Tag Archives: corporate citizenship

In Search of Transformational Leadership on Sustainability

A recent CEO study on sustainability conducted by the UN Global Compact and Accenture – the third one of its kind – reached out to more than 1,000 executives from 27 industries in 103 countries around the world, asking for their views on the past, present and future of sustainable business. This largest-ever CEO study on sustainability offered a mixed picture of global movement in the positive direction juxtaposed with the frustration over slow progress.

In the previous edition of this study, conducted in 2010, CEOs were optimistic that sustainability – understood as the active management of social, environmental, and governance issues as a part of core business – would soon become a norm embedded into operations of companies worldwide, with leadership on sustainability incentivized and rewarded. In 2013, 63 percent of CEOs still expect sustainability to transform their industry within five years and 76 percent believe that embedding sustainability into core business will drive revenue growth and new opportunities. However, the predominant feeling is that global business efforts on sustainability may have plateaued, and despite deeper awareness and commitment levels many business leaders deem the pace of change and the scale of impact insufficient.

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What’s New in CSR?

Participants on a panel at the BCLC event.

Corporate social responsibility (CSR), or corporate citizenship, is not a new concept. The idea that businesses should be responsible and engaged members of their communities, both locally and globally, has been around for quite some time. However, the understanding of what that means in practice and what the larger significance of good corporate citizenship is has evolved over time. Today it is more important today than ever before.

Recently, I had a chance to participate in two great events that explored this topic in depth: CSR: Business Solutions for Emerging Markets conference organized by the Business Civic Leadership Center (BCLC) and Corporate Strategic Responsibility: What’s Next for CSR? organized by Partners for Democratic Change, together with the GE Foundation and the International Finance Corporation CommDev Office. They both attracted excellent speakers and active participants, asking key questions about what makes corporate citizenship successful and why it should be a key element of a company’s strategy.

These are the themes and new concepts that I took away:

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Development Finance Institutions Tackle Corporate Citizenship

ADFIAP Corporate Citizenship Manual for Development Finance Institutions

In a world where sustainability has become a global buzzword, companies are reassessing how their business impacts local, national, and international communities. Companies are also taking a proactive approach and thinking about what role they can play in a building better and more sustainable society.

While all that sounds nice, what does it really look like in practice? What does it mean to be a good corporate citizen?

Good corporate citizenship starts with good corporate governance. According to a guidebook recently published by CIPE partner the Association of Development Financing Institutions in Asia (ADFIAP), corporate governance “is an internal set of rules that ultimately focuses on accountability of the business to its investors and stakeholders.”  In other words, an organization must ensure good business practices, sustained growth, and risk management before it can be accountable to its community.

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Building Sustainable Global Value Chains

Siemens is a leading supplier of technologies like wind turbines that help its customers reduce their environmental impact. (Photo: Wind Power Monthly)

As companies around the world strive to create sustainable value chains, they are paying increased attention to the operations and management practices of their suppliers, distributors, and partners. A recent joint research project of the American Society for Quality, the Corporate Responsibility Officers Association, and the Institute for Supply Management with Deloitte Consulting LLP took a closer look at what improves the effectiveness of sustainable value chains. The project gathered almost 1,000 responses from sustainable supply chain executives.

The responses measured how much a given management practice can increase an organization’s sustainable value chain effectiveness, as compared to respondents not adopting the practice. Not surprisingly, among the top 10 such management practices, the top five have to do with engagement, organizational culture, and incentives (percentages represent an increase in sustainable value chain effectiveness):

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2012 Global Corporate Citizenship Conference

The U.S. Chamber of Commerce is hosting a corporate citizenship conference on October 10 and 11, 2012, in Washington, DC. The conference, sponsored by the Chamber’s Business Civic Leadership Center, will feature briefings on international development trends, regional development assessments, and U.S. government and multilateral initiatives and will provide many opportunities for companies, organizations, and individuals to network, share, and learn.

Literacy, nutrition, poverty, hygiene, corruption, violence, disease, pollution are not just social issues, they profoundly affect the business landscape. As companies increasingly cultivate business opportunities in emerging markets, they encounter these challenges and are developing strategies and innovations that are improving social, environmental, and governance conditions. Businesses are changing the way that they work with governments, development agencies, and key stakeholders; applying technology in new ways to old problems and re-framing problems to come up with new solutions.

The organizers are also accepting speaker proposals.

Find out more about the conference, register, and see video from last year’s conference here.

The power of purpose

What are some of the key reasons why employees choose a particular company and what determines how long they stay? There are some obvious answers like compensation, benefits, growth opportunities, or flexible schedule. But another factor is becoming more and more prominent: purpose. According to a new report by global brand consultancy Calling Brands, corporate purpose – a deeper role that goes beyond satisfying commercial and operational goals and demonstrates exactly why a business is valuable to all its stakeholders – is emerging as a powerful driver of employee attraction, retention, and productivity.

The report is based on interviews with HR and Communications chiefs from large multinational companies and a survey or over 4,000 workers in Germany, the UK, and the U.S. This research found that after pay and benefits purpose is the most important factor for employees when considering who to work for and it is a very significant driver of discretionary effort and loyalty. It ranks ahead of other traditionally valued factors such as level of responsibility in a job and even career progression. To that effect, 65% of respondents claimed that purpose would motivate them to go the ‘extra mile’ in their jobs and nearly two-thirds (64%) felt more loyal toward businesses that aim to do more than simply create shareholder value.

These findings are on some level very intuitive. After all, who doesn’t want to see the value of their work mean more than just a paycheck? Purpose is a company’s ambition and commitment to make a difference in the world that provides this much-needed motivation. Demonstrating how strong this desire is helps drive home a crucial point for businesses.

When a good employee leaves, it takes time and resources to find a replacement, it disrupts company operations, and translates into losses to both the immediate bottom line and longer-term business potential. Since employees increasingly seek the alignment between their personal values and the values of the business they work for, purpose translates into a real competitive advantage because it helps companies attract and retain top talent while avoiding the costs of personnel turnover.  That is why companies should consider it as one of the core elements of their strategy and operations.

Calling Brands experts conclude, “People want to work for a good business (…) all it needs is for employers to start making the argument – and act on it. (…) This is not an HR issue: this is a Board issue.” That is the message that every employer must take to heart.

Corporate purpose is closely intertwined with good corporate citizenship, or CSR. Consequently, the business case for purpose demonstrated by the Calling Brands study complements the related argument that corporate citizenship is not just good business, it is a good business strategy. Especially in the global context, being a good corporate citizen can lead a business to prosperity and at the same time help build better societies, protect human rights, and facilitate economic development.

As such, corporate citizenship – and purpose – must go beyond philanthropy and extend to broader socio-economic management that affects how a company works in an interconnected ecosystem of countries where it operates. What that means in practice and how companies can become CSR 2.0 leaders was the topic of today’s conversation hosted by Business Civic Leadership Center’s Executive Director Stephen Jordan with Katherine Pickus, Vice President of the Abbott Fund and Vice President of Global Citizenship Policy of Abbott Laboratories. Testifying to the importance of having a corporate purpose and the value of employees devoted to that purpose, Pickus noted, “CSR is about more than philanthropy, it’s about tapping into the value that the business brings. (…) We get our best ideas from people embedded in the business who are thinking about corporate citizenship in an innovative way.”

Friday Wrap-Up: Voices of Youth, Corporate Citizenship, and a Tenuous Balance in Liberia

This week on the blog: