I can really follow my passion, and if I think something's important, really dig into it.
Carol Cone:
I'm curious, how did you end up at Cambridge in England?
Christopher Marquis:
Cambridge had a job opening and it's a pretty high status position here. They contacted me, and I at first didn't think I would actually take it. I thought, "Maybe small chance, but I'll give it a shot." I think that after getting to know the faculty here and the administration and actually the focus at Cambridge on sustainability, on climate is just incredible.
I didn't realize this for your US listeners, Oxford is like Harvard and Cambridge is like MIT. It's much more in engineering, tech school, and a lot of the interest even in computer science and biology, engineering is very focused on issues of the natural world and climate and sustainability. So it really felt like it was a great home for this next phase of my career.
Carol Cone:
Fascinating. So now, I want to turn to your new book because that's what most of this is going to be about today, The Profiteers.
Christopher Marquis:
Sure.
Carol Cone:
Congratulations.
Christopher Marquis:
Thank you.
Carol Cone:
There's a lot in this book, but I love in the promotional materials that you talk about that your research, it wasn't just pure research, it wasn't just case studies. You said that you looked at investigative reporting, that you looked at court cases, that you looked at peer-reviewed research, and then firsthand case studies. So talk about the genesis of this book. Something gave you an itch, you did that wonderful B Corp book, the new way of capitalism. We discussed it in 2020 September, so right during COVID, and a lovely conversation, a great book, but this is different. This is, "Hmm, something's going on here."
Christopher Marquis:
Good question. It does depart quite a bit from the previous work that I did. I think that there's actually common themes underlying both books and a lot of my work, and that's that I really do think that business as an engine for social good, for environmental good is like nothing else in this world. I think that the innovation and creativity of business leaders is absolutely essential to solve some of our biggest problems and issues in the world, but there's a lot of headwinds that they face. I don't think that's the typical business is doing that.
My previous book that you mentioned on the B Corp movement called Better Business, when I was selling that to the publishers, many of them said, "Oh, it's too good of a story." People want to buy things that are a little bit more controversial and critical. Actually, you know me well, I'm actually someone that really looks on the sunny side of things and is very positive.
Carol Cone:
Oh, okay.
Christopher Marquis:
So that stuck with me. Along the same lines, there's been so many books and academics writing about the positive side of business doing well by doing good, et cetera. So I felt I should actually dig a little bit more into the challenges and the difficulties of the economic system that exists. There's a lot of people that talk about the problems with shareholder primacy where companies are very, very short-term oriented because of the markets and their investors, which creates a lot of economic and societal problems. So I really wanted to dig into that a little bit deeper and a little bit more to understand some of the roots of that system and then also how it gets manifest through business decisions. So that was really the genesis.
I must say you mentioned that you read the book and, certainly, I go into the critique in the first part, but towards the end, I get much more into areas of the future and reform where I'm able to draw on some of that more firsthand work that I've done with businesses, with entrepreneurs that are really trying to make a difference.
Carol Cone:
So dare I say, from the dark into the light. So let's get into it. I love early in the book you're saying, "Business is the cause of current troubles and, though, perhaps the most important cure." So there we go from the dark into light, but on the dark side, I love when you say this, "Hiding behind the mirage of ESG and CSR," and that was like a knife to my heart. Corporations continue to exploit obscure adverse consequences and hide costs or offload those costs, as you call them externalities, to the public commons. So why don't we start out with what is the problem that you really dive into in the first part of the book?
Christopher Marquis:
Sure. So this idea of externalities I think is where I've highlighted a lot of the focus. When companies are really under a lot of pressure for short-term earnings, if they can avoid costs, that goes right to the bottom line. So there's a lot of examples of this where companies are able to exploit externalities. Carbon emissions is the most famous. There's talks of pricing in markets in some areas, but in reality, that doesn't really exist yet in a widespread fashion. So companies pollute. This has a lot of negative effects, health effects in local areas, climate change, global warming effects.
