Sustainability Research

Companies still don’t know how to measure and report economic contributions to a community

2010-08-25T09:56:00.003+01:00

How can companies select the most meaningful indicator to report, for example, their local economic performance? What’s a better way of stating economic contributions to a community than 'paid $X in local tax contributions'?

Indicators become more meaningful when they communicate the greater impact of their work, both positive and negative.

How about using these indicators such as:
- 'created demand for $X in local products'
- 'established a supply of products for local market worth $X/yr and growing'
- ‘investing in (or now competing with!) X local businesses’
- 'integrated X local suppliers into our global supply chain'

This is exactly what a few companies, such as SABMiller, Nestle and Unilever, have started testing.

Download a free summary of our research on how some companies are selecting impact indicators, and better understanding the environments they work in.

Survey suggests Canadian and American interest in CSR is growing

2010-08-11T08:35:00.003+01:00

In some ways, corporate sustainability in North America lags behind Europe. Anyone with experience in corporate sustainability would agree that this recent Washington Post article pulls the sustainability debate in the US back a decade.

For corporate sustainability to progress in North America, stakeholder education about sustainability is obligatory, including awareness of the remit of sustainability professionals.

73 corporate sustainability professionals recently surveyed in Canada agreed with this requirement. Stakeholder awareness - especially among the general public – was the third biggest opportunity identified.

Top three opportunities identified by Canadians working in corporate sustainability:
1. Pursuing renewable energy & energy efficiency (22%)
2. Developing solutions to climate change (16%)
3. Generating public awareness (13%)

Top three challenges identified:
1. Climate change (27%)
2. Embedding CSR into strategy and operations (24%)
3. Addressing the needs of First Nations communities (11%)

Our upcoming briefing on the state of corporate sustainability in Canada indicates a significant boost in company commitments to sustainability, and progress is largely attributable to government commitment and legislation.

So, what do corporate sustainability teams spend most of their time doing?

They are not spending their time on charity or orchestrating great disasters as the Washington Post suggests.

According to our survey of 73 professionals in Canada and 147 in the United States:

Top three activities of CSR/sustainability teams in the United States:
1. Partnerships & collaboration tied with Reporting (33% each)
2. Performance measurement (27%)
3. Community engagement (22%)

Top three activities of CSR/sustainability teams in Canada:
1. Performance measurement tied with reporting (37% each)
2. Partnerships & collaboration (29%)
3. Community engagement tied with building corporate reputation (25% each)

There has also been a noticeable rise in strategic engagement of Canadian and American professionals, and a growing interest in working hand-in-hand with operational managers to embed sustainable practices across their company.

Preliminary findings available on measuring social and economic impact

2010-07-28T09:29:00.004+01:00

Preliminary findings are now available from our current research into how and why companies are measuring social and economic impact in vulnerable communities.

View these findings in the slideshow from a well-attended roundtable debate in London.

Thanks to all who attended and contributed to the debate.

Live surveys on the state of CSR in Canada and the USA

2010-07-28T09:18:00.002+01:00

If you are a corporate sustainability practitioner located in Canada or the USA, you're invited to participate in our sustainability surveys.

Canadian practitioners can click here.

American practitioners can click here.

Some findings will be shared with participants, and full country briefings will be published in September and October this year.

Thanks in advance!

OECD's MNE Guidelines to get a boost on supply chains, human rights & environment

2010-07-28T08:53:00.007+01:00

On the 1st of June the OECD continued it's long, consultative process for updating the Guidelines for Multinational Enterprises.

The OECD chose to strengthen the guidelines in response to stakeholder requests for a greater focus on human rights, supply chains and environment (a previous previous blog post links to these requests).

The consultation was based on discussion papers by John Ruggie, BSR and the OECD, each paper seeking to outline the core aspects of human rights, supply chains and environment.

The white papers and complimentary slideshows available on the OECD website provide a nice refresher for anyone working in one of these three areas.

Let's hope the final update of the Guidelines are able to reflect these core issues, and push businesses and governments to challenge the way they operate.

CCC says UK growth is dependent on low-carbon funding

2010-07-21T08:27:00.007+01:00

In the new report 'Building a low-carbon economy - the UK's innovation challenge', the prestigious Climate Change Committee warns that economic growth and progress towards climate targets are dependent on continued funding of low-carbon technologies.

The committee - comprised of nine distinguished scientists, economists, political scientists and an engineer - was asked by the UK's Chief Scientific Adviser, John Beddington to "review the adequacy of research and innovation arrangements in the UK related to achieving our climate change goals".

A strong recommendation emerged: the continued funding of green technologies, which the committee believes is sub-par relative to funding levels in other countries.

The report supports UK development and deployment of offshore wind, marine, carbon capture and storage (CCS) for power generation, aviation technologies, smart grids, and electric vehicle technologies.

It encourages research in hydrogen fuel cell vehicles, technologies in agriculture and industry, 3rd generation solar PV technologies, energy storage and advanced biofuels technologies.

Additional recommendations to the UK Government include longer-term climate change objectives (beyond 2020) and to quickly develop a clear strategy on climate change so that the necessary institutions can be supported or established.

Cameron plans to eliminate the Sustainable Development Commission

2010-07-21T08:02:00.003+01:00

Contrary to David Cameron's pledge to lead the "greenest government ever", the UK Government plans to axe its sustainability watchdog.

The Sustainable Development Commission was established in order to advise government how to cut carbon emissions.

The Green Party is calling it an absolute disaster, and purports that public sector spending cuts are misdirected.

According to the Guardian, Caroline Lucas MP, the head of the Green party, called the move an "absolute disaster". "The Sustainable Development Commission has been a vital source of well-informed scrutiny of government policy. The commission has come out with very sensible proposals."

In a similar vein, the new Government has also failed to appoint a replacement CSR minister.

Given a shortfall of sustainability regulation, is removal of these positions likely to impact the level of corporate commitment to sustainability?

Reports of unethical findings in supply chains are aplenty

2010-07-13T23:48:00.007+01:00

Unethical allegations

In Ethical Corporation's new briefing, Rajesh Chhabara, our Asia Editor, states “It’s a familiar picture. Dirty Clothes, a report in April 2010 by the National Labour Committee, a US-based rights group, accused a Wal-Mart and JC Penney supplier in Jordan of human trafficking and abuse of young women migrant workers from Bangladesh, Sri Lanka and India.”

Are supply chain scorecards helping?

Traditional supply chain scorecards have made a significant impact in areas such as strengthening the rule of law and ethical norms, but have under-performed in areas such as worker awareness and temporary worker inclusion.

How can this scorecard/audit approach be improved?

Success in prevention

Sustainability professionals and consumers alike are applauding pro-active measures taken by companies such as P&G and Wal-Mart.

The UN Global Compact hosts a website on common human rights dilemmas. Through case studies, the UN hopes to educate and encourage discussion within companies.

The UN also recognises leaders, recently recommending an M&S supplier in Sri Lanka, the Brandix Group’s ‘Green factory’ as a model of sustainable production.

P&G recently introduced their supplier code.

Wal-Mart made headlines with the introduction of their sustainability index and supplier assessments this year.

More and more companies are realising faster change by openly working with suppliers to address ethical challenges.

Further reading

Recent supply chain allegations have been published by watchdog organisations such as War on Want, an Australian television company, and major newspapers such as the The Guardian, and reports of garment worker deaths due to a fire in a factory in Bangladesh.

Each of the companies featured in these reports now devote significant attention to factory conditions and preventative measures.

Read more in our Briefing on Supply Chains.

Fair trade for developed countries

2010-07-07T09:35:00.007+01:00

Farmer Direct, a Canadian farmer-owned cooperative, is the first organisation to receive certification for a fair trade scheme that has been adapted to the needs of developed countries.

Why fair trade in developed countries?

Two farmers who have helped formalise the fairDeal explain the needs of workers and farmers in developed countries.

"People usually associate fair trade with coffee, sugar, bananas and other crops from the global south, but fair wages to farm workers and fair prices to farmers are just as much a concern in industrialized nations like Canada and the United States," explains Murray Horkoff a Farmer Direct Coop farmer-owner. "Now organic consumers can purchase fairly traded, flax, wheat, beans, hemp, peas, lentils and other crops grown in the Northern Hemisphere," adds Horkoff.

"Most of society is unaware that farm workers in many states and provinces are not protected under Federal, State or Provincial Labour laws. Since farm workers have no recourse under law they are often exploited. Therefore, organic consumers are now demanding organic foods that are fairly traded," states Keith Neu another Farmer Direct Coop farmer-owner. "We are proud to be able to offer certified organic, fairly traded food to these families."

About the fairDeal

Along with fair prices to farmers and living wages to farm workers the fairDeal, an organic industry supply chain non-profit and product seal, was founded to incorporate fair trade, pay equity and other additional ethical standards into organic agriculture.

The fairDeal is a nonprofit organisation that was developed through the collective efforts of a number of organisations in Canada and the US including the Agricultural Justice Project, RAFI and Farmer Direct Co-operative.

Farms are independently certified through Quality Certification Services, an independent auditing company with a long history of organic certification across North America.

For more information on the fairDeal is available on the Farmer Direct Coop website.

Companies look beyond performance, and now measure impacts

2010-06-30T09:38:00.008+01:00

Our analysts have been conducting in-depth analysis on companies are now measuring more than just performance and outputs. Leading companies wish to understand the true impact of their business on local communities, and communicate it to their stakeholders.

Our upcoming report focuses on an area of sustainability that is not well-understood by companies: how to measure socio-economic impacts.

Initial findings suggest that corporate communication and reputation-building needs are driving this interest in socio-economic impacts.

Find out more

On the 14th of July, the London Centre for Corporate Governance & Ethics and Ethical Corporation will be hosting a free roundtable debate on this topic. In August, a free summary of this report will be available here.

CEOs are more optimistic about sustainability than sustainability managers

2010-06-30T08:54:00.010+01:00

In a United Nations Global Compact (UNGC) and Accenture study of 766 CEOs 93% believe that sustainability will be critical to their future success and 81% said that sustainability issues had become part of their company’s strategy and operations.

That's good news, but is it all talk?

Well, not necessarily.

78% of the CEOs say the downturn has actually raised the importance of sustainability - a term which has also come to incorporate the reliable provision of a company's products and services to communities. According to CEOs, sustainability is just good business, and it is being recognized as a source of cost efficiencies and revenue growth.

Consumer trust again emerges as the much-discussed driving factor. 72% of those surveyed said that "brand, trust and reputation" was a primary factor.

According to the study, consumers have become the most influential stakeholder - a title previously reserved for employees. 58% of the CEOs selected consumers as the stakeholders with the greatest influence, while 45% selected employees.

Government is the third most important stakeholder, selected by 45% of CEOs.

The most affirming news is that 54% of the CEOs surveyed think sustainability will be fully integrated into business worldwide within the decade, but 80% say it will happen within 15 years.

This view contrasts with the often pessimistic discussions that have emerged among sustainability managers at Ethical Corporation events. Perhaps top management is more committed than we think.

Read more about how companies are actually integrating sustainability at www.ethicalcorp.com/csr.

