How important are corporate responsibility reports? Does anyone read them? Do the right people read them, meaning, in a business sense, investors?
Or are they mostly for PR or to mollify a restless employee base?
Over The Guardian’s The Sustainable Business Blog, Rory Sullivan makes a very convincing case that investors do not care about corporate responsibility reports, that they remain hyper-focused on the bottom line, not on the environmental or social impacts of their investments.
In other words, every environmentalist’s worst nightmare.
But then, at the end, Sullivan turns a corner. This might be the business world today, he says. But the business world tomorrow will be different:
There is a growing consensus among investors that the production of a corporate responsibility report is effectively a minimum requirement for companies seeking to demonstrate that their social and environmental issues are being effectively managed.
The non-publication of a report, or the absence of published policies, targets and performance data, is increasingly likely to be taken as evidence that the company does not recognise social and environmental issues as management priorities, thereby raising wider questions about the quality of the company’s risk management systems and processes.
Here at JG we have produced a series of corporate responsibility reports for various clients. So, obviously, I’m only writing about this on the company blog because I agree with Sullivan.
And I do really, really agree.
Right now, consumer companies are already judged by their perceived commitment to sustainability or corporate responsibility issues. And this trend will soon seep into the rest of the business world for what I see as two reasons.
The first is that poor communication on corporate responsibility will be bad business, as Sullivan says. But, also, to rip off a line from a presentation I saw recently, companies do not do business with companies. Instead, people at companies do business with people at other companies.
And people care about the environment now. They care about sustainability (at least here in Sweden). So even if it is subtle, a passive approach to environmental or corporate responsibility – meaning no one knows what you do if you have no report – will leave behind a bad taste, or the least, mean a missed chance for enthusiasm … and sales.