How Businesses View Sustainability & CSR Reporting
By courtesy of Tim Smith
It has been fascinating to watch over the last decade as more investors around the world actively embrace the importance of companies acting responsibly on environmental, social and governance (ESG) issues. And equally, if not more important, we have seen companies globally step up and confirm the importance of being a responsible corporate citizen and its central importance for protecting and building shareholder value.
Walden Asset Management recently conducted research on how companies see their roles in this evolution. The wide ranging quotes compiled below all connect to the premise that being a responsible company is good for the bottom line. What's significant about the quotes is that they all come from the companies themselves, drawn from several dozen corporate social responsibility reports (CSR) including a wide range of industries.
Please understand that including a quote from a company does not mean that I or Walden Asset Management automatically think this company is a "living model" for good CSR reporting or performance. However, these quotes do illustrate the expanding belief that CSR has become vitally important for a company's business, and that transparent reporting is, as one CEO said, one of "the prices of doing business today."
Special thanks go to Carly Greenberg, a Summer Associate at Walden, who painstakingly reviewed dozens of CSR reports to gather this information.
From the President and CEO statement, Paul S. Otellini
"Corporate responsibility is about doing the right things right."
"Our approach has created value not only for our stakeholders and society, but also for Intel. We have reduced costs through energy conservation investments, minimized risks by proactively working with our communities and supply chain, and enhanced our reputation as a leading corporate citizen by building trusted relationships around the world." (pg. 2)
As one of HP's seven corporate objectives, global citizenship has long been integral to the success of our business. We're responding to pressing issues, such as mitigating climate change, using energy more efficiently, enriching education and improving healthcare, by providing solutions that are transforming how people live, work and connect." (pg. 3)
From the Letter from CEO, Michael Dell
"Dell has a full-time commitment to being a responsible corporate citizen. It's a commitment driven by the types of goals, strategies and accountabilities that characterizes every part of our business." (pg. 4)
From the Text of the Report
"We live in an increasingly complex world. That reality, combined with the financial downturn of the global economy and the issues facing our planet and our communities, means business as usual is not enough. To make a meaningful difference, we must inspire and innovate..."
"During times like these, we must continue to build trust with customers and stakeholders by demonstrating our positive impact on society and the planet and developing meaningful measures for reporting our progress. Corporate responsibility is a critical component of Dell's overall business. We are committed to being a responsible corporate citizen." (pg. 6)
From the Letter from the CEO, Ursula M. Burns, and Chairman of the Board, Anne M. Mulcah
"Despite the toll the recession has taken, we are pleased to report that it has not caused us to waiver from our belief in the need to behave responsibly as a good corporate citizen in the communities and countries in which we operate. There are two broad reasons for that - a belief that good citizenship is the right way to behave and an equally important belief that behaving the right way is a good thing for our business." (pg. 2)
"The more we have integrated sustainability into our business operations, the more it has become a part of our DNA. We like to think of ourselves as a leader, still pushing the boundaries of what is possible." (pg. 2)
"We were an early leader in the sustainability movement because we thought it was the right thing to do for the environment. But we discovered something else along the way. Every one of our innovations ended up either saving us money or creating new markets and new revenue. We found, in other words, that we don't have to choose between the environment and profit. We can do both." (pg. 3)
Conducting our business with integrity and transparency builds credibility and attracts investors." (pg. 4)
"Nurturing a greener world through sustainable innovation and development saves money, creates value and helps develop new markets." (pg. 4)
From the CEO introduction statement, Peter Voser
"Safety, environmental and social performances are now closer to the core of our business plans and decisions." (pg. 1)
"I believe sustainable development works best when it is thoroughly integrated in our business decisions at the very earliest opportunity... That is exactly how it must be if we are to meet the complex challenges ahead in the most effective and responsible way." (pg. 1)
From the interview with CEO Peter Voser, interviewed by Aron Cramer