Instant news service on corruption launched

2010-06-22T23:51:00.004+01:00

Thomson Reuters, the well-known providers of instant information on global disasters, has today launched a similiar service on corruption.

TrustLaw is described as a global hub for free legal assistance and anti-corruption news and information.

Watch this site as its content develops. It may prove to be a rich source of country corruption information, case study analysis, updates on global anti-corruption conventions and free legal advice.

When will sustainability rankings become more accurate?

2010-06-22T23:48:00.001+01:00

Macleans recently published a list of the 50 most socially responsible companies with a strong presence in Canada.

Among the leaders are Adidas Group, Ballard Power Systems Inc., BCE Inc., BMO Bank of Montreal and BMW.

Some of their CSR practices are worth sharing. However, there are a number of critiques on their methodology. This is commonly the case with corporate ranking schemes.

Yes, it is good to recognise socially and environmentally productive activities. But it is time that we stop labelling a giant corporation as an overall sustainable leader based on a few activities.

It’s time we start rewarding companies that have embedded sustainable practices into their company’s strategy, operations and culture. At a minimum, let’s put a company’s praise into context.

Does such a ranking of ‘embeddedness’ exist?

Water Footprinting versus Water Life Cycle Analysis

2010-06-16T18:54:00.007+01:00

Water is the new environmental issue being discussed by businesses.

This does not mean that we can manage it in the same way we manage carbon emissions. Why? Well, because water is also a social and political issue.

So, how should companies measure water use, and use the findings to inform business strategy?

One camp supports the adaptation of Life Cycle Assessments (LCAs) to water

LCAs now have a standardised approach to measuring greenhouse gas emissions at the product level.

Advocates of LCA purport that we should not reinvent the wheel, and simply adapt this widely-accepted method to water.

Additional benefits of LCA for water include:
1. Quantifies impact and results in an absolute volume-based figure for which the method is more robust and incontestable
2. Allows stakeholders to benchmark competitors, and compare products irrespective of their industry or location
3. Focuses on direct impact only
4. Benefit from globally accepted method used for carbon that has clear timelines and budget estimates

In the other corner is water footprinting

Proponents for footprinting include organisations such as WWF and the Water Footprint Network.

Benefits of the water footprinting methodology include:
1. More inclusive as it includes direct and indirect water use along the value chain
2. Captures the full impact picture including type of water use, location, timing, temporal and local scarcity dimensions of water
3. Provides basis for local impact assessment and formulation of sustainable water use strategy

Here is an overview of the results of a recent water footprinting exercise, presented by WWF UK's Director of Corporate Partnerships at the 2010 Climate Change Summit.

These methodologies are not mutually exclusive. Hypothetically, a company could measure it's water LCA, and follow-up with a longer-term footprinting in order to place the findings into context, looking throughout the entire supply chain.

Read more about corporate water strategies at www.ethicalcorp.com/water.

Chinese consumer cynicism about corporate sustainability claims

2010-06-13T17:41:00.005+01:00

Chinese consumers are becoming just as cynical as Western consumers about corporate green- and whitewashing (insincere environmental and social claims communicated by companies), according to the GlobeScan’s annual global tracking research.

The study, which interviewed over 30,000 people across 34 countries, finds that "while in 2005 more than 80% of Chinese consumers felt that companies communicated ‘honestly and truthfully’ about their social and environmental performance, this has now fallen sharply, with only 40 per cent feeling this way in this year’s study".

An increasing number of consumers are reading company sustainability pages. However, an even larger number of consumers (30%) look beyond company websites, to other online sources for information about a company's sustainability performance.

GlobScan also finds that the top-scoring green consumers of 2010 are in the developing economies of India, Brazil, China, and then Mexico.

Read more here.

UK DEFRA Chief Scientific Advisor explains the science of climate change

2010-06-13T17:26:00.006+01:00

If you are given an opportunity to listen to Professor Robert Watson, UK DEFRA's Chief Scientific Advisor speak, take it!

Watson has the ability to captivate an audience and explain, in simple terms, the science behind climate change's impact on rising temperatures, increases water stress and more.

Here is a link to one of his many presentations on the science of climate change, and another on food security.

A 60-second clip gets to the crux of the climate change challenge

2010-06-13T16:53:00.003+01:00

WWF Canada gets straight to the point with this public advocacy clip, highlighting the need to change societal norms.

Sneak peek into a new report on the CRC

2010-06-08T23:30:00.006+01:00

Here's a sneak peek into the results from Ethical Corporation's research for the brand new, 2nd edition report 'The Carbon Reduction Energy Efficiency Scheme: How Companies Cut Carbon, Save Money and Meet Legal Compliance'. The report covers:

Insight into how the CRC was designed, such as…

The scheme has been designed so that, over the long term, the relatively high price of allowances will make it more cost-effective for all firms to invest in cleaner technologies, improved production processes and energy-efficiency strategies. In this respect, the cap-and-trade market structure provides an incentive for organisations to reduce their emissions.

Strategic approaches to trading, such as…

By identifying and separating out its emissions sources, a firm can plot a marginal abatement curve that enables the firm to develop the most cost-effective and efficient abatement strategy based on its existing emissions. Firms should only purchase CRC allowances if all the abatement opportunities have been exhausted. The market price of carbon would need to be lower than the cost of abatement or there would be no point in purchasing allowances.

Exemptions from the scheme, such as…

Subsidiaries of CRC organisations (or whole CRC organisations if no subsidiaries exist) are exempt if they can demonstrate that they have more than 25% of their relevant emissions covered by Climate Change Agreements.

