Sustainability reporting is no longer just for companies.
This year, the Global Reporting Initiative (GRI), the world’s biggest sustainable reporting initiative, is introducing specific guidelines for non-profit reporting.
2 public companies and 1 university already have reports listed in the GRI's most recent list.
In comparison, 2,149 non-business organisations are UN Global Compact participants, of which 142 are categorised as global NGOs and 747 as local NGOs.
Normal GRI guidelines will be broadened “to reflect the value-driven nature of NGO work by introducing reporting on programme effectiveness”, according to the recently posted GRI sector supplement.
NGOs directly engaged in promoting sustainable development, will also hold a level of accountability for sustainable development outcomes.
In the GRI’s own words, the need for specific non-profit guidelines is due to the following reasoning:
• “Organized civil society has begun to carry out some of the functions traditionally carried out by state”
• “Non-profits significantly influence public policy development on an international, national as well as on a local level”
• “Questions on transparency within these entities have been raised and the Non-Profit Sector Supplement project was initiated as a response, to further enhance sustainability reporting practice in the non-profit sector”
Results from the GRI’s final public comment period suggest that programme effectiveness will be an overarching issue, and will call on non-profits to report on:
• Affected Stakeholder involvement
• Feedback, complaints and action
• Monitoring, Evaluation and Learning
• Gender and diversity
• Public Awareness and Advocacy
• Coordination
Non-profits can also expect values and governance will also be key issues.
24 May 2010
Securing employee and top management commitment rank among top ethical challenges
If this is true, ethics has a long way to go. What do ethics and compliance professionals need to do in order for their agenda to be taken seriously within their companies?
My colleague, Cora Ng, recently asked ethics & compliance experts what they see as the biggest challenge in their line of work.
According to the responses received, the top ten challenges currently facing ethics and compliance managers are:
1. Getting employee buy-in and commitment to true ethical behaviour
2. Getting support from top management and changing the view of compliance function as a mere cost centre
3. Fighting against the existing ‘turn-a-blind-eye’ culture, and the way ‘business has always been done’
4. Managing an effective global program that complies with different and sometimes contradicting local laws
5. Keeping abreast of ever increasing legislation and ensuring that new requirements are always met
6. Managing an effective compliance program in a resource constrained environment
7. Managing rapidly changing stakeholder expectations and avoiding negative media publicity as a result
8. Increased liability of individual prosecution under tough legislative regime
9. Educating, monitoring and managing activities of third parties to ensure compliance
10. Defining ‘adequate’ for your company’s compliance efforts, how do you know you’re doing enough?
(Note: The top three answers came from 35% of responses received.)
This may be the primary cause for a noted shift from rules-based ethics towards fostering a values-based cultures. A big research project we did last year found that Companies’ ethical policies have historically comprised extended lists of ‘dos’ and ‘don’ts’. Many still do.
One interviewee, David Bar, regional director for Europe at LRN has observed this trend towards values as well, noting that“more and more, we are seeing ethical policies being developed that are not about rules and legal transgressions… Instead, companies are seeking to provide parameters as to what constitutes acceptable behaviour within an organisation, with the aim of making that organisation a better place to work for and with.”
What does a values-based approach require?
As a bare minimum, this approach requires provision of a set of guiding principles, guidance, open dialogue about ethical challenges, training, honest dealings with suppliers, and building trust among stakeholders.
The above survey responses have informed an upcoming conference, the 3rd Global Anti-Corruption Summit (June, Washington DC).
My colleague, Cora Ng, recently asked ethics & compliance experts what they see as the biggest challenge in their line of work.