"Sustainability is central to the way we do business, our business principles and our long-term strategy, so we take a very far-reaching view, not a short-term view. It means to me that we help to meet the growing energy needs of the world in economically, environmentally, and socially responsible ways. You can't have one without the other two" (pg. 7) - Peter Vose
"We wanted to embed sustainable development as deeply into the business as possible" (pg. 7) - Peter Voser
"It is our view that successful companies are those that see business objectives and sustainability objectives as interlinked." (pg. 2)
"For a number of years, our business lines have been incorporating sustainability considerations in their operations and sharing the outcomes with stakeholders." (pg. 2)
"Our disciplined approach and long-standing commitment to corporate governance have contributed to our continued success during the global recession of 2009." (pg. 15)
"We believe that an unwavering commitment to high ethical standards and business integrity is critical to our competitive advantage and shareholder value." (pg. 16)
From the Letter from the Chairman and CEO, Jim Rogers
In tough economic times, when every aspect of our business is under scrutiny, some might ask whether we can afford to focus on sustainability. To that I respond: Can we afford not to?" (pg. 4)
"Sustainability - operating our business in a way that is good for people, the planet and profits - is, in my opinion, no longer optional. It is the strategic and decision-making approach we are following at Duke Energy to create long-term value." (pg. 4)
"At Duke Energy, sustainability describes the way we work; it is a competency that leads to improved risk management, efficiency and innovation for today's complex, resource-constrained and connected world." (pg. 4)
"At AT&T, when we talk about 'sustainability', we're not just talking about the environment. We're talking about a broad array of initiatives that will make our business and communities stronger well into the future." (pg. 13)
From the Message from the Chairman and CEO, Ivan Seidenberg
"Our corporate responsibility process helps us assure that our practices keep pace with the evolving needs and expectations of our customers." (pg. 7)
"We have built a sustainable model for incorporating corporate responsibility into the way we manage our business." (pg. 7)
Industry: Food & Beverage
From the Chairman and CEO Letter, Muhtar Kent
In the midst of the global financial downturn, the economic, environmental and social implications of business are more important than ever. There's no question that the world is undergoing a massive resetting of priorities, values and expectations."
"The strength and sustainability of our brands are directly related to our social license to operate, which we must earn daily by keeping our promises to our customers, consumers, associates, investors, communities and partners. It is an honor, and a responsibility that we take very seriously."
From the Text of the Report
"LIVE POSITIVELY™ is our commitment to making a positive difference in the world. Through redesigning the way we work and live, we consider sustainability as part of everything we do. As we act with an eye toward future generations, we will focus on driving business growth and creating a more sustainable world." (pg. 12)
From the Message from the Chairman and CEO, Irene B. Rosenfeld
"To build and sustain brands people love and trust, one must focus-not only on today but also on tomorrow. It's not easy but balancing the short and long term is key to delivering sustainable, profitable growth-growth that is good for our shareholders but also good for our consumers, our employees, our business partners, the communities where we live and work, and the planet we inhabit." (pg. 5)
From the Message from the Chairman and CEO, Klaus Kleinfeld
During these tough economic times, we recommitted ourselves to integrating sustainability as a core value for Alcoa; protecting the health and well-being of our employees and our communities; conducting business with the highest code of ethics; preserving the environment and our natural resources; and earning our license to operate each and every day."
"In short, we are committed - through chemistry - to the betterment of global humanity. And it is this commitment that drives all of our strategies for growth and profitability." (pg. 3)
From the Letter from Chairman and CEO, Andrew Liveris
"Setting the Standard for Sustainability" is our desire to have corporate citizenship inherent in everything we do as a global corporation, directly supporting our vision of being the largest, most profitable and most respected chemical company in the world." (pg. 20)
From the Statement from CEO presenting overall vision, Andrew Liveris
"We see sustainable development as an opportunity to tap new markets that create value for our customers, consumers and the planet." (pg. 23)
"By integrating sustainability elements into every facet of our business - from our product offerings to our energy use - we are creating a better future for our Company and the world." (pg. 23)
Industry: Consumer Services and Products
From the President and CEO Statement, Bob McDonald
"In fact, our growth strategy for the coming decade is linked tightly to our Purpose. We will grow P&G's business by touching and improving more consumers' lives in more parts of the world... more completely.
