Corporate Responsibility is in the DNA of Your Business
Corporate Responsibility (CR) shouldn’t come from a single department—‘doing good’ should be woven into the fabric of your business model.
“People often ask me what’s the business case for sustainability. My reply? I’d love to see the business case for the alternative,” writes Keith Weed, Unilever’s Chief Marketing and Communications Officer, in a contributed article on the World Economic Forum website.
Keith makes the case that Corporate Responsibility (CR) shouldn’t come from a single department, arguing that ‘doing good’ should be woven into the fabric of your business model. “Show me the business case for destroying the very planet and society in which we live,” he continues. “Future proofing your business against a changing climate and building a more prosperous and healthy society can only be of economic benefit to a business.”
Redesigning the Corporate Identity
Dan Pontefract, author of OPEN TO THINK: Slow Down, Think Creatively, and Make Better Decisions, explains that organizations must be careful to not confuse CR with their overall purpose. However when “the purpose of [any] organization is to serve society now and into the future”, it’s clear that CR has an important role to play in the wider vision for the business.
Sustainability isn’t the sole purpose of most businesses. But it should be part of every company’s identity. Making that leap from an isolated and reactive CR team, to a ubiquitous “business for good” culture is a challenge all business leaders face. It’s a challenge that asks for new vision and acceptance that a sustainable future is the only future.
In early 2016, the United Nation’s 17 Sustainable Development Goals (SDGs) officially came into force. The Agenda for Sustainable Development confronted a broad range of environmental and societal issues with targets set for the year 2030. Then in November of that year, the global commitment to tackle these issues stepped up another gear with the Paris Agreement.
Global targets and commitments are helping to accelerate change. However, the lion’s share of responsibility still rests with corporate leaders. “The signing of the Paris Agreement was a landmark commitment toward climate change action,” says Group SVP for Corporate Responsibility at Sodexo, Neil Barrett. “While public policies can help foster a better quality of life for people, the private sector must contribute to this goal.”
This means not only taking an active role in solving global issues such as climate change, hunger and discrimination, but redesigning the DNA of the business to ensure that everyone is pulling in the right direction. “Business leaders must recognize what many in the workforce believe—that businesses have a much wider purpose beyond profits alone,” says Pedro Tarak, co-founder of sustainability consultancy, Emprendia.
But this shift shouldn’t come at the expense of profit—and it doesn’t have to. In fact, a recent study from Unilever highlights a $1 trillion market opportunity for corporate eco-innovators. And according to Edelman’s 2019 Trust Barometer, 73% of the workforce agree that a company can both increase profits and improve the economic and social conditions where it operates.
“The number of companies setting carbon and water reduction targets has increased by around 10% over the past five years.”
- GreenBiz, 2018 State of Green Business Report
Key Issues Facing Organizations Right Now
The push for positive impact business models should occur because it’s the minimum benchmark, not because it’s applauded. Meaningful action comes through commitment to clear targets based on science and other evidence, wider appreciation of the benefits to business and society, a desire for brand image enhancement and, simply, on moral grounds.
There are three big issues facing all organizations right now when it comes to creating a sustainable future for the business:
1. Carbon Emissions
Recent figures show that only 48% of Fortune 500 companies have committed to at least one climate or clean energy target. This is despite 82% of corporate leaders calling for companies to advocate for or take a standon environmental, social and governance issues.
Much more needs to be done before we see light at the end of the tunnel. Organizations must hold themselves accountable for a reduction in emissions associated with operations and the supply chain, and progress needs to be scaled. “Effective corporate responsibility strategies are going to prove crucial in the fight against global warming,” says Neil Barrett. “Environmental innovation comes from within the business. C-suite decision makers must look to set bold, but achievable targets, and adopt progressive processes.”
CASE: Global industrial manufacturer Siemens announced aims to become 100% carbon neutral by 2030. Plans involve optimizing production energy costs, introducing low-emission and electric vehicles to its global car fleet, and implementing renewable energy programs.
At Sodexo, through our partnership with World Wildlife Fund (WWF), we created a new methodology to calculate the carbon embedded in our operations and supply chain. This information has allowed us to set a target to reduce carbon emissions by 34% from our operations and supply chain between 2011 and 2025.
2. Diversity and Inclusion
Beyond basic human decency, building a diverse workforce and an inclusive workplace are key for business success. As organizations compete for the best talent in order to provide innovative solutions and to meet the needs of diverse consumers, they are increasingly looking to diversify their workforce. Ensuring there is diversity in leadership and on the board, coupled with fostering an inclusive culture, has also been proven to benefit financial performance.
Sodexo research shows that teams with gender-balanced management can expect higher operating margins, better employee and client retention rates, and increased employee engagement levels. “When employees from all walks of life are given equal opportunity, the entire organization is successful,” says Dr. Rohini Anand, SVP Corporate Responsibility and Global Chief Diversity Officer at Sodexo. “An inclusive workplace promotes employee engagement, attracts top talent, spurs innovation and drives business growth.”
CASE: Law firm Nixon Peabody reduced the billable hours expected from employees returning from parenting leave by 20% for up to six months. This gives new parents time to adjust to their new work/life situation without impacting on the business.
3. Ethical practice
Corporate misconduct has come increasingly under the spotlight over the last two or three decades. Sweatshop scandals, data breaches and tax avoidance represent just some of the stories that have hit global headlines. Businesses must operate in the ‘right’ way, rather than the most profitable way, as we move into the future, or risk wrecking their reputation beyond repair.
“Organizations are expected to conduct business within specific ethical boundaries,” says Neil Barrett. “Embracing responsible practices helps deepen that line in the sand, and enables brands to further demonstrate their commitment to moral practice and sustainability.
At Sodexo, we hold ourselves accountable to behave responsibly in the way each of us does business with our clients, partners and suppliers to diminish adverse impacts that may result from our activities. This is why we put in place policies and codes to frame our practices and expected behaviors around key issues such as respect for human rights, animal welfare and sourcing policies.
CASE: Outdoor clothing company Patagonia works with factories and mills across the world to promote fair labor and safe working conditions. The Fair Trade™ certified brand has also made steps towards introducing a living wage throughout the company’s supply chain.
“The new bar of competitiveness is not to be the best in the world, but the best for the world.”
- Pedro Tarak, co-founder of sustainability consultancy, Emprendia
“Mainstreamed” Sustainability
Forward-thinking companies understand that sustainability should be at the core of their strategy to drive accountability at every corner of the business. Because progress doesn’t come from siloes.
“You can’t have marketing sitting in one corner shouting “sell more stuff” with a CR department somewhere else trying to negate the ‘bad’ your business is doing elsewhere,” writes Keith Weed. “It has to be a whole system approach—all brands, all markets, no exceptions. Sustainability needs to be mainstreamed.”
Ultimately, there is no case against sustainable business. Businesses, employees, and communities can only benefit from this shift in approach. With this in mind, the desire to “do good” should be embedded in every decision we make. And when leaders fully embrace this, the heart and mind of the organization changes.
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