Prof. Dr. Thomas Beschorner is the Director of the Institute for Business Ethics at the University of St.Gallen. Defining sustainability, he says, is no easy task, let alone in combination with digitalization. Corporate Digital Responsibility (CDR) is about harmonizing these two fundamental aspects. In the following interview, he explains why it is long overdue to give CDR the attention it deserves.
Mr. Beschorner, can you explain in three sentences what the connection between sustainability and digitalization is?
That’s no easy task, but I can try: Sustainability is closely related to issues regarding justice and fairness. It affects individuals inhabiting our planet now, as well as generations to come. In connection with digitalization, it’s important to strive for a fair and equitable digital future.
In addition to corporate social responsibility (CSR), there’s more and more buzz around the topic of corporate digital responsibility (CDR). Do you consider this to be a short-lived hype or a relevant development?
Definitely the latter. We have been debating CSR for years, most often focusing on the impact and responsibility that business activities have or should have regarding the environment, the economy and society. The topics of climate change and human rights are especially relevant. But giving CDR the attention it deserves is long overdue.
Why?
We see it every day: far-reaching technological changes are taking place at breakneck speed. Digitalization has been radically affecting our lives for the past two decades—mainly in positive ways. It helps us navigate better and more easily, increase efficiency and productivity, and conserve energy. On the flip side, there are a number of negative side-effects to digitalization. We are only at the beginning, and there’s still a lot in store for us.
Such as?
Take robots for instance…One day they’ll be sitting beside us as coworkers, or they will be caring for the elderly. How will that affect us? Or take advances in artificial intelligence and neural networks. What impact will they have on our understanding of consciousness and humanness? Or the metaverse…Assuming more and more of our interactions with each other will be as avatars, how will that affect our understanding of reality? There is a plethora of topics that challenge us to contemplate and make decisions about ourselves and the world we live in.
Can you define CDR?
CDR is about harmonizing two fundamental aspects. First, we have to avoid bad digitalization practices and employ good ones instead—not just once, but on an ongoing, long-term basis. Second, the good practices must be within a company’s core business and have a positive social impact. Good CDR and CSR aren’t additive. They’re integral components of business operations, relevant to every imaginable department in a company: Human Resources, Research & Development, Procurement, Marketing, and so on. A key question you’d want to address here would be how to create positive and inclusive connections that enable people to thrive in their social interaction. In addition, CDR is about technologies serving people in ways that are beneficial to their lives.
How do you differentiate between good and bad practices?
This can be done systematically, by conducting professional impact assessments, and individually, by asking yourself as a software developer, a department, or a CEO what impact your products have on society. Put yourself in the shoes of your software users—employees and customers. Ask yourself questions like: Would I want to be the object of this surveillance system? How will my app affect children and young adults? Would I let my child play with it?
The answers won’t always be straightforward. What do you do then?
No, they won’t. Seeking and having the conversation is what’s essential. Otherwise, we won’t be able to tell the difference between good and bad, acceptable and unacceptable. I sometimes conduct this thought experiment in my seminars: Could you, in good faith, explain and justify your business choices at the dinner table with your family or friends? For example, an algorithm that preselects applicants and may seem discriminating.
Some critics claim CDR is counterproductive to profitability. What do you say to them?
An organization that doesn’t truly listen to society to act responsibly, will disappear from the market in the long term. But more importantly, I’ve observed a new mindset taking hold in companies slowly but steadily. They aren’t just aiming for short-term profits anymore but thinking about their purpose in society as well. Who are we as a company? What are our values? How can we make a positive contribution to society or at least not have a negative or damaging effect on social progress? It is high time companies take CSR seriously and not minimize it to a “win-win wonderland.”
What role does CDR currently play in the corporate world?
It seems to me that it’s just getting started. The current focus is mainly on privacy and protection of customer and employee data. In addition, there is some debate about the danger of algorithms, such as those used in hiring processes, contributing to discriminatory practices. Personally, I think blockchain and future supply chain organization are very interesting topics and they’re giving way to relevant questions about sustainable digitalization. Secure and traceable systems enable consumers to verify the origin of products and make sustainable investment decisions accordingly. And they enable companies to better monitor product quality and origin.
What should companies do that want to address these questions more seriously?
The first step for them is to closely consider their own values. Who are we and who do we want to become? They can use their answers to form a mission statement. The second step is to determine their company’s key topics, and this needs to happen in dialogue with stakeholders. I suggest organizing a “stakeholder day” and intentionally inviting critical members of that community. The third step is contemplating and defining strategies and putting them into practice. How that will work depends on the specific issues and the company.
That sounds like a long to-do list and a long journey.
It is an ongoing process and companies must recognize that. That’s why there’s no reason to think a company’s handling of CDR has to be perfect from one day to the next. As far as I can tell, Software AG is right on track. The topic of sustainability is strategically and structurally anchored in the company along with all the implications associated with putting it into practice. Like all companies, Software AG will have to continue seeking sound solutions, trying out different things and experimenting with new approaches. Some will be rejected, and some will be kept. This is a journey. It’s up to us to forge the path but the direction is clear: without sound and serious CSR, we’ll get lost in the woods.
