Carbon is just the tip of the iceberg” Jeffrey Hittner, corporate social responsibility leader for IBM Global Business Services, told VNN’s Laurance Allen as we discussed IBM’s new consulting offerings designed to improve their clients’ competitive position by being greener and more ethical.

Clearly the ability of corporations to meet today’s higher expectations has become critical, people are watching company behavior more closely than ever on a whole range of issues – the environment, fair wages and workplace safety, international trade, product safety and philanthropy. Empowered by the Internet, people are equipped or organize and act quickly to reward or punish brands depending on what they observe – deciding what to buy, who to work for, where to invest, and how business should be regulated.

I asked Jeffrey how IBM went about setting their corporate priorities in this broad arena. He explained that IBM Global Business Services used internally developed Jam Event methodology to prepare, market and host a 72-hour real-time discussion around global issues, ideas and best practices. “This Jam Event is like a Wiki combined with Facebook and put on steroids,” he explained. And how did it come into being? “It was initially developed as a ‘virtual supplier auditing’ application for a client case study.”

Then more than 50,000 IBM employees took part in an online jam-session, where the value of each employee’s role in innovation crystallized into a need for global action. IBM responded by exploring a new approach to suggestion boxes, based on the jam format, IBM’s dedication to open collaborative innovation and an understanding of idea-rich communities. All this informed IBM’s $100 million Big Green Innovations initiative.

The IBM Big Green Innovations team applies advanced materials science, physics, modeling tools, materials science, physics, and integration expertise to address emerging environmental management opportunities.

By collaborating with clients that have a global presence in water and energy related problems they can bring innovative perspectives that reach across ecosystems to solve problems none of us could have solved individually.

Today IBM ranks its global priorities and opportunities in this order:

• Advanced Water Management — encompasses a broad agenda from availability and quality to distribution and consumption. Our technology and expertise can help water utilities, agencies, and private industry improve water quality and water system performance. By collaborating with clients to provide them more accurate and timelier data on water operations, IBM can help clients proactively manage provisioning for human, industrial, and agricultural consumption leveraging tools like IBM Deep Thunder. Understanding weather impact on water management can help optimize the management of complex water environments.IBM will also work with organizations to develop nanotechnology-based water filtration systems and other products that address the challenge of providing potable water in a world where water is becoming a scarce resource.

· Alternative Energy - We offer integrated solutions to help utilities, enterprises, and governments maximize the efficiency and sustainability of energy generation, transmission, and distribution. Solutions include decision support for renewable energy and business processes, overall management of an organization’s impact on climate change, and the impact of climate change on an organization’s operations. An example of this is Intelligent Utility Network.

· Carbon Management — we have the expertise to support integrated solutions that can help clients minimize the carbon implications footprint of companies’ operations and supply chains. Our set of tools and services reflects our view that for maximum effectiveness, carbon management should be integrated with the day-to-day management of other business variables such as inventory, customer service and cost so you can experience the double benefit of reduced carbon and reduced cost or improved process performance.

· Computational Modeling — We have computational modeling, data analysis, visualization and business/process modeling, and analytics associated with improving global environmental health in areas such as weather, climate, hydrology, pollution, and pandemics.

By taking their license to operate beyond Milton Friedman’s single stakeholder definition of the 1970’s, IBM is walking the talk on global challenges. This carefully crafted and bold positioning now allows their consulting arm to benefit by offering new services through their recently announced ‘Corporate Social Responsibility Benchmarking Utility.’

This helps clients assess:

– Whether they’re currently treating CSR as an expense or an investment;
– The effectiveness of their environmental policies, labor practices, regulatory compliance, corporate values, and other CSR-related activities, and where they may have gaps;
– How well they engage customers and other stakeholders to understand their concerns and to communicate CSR performance.

The benchmarking utility is based on data from a survey by IBM of c-level executives at more than 250 companies worldwide. The study, titled “Attaining Sustainable Growth through Corporate Social Responsibility,” shows that 68 percent of the executives surveyed see CSR as an opportunity to grow revenue and 54 percent believe it gives them a competitive advantage.
But the report also shows some significant gaps in how companies are approaching CSR – more than three quarters of the executives surveyed admitted they don’t understand their customers’ concerns about CSR, and only 17 percent are even asking them. This indicates that many companies need to analyze and improve their CSR practices to ensure they line up with what customers and other key stakeholders expect.

In another survey conducted by IBM of more than 1,100 CEOs worldwide, the majority of respondents said they plan to increase their investments in CSR activities by 25 percent over the next three years. The key for them is to ensure they are investing in the right programs, policies and practices to meet the expectations of their stakeholders, and that is what these new consulting offerings from IBM are designed to help them do.

Based on what the benchmarking utility reveals about a client, IBM can use its CSR Strategy Assessment and Roadmap offering to help it improve its business processes and operations, address any shortcomings, and integrate CSR into its overall strategies and objectives.

IBM can then assist clients in a range of CSR areas, including:
– Carbon footprint analysis and management;
– Environmental procurement;
– CSR policy development and monitoring for suppliers;
– “Green” data center;
– Information sharing and engagement with customers, shareholders, regulators
and advocacy groups;
– Linking philanthropy to corporate strategy;
– Diversity and labor practices;
– Engagement with employees on CSR.

As Jeffrey Hittner stressed during our interview; approached as an opportunity and done in the right way, improving corporate social responsibility can grow revenue and market share.

Jeff Hittner is the Corporate Social Responsibility Leader for the IBM Institute for Business Value. He works with a range of industries and clients to address the emerging role of corporate social responsibility in core business strategies. He can be reached at jhittner@us.ibm.com.