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U.S. Department of State

Diplomacy in Action

Businesses for Social Responsibility

Elizabeth Frawley Bagley
Special Representative, Global Partnership Initiative
Washington, DC
October 21, 2009


It is wonderful to be here at BSR. Over the last seventeen years, you have shown how businesses can make a real difference – one that goes beyond job creation by turning our world’s most serious challenges into opportunities to improve the bottom line. Some of you have emphasized the perils of climate change, anticipating how “going green” would have such immense business potential long before it became popularized. Others have focused on how over-exploitation of natural resources compels companies to develop more sustainable, long-term solutions to maintain and grow the bottom line. Still others have underscored how strategies to tap into emerging markets must take the welfare of impacted communities into account to create a more sustainable, secure, and equitable future.

Each of these conversations has been important, and each time they have brought us back to the reality that in our changing world, “business as usual” no longer makes sense. The triple bottom line must become the bottom line.

At BSR, you understood this long before the economic crisis and led us to these truths more often than others. When business as usual denied these realities, BSR and its member companies challenged the status quo as effectively as anyone over the last seventeen years. With your network of over 250 members around the globe, BSR has been at the forefront of creating a just and sustainable world – through pioneering research, game-changing advisory efforts, and a phenomenal ability to convene – as we can see by looking around the room today.

Aron Cramer deserves a round of applause. I hope he knows that in addition to those gathered here today, he also has the thanks of a grateful nation.

I have three points to address in my brief time with you this afternoon. The first involves the scope of our world’s shared challenges. The second entails our shared responsibilities. And the third is about the shared response required from all of us now and in the years to come. 

I came here today to raise these issues on behalf of the President and the Secretary of State, and to issue this challenge: we must increase the scale of our collaborations to meet the scope of the shared problems our world is facing. We must regroup after the economic crisis, we must reset our priorities, and then we must re-organize ourselves into new partnerships to meet the world’s challenges.

We must realize that globalization has changed the way we do business, and it is up to us to lead the way to a better, more responsible type of globalization moving forward, through smarter business and more open government. As we have seen with the recession – which sent 2.6 million more Americans into poverty and 90 million more people around the world into the extreme poverty of less than a dollar a day – we have not been living up to the responsible leadership the world needs.

We must come to grips with the realities of this young century. As we pursue recovery and growth, we have an opportunity – and a responsibility – to reassess our values and realign them to the hard facts that we face due to the worst recession since the Great Depression.

The scope of the world’s challenges requires us to act now to create a better, smarter, and more equitable approach to globalization. In the 1960s, nearly 70% of all money flowing from the United States to the developing world was official development assistance; today, over 80% is from private sources. Globalization is making the pie that much bigger: the total value of Official Development Assistance has actually grown at an average annual rate of 5.5 percent, from $7.14 billion in 1980 to $27.6 billion in 2005. But even with this growth, the share of the pie has decreased from 70% to 20% of the total money flowing from the US to the developing world.

As globalization impacts our world in these ways, it acts as a double-edged sword with great rewards and even greater responsibilities; and with the recent economic crisis, we know that it can cut both ways. Yet if we don’t work together to solve the food, water, climate, health, and energy crises we are facing, the worst will be yet to come. Just as we have to learn from the mistakes of the economic meltdown, so too should we learn from how these crises will threaten sustainability and security.

Industrialization created opportunities for hundreds of millions of people across the world to have safer, more secure, and more productive lives. But rampant pollution has forced us to reevaluate our consumer habits in order to avoid ecological disaster. Carbon emissions from factories across the Pacific in Beijing, and from cars right here in San Francisco, are melting the ice caps and imperiling the planet – and so we face the hard realizations about the risks we haven’t taken into account.

Because AIDS impacts your employees in Nairobi, your healthcare costs will rise for employees in Florida. Just as air travel has allowed us all to come here to San Francisco and then to go on from here to wherever else we wish – making worldwide networks and global business truly possible – it also means that a few cases of the flu could become a pandemic that could slow down world trade, or that a few extremists can bring down the World Trade Center.

Yet we also know that in many ways, the future market for your products is not Iowa, it is China. You will no longer grow your consumer base as much in Indiana as you will in India, where untold numbers suffer in poverty today but where they will be participating in a robust and vibrant economy if we are successful in working together towards a better world, marked by the smarter globalization we all desire.

This brings me to my second point: we must realize the need to organize around our shared responsibility in meeting these challenges.

We realize that as our world has grown closer and more interconnected, we also know that it is more dangerous and more fragile. Even as we grow closer together, divisions continue to tear our world apart – in Darfur, Afghanistan, and in hundreds of communities less well known that are dealing with corrupt governance, food scarcity, or the effects of climate change. And with these rifts, people everywhere are falling through the cracks. We have to work together to fill that space. We can no longer afford to take incremental approaches that do not mobilize business drivers to solve the world’s problems.

