Are you a “talker” or a “walker?” Corporate Social Responsibility in 2014

I have some good news and some bad news.

The good news is the recently published by KPMG Survey of Corporate Responsibility Reporting 2013 shows that CSR (also known as Sustainability) reporting is now a mainstream business activity all over the world practiced by 71 percent of the 4,100 companies studied across 41 countries. To put that in perspective, back in 1993, when the KPMG survey was first published, the average global CSR reporting rate was only 12 percent.

“Environmental and social risks can impact the supply chain, productivity, financial performance, reputation and brand value. So it is disappointing to see that so many companies still shy away from quantifying these risks in financial terms …” said Yvo de Boer, KPMG’s Global Chairman, Climate Change & Sustainability Services.

He goes on to say, “Corporate responsibility is no longer simply a moral issue and companies recognise this. They increasingly view it as a critical lens on concrete business risks and opportunities. It is encouraging to see that large companies are now seeing environmental and social change as a source of opportunity as much as, or more than a source of risk, providing a more rounded view for stakeholders.

The rise in reporting on CSR efforts however raises the specter of one of the biggest criticisms of CSR – that these reports are just lip service for publicity’s sake, but does not reflect a true commitment to people or planet.

That’s the bad news. A new report by MIT Sloan Management Review and Boston Consulting Group found  while some companies are addressing key CSR and sustainability issues they found a disconnect between thought and action on the part of many others. The report says:  nearly two-thirds of respondents rate social and environmental issues, such as pollution or employee health, as “significant” or “very significant” among their sustainability concerns. Yet only about 40% report that their organizations are largely addressing them. Even worse, only 10% say their companies fully tackle these issues.

The authors find  that those companies that perceive sustainability issues as significant and thoroughly address them share distinct characteristics. For example:

  • More than 90% have developed a sustainability strategy, compared to 62% among all respondents.
  • 70% have placed sustainability permanently on their top management agenda, compared to an average of 39%.
  • 69% have developed a sustainability business case, compared to only 37% of all respondents.

These leading companies suggest a path forward. The authors call them “Walkers” — companies that “walk the talk” by identifying and addressing significant sustainability concerns. How they do so is a major finding of their research. Walkers focus heavily on five business fronts: sustainability strategy, business case, measurement, business model innovation and leadership commitment.

“Talkers,” on the other hand, are equally concerned about the most significant sustainability issues, but address those issues to a far lesser degree. They also score much lower on the five fronts.

Are you working for a Walker or a Talker? In 2014 as the practice of CSR mainstreams, you can be the leader that converts your business from a talker to a walker. Reporting is a great way to start- it forces you to take an audit of your CSR efforts across the enterprise, guaranteed to surprise you that you’re further along than what you see on the surface, and laying out a roadmap for how to improve and start walking down the road to change.

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christengraham

About christengraham

President of Giving Strong, Inc. Christen advises businesses, foundations and families for how to make a greater social impact.