Corporate social responsibility becomes strategic

For sustainability, cast the information net wide


Nearly 60 percent of organisations are not collecting information about key operations and sustainability objectives on a frequent basis. Even in the high-profile area of CO2 emissions management, for example, eight out of ten business leaders surveyed fall short. They may be able to use the information they have for an annual CSR report. But since they aren't evaluating the ongoing impact of actions on their CO2 emissions, it's unlikely they can use the data to make their operations more sustainable.

Outperforming organisations in our survey were significantly more likely to collect timely information about their operations. For all companies, peer pressure and persistence may move those numbers up. The longer a company has been required by its business partners to adopt CSR standards, the more frequently it collects data. When it comes to making strategic decisions based on timely information collected, in Western Europe, roughly a quarter of business leaders report that they are collecting data about carbon and water management frequently enough to make informed decisions. A third are collecting data frequently enough on ethical labour standards to do the same.

Supply chain information: Still too Insular

More than half of the business leaders surveyed said they consider the open sharing of information among stakeholders and business partners a high priority. However, the vast majority aren't collecting adequate information from their suppliers to support their CSR objectives. In fact, 14 per cent of Western European countries still do not collect supplier data.

Outperforming organisations, on the other hand, are collecting more information from their suppliers in each of the eight categories we tracked as compared to their peers.

Three out of ten organisations surveyed aren't asking their suppliers for any information in any of the eight categories. Surprisingly, in the CO2 and water categories, where cross-ecosystem "footprinting" is becoming more common, approximately eight out of ten aren't collecting information from their suppliers. And, despite a long history of brand-damaging stories in the area of labour, 57 per cent aren't collecting information on ethical labour from their suppliers.

Customer information: Improving but far to go

Consumer purchasing decisions are often influenced by perceptions of how socially and environmentally responsible an organisation is. Yet overall in 2009, two-thirds of our survey respondents admit they don't understand their customers' CSR concerns well. This represents an 11 point improvement over the previous year and suggests organisations are making inroads fast. Nevertheless, 37 per cent of organisations globally, and 25 per cent in Western Europe have still not conducted any research on their customers' CSR concerns. Outperforming organisations were nearly twice as likely to understand their customers' needs well.

Across the entire sample, the shortfall in collecting information related to operations, supply chain and customers reveals an optimisation gap. In addition, we found that outperforming organisations perform better in all three information categories, as do organisations that have focused for more than three years on integrating their CSR objectives to grow revenues and become more efficient. The approach to information and actions taken by these organisations suggest that the gap will narrow over time. The immediate challenge is to identify what information is needed and then aggregate and analyse it so it contributes to efficiency and growth objectives.

Insight, engagement and action

Today, every organisation is a system of systems, more bound up in complex, inter-dependent forces than traditional business systems in the past, with a clear cut focus on profits. Given increasingly finite resources, businesses depend on balanced natural ecosystems for raw materials, water, energy and the physical health of their employees and customers. They depend on thriving community systems for labour, new sources of innovation and customers. Given the links among its systems, an enterprise committed to practicing sustainability considers both the immediate and far-reaching consequences of any action it takes.

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