Are you doing the right thing for the wrong reason?

The practice of sustainability reporting is now embedded in businesses DNA, as it enables best practice in engaging with stakeholders, preparing to manage risk and measure sustainable economic growth in the long-term. So, if the question is whether your organization should invest in producing a sustainability report or not, the answer, in today’s vastly increasing demand for transparency, is that number speak for themselves! According to Marjella Alma, manager of external relations for the Global Reporting Initiative (GRI), 95 percent of the world’s 250 largest companies today disclose sustainability performance information. Why? Simply placed: “What gets measured gets managed”, which of course in turn enables you to gradually improve your performance whilst addressing the triple bottom line!  Now if the question within your organization is why publish a CSR report? Again simply placed, a CSR report acts as a vehicle to engage and communicate with stakeholders as it can ensure that a company is acting in a responsible manner! Yet to be credible, among many reasons, external assurance is vital for the integrity of data…No wonder 50 percent of companies internationally use external assurance for their reports!

 Consequently, a CSR report is of significant importance to organizations performance, but what in fact drives towards success? The two most important values are based upon the influences and motivations behind CSR as well as how decisions are made! For instance a resent research report conducted by Julia Bonner (New York University student) and Professor Adam Friedman on the influences and motivations of CSR in 77 Fortune 1000 companies, found that whilst CSR is more than often integrated within business strategies, thus doing the right thing, it is actually being done for the wrong reasons. According to the report’s results, environmental issues manifested the list as the most important focus for CSR efforts (96 percent), followed by health issues (68 percent), education (59 percent) and human rights (55 percent). Yet the reasons why the above pillars are addressed are motivated on reputation groundings by 88 percent of the respondents! On top of that, approximately two-thirds of these respondents stated that not engaging in CSR would have harmful effects on the company’s reputation.

Such motivations in turn indicate that CSR is not always altruistically driven, but the moral of the “story” is that if business motivations are built with such weak foundations and unsustainable principles, a collapse is bound to occur in the near future. Therefore before a company begins to engage in the philosophy of “What gets measured gets managed” and in turn produce a CSR report, it must embrace that acting in a responsible manner, needs to be done for the right reasons and represent the organization’s vision, mission and values holistically. There are many ways and guidelines on producing a sustainability report. To date the Global Reporting Initiative (GRI) is the world’s most widely used framework to effectively disclose environmental, social and governance data. Its guidelines aim to ensure Sustainability Reporting encloses valuable information about organizations material issues to stakeholders and it is currently used by more than 5,000 organizations worldwide.

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Sustainability Invitation Accepted

According to the MIT Sloan Management Review Report corporate sustainability programs grew in 2011. Two thirds of the executives surveyed have responded that CSR has been part of their strategic agenda and is more likely to remain in the preceding years. Another issue being raised is also the necessity of CSR in order to increase business competitiveness in the dynamic business environment. However, although 70% of those surveyed realize the aforementioned importance of CSR strategies in the corporate agenda, only 24% have embraced such long term strategies and a 31% has started to realize the sustainability business case but have not yet integrated it in the organizational culture.

A further interesting finding of the study is the nature of corporate motivators to embrace sustainable business strategies: Consumer preference of the offered product or service seems to be to the most highly appreciated factor, with political pressure, resource scarcity/price volatility, competitors’ sustainability programs and stricter requirements from customers along value chain following.

And while businesses need to make a decision on establishing CSR strategies, it is also important that they understand the augmented value such strategies would offer. Apart from increased, businesses can gain a great competitive advantage, develop an ideal working environment and achieve high levels of risk and reputation management.  Organizations therefore face a great challenge, now more than ever: Embrace Sustainability in their Corporate Strategy and form a solid sustainable business case.

Are Businesses Practicing What They Preach?

Sustainability issues are at the forefront of corporate agendas across the world. Investors, board members and consumers are all curious as to what practices companies are using to remain sustainable.

“Twenty years ago, there were very few businesses that even knew what sustainability was,” says Bill Ford, executive chairman at Ford Motor Company told The Guardian. “If they did, they were pretty much against it. Today, you’d be hard-pressed to find a business that doesn’t understand the importance of it.”

A new survey, released by Accenture and the United Nations Global Compact, showed that 93% of CEOs realize that sustainability issues are important to the future success of the companies that they lead. Additionally. 81% of CEOs surveyed believe that sustainability issues are fully embedded into their companies’ strategy and operations, with many moving focus to their supply chains.

Are these companies really implementing processes in their everyday practices?

John Elkington, founder of SustainAbility and Volans, explained to The Guardian that while CEOs have appointed CSOs and complete annual reports, they are not looking at sustainability as a transformative agenda.