"To execute this strategy and fulfill the Company's Purpose, we must grow responsibly and sustainably. As a result, Sustainability is at the heart of P&G's business model. Keeping Sustainability at the core of our business fuels innovation and strengthens our results." (pg. 4)
"We're a company that focuses on growth now and for generations to come, and therefore Sustainability should and will be a focus area for me." (pg. 4)
From the Letter from the CEO, Mark Parker
"We saw that doing the right thing was good for business today - and would be an engine for our growth in the near future. With each new discovery and partnership, we willingly gave up old ideas to shift our thinking toward a better, smarter, faster and ultimately more sustainable future - financially, environmentally and socially." (pg. 4)
"All companies face a direct impact from decreasing natural resources, rising populations and disruption from climate change. And what may be a subtle effect now will only become more intense over the next five to ten years. Never has business had a more crucial call to innovate - not just for the health and growth opportunities for our companies, but for the good of the world." (pg. 5)
"We see sustainability, both social and environmental, as a powerful path to innovation, and crucial to our growth strategies." (pg. 5)
"And for all the athletic and cultural and financial successes of the company, believe our work in sustainable business and innovation has equal potential to shape our legacy." (pg. 5)
"There is now only one path and it leads to greater sustainability, equity, growth and prosperity." (pg. 5)
From the Letter from CEO, Mike Duke
"I meant we would make sustainability a priority throughout our entire company and we would act with a sense of urgency." (pg. 3)
"It shows that even during the economic crisis, our company does not slow down on sustainability or even just stay the course; we redouble and strengthen our efforts." (pg. 3)
"When we look at the world today and the trends that will shape the world in the future, we see that sustainability is no doubt one of Wal-Mart"s greatest opportunities to make a difference for our business, our communities, our customers and the planet." (pg. 5)
From the "Choices for a Sustainable Future" section "Put simply, sustainability is critical to our future success. It's an enormous challenge. But we choose to do it, and to work with those who support positive change, because it's the right thing to do. That's one choice that will never change." (pg. 3)
From the Message from the Chairman and CEO, Tom Falk
"Sustainable business practices are woven into the fabric of our Global Business Plan. We challenge ourselves every day to look for ways to sustain the resources we enjoy today for generations to come. That's why Kimberly-Clark is focused on setting and achieving sustainability performance metrics for our brands and facilities. And through our resource stewardship, we are demonstrating to our stakeholders that sustainability isn't just the right thing to do, it's also good business." (pg. 4)
The letter from Executive Chairman and Chairman of the Board, William Clay Ford Jr.
"We continue to aggressively search for new ways, both big and small, to improve our economic and environmental sustainability. Often the actions we take accomplish both goals."
"Creating a strong business and building a better world are not conflicting goals - they are both essential ingredients for long-term success."
From the Letter from President and CEO, Alan Mulally
"We also know that the successful companies of the 21st century will be those that understand global sustainability issues and offer viable solutions. Through a decade of work and a disciplined reinvention of our Company, we have built sustainability into our business model."
