Working in the area of sustainability is very exciting – collaboratively we are helping shape tomorrow’s sustainable companies and developing a whole new success dimension for the business world.
In the early stages of development, it became clear that sustainability teams could not be the be all and end all of responsible business, and an agreement was quickly reached: we needed to embed sustainability into business functions. Based on this principle, companies started seeking the holy grail of integration, with sustainability managers leading the way and helping individual teams find their sustainability gene.
We are now entering the next era, with a brand new challenge: where can we find sustainability talent and leadership within teams, given that these competencies are still being shaped and defined? Without ambitious team leaders eager and able to innovate, our brilliant initiatives might not evolve much further.
The BiTC-EDF Energy study opens this debate, and provides an interesting first step in addressing the challenge. It highlights the full range of options beyond traditional training courses, and encourages companies to develop their own sustainability leaders through innovative ways. For executive learning, this includes developing through mentors, tailored third-party assistance, and immersion in the sustainability world. For employees, this includes “champions” networks, collaborative action with external stakeholders, as well as clear objectives and incentives.
There is a wealth of opportunities out there for companies to identify and develop potential talent in sustainability. For example, they could tap into the growing appetite of MBA students and graduates for sustainability. Last year, Harvard MBA students created the “MBA Oath”, and 20% of the promotion pledged to act responsibly and ethically, “serving the greater good”. This is just one indication of the growing sustainability interest and ambition of future business leaders. Those companies who will be able to offer their employees and new recruits with innovative paths to sustainability leadership will be the ones to shape Sustainability 3.0. The race is on.
Myriam is a consultant at Corporate Citizenship Email her at Myriam.galopin@corporate-citizenship.com to discuss campaigns, responsible sourcing and community investment.
KPMG, PwC UK, and Unilever top CR Index
KPMG, Unilever and PricewaterhouseCoopers (UK only) have earned the Platinum Plus rating in this year’s Business in the Community Corporate Responsibility (CR) Index, announced 7 June. The CR Index is the UK’s leading voluntary benchmark of corporate responsibility. A valuable management tool, it examines the extent to which responsible business practices are embedded within corporate strategy and operations. The companies earned the index’s highest ranking by incorporating long-term sustainability into their business strategies. The top ten Platinum Plus rankings further comprised BT Group, EDF Energy, National Grid, Northumbrian Water Group, Scottish & Southern Energy, The Co-operative Group, and United Utilities.
To strengthen the quality of sustainability reporting in the corporate sector, the Global Compact and the Global Reporting Initiative (GRI) announced an agreement to align their work in advancing corporate responsibility and transparency. The two initiatives seek to further develop their combined strengths – the Global Compact’s strategic advancement of key sustainability issues and GRI’s reporting framework. GRI will integrate the Global Compact’s ten principles and issue areas centrally in the next iteration of its Sustainability Reporting Guidelines while the Global Compact will adopt the GRI Guidelines as the recommended reporting framework for companies to communicate on progress made. The agreement is intended to provide companies in the Global Compact with a clear set of reporting principles and indicators to meet the initiative’s compulsory annual disclosure requirement, Communication on Progress.
IBM to lead HRH The Prince of Wales’ Start Initiative
Start, an initiative established by HRH The Prince of Wales to promote and celebrate sustainable living, announced on June 1 that IBM will be Start’s exclusive partner to lead a nine day Summit in September 2010. IBM will convene business and industry thought leaders to discuss the next steps that should be taken to enable economic, environmental and societal sustainability. Themes to be discussed include: The future of cities, energy, transport, skills, future business leaders, smarter supply chains, financing sustainability and the information revolution. The audience of business and public sector leaders will be challenged to review and refine outputs, and identify new ways to collaborate to turn these outputs into recommendations for British business.
Contact: IBM www-03.ibm.com
IFC & GRI launch Good Practice Note
On 24 June, IFC (International Finance Corporation), a member of the World Bank Group, and the Global Reporting Initiative (GRI) announced the launch of a joint publication: ‘Getting More Value out of Sustainability Reporting’. The Good Practice Note links GRI’s internationally recognized Framework for Sustainability Reporting and IFC’s Sustainability Framework, aiming to make it easier and more profitable for companies in emerging markets to adopt sustainability reporting. The Note emphasizes the value of integrating sustainability into core business strategy and management, and responds to the pressing need for improvements in corporate transparency, both to restore trust in the private sector and to attract investment that is increasingly guided by environmental, social and governance factors. The current version is being released as a “Road Test” draft to solicit feedback from companies and stakeholders. [PR]
As of June 1, over 450 companies listed on the Johannesburg Stock Exchange will be required to produce an integrated report in place of their annual financial and sustainability reports. An integrated report gives users an all-round view of a company by including social, environmental and economic performance along with the company’s financial performance. Due to a lack of set standards on integrated reporting, various organisations have come together to form the Integrated Reporting Committee (IRC), to be chaired by Professor Mervyn King, Chairman of the GRI Board of Directors. The founding organizations are: The Association for Savings and Investment SA (ASISA); Business Unity South Africa (BUSA); Institute of Directors SA (IoDSA); JSE Ltd; and The South African Institute of Chartered Accountants (SAICA) , with the IRC aiming to issue guidelines on good practice.