Last-minute changes to the scheme, such as…

Principal subsidiaries have now been renamed to ‘Significant Group Undertakings’, and regulations have been made more flexible for this group. Subsidiaries that are large enough to qualify in their own right (over 6000MWh) may now opt to participate in the scheme separately from their organisation group. The caveat here is that organisations cannot opt to disaggregate a nominated SGU if this will bring their own energy consumption below the 6000MWh threshold.

Critiques of the scheme, such as…

The British Retail Consortium believes that the UK Government has failed to understand the business realities of franchising operations, arguing that franchisers have very little control over their franchisees’ energy management.

BT contests DECC’s decision to exclude renewable energy, requiring companies to report renewables at the average grid factor. Several other interviewees echoed BT’s concerns, yet most agreed why DECC seeks to avoid double counting of fuel credits.

A simple presentation of what is required by your company, and associated fines such as…

If your organisation is eligible for CRC, but has failed to register by the end of the registration period, you will have to pay a fixed fine of £5,000. Then, for each subsequent working day you fail to register, you will be fined an additional £500 per working day to a maximum of 80 working days, together with publication of non-compliance.

Expert opinions on the specifics of the scheme, such as…

The following quote by an Asda representative: “The problem with a league table is that it is open to abuse, in that companies that have taken no action to reduce their carbon outputs could take rapid action and be seen as progressive whereas those companies, such as Asda, that have a sensible plan to reduce carbon outputs could join the scheme and have an impossible challenge of further reducing carbon against those companies who have taken little action to date. For the measure to work effectively, credit must be given to work undertaken before CRCs came into effect.”

By the end of the week, you can download a free summary from www.ethicalcorp.com/crc.

Water stewardship surfaces as a top concern among sustainability professionals

2010-06-07T10:42:00.009+01:00

Responsible water management has emerged as a leading concern among sustainability managers. 52% of sustainability professionals surveyed already list water stewardship as one of their company’s top 5 responsible business issues, while 99% believe that water concerns will become more of a priority for businesses in the next 5-10 years.

Ethical Corporation’s brand new report, Unlocking the Profit in Water Savings, 2nd Edition, explores how big companies manage water risk – and the business opportunities in doing so.

Many companies have made significant progress in their water management strategies. Since the first edition of this report in 2008, mainly more clear lessons and twice as many solid case studies have surfaced.

Several companies interviewed, such as Rio Tinto, now have ten years of experience to draw from.

Like carbon, the initial approach to water stewardship focuses on reduction. Efficiency and simple monitoring technologies provide quick wins, often realising a return on investment within one year.

Unlike carbon, corporate water management engulfs a host of direct social, economic and environmental risks. Degradation of community access, treatment and sanitation, ecosystems, scarcity and licenses to operate have become realities for many of the sustainability managers interviewed and surveyed.

A company’s water strategy depends on the specific risks and local issues confronting its operations, and determines where to focus its activities.

For more information:

Read about water management strategies from Whitbread, M&S, Unilever, Shell, SAB Miller, Coca-Cola, Molson Coors, Intel, Rio Tinto, and many more. Visit the report web page.

Listen to a podcast on one of our case studies. Toby Webb interviews Andrew Wales about water management at SAB Miller.

Can volunteering be strategic or is it merely charity?

2010-06-01T19:13:00.008+01:00

A few weeks ago, I was discussing the business case for volunteering with the Lord Mayor, City of London.

The City of London Corporation’s recent publication seeks to articulate the business case for volunteering.

Recent research by a number of organisations and academic institutions supports this case for volunteering. One challenge researchers face is that the impact of volunteering is usually indirect or induced. Cause-effect can be difficult to ascertain.

If you are looking to build a case for volunteering in your company, or tightening the connection between your volunteering programme and your bottom line, here are some statistics to help you:
2010 findings from the City of London’s ‘Volunteering – The Business Case’:

- The average annual cost to support each volunteer involved in an education based activity in London is £381 per person per annum. (This figure comprises the full cost including direct management costs and all additional costs involved in running an effective volunteering programme)
- 31% of organisations used volunteering as part of their strategy to address critical business issues.
- Over 60% agreed that volunteering builds teamwork skills in employees.
- Volunteers believe that they developed the following competencies:
66% communication skills
65% ability to help others
54% adaptability
45% influencing/negotiating
43% team working
41% leadership
41% willingness to improve
40% planning/organising
39% decision making
39% problem solving
39% fostering relationships and networks

The Institute for Volunteering Research conducted a 'Helping Out' study for the UK Cabinet Office in 2008. They found that:
1. 54% of UK employees who do not have access to a volunteering scheme, wish their employer had one.
2. The same study found 67% of UK volunteers felt satisfaction from their results.
3. 82% of UK employees said that having time off would motivate them to volunteer.
4. Where a volunteering scheme existed, 29% of employees volunteered.
5. Women are more likely to volunteer than men (64% vs 54%).
6. The biggest motivator for employee volunteering is having the ability to choose where to volunteer, followed by paid time off and the opportunity to build skills.
7. Employees of large UK companies are 47% more likely to have a work volunteer scheme.

D&T's 2007 Impact Survey found:
8. 62% of employees would prefer to work for a company where they can volunteer

According to the UK Home Office:
9. 11.1 m people involved in formal volunteering at least once a month are most likely to be involved in: organising or helping to run an activity or event (57%), raising or handling money (54%), leading a group/ being a member of a committee, giving other practical help (32%).

Do-It.org finds:
10. The most important aspect of volunteering opportunity is career training (36%), closely followed by wanting to make a difference (27%).

According to this study from Fidelity Charitable Gift Fund and VolunteerMatch:
11. Americans who volunteer their time and skills to nonprofit organizations donate an average of 10 times more money to charity than people who don't volunteer.

