When Companies Unite to Make Visible Changes

Lots of claims are showing positive results. There are companies specialized in assessment and promotion of green measures, which encourages companies to add sustainability into the formula. Nevertheless, why are we not observing visible changes? It would be an overstatement to claim that Corporate Knight, PwC, and UN Global Compact-Accenture CEO study analyses things from a rosy lens; however, the publication of the hard numbers should be alarming.  Why do the actions appears to be incoherent with observations, claims, and beliefs?

Remly has communicated some extraordinary figures, where 74% of CEO believes that “environmental, social, and governance (ESG) data and sustainability efforts” are material considerations that are at core for the long-term success of companies. The UN survey affirmed that 91% of the 750 companies regards climate as a key issue for their future success, solidifying that the preservation has penetrated the day-to-day routine of the “evil economic giants”. Even more interesting, Corporate Knights discovered that 87% of its top 100 knights award the CEO through bonus in return for achieving the organization’s sustainable objectives.

What is thought-provoking; however, is people’s attitude on sustainable goals versus monetary targets. The latter is deemed to be much more conventional which contrasts with an almost “contradictory looking” environmental objective. Despite that more and more companies are adding sustainability into the formula to further boost their balance sheet, most consumers still regard this as a CSR – more noble and dignified. There is an implication from Corporate Knights, which advocates consumers to raise their standard and expectation when making a purchase decision. Consequently, the business will make the adjustment, so that their product can gain more popularity. Nevertheless, there is still a link missing to trigger an action. We need a more concrete answer than “because we should protect environment for the future generations and we should respect Earth” when asked why one should engage in sustainable behaviour.

Often times, as individuals, we tend to claim that we are not powerful to enough to make impressive changes. However, with more powerful business leaders, who take control of a larger population, we would expect the change to be more obvious, although this is not necessarily the case. We see company getting increasingly conscious; however, we still see them using excessive packaging, utilizing cheaper labour in third world countries, discharging waste into water streams. It is not to say that they are not trying hard enough; but we might be missing the point here. Sustainability may be one of the many objectives that companies consider, or claim to consider. When this is tied to economic performance and opportunities, there is also an incentive for these companies to paint their image with suitability. Sustainable objective is something that needs to be tracked. It should also be normalized, as one of the many strategic goals for companies, rather than being separately treated as a bonus perk.

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  1. Hi Wanda,

    You make some really interesting points by stating that transparency and actionable sustainability goals is what differentiates a green washer from a great winner but you also believe that there is a contradiction when boards tie senior leadership compensation to sustainability goals. But is that really a bad thing when we have to align interests? On one hand I totally understand your view that companies must be long term stewards but on the other hand we know that short termism is a huge problem for companies as CEOs and execs come and go. I also understand that other industries like healthcare face these issues as can be seen in papers like this.

    In what ways do you think boards could balance the short term drive for ROI while balancing longer term environmental and social goals?

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