One study that I saw discussed how actually some utility, I think it was in the US, basically had to pay $10 in cost for its coal-fired processes, but there was a calculation that actually it led to $8 worth of health effects and then another $8 or so worth of other environmental issues within the global warming. So really, it should be paying $26. The cost that it was occurring in some ways were $26, but it was only paying 10 of those, and society and the environment paying other 16.
This pattern actually exists in a lot of other areas like plastic, and inequality do have these issues where businesses get a free lunch, basically. I use that term in the book. Why I think this is important to highlight is that many will say, "Oh, this is the way economics works. It's a neutral economics concept, externalities," or, "We should have the government come in," and I think certainly, some government solutions might make sense, but actually, businesses are very active or many businesses or many are very active in trying to hide or push those costs onto someone else.
So around plastic as an issue, very low rates of recycling, but many large companies are just telling you, recycle, recycle, recycle, but probably they should actually be investing in new packaging, alternative ways of distribution as opposed to promoting recycling. So that's some examples.
Carol Cone:
Let's talk about the public commons and why do you feel that ... There are great examples at the end, but that it seemed to be like whether it's oil and gas or to your point about packaging or CPG companies, that they're really offloading these.
Christopher Marquis:
So people probably in their grade school or elsewhere learned about this tragedy of the commons metaphor where there's a commons, there's actually public commons here in Cambridge, interestingly enough, that people can graze their cattle on.
Carol Cone:
That's great.
Christopher Marquis:
There must be some regulation where there's certainly certain numbers, but when the commons is free, farmer Joe, he'll realize, "Well, I should get another cow," and everyone ends up getting another cow and then, actually, all the grass gets eaten and then all of a sudden there's this collapse. This has happened in a lot of different markets like for cod fishing in New England, in other areas. I think that this is relevant for us in the world because related to this, there's also this earth overshoot day. I don't know if you've seen this, but it's where we've overused the total resources of the earth.
What happens is like a public commons, when you keep overusing every year, at some point there will be a collapse. I think this is something that we around climate need to be thinking about very seriously and take a lot of very serious actions. So I think that these externalities do lead to this public commons issue, which is one of the important reasons why we need to be more enhanced in keeping companies in line.
Carol Cone:
Regarding the public commons, I think you asked the question, who pays for the damage? Should a company say, "Well, we're giving you a product and here's the product and it's a fair price," but there's all these externalities and the hidden costs, to your point about climate change, plastic pollution, biodiversity loss, wealth inequality, who pays for these?
Christopher Marquis:
It's people, basically, and I think the general public. It's interesting. How I identified this and got really interested in writing a book about it is actually from companies that see this issue and realize it's part of their responsibility. So one company is an example, Grove Collaborative. So I don't know if you know Grove, but they're a company that does health and beauty, kitchen type products. Frequently, people get them on subscription or you can buy individually. The co-founder and current board chair, Stu Landesberg, when I interviewed him, and it really was very influential in how this book was developed, he told me, "As we see our social responsibility and sustainability, we focus on plastic because plastic is our biggest externality."
What he meant by that is that it's a lot cheaper for companies to actually make things out of virgin versus recycled plastic. So he said, "Actually, we're going to develop a system to have internal tax on ourselves for plastic, and we're going to actively work to remove plastic, to avoid plastic, eliminate it from our packages, from our products." I firmly believe the current day is very much this take make waste linear type of model, but I think the companies are going to be much more accountable for their supply chains and for being much more circular in the future, and the companies that are getting behind this now are actually learning how to do this and able to be pioneers and leaders in the future.
Carol Cone:
You talk in the book about those who are forward-thinking and you talk a lot about Emmanuel Faber and I want to talk about him because he was one of my heroes, but there's also the issue of regulation, and the EU is much further ahead than the US. Then you have EPR laws that are popping up in states. So is this going to be voluntary? Is it going to be regulation? What's the balance?
Christopher Marquis:
I think that definitely there's going to be both, both voluntary and more state-oriented regulation. Only a small part of companies are ever going to actually do this voluntarily, I think. I think this is something where we need to actually have much more rigorous policy.