A 2009 Boston College publication shows:
12. The top three reasons American companies provide volunteering are PR, job satisfaction and team building.
13. Boston College has also published the drivers for volunteering effectiveness based on Fortune 500 companies. They found that one of the biggest drivers (36%) is having a culture of volunteering, which includes senior management volunteerism.
14. The college also designed a benchmarking tool for measuring the impact of volunteering.

A related area that lacks sufficient research is employee ethics. Recently LRN rightfully reported that most companies could do a lot more to encourage employees to do good on-the-job, not just off-the-job. One in three employees have left a company due to questionable ethics:

The sceptical consumer: when does trust matter?

2010-06-01T18:57:00.005+01:00

Facebook and Google are frequently attacked for having unethical intentions with user data.

Yet, Google is expanding and experiencing exponential increases in traffic, while the latest number of Facebook users suggests that if it were a country, Facebook would be the third largest nation in the world.

Or, is it that we’re all a bit fickle with our trust, and relish the opportunity to complain about big business?

When it comes to our trust in companies, what is our breaking point?

Nestle still can’t shake a large number of baby formula critiques, despite its strong commitment to sustainability, and active engagement with a variety of stakeholders and critical friends. (You can find interesting debates in the video coverage of last week’s Creating Shared Value event)

BP’s integrated sustainability measures will be overshadowed by the reputational damage of the recent oil spill for years to come.

The Bodyshop fell under mass criticism for false claims about testing on animals. Now, decades later, they are frequently heralded as a sustainability leader amongst multinational companies.

What can we learn from recent trustworthy research?

Key trends revealed by Edelman’s annual Trust Barometer:
• For the first time, this year’s survey suggests that trust is as important as important to corporate reputation as the quality of their products and services.
• Global trust in business is up modestly but the rebound is fueled by a spike in a handful of Western countries, especially the United States where it jumped 18 points to 54%.
• Trust in business remains high in three of the four BRIC countries, with Brazil, India, and China above 60%.
• Trust in banks declined dramatically in most Western countries, plummeting 39 points (68 to 29%) in the U.S. and 20 points (41 to 21%) in the U.K. from 2007-2010.
• While Sweden, Canada, and Germany remain the most trusted countries for global headquarters (76, 76, and 75%, respectively), the U.S. is now trusted by 61%, up 10 points from last year. China rose by seven points in this category (27 to 34%).
• In all 22 countries, when asked which stakeholder should be most important to a CEO’s business decisions, respondents replied that “all stakeholders are equally important” – by as much as a 4:1 margin against individual stakeholders.
• Trust in business jumps by 26 points in Italy, 18 points in the U.S., 15 points in the Netherlands, and 14 points in Spain. In Russia, trust in business falls by 10 points (to 42%).
• Trust in government is stable, with significant moves in the U.S. (up 16 points to 46%) and in Russia, where trust decreased by 10 points to 38%.
• In 20 countries, corporate or product advertising continues to be the least credible source of information at 17%.
• In the U.S., U.K., Germany and the BRIC countries, more than 70% say that actions such as firing non-performing managers, repaying bailout money, or reducing the pay gap between senior executives and rank and file workers would restore their trust in the company.

Key Findings from AccountAbility’s What Assures Trust in a Downturn?

• Consumers are uncertain about who to turn to in order to reinstate their trust in business.
• There is an “accountability gap” between the institutions consumers deem to be accountable for ensuring sound business behaviour, and the trust held in those institutions to deliver. Regulators and businesses themselves score 60% and 56% respectively for their responsibility, yet only 22% and 6% of people trust them to deliver.
• Most survey respondents predict their use of ethical labels will be maintained.
• 73% of consumers say fair treatment of employees and suppliers are the priorities for what makes a responsible business.
• There is a generational difference in consumer perceptions of “who is responsible.” While the over 55s are more likely to make an effort to buy responsible products, they are also more likely to think that consumers have a personal responsibility to ensure business behaves well. Conversely, the under 24s externalise responsibility, putting the onus back on businesses, government and regulators.
• The following graphs illustrate the potential rewards and penalties consumers place on non trusted businesses:

Additional trust rankings are offered by PWC’s Building Public Trust awards and
Reader’s Digest European Trusted Brands 2010.

GRI seeks to help NGOs be more accountable and transparent

2010-05-25T17:32:00.002+01:00

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.

Securing employee and top management commitment rank among top ethical challenges

2010-05-24T22:19:00.003+01:00

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).

The most stated words at RBS 2010: ‘DNA’ and ‘embedding’

2010-05-18T09:34:00.005+01:00

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.

Corporate sustainability takes notes from IT

2010-05-12T09:19:00.002+01:00

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."

Sustainability incentives work better than deterrents

2010-05-11T09:54:00.002+01:00

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.

How sustainable is the role of a sustainability professional?

2010-05-02T14:39:00.003+01:00

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?'

More free ethics resources available online

2010-04-25T22:05:00.003+01:00

I’ve been stumbling upon an increasing number of online corporate ethics tools. If you’re looking for ways to help your employees improve their ethical performance, check out these six tools.

The Anti-Corruption Tools Inventory (A joint effort between Global Compact and Transparency International)

Institute for Global Ethics Interactive Corruption Map

Institute for Global Ethics Ethical Business Dilemmas

Danish Institute for Human Right's Human Rights Compliance Assessment Tool (and checklist)

Doing Business country rankings

World Bank’s Global Integrity Index

Boston College’s Benchmark Survey tool for evaluating employee volunteer schemes

Airport closure provides evidence of airline pollution

2010-04-22T13:32:00.006+01:00

Today the Independent has published a story about a drop in NOx and NO2 levels since airports have come to a standstill.