According to the responses received, the top ten challenges currently facing ethics and compliance managers are:
1. Getting employee buy-in and commitment to true ethical behaviour
2. Getting support from top management and changing the view of compliance function as a mere cost centre
3. Fighting against the existing ‘turn-a-blind-eye’ culture, and the way ‘business has always been done’
4. Managing an effective global program that complies with different and sometimes contradicting local laws
5. Keeping abreast of ever increasing legislation and ensuring that new requirements are always met
6. Managing an effective compliance program in a resource constrained environment
7. Managing rapidly changing stakeholder expectations and avoiding negative media publicity as a result
8. Increased liability of individual prosecution under tough legislative regime
9. Educating, monitoring and managing activities of third parties to ensure compliance
10. Defining ‘adequate’ for your company’s compliance efforts, how do you know you’re doing enough?
(Note: The top three answers came from 35% of responses received.)
This may be the primary cause for a noted shift from rules-based ethics towards fostering a values-based cultures. A big research project we did last year found that Companies’ ethical policies have historically comprised extended lists of ‘dos’ and ‘don’ts’. Many still do.
One interviewee, David Bar, regional director for Europe at LRN has observed this trend towards values as well, noting that“more and more, we are seeing ethical policies being developed that are not about rules and legal transgressions… Instead, companies are seeking to provide parameters as to what constitutes acceptable behaviour within an organisation, with the aim of making that organisation a better place to work for and with.”
What does a values-based approach require?
As a bare minimum, this approach requires provision of a set of guiding principles, guidance, open dialogue about ethical challenges, training, honest dealings with suppliers, and building trust among stakeholders.
The above survey responses have informed an upcoming conference, the 3rd Global Anti-Corruption Summit (June, Washington DC).
18 May 2010
The most stated words at RBS 2010: ‘DNA’ and ‘embedding’
As corporate social responsibility (CSR) and sustainability moves from a niche activity to the mainstream of business thinking, the role of CSR or corporate sustainability directors is evolving. Over, and over RBS speakers stated their plans to embedding CSR into operational strategy and the DNA of corporate culture.
Is CSR being embedded, and how is this changing the role of in-house CSR professionals?
CSR directors are increasingly aiming to become victims of their own success. By effectively influencing their companies’ DNA, they are escalated the number and scope of CSR activities. A natural outcome of this is the devolution of responsibilities.
Recent Ethical Corporation research published in the report ‘How to Embed Corporate Responsibility across Different Parts of Your Company’ reveals some overwhelming statistics about their changing roles.
Firstly, when Ethical Corporation asked some of our key sustainability clients what they will need to learn more about in order to succeed in your job, each respondent listed a range of answers. The aggregated responses illustrates their role diversity (n=50):
Resources are also being redirected. In 2009, following the global financial crisis, over 1/3 of sustainability survey respondents stated a reduction in the direct budgets they manage (n=50).
In addition, 1/3 of respondents already recently introduced a company-wide framework for monitoring social or corporate responsibility impacts per department (n=54):
These days, advanced sustainability strategies encompasses diverse tactile jobs such as managing water footprinting, energy efficiency, integrated sustainability-financial reporting, safeguards against corruption, and even ethics measures that are integrated into employee performance appraisals.
A diverse set of competencies required to embed CSR suggests that operational staff can have more capacity to implement many CSR activities more effectively.
But, CSR employees are not working themselves out of a job. We've noticed a shift in their remit towards impact measurement, reporting, managing partnerships and stakeholders, ethically motivating and engaging employees and working with departments to set strategic ethical targets.
It was no surprise to find that 63% of sustainability survey respondents have four or less employees in their CSR team (n=50):
What do CSR directors need to know now?
Ethical Corporation sought to understand exactly how companies effectively embed CSR. Further,
• What is the role of a central corporate responsibility department?
• How can a CSR department work effectively with other business functions?
• What are the best methods and tools for embedding CSR right across a company’s activities?
These CSR facilitators must learn to speak the language of, and understand the incentives that motivate and persuade managerial staff across the company. This includes working closely with Procurement, Human Resources, Finance, Operations, Facilities, and the Senior Management team.
Ethical Corporation’s publication features individual CSR guides for each of these departments, each filled with real life examples. A free summary can be downloaded online.