Diageo hailed as NI responsible company of the year
Diageo Northern Ireland has been named Northern Ireland’s Responsible Company of the Year 2010—scooping the top accolade at Business in the Community’s Gala Awards dinner on 10 June in association with ESB Independent Energy. The award was presented to Diageo for its vision, determination and commitment to filtering responsible business practices throughout the organisation. Other winners on the night included Translink (Climate Change award) for its incredible impact in changing operations and making investments to reduce its carbon footprint; and Northern Bank for Workplace Health and Wellbeing.
Responsible businesses recover quicker from crises
Research released on 7 June by Business in the Community (BITC) confirms for the second year running a link between effective management and governance of environmental and social issues and financial performance. According to research conducted by Ipsos MORI, companies participating in BITC’s Corporate Responsibility Index each year between 2002 and 2009 outperform their FTSE350 peers on total shareholder return (TSR) by an average of 10 percentage points in seven out of the eight years. Furthermore, the TSR of these companies did not fall as far and recovered more quickly in 2009. BITC first published this research in October 2008, when it showed FTSE 350 companies consistently managing and measuring their corporate responsibility outperformed their FTSE 350 peers on total shareholder return 2002-2007 by between 3.3% and 7.7% per year. The replication of the research during the financial downturn helps to ascertain whether corporate responsibility still makes a difference to financial performance, and whether the companies that had outperformed their peers in better times were faring differently now.
Business in the Community Examples of Excellence 2010
Unilever was awarded Company of the Year in the Business in the Community Examples of Excellence Awards. Since 2005 Unilever have systematically integrated sustainability into its brand innovation and product development taking responsibility for its brand imprint at every stage of its products’ lifecycles, including after its products have left the shops. Other winners include: EDF Energy (Building Stronger Communities) for its partnership with British Red Cross in providing support to nearly 100,000 customers; and Barclays and Guardian News Media (Coffey International Award) for their Katine Partnership in Uganda, which increased access to clean water from 42% of people in 2007 to 66% and has given voice to a community trapped in a vicious cycle of poverty.
A European project on Building Responsible Competitiveness, co-funded by the European Commission, has published corporate social responsibility (CSR) guidelines for companies in the construction sector. The guidelines offer practical advice and best practice examples in four thematic areas of health and safety, eco-compatibility, supply chain management and equal opportunities. Focusing on both the internal and external aspects of business performance, including an in-depth analysis of the benefits of integrating CSR principles in day-to-day business, the CSR guidelines demonstrate how a strategic approach to corporate social responsibility can enhance the competitiveness of individual construction companies as well as the societies they operate in.
Leadership skills gap is UK’s “most pressing challenge”
EDF Energy and Business in the Community (BITC) launched the findings of their inquiry into the ‘Leadership Skills for a Sustainable Economy’ on 1 July. Over 700 business leaders took part in research, with 70% believing the leadership skills gap will become one of the most pressing challenges facing UK businesses in the next five years. Examples of excellence were found, but many businesses have not yet connected with the commercial benefits of sustainability. The desire for programmes and tools that can be tailored to the specific needs of an organisation was indicated by 84%. In response to this, a new industry-led Taskforce has been launched which encourages companies to share best practice, resources and intellectual property. Founding members of the taskforce include EDF Energy; M&S; WSP; Lloyds TSB; EDF Energy, Adnams; Boots and RSA Group. The Taskforce will be challenged and supported by BITC working together with the Cambridge Programme for Sustainable Leadership; Global Action Plan and Forum for the Future.
A draft report from the Doughty Centre for Corporate Responsibility at Cranfield School of Management explains the contribution of social intrapreneurs to corporate innovation and tackling societal needs. The Centre defines social intrapreneurs as A person within a large corporation who takes direct initiative for innovation(s) which addresses social or environmental challenges profitably. The paper highlights a number of social intrapreneurs and suggests a mindset, behaviours and skills common amongst social intrapreneurs. There are some initial ideas about what constitutes an enabling environment for social intrapreneurs – both within the company and externally. The paper raises a series of questions on which the Doughty Centre is consulting and welcomes input.
Report calls for mandatory reporting of CSR key performance indicators
A research report published in June by the Initiative for Responsible Investment (IRI), a project of the Hauser Center for Nonprofit Organizations at Harvard University, puts forward a model system for developing key performance indicators (KPIs) appropriate for mandatory sustainability reporting. The report; ‘From Transparency to Performance: Industry-Based Sustainability Reporting on Key Issues’, develops a system to identify key KPIs by industry sector, with the goal of creating a regulatory regime with concise, comparable metrics that set a mandatory floor for sustainability reporting.
Investors want greater transparency in the boardroom
On June 15, the National Association of Pension Funds (NAPF) and the Local Authority Pension Fund Forum (LAPFF), whose members hold £800bn and £85bn of assets respectively, wrote to the chairman of every company in the FTSE 350 saying companies must be more upfront with shareholders about the pension perks of their top executives. The investors warned that a lack of transparency around boardroom pensions is an obstacle to shareholder scrutiny, and that generous pensions risk rewarding bosses for poor performance. The letter notes that firms already offer some information about boardroom pensions, but it calls on them to volunteer more, so that shareholders can judge total pay policies more effectively. Pensions are not linked to performance in the same way that annual pay, share options or bonuses are and there is concern that the generous pension terms could reward directors in their retirement despite failure in the job.
Contact: National Association of Pension Funds www.napf.co.uk
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