More and more frequently we hear some terms being used in the corporate lexicon: Corporate Social Responsibility, CR, Sustainability; and just as frequently we hear about the environmental, social, and governance issues that are often associated with this terminology: GHG emissions, Human Rights, Ethics and Transparency, and on and on. The terminology is confusing and the issues are endless.
It seems that many companies today are chasing all these terms and issues, checking off all the lists and attempting to properly report their activity in the hope that they will be able to proudly (and publicly) claim their sustainability title. They publish glossy reports that tout their initiatives, they proudly display their CR awards behind the receptionists’ desk, they are members of all the right sustainability clubs, and ‘engage’ with all the right NGOs. But does having all the right CR elements make a company sustainable?
The short answer is yes…and no.
A recent working paper by the Harvard Business School provides some very interesting conclusions. First, and perhaps most important to many executives, is that companies who have a strong focus on sustainability “significantly outperform” companies that do not have a strong focus on sustainability. This conclusion is listed as first because it is potentially the long awaited ‘business case’ holy grail that CSR professionals have sought for decades (but I will save that discussion for a different post).
It is the second conclusion, however, that directly relates to this article and is the more important of the two for both executives and for those working to implement a sustainability program within their business: it is a culture of sustainability that creates this business success!
Collectively, the evidence above suggests that sustainable firms are not adopting environmental and social policies purely for public relations reasons. Adoption of these policies is not just cheap talk; rather these policies reflect substantive changes in business processes. —Harvard Business School (The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance)
The authors of the HBS working paper conducted extensive research on companies from across all sectors, looking at everything from CSR program elements, to stakeholder engagement efforts, to market and accounting performance over a period of several decades. They categorized companies as high sustainability (those with strong programs that preceeded the current popular attention to sustainability) and traditional (those companies with little or no sustainability attributes).
One of the most interesting aspects of this paper is throughout their research the authors found that traditional companies or those companies who ‘green washed’ (using CR for ‘public relations’ purposes) did not achieve the business success that companies who created a culture of sustainability enjoyed. This is not really much of a revelation to many of us who have worked with sustainability within companies, but it is perhaps a revelation for those new to sustainability or for those wondering how to ‘make it work’.
You see, it is not enough to have a CR department, a CSO (Chief Sustainability Officer), a Board Committee on Sustainability, or Certified and Audited Annual Non-Financial Report. It is not enough to have all the right environmental and social issues addressed, all the right awards and accolades, and all the right stakeholders engaged…if you haven’t created a culture of sustainability and elevated ‘being a responsible business’ as a vital part of your company values, then you may just be going through the motions; motions that won’t create the outcome you desire.
Having witnessed both sides of this coin, it is evident that without the proper attention paid to nurturing a culture that values sustainability within your organization, your efforts to build a responsible business will be more difficult—and potentially futile.
What is the culture in your company?
How do you change or create a culture that values sustainability? Does your entire organization understand sustainability and do they live it in their actions? These are some questions to consider when you begin your sustainability journey and these are also questions to consider as you evaluate your current journey. The good news is that it can be done…
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Eric Dziedzic has worked in the Middle East, Asia, Africa, Europe and North America cultivating his unique expertise in communication, sustainability reporting, and human rights. He brings the right blend of global perspective, business acumen, and issues knowledge to ensure his consultancy CRx Solutions can provide the right answers.