Is CSR being embedded, and how is this changing the role of in-house CSR professionals?
CSR directors are increasingly aiming to become victims of their own success. By effectively influencing their companies’ DNA, they are escalated the number and scope of CSR activities. A natural outcome of this is the devolution of responsibilities.
Recent Ethical Corporation research published in the report ‘How to Embed Corporate Responsibility across Different Parts of Your Company’ reveals some overwhelming statistics about their changing roles.
Firstly, when Ethical Corporation asked some of our key sustainability clients what they will need to learn more about in order to succeed in your job, each respondent listed a range of answers. The aggregated responses illustrates their role diversity (n=50):
Resources are also being redirected. In 2009, following the global financial crisis, over 1/3 of sustainability survey respondents stated a reduction in the direct budgets they manage (n=50).
In addition, 1/3 of respondents already recently introduced a company-wide framework for monitoring social or corporate responsibility impacts per department (n=54):
These days, advanced sustainability strategies encompasses diverse tactile jobs such as managing water footprinting, energy efficiency, integrated sustainability-financial reporting, safeguards against corruption, and even ethics measures that are integrated into employee performance appraisals.
A diverse set of competencies required to embed CSR suggests that operational staff can have more capacity to implement many CSR activities more effectively.
But, CSR employees are not working themselves out of a job. We've noticed a shift in their remit towards impact measurement, reporting, managing partnerships and stakeholders, ethically motivating and engaging employees and working with departments to set strategic ethical targets.
It was no surprise to find that 63% of sustainability survey respondents have four or less employees in their CSR team (n=50):
What do CSR directors need to know now?
Ethical Corporation sought to understand exactly how companies effectively embed CSR. Further,
• What is the role of a central corporate responsibility department?
• How can a CSR department work effectively with other business functions?
• What are the best methods and tools for embedding CSR right across a company’s activities?
These CSR facilitators must learn to speak the language of, and understand the incentives that motivate and persuade managerial staff across the company. This includes working closely with Procurement, Human Resources, Finance, Operations, Facilities, and the Senior Management team.
Ethical Corporation’s publication features individual CSR guides for each of these departments, each filled with real life examples. A free summary can be downloaded online.
12 May 2010
Corporate sustainability takes notes from IT
A recent, rather refreshing article published in the Harvard Business Review advocates for sustainability that is embedded in strategy, a movement from structure to networks and value creation for customers, shareholders and other stakeholders.
The writers of the article, Lubin and Esty, have analysed sustainability with megatrends approach, and tell us how we can learn from the experience of the IT sector.
"First, they [IT companies] focused on reducing cost, risks, and waste and delivering proof-of-value. Second, they redesigned selected products, processes, or business functions to optimize their performance—in essence, progressing from doing old things in new ways to doing new things in new ways. Third, they drove revenue growth by integrating innovative approaches into their core strategies. Fourth, they differentiated their value propositions through new business models that used these innovations to enhance corporate culture, brand leadership, and other intangibles to secure durable competitive advantage."
What are their steps to value creation? Innovation is the bedrock of progress at each stage.
1. Do old things in new ways. "Firms focus on outperforming competitors on regulatory compliance and environment-related cost and risk management. At its inception 30 years ago, 3M’s Pollution Prevention Pays was just this kind of initiative. As of 2005, PPP had reduced 3M pollutants by more than 2.6 billion pounds and saved the company more than $1 billion."
2. Do new things in new ways. "Firms engage in widespread redesign of products, processes, and whole systems to optimize natural resource efficiencies and risk management across their value chains."
3. Transform core business. "Sustainability innovations become the source of new revenues and growth."
4. New business model creation and differentiation. "At the highest level, firms exploit the megatrend as a source of differentiation in business model, brand, employee engagement, and other intangibles, fundamentally repositioning the company and redefining its strategy for competitive advantage. GE’s ecomagination initiative, poised to deliver $25 billion in revenues in 2010, enabled CEO Jeff Immelt not just to reposition the company as an energy and environmental solutions provider but to build a green aura into the GE brand."
