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Sustainability anyway
Regional or global? No single model
ideal for all sustainability programmes, says Economist Intelligence
Unit
Sustainability has entered mainstream corporate practice
worldwide. Policies such as recycling of waste and improvements in
energy efficiency have become widespread. Yet companies are still
grappling with how to structure their programmes to ensure that they
are effective in delivering on their sustainability goals while also
meeting key financial benchmarks. One particularly difficult dilemma
is whether programmes are best run regionally or globally.
Sustainability across borders, a new report written by the Economist
Intelligence Unit and sponsored by SAS, finds that while companies
are more satisfied with the global approach, there is actually no
single right answer.
The report is based on findings of a global survey of more than 220
executives in multinational corporations that have sustainability
programmes, complemented by in-depth interviews with business
leaders and other experts around the world. It concludes that firms
tend to favour global programmes even when regional ones are often
more effective.
Key findings of the report include:
While companies are almost evenly split between global and
regional approaches, they are still experimenting to find which type
of programme is optimal for them. Our survey found that 54% of
executives have adopted a regional approach, while 46% seek a more
global structure. In the future, executives say that their companies
will change their approach. Despite their conclusion that a regional
focus works better (65% of respondents), most executives (56%) say
that their companies will have a global programme in three years.
Furthermore, 60% of respondents whose companies have a regional
focus expect to switch to a global approach, while one-quarter of
those now favouring a global approach believe that their company
will take on a regional focus.
Global and regional approaches each have distinct challenges and
advantages. Management buy-in, data-collection on appropriate
metrics, the integration of sustainability into corporate processes
are among the main challenges for all companies implementing
sustainability programmes. Those with regionally focused approaches
grapple especially with gaining attention of corporate-level
management. For globally focused companies, the impact of
regulators, particularly from their home country, is a defining
force.
Overall, companies are more satisfied with the global approach.
Companies with a global approach were more likely than firms with a
regional one to rank themselves higher than competitors in
sustainability performance. Executives report that, overall, a
global approach is more consistent in addressing sustainability
priorities on both a regional (66%) and global level (75%). This may
explain the shift by the majority of executives towards globally
focused programmes in the future.
Sustainability across borders is available free of charge at:
www.eiu.com/sponsor/sas/sustainability
Sustainability across borders is an Economist Intelligence Unit
report, sponsored by SAS. The research is based on an online survey
of 226 senior executives from around the world conducted by the
Economist Intelligence Unit in August and September 2008.
Thirty-six percent of the executives were in Europe, 28% in North
America, 22% in Asia-Pacific and 14% in the rest of the world.
Participants represented 19 different industries, of which the top
three were financial services, professional services and
manufacturing. Fifty-five percent of the respondents’ organisations
had annual revenues of more than US$500 million. The quantitative
survey was supplemented with interviews with executives and experts
worldwide who addressed sustainability issues with globally unified
of regionally focused approaches.
The Economist Intelligence Unit is the world leader in global
business intelligence. It is the business–to–business arm of The
Economist Group, which publishes The Economist newspaper. As the
world’s leading provider of country intelligence, the Economist
Intelligence Unit helps executives make better business decisions by
providing timely, reliable and impartial analysis on worldwide
market trends and business strategies.
SAS is the leader in business analytics software and services, and
the largest independent vendor in the business intelligence market.
With innovative business applications supported by an enterprise
intelligence platform, SAS helps customers at 45,000 sites improve
performance and deliver value by making better decisions faster.
****
Corporate citizenship can boost
profits over time
Corporate citizenship is becoming increasingly important for the
long-term health of companies even though most struggle to show a
return on their investment from socially responsible activities,
according to a new study from the Economist Intelligence Unit.
The effects of corporate citizenship—the management of a firm’s
economic, social and environmental impacts beyond philanthropy and
compliance—are typically indirect and intangible. But visible
effects on the bottom line can be gained from environment-related
improvements, such as reductions in waste and increases in energy
efficiency. As yet, however, few companies have taken advantage of
these opportunities. While almost three-quarters of respondents to a
survey conducted for this report say their business depends on
effective corporate citizenship—and that it can help improve the
bottom line—only about one-quarter believe it is “very important” to
overall business strategy. These are the key findings of Corporate
citizenship: profiting from a sustainable business. The lead
sponsors are Cisco, HP, Qualcomm and SAS. The supporting sponsors
are Abbott and UTC. The report is based on a survey of 566 US-based
respondents, which was supplemented by interviews with 16 senior
executives and experts in corporate citizenship. The research shows
that while intangible benefits are often greater than tangible ones,
there are exceptions. The report outlines the cases where corporate
citizenship can be profitable, and the foundations needed on which
to create them. There are many lessons to be learned from the
leading companies. In particular, they build on four elements:
leadership at all levels, employee engagement, solid measurements,
and public-private partnerships.
“US companies increasingly take a holistic approach by making the
business case for corporate citizenship,” says Kim Andreasson,
senior editor, Industry & Management Research at the Economist
Intelligence Unit and editor of the paper. “And that is especially
relevant in an economic downturn.”
The main findings of the report include:
* Corporate citizenship can help improve the bottom line.
