Climate change, water scarcity, and food and energy security, are some of the key concerns facing businesses in the 21st century. A so-called ‘perfect storm’ is brewing, driven by global population growth, and the associated increased demand for food, water and energy.
Consumers, customers and regulators are already aware and increasingly active on these issues, particularly climate change, as evidenced by UK’s growing range carbon reducing regulatory instruments, including the CRC Energy Efficiency Scheme, the EU ETS Phase 3 and the prospect of mandatory carbon reporting for all UK listed companies coming soon.
Water scarcity is already being touted as the next ‘climate change’, and as the number regions of the world experiencing this grows, more stringent efforts to control and monitor the use of water will begin to emerge.
The winners of this shift towards more resource-efficient and environmentally responsible business practices will be companies that adapt to the risks, constraints and market opportunities presented by the world’s looming sustainability challenges. Companies like IBM and Orange Business Services have already begun to integrate ‘green’ issues into their mainstream business strategies, much in the same way that GE has with its ‘eco-imagination’ campaign. Investors are also taking note, both venture capitalists and leading asset managers alike. All of this points to the fact that the world is indeed changing and demanding new competencies and definitions at the highest levels of leadership within firms, thereby creating room for the emergence of the Chief Sustainability Officer. This role may or may not be a permanent feature of organisational charts going forward, however, the underlying demand for more sustainable business practices appears to be here to stay, at least for the foreseeable future.
Yohan Hill is a senior consultant at Corporate Citizenship. Email him at Yohan.hill@corporate-citizenship.com to talk climate change, environmental strategy and emissions.
Verdantix says the Chief Sustainability Officer plays a critical role
Firms must appoint a Chief Sustainability Officer to succeed with strategic innovation in a resource-constrained economy, according to a new report from independent research firm Verdantix. The Chief Sustainability Officer requires proven general management skills, business transformation experience and the commercial insight to support sustainability-driven innovations. The Verdantix Report, ‘Who should be the Chief Sustainability Officer?’, defines the CSO role, explains why it is needed and outlines the unique skill set required. Research indicates that many CEOs hold their firms back by appointing the wrong person to lead their sustainability strategy. The report is based on interviews with 33 industry experts, from low carbon technology providers to environmental consultancies and executive search firms.
CDP issues its first Water Disclosure Questionnaire to world’s largest companies
CDP Water Disclosure has asked more than 300 of the largest global companies to report for the first time on water use and other water-related issues, to increase the availability of high quality business information and raise awareness of water-related risk. With the launch of CDP Water Disclosure, the CDP organization is using the same established system it uses on gathering carbon emission data in order to tackle the increasingly vital issue of water scarcity. The information is gathered so that it can be incorporated into business and policy decision making. 137 financial institutions globally with a combined $16 trillion in assets, including Allianz Group, CalSTRS, HSBC, ING, Mitsubishi UFJ Financial Group and National Australia Bank, have signed the request for information, asking companies to measure and disclose information on their water usage, the risks and opportunities in their own operations and supply chains, as well as water management and improvement plans.
The Doughty Centre at Cranfield releases new CR guides
The fourth in the series of ‘How to do Corporate Responsibility’ guides from the Doughty Centre for Corporate Responsibility is now available. The latest guide entitled ‘The Governance of Corporate Responsibility’ assesses and advises organisations on successful tactics for ensuring a robust approach to governing corporate responsibilities. The guide includes research of best practice and review of management literature to compile a set of critical success factors for achieving successful CR governance as well as typical barriers and how to avoid them. It also highlights the importance of the tone from the top – from both CR committees and the Board in their roles and responsibilities.
Businesses shouldn’t wait for world leaders to decide on climate-change legislation before driving their own sustainability goals, according to a new guide from Cranfield University and Ogilvy PR Worldwide. The guide, ‘The strategic importance of communicating corporate responsibility’, was released 26 April and shares best practices through real-world case studies and provides advice on how to make corporate responsibility communications work, which includes discussing difficult issues and working to resolve them. Ogilvy says if businesses can communicate corporate responsibility progress as well as problems with the same levels of transparency and consistency, they are more likely to engage key stakeholders and maintain their corporate reputation. The report also recommends that a commitment to sustainability has to become part of a company’s core business activity, and communicating corporate responsibility a key business imperative. A second guide, ‘From greenwash to great’, has also been released to help steer brands through the challenging terrain of sustainability marketing.
After 11 years of publishing a list of the best corporate citizens, Corporate Responsibility Magazine introduced it’s first-ever ‘black list’ of the worst companies, or those that are the least transparent, in its April-May issue. Transparency, as the magazine defines it, means making information about practices like employee benefits, climate-change policies or philanthropic efforts publicly available. This allows other players, players with a variety of values – be they journalistic, NGOs, competitors, collaborators – to weigh in according to their competing interests. 30 companies were listed including Abercrombie & Fitch, Weight Watchers International and CTC Media.
Urgent change in corporate culture needed to tackle bribery
New research into the activities of some of the world’s biggest companies finds that the vast majority of them are failing to tackle bribery. In the UK many companies are unprepared for proposed legislation on bribery which, if passed, will make both companies and individuals criminally liable for a failure to prevent bribery. The study, conducted by London-based sustainability consultancy EIRIS, focuses on those companies which have operations in sectors and regions identified as being at highest risk from bribery. Of the 625 global businesses analysed, 85% lack adequate anti-bribery policies and 94% lack adequate management systems on bribery. Levels of transparency and openness on bribery are also extremely poor with less than 1% of companies adequately reporting on the issue.
The winners of the Corporate Responsibility Reporting Awards 2010 (CRRA ‘10) were announced 20 April. They identify and acknowledge the best CR reports across nine categories, five of which are for specific ‘transparency aspects’ such as carbon disclosure. The CRRA’10 solicited reports published between October 2008 and October 2009, with entrants from 128 companies from over 40 sectors, from well-known multinationals to local SMEs. Winners include Vodafone Group (Best report), The Walt Disney (Best first time report), Hewlett-Packard (Best carbon disclosure), Coca-Cola Enterprises (Creativity in communications) and Virgin Media (Openess and honesty).
The World Cocoa Foundation launched the Cocoa Livelihoods Programme in Cameroon on 4 May. The work is part of a larger five-country programme targeting 200,000 cocoa-growing households across Cameroon, Côte d’Ivoire, Ghana, Liberia and Nigeria. The programme objectives include: improving cocoa yields and quality; helping farmers to reduce losses to diseases, such as black pod, and learn proper post-harvest techniques; promoting diversification of income and business skills development. Funding for the programme comes from the Bill & Melinda Gates Foundation and 15 chocolate industry companies including The Hershey Company, Kraft Foods, Mars and Transmar Commodity.
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