I think that something like plastic, we have all been schooled in the mantra of reduce, reuse, recycle. I think that, obviously, if we have something, we should recycle it, but that shouldn't be our choice. We should actually be able to avoid products like plastic that actually are damaging. Companies should take more responsibility like Grove Collaborative or Seventh Generation to reformulate products to avoid plastic. Companies like Pepsi and Coke, instead of actually promoting their plastic recycling, which they do in television advertisements and all this stuff, should actually be working to use different materials that actually can end up being recycled.
Carol Cone:
Let's talk about Danone, and then we'll talk about ... Because Danone, I mean, Emmanuel Faber, he really tried very hard in so many ways to reinvent that company. Everybody talks about Paul Pullman, who we love, and I've had Paul on the show, but you have to know a little bit more of the inside about Danone. So can you talk about this issue of alignment?
Christopher Marquis:
I do, like you mentioned, have tremendous admiration for him. He really tried to make Danone a truly sustainable, focused on certain SDGs. During COVID, for instance, he took a pay cut, the board took a pay cut. They delivered that to the farmers and to the employees. I think this idea of putting your money where your mouth is is really, really important. He wanted to have a business that existed for and gave back to all employees. So he actually turned in one of his retirement plans so that shares could be distributed to Danone employees. So he tried to build a business that was focused on all stakeholders at its core.
So he ultimately was fired, I guess, let go from his position. I think he was the CEO for seven years. As you mentioned, some of the competitors had been performing better and some activist investors, very small holders. It's interesting how people that own less than 1% of shares in a company can actually make a lot of noise and lobby board members in order to get someone to step down.
There's a lot of headwinds for business trying to do good and be sustainable, that if you're going to do it, you have to have the most rock solid businesses possible. You can't just talk about it and be aspirational, and you have to actually have the pieces put together inside your business, and this includes governance, includes incentives, includes a variety of other measurements and transparency practices. I think that's a challenge for companies because it's easy to say things and changing internally is a lot harder.
Carol Cone:
Absolutely. Let's talk another point you make in the book, which is about employees. I love when someone talks about the employees. You say, "When employees become the business, they thrive and their communities begin to thrive." So why do you emphasize employees as a critical lever to rebalance a company's effectiveness and power with social responsibility?
Christopher Marquis:
I appreciate you liking that. I think that this is something that my ... I've always been in an organizational behavior department, which frequently has human resources. I think that in the social responsibility realm, employees are an undervalued asset. There's a lot of discussion of brand lift and what type of reputational benefit. So people look, when companies are doing social responsible and sustainable activities, frequently looking outside to the brand ... Brand of the company is where people think to look first, but I always think that, actually, the values of a company and what it means to work there and the purpose is so important.
Carol Cone:
I love that. I'd love you to talk about some other examples, and you talk about some that people don't know. You talk about Patagonia. Patagonia may be the ultimate purpose-driven company. We're here to save our home planet earth, but talk a little bit about some others. You talk about Toast Ale or Greyston Bakery. Why do they stand out and what are they doing that we can learn from?
Christopher Marquis:
Sure. It's going to be maybe a future book that I do is how focusing on social innovation really is a level of creativity that is beyond what a lot of other businesses are doing. You see this situation where people think having some new app or some new, I don't know, online tool is really, really creative, but these social entrepreneurs are really flying in the face of the standard business process. To actually find a way to make a product and service and succeed in that, it's obviously a level of creativity that's beyond what the other business is doing.
Also in doing that, when you start connecting those dots, you actually learn a lot of other things. So Toast Ale is a UK-based beer company and their interest is around circularity and actually helping fight food waste. So a bunch of the ... I don't remember how to actually make beer, but some of the inputs that they use actually are bread that would be discarded otherwise. What they found is that, actually, they ended up collaborating with a lot of other breweries and the other breweries said, "Oh, this is great. These breadcrumbs, we can totally use this in our brewing process." So they ended up actually starting a side business actually producing these discarded bread into an input for major beer companies production. So that's one reason why I like them. It's this how being responsible and thoughtful in your business can generate other opportunities around circularity.
