Making the most of a changing world: Sustainability (CSR) trends in 2013

2012 introduced several significant developments in sustainability, most notably around the issues of climate change, risk management, and supply chain ethics.

June’s Rio+20 United Nations Conference for Sustainable Development dominated the year’s discussion, reinforcing the need for corporations to play a larger role in attaining sustainable development goals. PricewaterhouseCoopers’ Low Carbon Economy Index publication supports this sentiment, showing only minor improvements in global carbon intensity reduction. As climate change regulation escalates in response to these numbers, we can expect to see more investors and consumers paying attention to corporate sustainable development strategies.

Companies anticipate these changes. More than two-thirds of Fortune 500 companies now issue sustainability reports, with many also investing in sophisticated methods of tracking and reporting emission data. The Carbon Disclosure Project reports that in 2012 alone top firms integrating climate change into their business strategies reduced their emissions by nearly 14%. In 2013 we can expect to see even stronger corporate leadership in sustainable development as more corporations begin to report their carbon and water footprints, use methods of assurance to confirm data, and develop long-term carbon management strategies throughout the supply chain.

Social and environmental risk management will also be at the forefront of 2013. 2012 was filled with corporate behavior scandals. Companies like Barclays and Walmart found themselves in the spotlight amid global concern over lack of corporate and supply chain ethics. Superstorm Sandy and other natural disasters raised further questions about the ability of companies to adapt and become resilient to social and environmental challenges. Greater investment in supply chain management, stakeholder engagement and financial-environmental reporting will develop as business leaders seek to address these reputation and environmental risks. Expect one popular management strategy – “social license to operate” to lead the year’s discourse.

As sustainability become more mainstream, one trend also continues to hold promise: companies will continue to expand their investments in sustainability, and intensify their focus on pressing issues like energy efficiency, natural resource management, and health & safety. A study by the Massachusetts Institute of Technology shows that greater numbers of companies view corporate environmental and social responsibility as a profit boost. 2013 will see increased corporate spending on sustainability issues like clean technology, sustainability reporting assurance, and corporate sustainability programs. In 2012 this was already made evident with evermore additions of chief sustainability officers to corporate boards; Unilever was one among many to expand its sustainability teams. 2013 will continue this trend with individuals being recruited internally from supply chain management, communications, marketing, and other units, to develop sustainability initiatives.

Sustainability (CSR) directives will become more coordinated across departments, causing a big shift in corporate structure and thinking. Corporate heads will look to leaders that can demonstrate the drive and flexibility needed to collaborate across business units and influence decision makers. Sustainability and CSR officers will adopt different roles in marketing, communications, management or project coordination. A recent article by Ethical Corporation argues that renewed emphasis on strategic planning will bring about more pragmatic programs and effective communication of the value of sustainability throughout company sectors. In short, these efforts 2013 will invoke a much broader understanding of sustainability, with greater opportunities for collaboration internally.

Externally, we will also begin to see a shift in thinking, as corporate marketers, communication managers, and sustainability directors direct their attention to consumer behavior. Stricter carbon regulations will encourage companies to identify more effective methods of consumer engagement Additionally companies they will also understand that Sustainability Reporting in not enough and that they need  further stakeholder engagement with their employees, community and investors for increase stakeholder value

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