The article states that "Although long suspected, the fact that mass take-offs and landings are large pollution sources could never be proved before, because aircraft pollution could not be measured as separate from the pollution caused by vehicles operating near by."

Two researchers from Kings College have proven that NO2 (nitrogen dioxide) and NOx (the generic term for oxides of nitrogen, taken together) fell virtually to zero since London's Heathrow and Gatwick airports have been closed.

The following chart illustrates current NO2 and NOx levels compared to levels under normal conditions.

Government involvement is critical to the success of responsible business standards

2010-04-20T11:42:00.005+01:00

The OECD’s Guidelines for Multinational Enterprises are a set of standards that are underestimated by many corporations.

But, the OECD is preparing for some revisions and a major push of the guidelines.

The OECD’s Guidelines have the unique advantage of receiving significant support from the national governments of OECD member countries. 42 OECD and non-OECD countries recommend the Guidelines.

Sustainability professionals whom attended the Ethical Corporation debate on voluntary initiatives in CSR last year unanimously agreed that governments must play a part in such standards.

Dr. Sue Konzelmann and her colleagues at the London Centre for Corporate Governance and Ethics (LCGGE) agree. Their research points to a strong connection between national regulation and corporate governance.

For the OECD Guidelines to have substantial impact, they will also need to convince companies of the value they bring to business.

They are well on their way to doing just this. In December 2009, I joined the OECD’s Consultation on the Update of the Guidelines for Multinational Enterprises, where an in-depth debate on necessary revisions to the Guidelines began. Themes that emerged from the discussion included a need for an increased focus on transparency, human rights, and supply chain issues.

This spring, the OECD’s adhering governments are expected to decide on the terms of reference for an updated set of Guidelines. Information will be posted here.

Healthy growth in sustainable forestry commitments

2010-04-12T23:16:00.003+01:00

Last year, we published evidence of how leading companies are embedding CSR into their operations and across different departments.

Now, there are clear signs that sustainability has penetrated the corporate DNA even further. Conservation of biodiversity is now a common topic in the meeting rooms of mainstream businesses.

Global understanding has come a long way since the 1980s and 1990s, when sustainable forestry was synonymous with tree huggers guarding forests by chaining themselves to trees.

Thriving commitment to sustainable forestry is largely attributed to the advocacy and activism, as well as the corporate nurturing of INGOs such as WWF, Greenpeace and Rainforest Alliance.

Here are a few forest figures that have caught the attention of many companies:

Changes in land use are responsible for 18% of carbon emissions, with deforestation accounting for most of these emissions, according to the UK government’s Stern Review Report on the Economics of Climate Change.

We are now losing about 200 square km - an equivalent of 18,100 soccer playing fields - daily according to the United Nations Environment Programme.

Only 5% of the world’s forests are certified sustainable. Of this 5%, half are certified by the Forest Stewardship Council (FSC).

DIY sustainability

During my visit to a sustainably certified Swedish forest that supplies carbonboard for Tetra Pak, I learned more about how companies are stepping in to ensure sustainability where protection is not mandated.

Lena Dahl, a biologist at Tetra Pak, explains the optimal criterion for evaluating sustainable paper sourcing. The FSC, Tetra Pak’s preferred certification, satisfies this criteria:
1. Certification of forest management and traceability
2. Avoidance of unacceptable and illegal wood (includes preserving ancient and at-risk forests)
3. Carbon Footprint (require green energy and low energy required per tonne of product)
4. AOX emissions/bleaching technologies (require best available ECF or TCF technology)
5. COD emissions (require low emissions of organic matter)
6. Waste to landfill
7. Participation in recycling
8. Certified Environmental Management System, for example ISO14001
Forest conservationists and development managers add maintenance of biodiversity and forest-dependent livelihoods to the list.

The WWF UK reckons that its Forest and Trade Network’s 46 members account for 40% of forest products imported to the UK in 2006. Members include Kimberly-Clarke Europe, Tetra Pak Ltd., Pearson plc. and BBC Worldwide Ltd., among others. The FSC has issued 940 certificates, covering 116 hectares in 81 countries.

The environmental benefits of regenerating and protecting forests are colossal. Healthy forests can counteract carbon emissions. For example, Canada's boreal forest soaks up 22% of the carbon stored on the earth's land surface.

Read more about sustainable forest certification options

There are more than 50 certification standards worldwide, trying to respond to the demand for sustainable forests or advancing the status quo. Other certification options are the lesser known to consumers Programme for the Endorsement of Forest Certification schemes (PEFC), and North American Sustainable Forestry Initiative (SFI) and Canada's National Sustainable Forest Management Standard (CSA).

While certification is intended as a tool to enhance forest management practices throughout the world, to date most certified forestry operations are located in Europe and North America. A significant barrier for many forest managers in developing countries is that they lack the capacity to undergo a certification audit and maintain operations to a certification standard.

Countries such as China, through the China Forest Certification Council are responding by creating schemes that are better suited to their operating environments.

Online sustainability tools

2010-04-12T23:06:00.002+01:00

Check out some of my favourite sustainability tools that are now available online:

HP’s Carbon Footprint Calculator for computers and printers

GreenBiz.com's Stimulus Funds Map

GreenBiz.com’s Eco-Patent Commons

Climate Change Corp’s Global climate policy map

Best Places to MeetGreen Calculator

WWF’s personal footprint calculators

Water footprint calculator

Tools for measuring corporate sustainability

2010-04-02T17:15:00.004+01:00

Evidence proving the business case for doing CSR is a dime a dozen. We now have a number of publications that instruct companies on how to implement good CSR. Impact measurement is where the real value lies.