Carol Cone:
You talk a lot about regenerative systems. Is there another company you want to mention that has this regenerative approach?
Christopher Marquis:
Sure. You mentioned Patagonia being maybe overdone, but I'm going to mention that. So Patagonia, you mentioned their current vision or mission is we're in business to save our home planet. Actually, up until maybe 2017, that was not their vision. That was not their mission statement. It was longer, but also had the phrase in it, "and do less harm."
When I interviewed Vincent Stanley, who is known as their director of philosophy, I think is his title, he told me, he said, "When we got into the regenerative agriculture space," which was through their Patagonia provision, which is a variety of foodstuffs, he said, "we realized that, actually, business and production could give back. It could actually generate positive effects," which is the hallmark of regeneration. He said, "It totally transitioned our thinking. We don't want to be in business to do less harm. We want to be in business to do better." He said this actually was a huge impetus behind their Black Friday, "Don't buy this jacket," behind their movement into repairing products, promoting reuse, having a secondhand market using regenerative cotton.
So really, this business model unlock that they had I think is really important to highlight because the natural way to do business is, again, this take make waste model, but through some creativity, businesses actually can think of ways to close those loops and to actually give back.
Carol Cone:
So that's a very positive approach, which you go through the first two parts of The Profiteers to get to the rethinking and transformation of the entire system. So I love the way that you're really leaning into regenerative and creativity and the unlock because I think that we work with so many companies and their employees are just starting to be unlocked to allow some new ideas.
Christopher Marquis:
You mentioned Greyston Bakery earlier, and that's I think a really important one because it's not as much about environment, it's actually much more about social equity, inequality. Greyston pioneered this idea of open hiring. So what open hiring is is that you just show up and put your name on a list and you get hired. This flies in the face of traditional HR where they do these background checks, do all this very invasive, detailed checking of people for jobs that really don't require a lot of that.
The truth is that a lot of these practices that are embedded into HR actually are subtle ways of actually reinforcing existing systems of discrimination and inequality. So this idea of just having open hiring, it totally avoids all those issues, and it's a really powerful way to actually overcome discrimination in hiring.
One of the things like Toast Ale that I think is really important is that Greyston has been very active in distributing that model to other companies.
They have actually started a foundation that is active in promoting open hiring to many other businesses. For instance, The Body Shop, which used to be part of Natura, but they recently sold it, also actually is very active in that practice as well and a number of other businesses. So it's these ideas that are creative in a way that they buck the traditional standards. The fact that HR, some HR department would think, "Oh, we're just going to basically let someone put their name on a list and hire them." Really, probably that wouldn't go over well in traditional HR departments, but actually has worked very well for them.
I should note it doesn't mean you don't need any standards, but certain jobs, actually, a lot of the screens that exist for them aren't needed and aren't necessary and, again, a way to just reinforce discrimination.
Carol Cone:
They're also hard to get by because it could be a drug arrest, it could be formerly incarcerated. We had a whole show on Greyston, so we're going to link that in the show notes.
Christopher Marquis:
Oh, fantastic.
Carol Cone:
So as we begin to wind this down, can you, in a finite way, and it's hard I know, what is the playbook to recreate our economic system?
Christopher Marquis:
So I'll say a few things. As academics, we frequently try to boil things down and have the 1, 2, 3. In this book, actually, it might end up hurting the sales and my ability to talk about it, but I think that we are dealing with systemic problems and we need systemic solutions. Systemic solutions, there's not one silver bullet. One of the quotes I have in there that I really like is from Eisenhower, the World War II general and subsequent US president. Someone asked him, he was responsible for the D-Day invasion and these massive logistical challenges, and they said, "How do you actually do those incredibly complex projects?" and he said, "Whenever I see a project I can't do, I make it more complex." That sort of flies in the face of typical standard operating procedure. You want to look for the easy wins or silver bullets or break it down into small steps.
