Originally published in Italian by Il Sole 24 Ore
Increasingly frequent floods expose the territory’s fragility and denounce decades of foolishness and negligence. Local and national politicians seem impotent before this emergency. In Rosora (near Ancona, Italy), a company with 350 employees and 65 million Euro in revenue decided to fill the void left by politics. The Loccioni Group, leader in developing automatic measuring and control systems, “adopted” two kilometers of the Esino, a river that runs along its establishments. The institutional responsibility is fragmented between the Italian region, province, civil defense, and five municipalities: until now, coordination was complex, maintenance scarce, and flooding frequent. Today, the Esino is secure and accessible, with bike paths and picnic tables thanks to an agreement between companies and administrators. There’s an understanding that finds its roots in farming traditions: like sharecropping agreements, the private sector sinks money and labor into other properties, which are in this case public, and shares the fruits—security, energy, stones to repair the bridge, and water to irrigate the park. The enterprise helps the community and the environment, but also benefits itself. Loccioni can expand safely, and the Esino can be used as a laboratory for technical development to test monitoring systems. It’s an example of corporate social responsibility and social innovation, which is the capacity of private businesses to manage problems with social and ethical impacts. Economists theorize about its advantages: a company that adopts socially responsible behavior, responding to stakeholders’ economic, environmental, and social expectations, can obtain competitive advantages and maximize profits over the long term. Multinationals have created notable examples. The Body Shop is one of the CSR pioneers, who started selling its cosmetic products at higher prices in the mid 80s, earmarking a portion of profits for environmental protection and human rights causes. Their success was enormous; Harvard Business School still uses this case study. Starbucks helps producer-suppliers in emerging countries to improve the quality of their products, develop their business models, and minimize impact on the environment. McDonalds spends millions of dollars on nutritional education. BP, after the Deepwater Horizon oil spill, has multiplied its environmental initiatives.
The Loccioni case demonstrates two things: you don’t have to be a multinational to create social innovations; interventions can be made at km zero, at home, not just in emerging countries.
There are many Italian businesses that, recognizing a competitive advantage in their home regions, seek a to have a positive impact on surrounding communities. Loccioni adopted the river in Rosora, Dallara and Varano Melegari invest in professional institutes in Parma and host thousands of students as interns; Cucinelli restored the village in Solomeo (Perugia), opening a professional school there and introducing the Beauty Project that envisions opening three parks in a disused industrial area. There are many initiatives to instruct and involve employees: Foppapedretti uses a nontoxic water-based painting process, in the interest of public health; Ferrari invests in its employees’ professional development, the Zambon and Diego Della Valle Group support their employees’ children with scholarships and reimbursing the cost of books.
These initiatives generate diffuse benefits, but also specific returns for the companies that enact them, beyond imagined advantages: absenteeism and employee turnover are reduced, corporate culture, participation, and productivity are improved, even innovation and creativity. The results indicate the ability of individuals and companies to operate in a complementary or alternative way to governments and administrations to compensate for inadequate policies and interventions from above. The awareness that targeted, efficient initiatives from below can correct inefficiencies and resolve problems is always more diffuse.