A new report entitled “Corporate social responsibility: beyond financials” from Grant Thornton draws on 2,500 interviews with business leaders in 34 economies to show what companies are doing to make their operations more sustainable and why.
Investor calls for transparency and the rise in social media have thrust the impact businesses have on the economy, the environment and society more firmly into the public spotlight. Businesses globally are reporting increases in major drivers to move towards more environmentally and socially sustainable business practices with cost management emerging as the key driver, followed by customer demand and because ‘it’s the right thing to do.’
The report shows that businesses are working to reduce their environmental impact with increasing numbers calculating the carbon footprint of their operations. Sustainability reporting has increased since 2011 with more than half of businesses now viewing integrated reporting as best practice.
Of those interviewed 39% had changed a product or service to reduce their environmental impact, 31% had calculated their carbon footprint and 65% had improved their energy efficiency or waste management.
There is a difference between the key drivers globally, where cost management is the strongest driver and in the UK, where client/consumer demand has the highest impetus followed by recruitment/staff attention.
Key drivers globally:
- Cost management – 67%
- Customer demand – 64%
- Right thing to do – 62%
- Brand building – 59%
- Staff recruitment/retention -58%
- Tax relief – 42%
Key drivers in the UK
- Client/consumer demand – 62%
- Recruitment/staff retention – 49%
- Cost management – 48%
- Public attitudes/building brand – 44%
- Because it’s ‘the right thing to do’ – 40%
At HWEnergy we have just completed a biomass installation for the Co-Operative Stores in Caol, while in the Central Belt our clients include Sky Livingston, Sky Dunfermline and Scottish Water. The drivers for all companies match the top 5 listed here and while it’s too early for them to start reporting on tangible outcomes anecdotal evidence no the positive returns has been good.
According to Paul Raleigh, Global leader – strategic development and growth, Grant Thornton “Customer demand is indeed a key driver in the move towards more environmentally and socially sustainable business practices. Encouragingly a strong sense of pure altruism is also evident; many businesses are adopting more sustainable practices simply because it’s the ‘right thing to do’.
However the potential for cost savings emerges as the most important driver globally, a significant change since we last researched this topic in 2011 when business leaders were more focused on attracting potential customers and employees. This suggests that the benefits of running a strong CSR programme are becoming more tangible and indeed the most popular initiatives undertaken by businesses around the world – donating money to charities and improving energy efficiency and/or waste management – can impact on the bottom line either indirectly through tax relief or directly through lower utility bills.”
The report highlights that in a digital world characterised by instant customer feedback and growing demands for transparency, businesses need to be mindful not just of what they are doing, but of how they are doing it. Building a strong brand is increasingly dependent not just on the quality of products and services but on the wider impact of business operations on society, the environment and the economy. Companies which boost profits at the expense of the local population or natural environment can find demand for their products and services drying up in the face of a press or social media storm.
As the Boston Consulting Group say, there is now a recognition that the “trade-offs between
economic development and environmentalism aren’t necessary. Rather, the pursuit of sustainability can be a powerful path to reinvention for all businesses facing limits on their resources and their customers’ buying power.”
See the full report