Given BSR’s impressive membership, the report, which surveyed BSR member companies to “identify common perceptions and practices of corporate sustainability professionals,” provides a one-of-a-kind overview of what major businesses across the globe think about sustainability and corporate social responsibility (CSR). It also suggests that consumers who care about CSR and sustainability could be doing a whole lot more to pressure corporations to act.
While BSR companies have a lot in common -- namely their size, wealth and power -- they also represent a wide range of industries, countries of origin, and (actual or perceived) commitments to sustainability. This spectrum of company experiences and philosophies makes the BSR report uniquely probative. If an issue is a priority to a majority of respondents in this survey, we can strongly conclude that it is a priority across industry and geography.
Integration. That sustainability is being increasingly integrated into businesses is more than just anecdotal -- it is supported by a variety of other data points in the report. For instance, 48 percent of companies said that their key performance indicators include sustainability measures, and 44 percent have a board committee dedicated to sustainability. Surprisingly, 15 percent of respondents said their companies have even pegged CEO compensation at least in part to sustainability goals.
Most respondents are taking real strides toward incorporating CSR and sustainability into their supply chains as well. For example, 83 percent of respondents now have supplier codes of conduct, and 68 percent “consider” sustainability in their sourcing. More impressive still: 67 percent of respondents reported regularly monitoring and auditing their suppliers, and 48 percent claimed to be training suppliers on key sustainability issues.
Motivation. Why, then, is sustainability gaining traction among the world’s largest corporations: is it altruism, or something more self-serving? Reading between the lines, it seems that companies’ movements on this issue are mostly motivated by business opportunities and/or the fear of bad press.
According to the report, reputation is by far the most important driver of sustainability efforts: 67 percent of respondents reported that it was a top-three factor, followed by operational risk at 43 percent. In addition, while a majority of respondents said an “inclusive economy” was important to growth, 44 percent admitted that this importance was driven by growth opportunities, particularly in emerging markets, and 22 percent said it was due to pressure or risk. Only 5 percent said it was due to concerns about impact of technology on workforces.
Falling short. The BSR report also highlights areas where improvement is needed. On the topic of human rights, for example, -- the most common action reported by companies was simply adopting a human rights policy (70 percent). Publicly supporting the United Nations Guiding Principles on Business and Human Rights -- another important, but rather insubstantial, step -- was reported by just 49 percent of respondents. As for meaningful actions, only 36 percent of respondents have conducted a human rights impact assessment; only 46 percent train their employees on human rights standards; and a full 10 percent have taken no actions (at least none of those listed by BSR).
Other less than encouraging results included:
Yet, despite this potential for impact, only 21 percent of companies reported that consumer demand was actually a driver of sustainability, and less than half believe that their customers care about their sustainability reporting.
This suggests that, while consumers may have the greatest potential to impact CSR, businesses do not feel correspondingly pressured by consumers to do more. In other words, the world’s most influential corporations have admitted that they would do more on sustainability if only their customers would demand it.
This all begs the question: Do today’s consumers really care as much about sustainability as we have been lead to believe?
In 2014, Nielsen issued a widely publicized report about today’s conscientious consumers. It ran that headline based on its finding: “Fifty-five percent of global online consumers ... say they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.” The numbers for North America and Europe, on the other hand, are 42 and 40 percent, respectively -- significantly lower than the global average.
In the press release announcing Nielsen’s findings, the company’s global leader of public development and sustainability made the audacious claim that “[c]onsumers around the world are saying loud and clear that a brand’s social purpose is among the factors that influence purchase decisions.” In support, Nielsen reported that ~52 percent of purchasers “check the labeling first before buying to ensure the brand is committed to positive social and environmental impact.” Yet, Nielsen found that this was true for only 36 percent of purchasers in Europe and 32 percent of purchasers in North America.
Nielsen’s bold claims about global consumer consciousness, therefore, do little to undermine the data from the BSR report. Consumers in Asia, South America, and the Middle East and North Africa region may feel strongly about the social responsibility of their preferred brands. But this doesn’t seem to translate to consumers in North America and Europe, where purchasing power is significantly higher.
This is a shame, particularly in light of the growing 'sustainability information market.' Yet, it is also emboldening. If we as consumers really do care about corporate social responsibility and sustainable business, it turns out there’s actually something we can do about it. We just need to speak -- big business, it turns out, is willing to listen.
Trained as a lawyer, I now focus on legal business development, corporate social responsibility (CSR), and business & human rights. My past experience includes work on complex commercial litigation, international human rights advocacy, education policy, pro bono legal representation, and analysis of CSR challenges in both the private and public sectors.