Where does your company stand on this? Do you go beyond annual reports?

The Public View of Corporate Greening

As more companies continue to focus on sustainability and provide the public with sustainable reports, the public is still has doubts about this commitment.

According to the third annual Gibbs & Soell Sense & Sustainability Study, 21 percent of Americans believe that the majority of business are making an effort toward sustainable development.

Although this skepticism exists, 71 percent of consumers are interested in what companies are doing to to become sustainable and 75 percent believe that the media is more interested in reporting bad news.

The study looked into multiple areas, including the perceptions of a businesses’ commitment to sustainability; responsibility for sustainability initiatives; barriers to more businesses “going green;” perceptions of media coverage and content about companies “going green;” interest in learning about companies “going green;” and the impact and reach of medial coverage for related news stories.

Other key findings of the study include:

  • Thirty-four percent of executives indicated that there is no one person who is responsible for “going green.”
  • One out of five corporate leaders report that there is a team of individuals who have a job specifically dedicated to sustainability. This is an increase from 17 percent in 2011.
  • Sixty-nine percent of executive believe the media is more likely to report on bad news than good news when it comes to sustainability.
  • Newspapers dominate green news among mainstream media. A study from Cision Global Analysts found that 83 percent of coverage of comes from print and online versions of newspapers.

U.S. Corporations Making Little Ground on Sustainability

Ceres released an analysis of 600 U.S. companies today, finding that the leadership on sustainability practices and performance has fallen short of expectations in four measured categories.

The Road to 2020: Corporate Progress on the Ceres Roadmap for Sustainability, which was conducted by Ceres and global research and analysis firm Systainalytics, found that 26 percent of companies are integrating sustainability into their governance and management systems. However, only a quarter of the these companies are disclosing supply chain monitoring and performance and only one-third have targets in place for reducing greenhouse gas emissions.

This new report is the first assessment of the progress on the corporate sustainability roadmap, which was released two years ago. The how-to guide for companies to reach sustainability by the year 2020 outlined expectations in multiple categories.The Guardian explains that the roadmap is composed of 20 specific expectations companies must meet in the areas of governance, disclosure, stakeholder engagement and performance.

Ceres’ new report utilized a four-tier assessment system. Analysis showed that only a quarter of all companies surveyed ranked within the top two tiers for progress on governance, while 24 percent have some degree of meaningful stakeholder engagement.

While the overall results of the analysis are disappointing to environmental activists, there are some positive highlights in the report. Here are some companies that have seen success in their sustainability initiatives:

  • Coca-Cola: Coca-Cola has been credited with being on track to meet its goal of improving water efficiency by 20 percent by the end of 2012.
  • Nike: The shoe maker has partnered to implement a water-free fabric dyeing process.
  • Kohl’s:The retailer has achieved net-zero greenhouse gas emissions in all stores.
  • Pinnacle West: This organization is using 20 billion gallons of recycled urban wastewater per year.
  • EMC: EMC has built an energy-efficient virtual data center to move physical data to a virtualized IT infrastructure. This shift saved the company $23 million and counting.

What success has your company had?

Corporate Social Responsibility: The 2012 View

Corporate Social Responsibility is in full swing in 2012. With consumers interested in what their favorite companies and brands are doing in terms of sustainability, corporations are spending more time and money on these initiatives.

But how is Corporate Social Responsibility defined? The World Business Council for Sustainable Development utilizes the following definition in their publication Making Good Business Sense: “Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large.”

This definition is changing due to all the continued growth and expansion of the field. And it’s seeping more and more into the workplace. Increasingly, companies are releasing reports to provide consumers with transparency when it comes to social responsibility.

According to, more than 5,500 companies around the world issued sustainability reports in 2011. That’s up from 800 a decade ago. The Rate the Raters report from found that more than 100 sets of ratings that measure which companies are most responsible.  Forbes acknowledged that this will continue in 2012, as “the Global Initiative for Sustainability Ratings will endeavor to standardize the ratings framework.”

In light of the increase in reporting of sustainability, CSR programs are becoming a more important part of the workplace. A Hewitt & Associates study looked at 230 workplaces with more than 100,000 employee as, finding that the more a company pursues social and environmental issues, the more engaged employees are. The Society for Human Resources Management also found that morale was 55% better, business processes were 43% more efficient, public images were stronger, and employee loyalty were 38% better in companies that place an emphasis on sustainability programs.

This is essential for attracting new employees in the field.  Linda Novick O’Keefe wrote for the Huffington Post: “The new generation of job-seekers places a high value on social obligation. 88% of new job seekers choose employers based on strong CSR value, and 86% would consider leaving if the companies’ CSR values no longer met their expectations.”

Which percentage would your company fall into?