No one government can address our world’s challenges alone. No group of world leaders could possibly come together and concoct the right solutions for any of these unprecedented challenges – whether it is climate change, HIV/AIDS, global poverty, food security, or human rights. And since all of these issues are interconnected, so too must our response be integrated and coordinated. The smarter, better, and more responsible answers require new partnerships among government, the private sector, civil society, philanthropies, faith-based communities, diaspora groups, and everyday citizens in order to solve our shared problems.

If any of our institutions or sectors tries to go it alone, we will unnecessarily limit ourselves, and we will fail by design. From the perspective of the US Government, our economic development and foreign assistance goals won’t be achieved without innovation, our diplomatic efforts will fall short if we go it alone, and our national security will be increasingly threatened unless we view global partnerships as critical to our mission.

That is why Secretary Clinton appointed me to work at the highest level of the State Department as her Special Representative for Global Partnerships, leading this administration’s efforts for global partnerships in the three Ds of Development, Diplomacy, and Defense.

With this new office, we are taking a new approach, a fresh start, and a new way of dealing with each other across the lines that too often have divided us. Aron has called this creating a “reset world,” where – after realizing how many mistakes we have made in the past – we begin to work together towards a more sustainable future.

BSR’s members have done so much over the last seventeen years, but we need more from all of you. The times are more dire and the stakes have been raised. The questions we must answer are serious and challenging: In this time of economic recovery, how can we go beyond the surface-level fixes? How can we restore a real sense of business ethics? And how can we harness the innovation, efficiency and expertise of the business community to address the challenges ahead? How can we rework our risk calculations to account for the social and ecological costs that we haven’t taken into account when calculating risks? And how do we go about adjusting our business practices accordingly?

In a reset world, even the most responsible businesses in this room must go further by extending CSR to be truly transformational. It should impact every aspect of your supply chain, every professional development program you create, every decision you make in the boardroom, every employee in your operation, and every stakeholder across the planet – all while taking into account, and taking care of, the planet that sustains economies and all of us in the first place.

When we begin to reflect on a reset world, we realize that despite the progress we have made, we all have so far to go before sustainable, responsible business practices are integral in everything we do. But we can do no less if we are going to be honest about what we need to do moving forward.

And this brings me to my third and final point, which is why I am here today. The challenge from the Obama Administration is this: hit reset on the way you see government, and even the way that you see your own business practices. Reclaim the future as it could be, and should be, rather than accepting the path we are now on because of short-term thinking and misguided decision-making. And let’s be real about what we are up against, and let’s act on that by responding in a coordinated fashion through new multi-sector partnerships.

On April 22, when Secretary Clinton announced the launch of the Global Partnership Initiative, she stated that the “doors to the State Department are wide open,” and that “it’s absolutely essential that we recognize our interconnectedness as we grapple with the difficult challenges sweeping the planet… The problems we face today will not be solved by governments alone. It will be in partnerships – partnerships with philanthropy, with global business, with civil society.” And as you can see from the Partnering with the US Government guidebook, we are taking an integrated, whole-of-government approach with the State Department, USAID, PEPFAR, OPIC, and others to encourage more efficient and effective development, diplomacy, and defense through new alliances.

Here are our priorities: We will be creating secure and healthy societies, which includes efforts in food security and water development, Muslim outreach, energy security and climate change issues, nuclear non-proliferation, and global health. We will be working on economic growth and empowerment, including efforts in global economic recovery and growth, democracy, human rights, and especially the rights of women, and Diaspora engagement. And we will be addressing immediate crises as they emerge through rapid response capabilities and responding to other priorities from the Secretary of State.

In all of these areas, we want to work with you. We are creating real change in how government should not only work with other governments – but also philanthropies, NGOs, citizens, and businesses – and we are poised to build new partnerships by convening, catalyzing, and collaborating on your behalf to address issues that concern American business interests, affect our foreign policy and national security interests, and can enhance global sustainability and security.

On April 22, Secretary Clinton launched the Global Partnership Initiative, and then on September 22, at the Clinton Global Initiative, President Obama called for a new era of global partnerships so that working with groups like yours – through the spirit of partnerships and innovation – would come to define this administration.In closing, I ask you to reflect on what it means to hit reset. Consider what it means to reclaim responsibility in our shared, interconnected world.And then tomorrow, when you wake up, it will be October 22, in a reset world where we begin to reorganize our efforts through a new spirit of partnership. Our doors are wide open, and I am eager to welcome you as we work together for increased impact and a better, smarter, and more responsible future for us all.

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