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The Key Questions of Corporate Sustainability Can Peer Deep into a Company's Very Purpose

CSR initiatives should answer the questions of why, what, and how it will change us.

Why

If the need for corporate sustainability isn't clear, read the Allianz/WWF report, "Major Tipping Points in the Earth's Climate System and Consequences for the Insurance Sector."

"It ponders the small changes that, at some point, could cause big changes in weather, sea levels, and other things," wrote Joel Makower on GreenBiz earlier this week. "It chronicles several potential consequences -- sea-level rise along North American coasts, Indian Summer monsoons in Asia, Amazon die-back and drought, desertification of the southwestern U.S. -- and the insurance aspects for each. Their conclusion: We're hopelessly in the dark about what these things mean financially."

One financial fact is clear: What the insurance industry views as increasing risk will translate to higher premiums, or denial of coverage, at some point. And that could put a lot of companies out of business.

Another financial fact is that paying customers are paying attention to everything "green," including your company and its competitors. So are investors and communities.

What

The question isn't whether to respond, but what the response should be. Some companies answer that question by taking the clearest or easiest path.

Others go deeper, asking external stakeholders to define what corporate social responsibility means for the company.

That was the topic of "Corporate Social Responsibility: It's All About Marketing" in Forbes. The author, a Boston University professor of corporate responsibility, reports:

"What we are slowly starting to see is a second wave of corporate responsibility behavior marked by a clearer focus on the total business value such policies can bring. To fully benefit from corporate responsibility, businesses must wake up to the fact that they need to take a more indirect route to creating value with it."

In other words, they must find out how key stakeholders, such as customers, react to a company's corporate responsibility initiatives.

To ignore customer opinion is a big risk. Customers may find initiatives to be completely irrelevant, or question the company's motivations. Procter & Gamble, General Mills and Timberland are cited as negative examples. Greenwashing insurance is hard to find.

The author proposes -- and here's the tie-in with his provocative headline -- engaging the marketing department to learn what stakeholders value.

"To effectively capitalize on the indirect route to corporate responsibility value, programs need to operate through more traditional and developed business functions. In particular, they should involve the marketing team. Marketing always has the knowhow to conduct meaningful campaigns and measure return on investment. Moreover, involving marketing in consumer research and analysis enables that department to coordinate how a corporate responsibility program is presented to those it wishes to influence."

Quoting a customer goes a long way in a boardroom debate over which initiative (or product, or policy) will create value for customers. In my firm's own marketing work with clients, I've occasionally seen reluctance to engage customers in defining what the company does. What if they don't like what they hear?

Once they begin, however, there's no turning back. I've seen companies go from resistant to enthused, to addicted.

"The reality is that the external stakeholders you engage with will often prove to be your toughest critics, and they will insist on much richer and ambitious corporate responsibility programs of genuine social benefit."

How will it change you

"Genuine social benefit" might seem like a high ideal for even a "green" enterprise to attempt. We are, after all, running for-profit businesses. Customers know that shareholder value still reigns in most boardrooms.

B Lab is pushing a new type of incorporation that would appear right alongside C-corp and S-corp.

Meet the B-corp. A team of entrepreneurs have created a nonprofit, B Lab, to certify businesses as "B corporations" and advocate for them. A recent article explained:

"'B' stands for benefit, as in the social and environmental contributions a company makes. A B corporation might, for instance, buy its supplies from local companies and hire underprivileged people from the surrounding community. Their ultimate goal is to get B corporations legally recognized by local and state governments and the Internal Revenue Service so they can qualify for tax breaks, among other incentives."

Which brings us back to "why."