From developing an equality strategy to establishing corporate political responsibility and the evolving role of the Chief Sustainability Officer. We're back with our new newsletter format highlighting the latest, most interesting takes and news in the purpose-driven business scene. Ready to jump in? Let's go!
When I ask you what your company's sustainability strategy is, you might have a few ideas or even an entire strategy paper and a few 'in-operation' things to mention. But what if I asked you what your equality strategy was? In case that's more difficult for you to answer, then definitely read the following article by Sustainable Brands and take a deep dive into the report mentioned below:
"When it comes to genuine sustainable development, businesses still have a blind spot. Collectively, we’re failing to address the systemic risk posed by mounting levels of inequality. This is a humanitarian tragedy and a barrier to long-term, meaningful sustainable change. [...]
As the reality and challenge grows starker and harder to ignore, businesses are waking up to the urgent and systemic risk of inequality. It erodes trust in our political and economic system, unravels the social fabric, fuels civil and political unrest and constrains economic growth. In May, a group of more than 30 major corporations convened under the Business Commission to Tackle Inequality (BCTI) to launch a flagship report asserting that growing inequality is bad for business. The report highlights how rising inequality contributes to:
an increasingly volatile business operating environment;
supply chain insecurity;
the erosion of productivity and innovation;
regulatory and compliance risks; and
reputation risk. [...]
By considering the views of rightsholders [those who are or could be affected by the organization’s activities], a company is much more likely to take on board the opinions of those who face greater levels of inequality."
Check out the entire report by BCTI here and get inspired to build your own strategy to tackle rising inequality!
A few years ago, we did a little workshop and live interview with Christopher Marquis after he published his book Better Business. In this edition of his newsletter, he summarizes a few key learnings from an interview he did with the so-called Corporate Political Responsibility Taskforce for Forbes:
"Lyon says that 'the basic idea of corporate political responsibility is that companies not only need to align their words and actions with their commitments, but that they also have a shared interest and a responsibility to support the larger systems on which we all depend.'
[...] Doty suggests that before engaging in civic and political affairs companies need to consider four factors, which are (1) legitimacy, i.e., on what basis do we authentically engage in civic or political affairs? (2) accountability, i.e., are our political activities aligned with our values, purpose, and commitments to all stakeholders? (3) responsibility, i.e., do our political activities support the systems on which markets, society and life depend? and (4) transparency, i.e., do we communicate openly about our political activities to relevant stakeholders and to promote public trust? [...]
Companies are increasingly going to be held accountable for their action, which constantly sets them up for hypocrisy traps. It is therefore crucial for companies to align their political actions with their social and environmental claims."
by Robert G. Eccles & Alison Taylor | Harvard Business Review
A very interesting article that emphasizes the importance and potential of CSOs becoming more involved in serious, strategic decision-making:
"The role of the chief sustainability officer has its roots in corporate social responsibility (CSR), and many CSOs began their careers in CSR-focused roles. Originally CSR aimed to showcase companies as responsible corporate citizens. Typical CSO-led initiatives included recycling, waste reduction, environmentally friendly energy consumption, and employee volunteer programs. The distinction between CSR and philanthropy was often unclear. There was virtually no connection between CSR and a company’s strategy, capital allocation, or business model. There didn’t need to be, because the CSR group was small and had limited resources—a modest cost center enabling a shiny annual CSR report.
The CSO role is finally becoming strategic, if you define strategy as the art of choosing what not to do. Today CSOs help identify and direct attention to the ESG issues that have a substantial impact on an organization’s financial performance and risk profile. This approach aligns with broader corporate strategy-making, as it helps organizations focus on what matters most to long-term value creation.
Moving the focus from feel-good corporate social responsibility to hard-nosed sustainable value creation requires pragmatic leaders who are willing to admit that not all ESG measures are win-win—that is, good for the planet and for the bottom line. Companies need more nuanced and rigorous discussions about the trade-offs and conflicts that exist among stakeholder interests, and among environmental, social, and governance issues. For example, an electric-car maker that rushes to get green vehicles on the road may need to source cobalt from conflict areas in Africa; a food company that sources organic food from far-flung locations can create more carbon emissions than if it sourced food locally. The CSO should be steering these discussions.
Acknowledging trade-offs is a step toward solving a long-running problem in corporate sustainability—the tendency to focus on the important at the expense of the existential. Social media platform companies, for instance, would prefer to discuss renewable-energy data centers than their products’ impact on mental health and democracy. Consumer packaged goods companies would rather talk about brands with purpose than their lobbying efforts against sugar taxes. Pharmaceutical companies would rather talk about packaging waste than drug access and pricing."
That's it for this month's curated highlights!
Scroll down to explore more insights from around the web.
