5 Trends for CSR & Sustainability in 2012

Dr. Michael Hopkins

Coauthored with Mr. Martin Summers and Dr. Adrian Payne

Every year, MHC International‘s annual CSR & Sustainability Update expert group meeting looks at the prospects for CSR in the coming year in the context of changing trends and themes in the corporate, social, political and economic spheres. Now in its sixth year, the group is comprised of a range of CSR practitioners and commentators.

Here are the group’s top prospects for 2012:

1. Trust in Brands, Companies & Sectors

There is clear evidence to suggest that trust in brands, companies and sectors is declining. This should, however, be seen in a positive light as it creates:

  • Opportunities for more open, honest and direct debate between consumers and companies, governments and other stakeholders about the key issues and future for certain sectors.
  • Opportunities for greater competitive advantage for those companies that do manage to build ‘trust relationships‘ with consumers and other stakeholders. While Steve Jobs exemplified how charismatic leadership can help build brand trust, the top 10 most trustworthy brands in the U.S. illustrate that brand trust can be built via a CSR programme that is embedded throughout the business.

2. Trust in Governments

This has led to greater skepticism about the ability and inclination of governments to tackle key sustainability and other issues decisively and comprehensively, as indicated by widespread protests in the crisis-hit Eurozone and in opinion polls about government’s ability to deliver on jobs, growth and climate change, etc. Against such a background the Rio+20 Earth Summit arguably holds little promise for delivering significant change.

3. CSR Continues to be Redefined

The Redefinition of CSRA few years ago it looked as if CSR would become more tightly defined around ‘corporate responsibility’ (getting the basics of company responsibility right) and ‘sustainability’ (focusing on the key long term material issues for a company and its stakeholders).

But the extent of the financial crisis and its social impacts mean that there is renewed emphasis on financial and government responsibility, and an increased scope for responsible capitalism.

The terms of the CSR debate have also been given an impetus by Porter and Kramer’s Harvard Business Review article on ‘Shared Value’, and wider discussions about what some have called ‘sustainable capitalism’ (often used in contrast to ‘casino capitalism’.) Although this debate is in flux, and covers many topics, the need to rethink financial markets and the link between executive remuneration and performance are common themes.

4. Demand for Greater Transparency, Disclosure & Non-Financial Reporting

Global Reporting InitiativeThere have been several very important developments in reporting: ISO 26000; the growing interest in integrated reporting; the development of GRI4 (GRI’s next generation of guidelines); the revised OECD multi-national guidelines and the EU’s push for a wider social responsibility concept and more social and environmental reporting in its 2011-2014 CSR strategy.

The number of companies reporting on sustainability is also increasing: KPMG research shows 95 percent of the world’s 250 biggest companies now report on their sustainability performance, up from 80 percent in 2008.

Some seminar participants did question whether too much reliance is being placed on reporting as a tool to drive and monitor corporate change. Given that one of the lessons of the financial crisis is that commercial and governmental accounts clearly cannot be trusted as a guide to future developments, the question demands some clear examination.

5. Social Media’s Role in Sustainability & Corporate Change

social mediaSocial media clearly played a major role in political protest from the Arab Spring to the Eurozone. It has also proved invaluable to many companies in building relationships with consumers.

At present, however, it is not at all clear how important social media can be in putting pressure on companies to change their practices from a CSR perspective. The combination of a vibrant civil society, dynamic mainstream media, and a critical populace still seems to be one of the best ways of keeping companies alert and responsive to changing social trends and demands.

Could social media play a role in coordinating (and thus increasing) shareholder activism? It’s hard to say. At best, social media is a crowd-engaging tool and while it can become a means to an end, its true potential in seeking and achieving corporate social responsibility is yet to be established.

Originally published on CSRwire

Dr. Michael Hopkins is CEO and Chairman of MHC International Ltd., a research and service company on Corporate Social Responsibility (CSR) and Labor Markets. He is Professor of Corporate & Social Research at the University of Middlesex in London, UK and Adjunct Professor of CSR at George Mason University in Washington DC. Hopkins also is Founder and Director of Executive Programmes on CSR at the University of Geneva in Switzerland, among others.