From the Letter from the Chairman of the Board and CEO, Jeff Kindler
"In times like these, some companies might choose to focus simply on running their businesses and think of their corporate responsibility work as a luxury that can wait for better times. Not Pfizer. We believe successful companies can't do one without the other." (pg. 5)
Industry: Capitol Goods
From the CEO and Chairman's Message, Jim Owens
"We're making sustainable development part of how we do business. In 2007, in the midst of our growth period, we set bold aspirational goals for 2020, and abandoning those goals, in the face of dramatic economic challenges, was simply not an option. This isn't a passing fad that we only care about during prosperous times. It's a serious commitment. And it's a real business opportunity, now and in the future." (pg. 2)
"Good things happen when we integrate sustainability into our products, services and solutions. We improve our competitiveness and create and capture customer value. We save money, reduce our environmental impact and improve employee satisfaction. And by partnering with others, we can help ensure sound policies that promote sustainable development and innovation." (pg. 2)
"In the next decade, the most successful companies will be those that integrate sustainability into their core businesses. That's what we're doing at Caterpillar, and we are also helping our customers do the same." (pg. 3)
"Some of Caterpillar's fastest-growing businesses are those focused on the sustainability of materials and resources." (pg. 3)
"In fact, the economic downturn has helped secure sustainability's place at the core of our strategy. It's not something extra that we do during good times. It's something that creates and captures value for the company, our customers, investors, employees, suppliers - and really, the world." (pg. 4)
From the Letter from the Chairman of the Board and CEO, Jeff Immelt
"Successful companies can only create solutions to some of the world's toughest problems by working collaboratively. Business must engage - with communities, governments, customers and each other - because the status quo is not an option. It is not only possible for a global business leader to be a good citizen, but a requirement." (pg. 4)
"Based on a commitment to integrity, a commitment to performance and a commitment to learn and grow stronger, GE is creating a better company coming out of this reset - a renewed focus that is better for GE, and also better for our world." (pg. 4)
Trade Associations and Consultants
BSR Report 2009: Innovating for Sustainability
From the Letter from the President and CEO, Aron Cramer
"2009 presented numerous challenges for the entire world, not least for all of us dedicated to sustainable business. At the start of the year, many observers thought companies would consider corporate responsibility to be an expendable luxury that could be cut along with other discretionary budgets. 'Sustainability,' they predicted, would be redefined as 'basic economic survival'. Fortunately, these predictions did not play out. Rather, 2009 showed us that sustainability can-as we had argued-help pull business out of the recession." (pg. 1)
"Despite the difficulties presented by the economic conditions, it is clear that sustainability remains as important to business-and to the world-as ever before." (pg. 1)
From the Text of the Report
"What's more, revived economic growth is again exacerbating existing challenges related to climate, water, and biodiversity. Long after the recession passes into history, these trends will be shaping economic conditions. They are the reference points that business should consider in shaping their strategies.
"More and more companies recognize this. As a result, they are making sustainability not just a program, but, in fact, the defining feature of success in a fast-changing world." (pg. 5-6)
"While calmer economic conditions have returned, the road to tomorrow's prosperity is not the same as what came before. The businesses that assert leadership, take a comprehensive approach, use sustainability as a driver for innovation, and champion sustainable consumption will not only become the sustainability champions, but also the most successful companies in the years ahead." (pg. 11)
This report summarizes findings from a survey of CEO's globally
From the Forward by Georg Kell, Executive Director UN Global Compact, and Bruno Berthon, Managing Director Accenture Sustainability Services
"It is a decade that, CEOs believe, could usher in a new era where sustainability issues are fully integrated into all elements of business and market forces are truly aligned with sustainability outcomes." (pg. 2)
"Today's CEOs are more convinced than ever of the need to embed environmental, social and corporate governance issues within core business. But they are also convinced that good performance on sustainability amounts to good business overall: The imperative to act has shifted from a moral to a business case." (pg. 2)
From the Text of the Report
"93 percent of CEOs see sustainability as important to their company's future success." (pg. 10)
"Demonstrating a visible and authentic commitment to sustainability is especially important to CEOs because it is part of an urgent need to regain and build trust from the public and other key stakeholders, such as consumers and governments-trust that was shaken by the recent global financial crisis. Strengthening brand, trust and reputation is the strongest motivator for taking action on sustainability issues." (pg. 10)