Seventy-four percent of respondents to the survey say corporate
citizenship can help increase profits at their company. When asked
for their firm’s primary motivation for corporate citizenship, the
top three answers all relate to the bottom line: revenue growth
(16%), increasing profit (16%) and cost savings (13%).
* Investments in corporate citizenship are significant. Nineteen
percent of respondents who know the answer say their company invests
more than US$1m in corporate citizenship initiatives annually.
Despite the economic malaise, five years from now 49% of all
respondents say they will spend more.
* For most, corporate citizenship remains a fringe activity. In
fact, only 28% of respondents characterise their strategy as
proactive. Yet successful companies implement major changes in the
way they do business, and long before government legislation
requires them to. They develop new technologies that eliminate
problems such as the production of toxic waste, eliminating the need
to install expensive controls mandated by the government.
* Without a strong commitment from top executives, corporate
citizenship will not be taken seriously at a firm. In fact, 92% of
respondents say a board member or C-level executive is in charge of
corporate citizenship at their company. Digging deeper, 34% say the
board is setting strategy, while 37% claim that it is the CEO,
president or managing director who is doing so. Many corporate
citizenship or corporate social responsibility executives are at the
senior vice-president, vice-president or director levels.
Having a well-designed corporate citizenship programme can be a
competitive advantage. Survey respondents who say effective
corporate citizenship can help to improve the bottom line are also
more likely to say their strategy is “very important” to their
business (33%) compared with other survey respondents (8%).
Based on the lessons learned, the report offers practical advice for
a profits-centred corporate citizenship strategy, including making
the business case, tying corporate citizenship to core objectives,
identifying the challenge and setting corporate goals publicly.
Corporate citizenship: profiting from a sustainable business is
available free of charge at
www.eiu.com/sponsor/corporatecitizenship
****
New guide on how
to build better brands, thru’ CSR
If you doubt the impact that CSR strategy can have
on a business’s bottom line, look no further than one of its least
likely champions - Wal-Mart. After receiving employer-provided
training on sustainability, one low-ranking employee suggested
removing the light bulbs from store vending machines would prevent
wasting energy while also saving the company money. As it turned
out, this employee was right on the money. When headquarters
crunched the numbers, they found that removing the light bulbs from
all of their in-store vending machines would save the corporation $1
million a year.
Despite CSR’s hard-earned ascendance into mainstream business
practice, few companies do it well, and even fewer know how to
effectively communicate their CSR strategy and initiatives to their
stakeholders—customers, shareholders, suppliers, and employees.
These companies are missing significant opportunities for
reputation, branding, talent management, and profits. Enter Kellie
McElhaney and her new book Just Good Business: The Strategic Guide
to Aligning Corporate Responsibility and Brand, published by Berrett-Koehler
Publishers. One of the most respected experts on CSR practices,
McElhaney, the founder of the Centre for Responsible Business at the
Haas School of Business, shows business leaders how to develop the
right CSR initiatives - ones that accentuate a company’s overall
brand—while also offering practical business tools to ensure that
those activities are effectively communicated and branded internally
and externally.
McElhaney draws on over ten years of consulting experience inside
companies grappling with developing strategically aligned CSR
initiatives. The book’s case studies, examples, best practices, and
strategic recommendations span a host of industries and sectors and
draw upon her work with leading corporations, such as McDonald’s,
Nokia, Levi Strauss, Digicel, Birkenstock, Gap Inc, HP, and
Pepperidge Farm. Savvy companies carefully manage their brand in
every area. CSR shouldn’t be any different. Just Good Business
offers a detailed blueprint that any company can use to ensure its
CSR strategy delivers significant, quantifiable, bottom-line
benefits.
“Kellie McElhaney is the leading expert and advocate for CSR.
There’s simply no one better. We’ve benefitted enormously from her
counsel and collaboration. I strongly recommend Just good business
to business leaders who want to make CSR an integral part of their
overall brand strategy.” - Gary Elliott, Vice President, Corporate
and Brand Marketing, Hewlett-Packard
“Kellie McElhaney’s book offers a practical and visionary approach
to corporate social responsibility in business. This book will be
invaluable to business leaders everywhere on how to approach and
communicate the benefits of CSR in business strategy.” - Enda
Kelley, Partner, Ernst & Young
“For organisations looking to propel their current corporate social
responsibility efforts, McElhaney’s practical and inspiring book
Just good business is a must read. Kellie has helped us at
McDonald’s to better understand and evolve our thinking around this
important subject. This book provides a meaningful roadmap for those
who also want to achieve new levels of strategic CSR.” - Bridget
Coffing, Vice President, Corporate Communications, McDonald’s
Corporation
Kellie A. McElhaney is the John C. Whitehead Faculty Fellow in
Corporate Responsibility and founder and Faculty Director of the
Centre for Responsible Business at the Haas School of Business,
University of California, Berkeley. She developed and launched the
centre in January 2003. She consults many Fortune 500 companies and
was named a 2005 Faculty Pioneer for Institutional Leadership in the
Aspen Institute’s biennial report Beyond Grey Pinstripes. (CSRwire)
****
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