Sustainability and corporate social responsibility solutions are central to organizations’ financial planning, both operationally and for new business opportunities. For C-level executives and Boards of Directors, understanding and supporting these initiatives are essential. Here are some of the session take-away’s on embedding sustainability into core business strategy, and what it takes to make that work.
Then and Now
Twenty years ago, it used to be enough to donate a percentage of profits to charity; that was what Corporate Social Responsibility (CSR) was about – giving back to society. But now, corporations need a multifaceted CSR program, and it has to involve multiple stakeholders. ‘Environmental’ and ‘green’ are just part of sustainability and CSR.
What worked as CSR twenty years ago is not even acceptable today. Today, it’s a given that your operations are environmentally sound, and your health and safety practices are good. That’s the price of admission; now the question for many firms is, ‘where do we go from here?’ More and more corporations understand that they have to treat green as ‘the new black’ but, overall, we’re just not there yet. We need to recognize that sustainability is much broader than simply ‘green’ or environmental. Sustainability is the key to being considered a socially responsible company.
CSR is a broad label. It implies corporations must look beyond the original constituents companies had to worry about in the past – shareholders, employees and customers – and must reach out to the general public, which is actually more important than the other three. If you’re not doing that effectively, you’re not addressing the basic needs of the corporation. You need society’s approval to earn the social license to do business. That responsibility is as important to the firm as shareholders, employees and customers. CSR has to be integral to the culture of the firm. It can’t simply hire a CSR coordinator and hang that function somewhere on the side of the business; that approach is fundamentally wrong.
Getting Buy-in at the Top
The senior levels of the organization have to believe in CSR, with buy-in across the entire C-suite level, not just from the person responsible for sustainability. It’s important to find a way to integrate sustainability into the executive decision-making process. However, the challenge in getting the C-suites involved is that there are often different levels of understanding of what sustainability means. Some CEOs only want to see the hard numbers – ‘what is it going to cost?’ – without understanding that there’s a tangible element of how do you set goals and how do you go about achieving them. There’s a literacy issue around sustainability that has to be addressed, in order to ensure that the corporation’s sustainability initiatives are well understood. And until that’s overcome, it can be a real barrier to getting true value out of sustainable initiatives.
The Board of Directors
Often, the Board or C-suite executives are engaged in CSR, but perhaps more from the point of view of defensiveness, rather than opportunity. So when you recruit at the Board level, sustainability and CSR have to be important. You need to have the right people on the Board and the right CEO in order prioritize sustainability and CSR. This frees up the management level just below, who may have been working against a headwind, to implement strategic CSR policies. It starts at the top, with the Board valuing good corporate citizenship. Then you have to ensure the company has the right people with the right skills to implement CSR programs that will answer the needs of the community. And if the Board has to encourage the CEO to embrace CSR and sustainability, it’s time to get a new CEO!
One of the biggest benefits of a robust corporate CSR policy is the ability to hire people who would never consider working for a company without one. It fundamentally changes the type of talent you can attract. Employees who are passionate about their workplace bring enormous benefits to their employers. There’s a real, tangible value to getting smart, insightful people on your staff.
Having a focused strategy for sustainability provides other advantages, including economic benefits. If you can improve efficiencies, motivate staff, and lower costs, these are all the sorts of things that CFOs appreciate and can quantify. A focused strategy also changes the issues around developing new projects, and can make that process easier. You also have to ask yourself what’s important to your investors. What’s their perspective, what do they want or expect to see the corporation doing?
Final Thoughts from the Panel
Make sure you involve younger generations, because they ‘get it’; they live and breathe sustainability and they’re the ones who are going to be impacted.
Have someone on your board who’s not from your industry. A fresh ‘outsider’ perspective can be very insightful.
Culture trumps strategy. What you do has to be relevant to the culture you’re in. Just because you have the tag line, are you living the message?
Make small, incremental and successful steps to achieve bigger returns. There are no silver bullets, it’s one step at a time.
Panel: Jessica Fries, Executive Chairman, The Prince’s Accounting for Sustainability (A4S) Project, United Kingdom (M)? Warren Allen, President, International Federation of Accountants, USA? Henry Stoch, Partner, Sustainability and Climate Change, Deloitte Canada Beverley Briscoe, Chair of Audit Committee, Goldcorp Inc., Canada? Patrick Daniel, Partner, Former President & CEO, Enbridge Inc., CanadaJessica Fries, Moderator Executive Chairman, The Prince’s Accounting for Sustainability (A4S) Project, UK / Warren Allen, President, International Federation of Accountants, USA / Henry Stoch, Partner, Sustainability & Climate Change, Deloitte Canada / Beverley Briscoe, Chair of Audit Committee, Goldcorp Inc., Canada / Patrick Daniel, Former President & CEO, Enbridge Inc., Canada.
HH Angus Publications on Globe 2014
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- Extreme Weather and the Case for Cogeneration
- The Long View: where do we go from here?