The writers of the article, Lubin and Esty, have analysed sustainability with megatrends approach, and tell us how we can learn from the experience of the IT sector.
"First, they [IT companies] focused on reducing cost, risks, and waste and delivering proof-of-value. Second, they redesigned selected products, processes, or business functions to optimize their performance—in essence, progressing from doing old things in new ways to doing new things in new ways. Third, they drove revenue growth by integrating innovative approaches into their core strategies. Fourth, they differentiated their value propositions through new business models that used these innovations to enhance corporate culture, brand leadership, and other intangibles to secure durable competitive advantage."
What are their steps to value creation? Innovation is the bedrock of progress at each stage.
1. Do old things in new ways. "Firms focus on outperforming competitors on regulatory compliance and environment-related cost and risk management. At its inception 30 years ago, 3M’s Pollution Prevention Pays was just this kind of initiative. As of 2005, PPP had reduced 3M pollutants by more than 2.6 billion pounds and saved the company more than $1 billion."
2. Do new things in new ways. "Firms engage in widespread redesign of products, processes, and whole systems to optimize natural resource efficiencies and risk management across their value chains."
3. Transform core business. "Sustainability innovations become the source of new revenues and growth."
4. New business model creation and differentiation. "At the highest level, firms exploit the megatrend as a source of differentiation in business model, brand, employee engagement, and other intangibles, fundamentally repositioning the company and redefining its strategy for competitive advantage. GE’s ecomagination initiative, poised to deliver $25 billion in revenues in 2010, enabled CEO Jeff Immelt not just to reposition the company as an energy and environmental solutions provider but to build a green aura into the GE brand."
11 May 2010
Sustainability incentives work better than deterrents
Innovation was a popular topic at last week’s Responsible Business Summit in London.
More and more companies are taking a positive, proactive approach to environmental and societal challenges through innovation.
Previously major multinationals were approaching issues such as climate change and community engagement purely as business and reputational risks.
Now, companies such as Marks and Spencer, Vodafone and H&M realise that they can have a bigger impact by creating a work environment that is open to pioneering product ideas and revolutionary approaches to daily operations.
Innovation requires the establishment of positive incentives for employees. Thanks to this approach, the three companies above have realised cost-saving, environmentally-friendly and socially supportive technologies and programmes such as mobile phone banking, packaging with reduced emissions, and more transparent and efficient supply chains.
Peter Unsworth, the CEO of Tata Beverage Group, also discussed their application of R&D technology to ‘disruptive product innovation’. Tata’s innovation-enabling ethos and organisational structure encourages all employees to consider sustainability improvements in all of their products and services.
Starbucks is another example. The company is reaching out to customors for their ideas on reducing the number of non-recyclable cups by creating a convenient alternative. Read about their betacup challenge here.
Sustainability professional’s interest in innovation is tied to their company’s overall approach to innovation.
A recent survey by the global consulting firm McKinsey finds that companies are spending more money on innovation, post-recession: “Four in ten respondents report that both R&D budgets and activity levels are up this year relative to 2009. What’s more, executives are remarkably optimistic that the R&D moves their companies made during the downturn will serve them well in the coming three to five years.”
Two other popular themes were trust and embedding corporate sustainability. These will be the topics of my next blogs.
More and more companies are taking a positive, proactive approach to environmental and societal challenges through innovation.
Previously major multinationals were approaching issues such as climate change and community engagement purely as business and reputational risks.
Now, companies such as Marks and Spencer, Vodafone and H&M realise that they can have a bigger impact by creating a work environment that is open to pioneering product ideas and revolutionary approaches to daily operations.
Innovation requires the establishment of positive incentives for employees. Thanks to this approach, the three companies above have realised cost-saving, environmentally-friendly and socially supportive technologies and programmes such as mobile phone banking, packaging with reduced emissions, and more transparent and efficient supply chains.
