A new year is often a time of reflection among businesses on strategic directions and corporate goals. For many firms, sustainability – environmental, social, economic – is fast moving up the agenda.
Raised regulatory standards and consumer expectations are today demanding far more from companies than an annual CSR report and a handful of associated token initiatives. The genuine integration of sustainability within an organisation may require significant organisational change and improved stakeholder engagement.
The Centre for Social Innovation – a partnership between the Universities of New South Wales, Melbourne, Western Australia and the Swinburne University of Technology – has been undertaking research on this shift taking place in the corporate sector in recent years. Researchers Gianni Zappala and Sarah Adams’ 2010 paper, The Integration of Corporate Responsibility: Evidence from leading companies in Australia & New Zealand, considers the level of integration of sustainability principles and practices achieved to date.
The paper defines Corporate Responsibility (CR) as “understanding and minimising a company’s negative impact or footprint on society and a broad range of stakeholders including the planet and environment, its employees, the communities in which it operates and the governments which make the laws.” It utilises data from the Corporate Responsibility Index (CRI) benchmarking tool developed by Business in the Community in the UK in 2002, which is applied annually in Australia and New Zealand by the St James Ethics Centre.
The reseach found that “corporate responsibility is on the whole well integrated into the way that leading companies in Australia and New Zealand are doing business.” However it suggests that firms could improve in four key areas, including ensuring improving CR training at board level and improving the extent and quality of stakeholder engagement.
The following criteria are suggested as a measure of firms that have achieved genuine integration of CR principles:
- Adopt a holistic conception of corporate responsibility or citizenship;
- Have board level governance systems to oversee CR policies and practices;
- Have senior leaders that champion CR internally and externally;
- Have a range of structures and systems to integrate CR across the business, including risk management systems, stakeholder consultation schemes, sustainability training for managers and employees, establish and monitor key performance indicators for CR, and
- Have an open and transparent approach to CR information disclosure (eg undertake assurance of their CR reports).
There is no denying the challenge for corporates in moving to greater levels of stakeholder engagement and associated transparency. However in many cases this is a necessary first step on the road to more sustainable, productive and profitable business. Which companies will rise to the challenge in 2011?