Companies are keen to measure the environmental and social impact of their business. Academics have been responding by developing a variety of financially-based sustainability tools.

Researchers at Queen's University Belfast (UK), Euromed Management School (France) and IZT - Institute for Futures Studies and Technology Assessment (Germany) have developed a value-oriented methodology to quantitatively assess corporate sustainability performance, called Sustainable Value.

Sustainable Value uses the same opportunity cost thinking that dominates the financial markets and is thus in line with managerial thinking. It allows a practical, integrated assessment of the use of economic, environmental, and social resources in monetary terms.

Put to test

The report Sustainably Successful? features the results of 28 companies that have trailed this approach as a way of analysing, monitoring and managing sustainability performance.

Indicators include non-financial assets, five types of emissions, water use, waste, the number of employees and the number of work accidents. These are expressed in monetary terms and benchmarked against the economy or industry.

A short summary of results shows strong distinctions between various sectors:

What do companies think of this tool?

BMW’s Sustainable Value Report 2005/2006 states “The importance and attractiveness of the approach in practice lies in the new scientific method which builds a bridge between value orientation and sustainability. The main advantage for companies is that the Sustainable Value presents sustainability success like economic success. This also helps, for example, SRI (Socially Responsible Investment) investors in their analysis. In the medium to long term, the Sustainable Value could become the basic element of a sustainability audit.”

The collaborative has also posted an audio tutorial, explaining underlying logic of this approach.

The European Academy of Business in Society (EABIS) and the SEABUS International Research Network host a number of publications on measuring sustainability.

Watch for future blog posts on other tools for measuring sustainability.

Trade measures pressure Chinese companies to focus on carbon

2010-04-01T10:58:00.002+01:00

An article recently published by China CSR states that developed countries are using carbon tariffs and carbon trading to limit China's beer exports.

The article points to a large variance between energy consumption of China's brewing technology in comparison to their peers in developed countries.

The popular Tsingtao beer has responded by signing a research agreement that aims to measure greenhouse gas levels in brewing beer and to help the company design a more environmentally friendly production model.

Expect more companies from developing countries to boost their sustainability in a response to developed country import requirements or consumer preferences.

A fresh look at water stewardship

2010-03-14T12:14:00.005Z

In December, PepsiCo UK and Ethical Corporation held a roundtable debate on corporate water stewardship.

More companies are developing a strong interest in, and strong opinions on water management. My colleague, Isabelle, is devoting her time to researching this further.

Water conscious companies realise the financial rewards of water stewardship. Here are a few of the water savings we have come across:

PepsiCo UK
PepsiCo UK is now working to reduce their water use, while maintaining healthy production. Efficiency has already been realised by managing other processes. They have reduced the starch generated from slicing and washing potatoes to make snack products has reduced the need to import starch from Europe, saving road miles and over £1m in 2007.

Tesco
Waterscan has published some findings from seven years of working with Tesco to improve their water efficiency. Since 2006, Tesco has saved £372,000 by harvesting 182,000m3 rainwater. The 24 systems, with a payback period of 3-4 years, provide Tesco stores with water for vehicle washing and toilet flushing, and reduced the stores’ water consumption by 31%.

Sainsbury's
Over a one-year period, Sainsbury’s managed to cut the water use by 700 million litres. This equates to a financial saving of £1.6m. The result was achieved by installing automatic flushing sensors on urinals, curtailing leakages and reducing toilet cistern capacity.

Impress Metals
Managed to make an annual saving of £40,503 by investigating their use of surface water.

Here are some free CSR/sustainability resources...

2010-03-14T12:11:00.001Z

1. The London Centre for Corporate Governance and Ethics, along with Ethical Corporation have hosted a number of roundtable debates on specific topics relating to CSR, such as living wages and voluntary initiatives. You’ll find past slides at SlideShare and Scribd.

2. Free summaries of all our practical reports on putting CSR to practice are available for download at www.ethicalcorp.com/reports.

3. At Ethical Corporation, we have introduced a subscription service - we're currently offering free trials here.

I’m always looking for reliable new research findings. So, please send any recent ethical business findings my way.

Sizing up sustainability in the UK

2010-03-09T11:18:00.001Z

In 2009, a number of research houses have attempted to quantify the size of sustainability in the UK. Here is a brief snapshot of some of their claims.

Spending

“UK spending on climate change & sustainability will top $5.3b in 2010 and grow to $8.4b in 2003” according to Verdantix report ‘Critical Moments: market size & forecast: climate change and sustainability spending (UK).’

Their research leads them to believe that the climate change and sustainability market will grow by 13% next year, and by 18% in the following year.

Corporate sustainability budgets

Around one fifth of the 354 respondents to Acre’s 2008/2009 CSR Salary Survey controlled budgets of £1m or more. Further, 50% work for FTSE 100 companies and 80% were based in London and the South East.

The study also found that 75% of corporate CSR teams have nine or fewer employees.

Corporate and employee interests

According to the May Day Carbon UK report, the result of a 1,695-person survey, corporate interest in sustainability needs a boost.

Over half of respondents do not know if their organisation is affected by the UK’s legally-binding Carbon Reduction Commitment (CRC).

A third of the respondents do not think that their company has a green policy in place.

According to results from a sub-sample of 226 senior managers:
· 36% of organisations have audited their annual energy consumption
· 35% have set targets to reduce carbon emissions
· 30% measure their carbon emissions (over half of these fall within the manufacturing, engineering or utilities sector)
· 29% externally report carbon emissions
· 21% do not have climate change on their agenda

Sustainable investments

According to EIRIS, the size of Britain’s green and ethical retail funds reached £6.8b by the start of 2009. This excludes UK money invested outside of the UK or in offshore funds.

