US companies are not as heavily regulated as those in other developed nations, and corporate responsibility is not addressed as a regulatory compliance issue but rather from a social and moral choice perspective.
In the US, the notion of a triple-bottom-line approach to business success has always been a voluntary one. So while stakeholders’ expectations that companies adopt more sustainable business practices that benefit people and society in
addition to profits are growing, the truth remains that companies are not obliged to participate.
Aligning with, or perhaps because of, noncompulsory corporate responsibility practices, corporate activities encompassing corporate responsibility in the US go beyond environmental, legal and workplace issues to ones that best enhance a company’s external reputation. Philanthropy and employee engagement – aka employee volunteerism – are key areas of a company’s corporate responsibility platform.
US companies have had the luxury of defining and interpreting their own view of responsible business within the context of their own company. Subsequently they have been able to measure and promote activities with greater freedom than their international counterparts.
Interestingly, US companies are much more explicit in their public statements on a commitment to corporate responsibility than their peers elsewhere, particularly Europe. But the lack of definition has led to confusion on terminology – ranging from social responsibility to sustainability, community investment and corporate citizenship and confusion as to what they mean. For some companies corporate responsibility is defined as philanthropic giving, while others include business activities ranging from raw material sourcing to employment practices. As corporate responsibility becomes more widely understood, accepted and practiced within mainstream companies, however, there begins to be greater convergence of common activities included in a company’s corporate responsibility platform.
Sustainable business is undergoing what Aron Cramer, chief executive of Business for Social Responsibility, calls a “confluence of practice.” Historically, corporate responsibility activities within a corporation have been led by a single
department responsible for reporting, implementing initiatives and communicating activities within areas such as philanthropy, volunteerism and environmental affairs. Today, responsibility is increasingly embedded into core business functions and decisions, such as supply chain, transportation, engineering and marketing. Corporate responsibility experts are increasingly serving as resources for those functional decision-makers. Cramer says: “Companies are moving beyond philanthropy endeavours to look at corporate responsibility as a driver of innovation and competitiveness.”
Companies now understand that corporate responsibility innovation must begin at the research and development phase. “It’s less about managing risks and more about how sustainable business practices can impact competitive differentiation and drive innovation,” Cramer says.
Chipotle Mexican Grill, a US chain of quick-serve Mexican-style food, set out in 2001 to demonstrate that sustainably and responsibly sourced food could be provided in a low-cost, fast-food environment. Today, Chipotle serves more naturally raised meat than any restaurant in the world, and was the first national US chain to serve dairy products from animals treated without recombinant bovine growth hormone. Customers responded. Although Chipotle raised prices on some products following the switch to naturally raised meat products, sales for them doubled. Chipotle has produced double-digit profit gains in each of the past nine years, unlike many within the competitive quick-service restaurant industry.
Other companies have demonstrated a similar commitment to innovation and customer development – GE’s ecomagination and healthymagination are two leading examples; another is Intel’s Classroom PC. Mitch Jackson, vice-president for environmental affairs and sustainability at FedEx, agrees. “Our goal is to get CSR to the research and development level, which helps us propel innovation forward and find solutions to existing and potential customers’ needs in a sustainable way,” he says.
To get a free copy of the full case study click here. This detailed briefing provides the latest on what US corporations are doing on the responsible business agenda. Companies featured include FedEx, Intel, and Green Mountain Coffee Roasters.
Better yet, consider attending the Responsible Business Summit in New York June 1-2. The CEOs of Timberland, Interface, AkzoNobel and Veolia Water America are already confirmed to speak.