The Evolution Of Corporate Responsibility

From Philanthropy to Values: The Evolution of Corporate Sustainability

Corporate Sustainability (CS) has evolved tremendously over the last 10 years with the majority of corporations embracing various aspects of the sustainability agenda. In fact, there has been a clear progression a from a philanthropic to a strategic approach. We will explore this evolution below and offer why, in spite of this, sustainability is still not truly integrated in day-to-day business operations.

Philanthropy led

The focus here is on financial, in-kind and time donations to various charitable organisations. (How much has business given?). While these donations did yield strong benefits for the organisations involved, they did not affect the broader impact of corporations. In fact numerous organisations who were known for their generous philanthropy were also some of the corporate world's worst offenders. An example of this is the Enron Corporation.

Communications led

Once it became apparent that social and environmental impact could affect a company's operations, both positively or negatively, it became a priority in many organisations to publicly embrace CSR or sustainability. However, in many cases, this was based on weak or inadequate understanding of the strategic importance of sustainability, with sustainability remaining an ad-hoc activity not meant to interfere in the 'real business' of running a company. Most sustainability-driven activity was therefore limited to communications exercises in CSR reports or glossy company brochures. There was little depth behind the facade.

Strategy led

Eventually, corporations became aware that irt wasn't enough to 'talk the walk', one had to 'walk the talk' if the real benefits of Corporate Sustainability were to materialise. This was triggered by an emphasis of the business case for corporate sustainability. For instance, CS improves risk management by increasing the understanding and awareness of risks that are relevant to the business, it allows for better attraction and retention of talent, it makes the company more marketable to customers and can generate new product development opportunities and business avenues. (For a detailed description of the various business benefits of corporate sustainability, see 'Buried Treasure: Uncovering the business case for corporate sustainability', a report Oliver Dudok van Heel co-wrote while at SustainAbility).

As a result, many corporations realised that CS was good for business, but that these benefits would only accrue if it was incorporated within the corporate strategy.

Implementation led

So, as with any strategy, its success lies in the ability to implement it, and CS is no different. Initially, little attention was paid to CS implementation, with many organisations cautious about disturbing the corporate status quo. The CS strategy was therefore not as effective as it could be, because it was not being carried through in the organisation.

Values led вЂ" the next frontier

This leads to the next challenge, and the next phase in the evolution of CS thinking: Once a company wishes to integrate sustainability within the strategy, how does it make this happen? How does it integrate a new way of thinking, a way of thinking that emphasises long-term performance and gives importance to things that are both intangible and in some ways alien to traditional business operations?

The most common barrier is getting sustained buy-in from middle management. Given the pressures they are under, managers understandably don’t