Commitment to global standards

British companies are active participants in global CSR institutions. For example, the UK currently has 212 global compact participants, 38 companies that published a GRI report in 2009 and 87 UNPRI signatories.

Job market

Last March Gordon Brown stated that the UK can expect 400,000 new environmental sector jobs over the next eight years. Factor in other sustainability jobs, and that’s a considerable estimate.

According to Acre Resource’s 2009 Carbon Salary Survey of 1157 climate change professionals worldwide, 28% of organisations employing people in climate change are headquartered in the UK. Although, this should not be taken at face value as the survey sample was not controlled and 20% of respondents are British.

In addition, anecdotal evidence supporting the rise of CSR and sustainability jobs is evident in the increasing number of UK postings on job boards published by well-known sources such as Acre Resources, the CSRchicks yahoo group and the Guardian.

Market demand

Consumer demand will be the topic of my next post. A few recent studies shed some light into this previously strongly biased research area.

South African divergence, not indifference

2010-03-09T10:47:00.002Z

Divergence of priorities

Markus Reichardt, Ethical Corporation analyst and independent consultant for the mining industry, observes that South African corporate sustainability may pay “more attention to social issues than is common in the developed world.”

In a recent Ethical Corporation survey completed by 124 sustainability professionals in South Africa, community engagement and partnerships ranked much higher on the list of key activities than they have in similar surveys in other regions. Both activities were listed as one of the top three activities by 27% of respondents.

Corporate sustainability in South Africa demonstrates a well-developed awareness: “it generally understands the concept in same the holistic sense common to European business: the challenge to balance the needs of the Economy, the Environment and Society.”

While public sector priorities display a more narrow focus: “the Government, despite rhetoric to the contrary, is primarily concerned with the economic and social aspects.”

Since 1994 the Government has developed the country’s legal framework, passing laws in the labour, human rights, environmental, and freedom of information spheres which have transformed the corporate environment.

Employees exercise their sustainability concerns as well. Nick Rockey of Trialogue estimates that in-kind contributions, employee matching programs and volunteerism easily treble the value contributed by South African business to the various causes of its diverse society.

Global initiatives are playing an increasing role. Popularity of and support for the GRI, the ICMM and other standards-setting organisations has increased substantially in the past few years.

Tangible support for sustainability

New survey results - using a sample of 124 individuals working on sustainability in South Africa – indicate relatively large corporate sustainability budgets. 58% of sustainability survey respondents state that their sustainability budgets exceed 358,000 Rands (roughly 30,000 GBPs).

This contrasts with previous global figures of only 24% of sustainability survey respondents operating with a budget over 30,000 GBPs. (note: this global sample contains mainly European professionals)

“These days sustainability, as CSR is often referred to South Africa, continues to be taken seriously in the country. Surveys by sustainability consultancy Trialogue show that CSI contributions have kept pace with inflation over the past decade and were unaffected by the current recession, rising 24% year on year to ZAR 5.1 billion for the 2008/09 financial year.”

Such budgets may reflect the nature of survey respondents (respondents were primarily from large multinational firms), the large scale of key industries in South Africa (heavy industry), or the palpable need for sustainability given proximity to the negative impacts of business.

Interpret the results as you will. But, you can’t deny that support for sustainability will continue to grow in South Africa.

When in Rome…

2010-02-16T12:44:00.005Z

The popularity of corporate social responsibility (CSR) / sustainability is growing rapidly worldwide. Each year we’ve noted soaring membership in global standards and initiatives, a greater number of companies producing CSR reports, and increased interest in our publications and conferences.

But, how is CSR put to practice within specific countries?

According to Ethical Corporation research, sustainability / CSR professionals in worldwide, spend the majority of their time on reporting.

Country level research in Germany and South Africa provide a case in point. While their peers in China, reflect a different reality. Their activities focus on partnerships and collaboration.

In a recent global survey, we asked CSR/sustainability professionals were asked to indicate the three activities that will consume the majority of their time this year.

What skills are needed at the local level? Which initiatives will have the greatest impact? How are companies adapting CSR strategies to the local environment?

We plan to contribute to this discourse through our research, lead by in-country experts.

One question we are asking CSR / sustainability professionals is: What three activities consume the majority of your time?

After surveying three countries, it is already evident that sustainability in practice differs substantially, depending on the local context.

Sustainable opportunities vary as well.

Germany companies foresee the biggest sustainability opportunities in green technology and energy, and in positioning their company as a sustainability leader.

Despite a strong interest in the environment, the recession has altered the priorities of the general public. For most Germans, fixing the German economy is more important to saving the global environment. Germany’s budget deficit is twice the EU ceiling; there are structural problems – such as the unaffordable pension system – to address; and employment figures need to improve.

In South Africa, the most-mentioned big CSR business opportunities include: energy efficiency, water management and education/technical skill development.

Professionals operating in China prioritise opportunities for collaborating with stakeholders, specifically civil society and with leading corporations.

A new country briefing will be published each month and posted here.

Welcome to the CSR / corporate sustainability research blog

2010-02-16T12:29:00.002Z

At Ethical Corporation we talk to corporate social responsibility (CSR) and sustainability professionals from multinational companies every day. This means that we are often among the first to hear about exciting new developments.

Through this blog, I’ll share some of the most business-critical research findings, evidence, case studies and statistics on CSR.

Most research in CSR focuses on the in-depth strategies by leading multinationals. I would also be interested in featuring some CSR best practices among SMEs. But, to be honest, I haven't come across many SMEs with CSR strategies that could be scaled up profitably, beyond a local social enterprise model. If you know of some, let me know.

Pam, pam.muckosy@ethicalcorp.com