Series: The top five trends in corporate responsibility - the pressure points

17 April 2018

by Jonathan Grant and Jacqui Machin in our sustainability team 

As we take a look at the main trends we’re seeing in corporate responsibility (CR) today, our second blog shifts from the public perspective to other pressure points.

2. Investors, governments and others are piling on the pressure

Governments expect businesses to play their part in tackling these global challenges – and are not afraid to set ambitious targets. This has been particularly apparent since the Paris Agreement and Sustainable Development Goals were adopted in 2015. Governments starting to implement these agreements realise that they will not hit their targets without a significant contribution from the private sector.

This translates into increasing social and environmental regulation.  It also means softer pressure such as recommendations, guidance and encouragement from governments for businesses to take a lead.  Governments also recognize the power of their purchasing to drive change, with increasing requirements in public sector tenders on social or environmental performance.

Alongside the pressure from governments, there has been a surge in interest in CR from mainstream investors far beyond the socially responsible investment community.  

In January, Larry Fink, CEO of BlackRock (the world’s largest asset management firm), sent a letter to CEOs calling on companies to explicitly state their strategy for creating long-term societal value. He drew a clear link between positive societal impact and strong long term financial returns, advocating a new model of shareholder engagement, with shareholders becoming more actively involved in encouraging positive impacts.

Tomorrow we will look at how companies are responding to these pressures.