Series: The top five trends in corporate responsibility - the corporate response

18 April 2018

by Jonathan Grant and Jacqui Machin in our sustainability team  

So we’ve seen how the public, government and investors, amongst others, are putting pressure on companies to address social and environmental challenges. In the third post in our series on the main trends we put the spotlight on the corporate agenda.

 3. The corporate response - creating wealth worth having?*

In response to mounting pressure from governments and investors, CR is undoubtedly moving higher up the corporate agenda and into the boardroom. This is no longer about charity or philanthropy, but impact and activism. Increasingly, CEOs are getting stuck into CR: sponsoring it internally, championing it externally and inspiring and collaborating with others.  For example, the CEOs of Ericsson, Olam International and Royal DSM are all well known for their positions on sustainable development goals (SDGs), sustainability and carbon pricing respectively.

As CR becomes more mainstream, businesses are reassessing their relationship with it. Leading global corporates are now talking about ‘Corporate Purpose’ and the importance of trust and ‘being trusted’ for business success.  But purpose is meaningless unless it is central to business strategy and backed up through implementation and action in the business.  When executives are used to a world where most business decisions and their own performance evaluations are based primarily on short term profit calculations, this can be unsettling. Ultimately, focusing on purpose should, ensure the business creates long-term societal value and remains resilient and sustainable.

Externally the lines between CR and purpose are invisible. A purpose helps explain why the business exists and what value it brings. Firms are increasingly looking at their core products and services in the context of purpose: either to articulate how their offerings already contribute societal value, or to innovate new ones that do.

In the last year, many companies have started to explain their purpose in their marketing and to use their marketing to influence consumer behaviour for positive impact.  Just look at Unilever’s Dove campaign supporting women’s self-esteem; or their recent announcement that Unilever will not invest in social media platforms that sow division. For those companies that get it right - having earned the right to a voice through genuine and authentic engagement with those around them and a strong track record as a responsible businesses -  there are real benefits.  This can be in customer loyalty, employee engagement and attraction of talent in a generation that expects no less.

As organisations grapple with purpose, we’re seeing greater recognition of the need to really understand stakeholder views and whether performance matches to purpose.  Companies that are truly guided by their purpose will have a strategic approach to stakeholder engagement, owned and driven by senior management, informing core business strategy and decision making, and vitally, how people behave across the organisation.

Tomorrow we look at how companies are using technology to support their CR objectives.

*Creating wealth worth having was the purpose of Climate Change Capital.