In a guest post, soon to be published on Ethicalcorp.com, Paul Hohnen wonders which part of the podium your company might be on.
With the London Olympic Games and the 3rd UN Conference on Sustainable Development both being held next year, perhaps it is time to use Olympic standards to rate corporate sustainability performance?
Based on private sector performance since the 1992 Rio de Janeiro ‘Earth Summit’, here’s my take on how the 2012 Sustainability Olympic medals might be awarded.
Companies in this group have not necessarily changed the products and services they offer, but have changed some of the ways they go about doing business.
Internally, these changes have included staff consultations on how energy and resource costs can be cut, and how the company can improve customer service in building healthy communities.
Externally, there have been more focused efforts to understand customer, supplier and community interests.
Typical reported benefits have included operating cost reductions (e.g. energy), improved staff engagement, a better understanding of the sustainability dimensions of the business, and more community trust.
As a result, they are better run and ready to move to the next level.
Companies in this category have typically engaged with stakeholders and mapped their sustainability issues.
Internally, they have improved both existing product line and introduced new management systems.
Management structures, reporting systems and incentives schemes have been put in place that embed sustainability issues in strategy and governance.
They communicate their sustainability policies, practices and dilemmas, and invite continuous stakeholder feedback and ideas.
In a performance distinguishing move, the business plan is often explicitly oriented to meeting the challenges of the future (e.g. GE’s Ecomagination, Siemens’ focus on low carbon cities).
Long term aspirational resource efficiency targets have been set (e.g. Unilever), while new manufacturing technologies reduce the environmental footprint of key products (e.g. recyclability, energy efficiency).
Company sustainability policies and expectations are communicated along the supply chain (e.g. Wal-Mart).
CEOs engage in public policy advocacy (e.g. on climate change).
Reported benefits include lower operating costs, increased profitability (and business share) of sustainable product lines, improved stakeholder relations, and recognition on green indexes.
Companies in this category are winners because they have embraced sustainability principles and integrated these into a commercially successful business model.
Some (Interface, Desso) have done so by using ‘cradle to cradle’ design and technology to deliver existing products and services with a radically lower footprint.
Others have targeted new technologies and products such as wind power (e.g. Vestas) or solar PV (e.g. SunTech), which directly challenge the traditional ‘brown industry’ model.
Interestingly, in their sharp focus on winning still fragile sustainability markets, some of these might give lesser attention to CSR principles and approaches.
However, they win gold because their sustainability impacts are measurable (e.g. less carbon) and their financial performance has been respectable.
There will be readers who point out that none of the companies in the groups above are actually yet 100% ‘sustainable’.
There will be also those who note that the majority of the world’s companies don’t qualify for any medal.
Both are right. However, this should not detract from the efforts made. Surely it has been better for a minority to act than none at all.
The challenge now is – and the economic context makes it tougher than ever – how to incentivize all companies to become medalists.
In the absence of better regulations, at the end of the day it may be superior and sustainable financial performance that continues to drive most change.
Paul Hohnen, former Director of Greenpeace International, and Strategic Director of the Global Reporting Initiative (GRI) is now an independent consultant, his clients include governments, intergovernmental agencies, business and non-profit organisations. http://www.hohnen.net