"Our survey found widespread agreement among CEOs about what the next era of sustainability will look like: It is one where sustainability is not only a separate strategic initiative, but something fully integrated into the strategy and operations of a company." (pg. 11)
"96% of CEOs believe that sustainability issues should be fully integrated into the strategy and operations of a company (up from 72% in 2007)." (pg. 14)
"80 percent of CEOs believe that the economic downturn has raised the importance of sustainability as an issue for top management." (pg. 16)
"74 percent say that the downturn has led their company to align sustainability more closely with core business." (pg. 16)
"Also bolstering the continued commitment to sustainability during the economic downturn has been demand for sustainable products and services." (pg. 18)
From "Industry perspectives: Belief in the importance of sustainability varies considerably by industry"
"Fully 100 percent of automotive CEOs identify sustainability issues as important or very important to their future success. This finding reflects how environmental concerns present both a challenge to the industry and an opportunity to serve a new market with low carbon alternatives such as e-vehicles. (pg. 19)
"CEOs from the energy and utilities sectors also see sustainability issues as critical to their future success." (pg. 19)
"Wolfgang J. Ruttenstorfer, CEO and Chairman of European oil and gas company OMV, said, 'I regard these issues as bringing competitive advantage in the long term; a transparent approach clearly oriented toward values, human rights and environmental objectives is the only right approach that will be appreciated in the long term.'" (pg. 19)
"Support is especially high in the banking industry, for example: 68 percent of CEOs note that sustainability is "very important" to their success...a commitment to environmental and social issues may be a prominent part of restoring brand value as the financial industry struggles to regain the trust of consumers." (pg. 19)
"CEOs in the communications and electronics & high-tech sectors are the least likely to identify sustainability issues as critical to their future success - just 22 percent and 31 percent of those industries' CEOs, respectively, cite sustainability as very important to their future success... leading companies in these sectors are beginning to think beyond the direct physical impacts of their business on sustainability issues, and are looking to shape a vision of the role that they can play in society by driving sustainable development... providing companies around the world with new technologies and ways of working that will help them achieve their own environmental objectives." (pg. 19)
This report published every 3 years; following statements are from the 2008 report.
From the Forward
Message from Global Head of Citizenship and Diversity, KPMG International, Lord Michael Hastings of Scarisbrick CBE
As you will see in the results, there has been an important shift in this direction with CSR reporting becoming the norm instead of the exception within the world's largest companies. Three years ago only 50 percent of companies surveyed included CSR in their reporting, in this survey the number jumped to 80 percent. More companies report the information as it relates to specific objectives and more companies include this information in their annual reports." (pg. 5)
Message from Global Head, KPMG Sustainability Services Partner, KPMG in the Netherlands, Wim Bartels
"But would these reports pass the "greenwash" test? For the first time in the 15 years we have been doing this survey, we think they just might. Nearly all of the Global 250 companies that report also publish a corporate responsibility strategy with defined objectives." (pg. 5)
From Text of the Report
"One of the most significant findings of the 2008 survey is that corporate responsibility reporting has gone mainstream - nearly 80 percent of the largest 250 companies worldwide issued reports, up from about 50 percent in 2005."
"National trends - National level companies trail the G250 with only 45 percent of the total sample issuing reports, but numbers vary from less than 20 percent in Mexico to more than 90 percent in Japan." (pg. 7)
"Now that some of the world's largest companies have been able to quantify the business case for corporate responsibility and reporting, it is likely that the practice will spread through countries and sectors to the smaller players." (pg. 7
"Reporting is necessity if companies are to know and understand their social and environmental impacts, and how to minimize the dangers and maximize the opportunities associated with new and emerging challenges." (pg. 10)
"In these challenging times it is now perhaps more crucial than ever for companies to show their commitment to transparency through sustainability reporting. Effective public disclosure of economic, environmental, and social performance can enable a company to rise above the rest and take advantage of the opportunity to position itself as a forward-thinking leader among an increasingly sophisticated constituency of stakeholders. No longer is publishing a sustainability report merely a matter of mitigating risk to reputation and costs. More than ever, employees, investors, and consumers are looking to the companies from which they buy, invest in, and work for to join them in addressing the critical sustainability issues of the day in innovative ways." (pg. 17)--Judy Henderson Board of Directors, Global Reporting Initiative