Corporate sustainability: changing from the inside is the next trend

This article was originally published on LinkedIn here

No one can deny that corporate sustainability and its structured sibling CSR are taking more and more space in our information age. Most companies now publish a sustainability report and a sustainability page on their websites, with announced goals and success stories.

The specialized media, conferences and green marketing businesses are rocketing, and if you are ready to buy your place on the stage, you will get seen and heard.

For the most advanced, the stamp of compliance has recently evolved into an activism tag, as for the top multinational companies involved in the COP21 and some of those based in the US who later opposed the American president’s decision to leave Paris Agreement.

When it comes to sustainability matters, are companies really changing, has green washing become an archaic behavior, or is it still essentially about investing in communication and brand image? What is going on inside companies, are they transforming deeply and investing for the long term?

Picture David Drexler  [businessmen]  2007 Flickr CC-BY
Who can tell if companies are (really) (deeply) changing?

We (Early Strategies & New Angles) just published a research report called ‘Managers Speak Out on Sustainability – How CSR is Changing Business’ giving the inside story from middle management on how sustainability policy and activity have reached a tipping point in the last 5 years.

We worked with middle and senior managers, as they are the ones having positions and power (hopefully) to perform change in their organizations. They know best how their companies are doing, how healthy and sustainable they really are; they are vision-mission-strategy ambassadors, and at the same time get their hands dirty in daily operations and decisions.

We asked them, via 36 questions including 25 open-ended ones, to describe us how they make decisions, consider responsibility and ethics, if leadership is evolving and how, what noticeable impacts have CSR and sustainability programs, and how positive change can be scaled.

The sustainability business case gets clearer and wealthier

75% of our respondents think the business case for sustainability is clearer than 5 years ago (this was our question 12).

Respondents were 130 middle and senior managers from 107 organizations of over 2000 employees, in 25 countries; we confirmed each individual identity and position. Half of them had sustainability or CSR responsibilities – full or part time – and the other half didn’t have.

We asked (Q13) participants to choose the dominant business case driver among 10 propositions, and the brand image still comes first, but only for ¼ of respondents. 75% mentioned other dominant drivers, competitive advantage coming just next with preference from 18% of the respondents. It is a sign that sustainability benefits are seen more engrained than before, and the business case is becoming more granular.

We also asked participants (Q16) how non-financial value creation gets its way in management decisions. A big third – 38% – said they always consider non-financial value creation to be an important factor in their management decisions, and additional 46% said they often do.

Beyond these statements, the topic was extensively commented, giving us a very rich feedback on what non-financial value creation means in a real world – I’ll share more insights on the 6 categories we identified in another post.

The business case is recognized more widely and many companies are including sustainability issues in their core strategies. At the same time, short-termism is also pointed, holding back progress. Short-term pressure is often mentioned all along the study, for example when pointing barriers to change (Q28): 48% mangers see the pressure for short-term results, versus long-term thinking, as a major corporate hindrance.

Middle managers willing to change their organizations

Q14 was about producing a real shift toward sustainability: answers show a discrepancy between what is needed according to the participants vs. according to their companies, and what is underway. For them, transforming the vision should be the priority: it comes first from our 12 proposals. But they see it coming 5th in their company’s plans, and 9th in the list of actions underway and already producing visible results. Differences in the rankings are a goldmine for grasping what is considered as successful, what is awaited from middle management, as opposed to what the companies are prioritizing in their plans.

We also asked the impact of CSR on participants’ job (Q30): 83% of managers report that CSR has changed their jobs in the last 5 years. Participants not in a CSR job give examples of transformation from different view points: decision making and sense giving, along with a better understanding of the issues at stake, and of course many practical examples, such as zero policy paper.

Asked where the impetus of change should come from (Q33), 60% managers answer it should come from everywhere – and not just from a specialist team or from the executive management.

Corporate awareness: burden or bonanza?

In link with this statement that everyone should be involved, managers point needs for improving awareness:

  • To get the companies transformed, the need for more training comes second need after budget in general (but who does not need money?) far before incentives, experts, and other ‘tools’ proposed
  • Involving employees comes high as a source of success stories – 28% of the examples quoted by the participants (Q34)

Awareness and involvement are definitely priorities. A CSR director I talked to recently had this nice sentence: “Having employees understand sustainability issues and willing to give a hand is really what we need now. We know how to communicate externally, but we have a long way to go to convince internally and transform the business”.

This is why we started this research: in order to give executives a tool to reflect, but also to grow awareness, push learning & thinking and support the implementation of change.

There is more information on the dedicated website