Largest CEO Research Study on Corporate Sustainability
Posted: November 1, 2010 Filed under: Studies | Tags: CEO, CSR, Future, Sustainability Leave a comment »
I just popped into the study “A New Era of Sustainability” that was published in June 2010 and might provide support for CEOs who want to make their company more sustainable. The UN Global Compact together with Accenture surveyed 766 companies and additionally asked 50 CEOs and 50 other leaders about sustainability. Here are some key results from the study:
- 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.
- CEOs address sustainability issues the following way: (1). The consumer is (or will be) king (“CEOs identify the consumer as the most important stakeholder in influencing the way in which they will manage societal expectations over the next five years.”) — (Governments are seen as less relevant than consumers – I guess that we must hope that the Myth of the ethical consumer is not true …). (2). Importance of technology and innovation. (3) Collaboration is critical (“while CEOs believe civil society is an essential partner in tackling these issues, they believe non-governmental organizations (NGOs) are declining in their influence on corporate sustainability agendas. Just 15 percent of CEOs identified NGOs as one
of the key stakeholders influencing their approach to sustainability, down 12 percent from 2007.”) - “Currently, the burning issue is how to better incorporate sustainability into daily practice.”
- 88% of CEOs believe that they should be integrating sustainability through their supply chain. Only 54% believe that this has been achieved within their company. An almost identical performance gap is seen for subsidiaries.
- “Consumer uncertainty: The consumer may be king when it comes to driving profitable sustainability, but the CEOs surveyed are looking for clearer signals that sustainability actually drives buying behaviors. Similarly, they are unclear as to the extent to which sustainability concerns will drive purchasing decisions by businesses and governments.”
- “Regulatory uncertainty: Across the board, CEOs spoke of the need for greater clarity around the shape and scope of future regulation in response to regulatory challenges.”
Sustainable business as win-win
Posted: September 11, 2010 Filed under: Book | Tags: CSR, Sustainability, win-win Leave a comment »
The EFMD just published a free PDF-book by Jonathan T Scott called “Sustainable Business”. At a quick glance, it seems to be a 130-pages manual on “how to generate win-win CSR” – and accordingly the content focuses on environmental issues. Why doesn’t the book talk about the economic benefits of treating workers well? My own research indicates that there can be win-win situations.
On the environmental side, however, the books seems to talk about some interesting issues, such as: “creating sustainability as an objective”, “analysing every stage of production”, “the history behind products”, “ecological rucksacks”. Regarding the “the perils of green-washing” it states, for instance:
Not Revealing Hidden Trade-Offs: 57% of the misleading claims made by manufacturers involved suggesting that the entire product was green when, in fact, the green aspect being promoted represented only a part of the product. The remainder of the product was both wasteful and destructive in terms of energy consumption, forestry destruction, and
water usage. (p. 42)
The publisher, EFMD, is “an international membership organization, based in Brussels, Belgium. With more than 730 member organizations from academia, business, public service and consultancy in 82 countries, EFMD provides a unique forum for information, research, networking and debate on innovation and best practice in management development.” Basically, many business schools and large companies are a member of the organization.
Icebreaker: Profitable sustainability?
Posted: September 8, 2010 Filed under: Academic paper, Company reports, Journal | Tags: Icebreaker, Sustainability, Transparency, Wool 2 Comments »
The current issue of the Ecotextile magazine (p. 30-32) reports about Icebreaker’s self-made strategy of “profitable sustainability”. The company (£ 65 Mio sales) argues that their focus on sustainability explains, why they have grown quickly without using advertising and instead focusing on word of mouth. If you are also interested in Icebreaker’s strategy to expand to the US and China market you can read two case studies in the HBR.
Icebreaker’s sustainability strategy fully builds on the idea that consumers trust the brand and connect it to sustainability. Surely it is good, if a company tries to embrace a philosophy of sustainability, but there remain some questions:
- Transparency: The ‘baacode‘ is the company’s web-based tool that tells the story behind the products: “to give consumers a clear understanding of Icebreaker, and of our deep commitment to the environment and to social ethics” (p.31). So far, more than 115.000 customers used this tool. It allows to type in a code from a product and read information and watch videos about how this product was produced. Great! But it would be even better, if Icebreaker disclosed the locations of their factory – as other companies (e.g. Timberland, Nike) already do. This would enable stakeholders to independently check the claims Icebreaker makes.
- Social standards: A quick look into the “Ethical Manufacturing Standards” indicates that explicit references to ILO norms are missing. Why is Icebreaker not obliging to pay living wages. And why is the company not member of a multi-stakehodler initiative that would verify their claims?
- Environmental standards: According to Ecotextile, Icebreaker does not use 3rd party eco-textile or organic certification: “Our mindset is called ‘Eco System’ which takes a holistic view of the entire company – not just manufacturing – and helps us balance ecology and economy” (p. 32). Why cannot they balance ecology and economy by using 3rd party certification systems (apart from ISO 14001)? This might provide more trust in their promises and it could make it easier for customers to compare their approach to that of other companies. The article gives one explanation, why their wool is not organic: “because the growers choose to use an anti-parasite treatment annually to improve animal welfare. Claiming that a fibre is organic covers only the use of chemicals, and doesn’t say anything about the other environmental and social issues involved in the garment’s production”. This might, indeed, then be a problem of organic standards for wool.
I have asked Icebreaker to comment on these issues.
