A new barometer of corporate practice finds movement in the right direction

New research shows that 60% of companies have a senior executive leading corporate citizenship, a 74% increase since 2010, with one-third of these directly reporting to chief executives. The Boston College centre for corporate citizenship’s Profile of the Practice report also finds that virtually all companies now set aside an annual budget dedicated to corporate citizenship, compared with 81% in 2010.

“The evolution of today’s social media is driving higher demand for greater transparency,” says Karen Hoff, the report’s author. “These elements of competitive global business context make the management of the environmental, social and governance [ESG] dimensions of business more crucial than ever.”

Boston College surveyed 231 companies on ESG, comparing corporate citizenship programme priorities, operational structures and business practices with a similar study in 2010. Along with transparency and competition, current and prospective employees are a new, significant target for today’s corporate citizenship efforts.

“Resources available for participation in external corporate citizenship professional development programmes have increased by two and a half times since 2010,” Hoff says. “45% of companies indicate retaining employees is one of the top business goals to achieve through their corporate citizenship efforts. More than 40% include improving ability to attract employees among their top three business goals.”

Reputation revival

Also encouraging is the news that 71% of companies cite enhancing reputation as a business goal to achieve through corporate citizenship, another increase from 2010.

But despite rising corporate capital available for ESG, only 23% of companies tie monetary incentives to corporate citizenship. “When companies do offer monetary incentives, they are most often connected to environmental performance,” Hoff explains.

“Budgets for these programmes are being institutionalised, indicating corporate citizenship is becoming an expected practice; a necessary component of business strategy.

“Quantified goals, increased professional development opportunities and connection to key business goals are other reasons for optimism. Managing ESG performance is becoming an accepted and important source of business value,” Hoff concludes.

Some 30% of companies had a 2013 ESG budget of at least $1m, compared with 24% in 2010.

“Sustainability challenges, like climate change, resource scarcity and human rights, are changing how companies do business,” says Mindy Lubber, president of Boston-based business coalition Ceres. “Leading companies recognise these as fundamental economic issues requiring effective management, oversight and integration into business strategies. Key to this approach is engagement throughout the business, from the boardroom and executive suite across operations and supply chains.”

Lubber believes companies should now expect to be held accountable on key metrics, including setting and achieving greenhouse gas reduction goals, boosting renewable energy sourcing and lowering water use.

“They should be pushing their suppliers to do the same,” she says. “In the case of GHGs, companies should be shooting to reduce greenhouse emissions by at least 25% below 2005 levels by 2020, in alignment with reductions leading scientists agree are needed to prevent catastrophic warming.”

Verify, a US aerospace supplier to more than 40 countries, recently launched its corporate citizenship programme. Chief executive Kathleen Boyle says: “Our formalised programme will facilitate extension of efforts beyond aiding the community into benefiting the environment and improving our workplace.”

business performance  corporate citizenship  ESG  ESG budget  reputation  transparency 

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