What he said is that if you just break things down, you won't see the big picture. Then actually by making it more complex, the outlines of actually what the underlying root causes are come into view. So in the book, I talk about how there's no silver bullets. What we need is multi-sectoral, many forces on many fronts type of thinking. So this is policy. We've talked about some of this regarding accountability policy like the EU is doing, other policy around corporate governance. We need changes in investor norms.
I talk a bit in the book, we haven't chance to talk about it yet, about this idea of universal ownership and other types of investment practices that are focusing investors on the system, not just on individual companies. I think companies play a huge role in this, in creating innovation and new practices and new models. I'm in the business school, I spend most of my time with business, so I focus a lot of attention there, but I do think these larger system-oriented things like the governments and investors are really important.
Then finally, of course, consumers are also tremendously important to this. I think that a lot of times, business that want to avoid responsibilities try to say it's consuming the idea of litter bugs and personal carbon footprints or ideas that businesses put out in order to avoid responsibility. So I don't want to say consumers should do everything, but I do think we all make tons of decisions a day around what to buy, what to support, what to vote for. I think that we should always be keeping in mind, is this company a company that's doing well by the world? Is it a local business? I buy from a lot of B corps because I know that they've been through that process. So I think the playbook is ... There's not really a playbook, to be honest. It's actually about a systemic change through multi-sector action.
Carol Cone:
Okay. So before we close, I want to ask you a couple of questions since you are wise and in academia and it has to do with AI.
Christopher Marquis:
Okay. AI.
Carol Cone:
My question is, what is the role of purpose in an AI-driven world?
Christopher Marquis:
I think purpose is more important in an AI-driven world than a non-AI-driven world. I've been seeing discussions and reading about things like human-centered AI, responsible AI, and I think that those are things where people are struggling with this idea that if there's some algorithm or machine that ends up making a lot of decisions, we've seen these issues where bias can creep in through AI algorithms, where people can be treated unfairly. So I think the purpose is so important in having humans in the loop, as they say, is essential because we want to make sure that any technical system is working in ways that are for the benefit of society and humanity and the environment and not reinforcing some of the issues that exist.
Carol Cone:
Thank you. So as we close, and you and I can have a long conversation over many, many shows, so we'll have to do another one in the future before you do the next book. So what haven't I asked about The Profiteers, and I do want to say, why should people buy the book? Let's just get to a succinct answer. Why should people buy The Profiteers from you?
Christopher Marquis:
I think the main reason is that so many books are out there talking about how purpose can lead to profit. There's scores of books with that almost exact same title, and I think in times that can occur, but I think that actually for the systemic issues we have today, climate change, biodiversity, risk, inequality, et cetera, we need to actually do a more thorough job of diagnosing the systemic issues, and that's what I try to do. I try to actually dig in to what some of the systemic issues that are underlying common, these big problems we have, and then roles of business policy investors can play in solving them.
Carol Cone:
Thank you. That was great. So I do give you the last word, and so anything else you want to add?
Christopher Marquis:
No. I just want to thank you, Carol. You were an early influence in my sustainability and social responsibility journey, and it's great to reconnect and talk to you about this book.
Carol Cone:
Well, thank you so much. So I wish you so much success with the book. I think it is very, very well-researched. It is in your face, which I think we need, and I can't wait to see what the next one's going to be. So please stay in touch and continue to advance true, authentic, aligned, sustainable companies that truly want to do their best in the world. As well, I love the creativity side because innovation in this field is sorely needed. So thank you, Chris Marquis, and good luck on your book tour.
Christopher Marquis:
Great. Thanks a lot, Carol.
Carol Cone:
This podcast was brought to you by some amazing people, and I'd love to thank them, Anne Hundertmark and Kristin Kenney at Carol Cone on Purpose, Pete Wright and Andy Nelson, our crack production team at True Story FM, and you, our listener. Please rate and rank us because we really want to be as high as possible as one of the top business podcasts available so that we can continue exploring together the importance and the activation of authentic purpose. Thanks so much for listening.
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