Peter Unsworth, the CEO of Tata Beverage Group, also discussed their application of R&D technology to ‘disruptive product innovation’. Tata’s innovation-enabling ethos and organisational structure encourages all employees to consider sustainability improvements in all of their products and services.
Starbucks is another example. The company is reaching out to customors for their ideas on reducing the number of non-recyclable cups by creating a convenient alternative. Read about their betacup challenge here.
Sustainability professional’s interest in innovation is tied to their company’s overall approach to innovation.
A recent survey by the global consulting firm McKinsey finds that companies are spending more money on innovation, post-recession: “Four in ten respondents report that both R&D budgets and activity levels are up this year relative to 2009. What’s more, executives are remarkably optimistic that the R&D moves their companies made during the downturn will serve them well in the coming three to five years.”
Two other popular themes were trust and embedding corporate sustainability. These will be the topics of my next blogs.
2 May 2010
How sustainable is the role of a sustainability professional?
Controversial? Perhaps. But it's a genuine question to consider.
Several CSR managers have told me that they hope to work themselves out of a job, as they aim to fully embed all CSR activities into the every day activities of their operational colleagues.
This sounds portentously similar to the mantra of international development professionals.
I would argue that as companies embed CSR, the need for CSR professionals is not eliminated, but their role shifts to that of a strategist, facilitator and communicator.
Data published last week by Acre Resources supports this position.
The recruitment agency's survey of 595 CR professionals worldwide finds that the top 5 job functions for those working in-house are reporting, environment, community investment, climate change and stakeholder engagement.
Similarly, the top 5 job functions for consultants are reporting, audit/assurance, stakeholder engagement, climate change and external marketing.
Acre purports that CSR has evolved from a relatively niche sector to an increasingly important business function for all areas of industry. Furthermore, 72% of survey respondents continue working in-house as opposed to working as consultants; and, 80% felt as or more secure in their role compared with 12 months ago.
The survey also provides the most thorough insight into the wage levels, the median salary falls within the range of $85,000-$90,000). In the UK, salaries have risen from around £46,000 to £80,600.
A note of caution: although this year's survey is global, it remains heavily UK-based.
This Wednesday, Peter Unsworth, CEO of Tata Beverage Group, John Brady, CEO of Plant Health Care and I will discuss this topic at the Responsible Business Summit. The session will explore the debate 'embedded CSR versus active CSR departments: what's the best model?'
Several CSR managers have told me that they hope to work themselves out of a job, as they aim to fully embed all CSR activities into the every day activities of their operational colleagues.
This sounds portentously similar to the mantra of international development professionals.
I would argue that as companies embed CSR, the need for CSR professionals is not eliminated, but their role shifts to that of a strategist, facilitator and communicator.
Data published last week by Acre Resources supports this position.
The recruitment agency's survey of 595 CR professionals worldwide finds that the top 5 job functions for those working in-house are reporting, environment, community investment, climate change and stakeholder engagement.
Similarly, the top 5 job functions for consultants are reporting, audit/assurance, stakeholder engagement, climate change and external marketing.
Acre purports that CSR has evolved from a relatively niche sector to an increasingly important business function for all areas of industry. Furthermore, 72% of survey respondents continue working in-house as opposed to working as consultants; and, 80% felt as or more secure in their role compared with 12 months ago.
The survey also provides the most thorough insight into the wage levels, the median salary falls within the range of $85,000-$90,000). In the UK, salaries have risen from around £46,000 to £80,600.
A note of caution: although this year's survey is global, it remains heavily UK-based.
This Wednesday, Peter Unsworth, CEO of Tata Beverage Group, John Brady, CEO of Plant Health Care and I will discuss this topic at the Responsible Business Summit. The session will explore the debate 'embedded CSR versus active CSR departments: what's the best model?'
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