Corporate Responsibility Gaining More Visibility in the Enterprise

September 29th, 2008

Wall Street is being called on the carpet for doing what Milton Friedman told it to do: maximize profits and nothing else. However, in the current financial climate, investors and stakeholders want more. They want companies to move toward sustainability.

Wall Street may be the last to know that investors, employees, governments and Main Street require more of corporations. Stakeholders require companies to implement corporate responsibility best practices that are comparable to or exceed the performance of their industry peers. That’s because executives now regard corporate responsibility as a business differentiator that separates companies based on their ability to effectively manage operational risks.

Therefore, climate change occurring on the planet mirrors the climate change concerns that are addressed by the enterprise. This is magnified by the global connectivity provided by the internet and the increasing ability of stakeholders to form activist groups demanding change in emissions policies and manufacturing processes. These groups cannot be ignored because they affect a company’s ability to raise capital for operations and expansion.

Corporate responsibility itself has changed, becoming at once a more inclusive and a more specific term. It used to refer to philanthropy — the volunteerism of employees coupled with the pet projects of the CEO. But now, according to Jeff Hitner of IBM Global Business Services, corporate responsibility is an investment that can bolster a company’s performance. That’s because customers are demanding that the companies they buy from maintain sustainability practices that are measurable. Earth911.com, a consumer recycling site, even has a series called “CSR for Dummies” that evaluates and comments on the sustainability reports of major consumer-facing companies.

In this atmosphere, it is best for companies to be transparent and provide accurate, comparable reporting that shows investors and stakeholders that they are working to achieve sustainable operations. Be proactive, rather than reactive. Companies can set themselves apart by demonstrating leadership in environmental, health and safety best practices. It’s always best to be a leader in times like these.

Tags: climate change corporate responsibility csr stakeholders sustainability

Entry Filed under: Sustainability, Corporate Responsibility