Global Trends Impacting CSR
August 12, 2013
Recently, CSR Wire published a "Talkback" led by Dinah Koehler and Chris Park of Deloitte, which focused on five global trends leading a growing corporate interest in ESG (environmental, social, governance) issues.
According to research by Deloitte, these five trends account for the accelerating interest in CSR work and they show no signs of abating anytime soon.
The five trends are:
- Loss of Trust. According to the 2012 Edelman Trust Barometer, public trust in business continues to decline – dropping to 45 percent in the United States compared to 51 percent in 2010. And, trust in government is even lower. Koehler and Park assert that these findings suggest a growing perception that large institutions are not serving the public interest well.
- Stakeholder Pressures. Globally, stakeholder pressure on corporations is increasing, especially as the ranks of the middle class expand in emerging markets like China and India. A wealthier and more educated middle class may have higher expectations for corporate CSR performance.
- Natural Resources Pressures. Growing global demand and supply constraints are pushing prices up for energy, agricultural products and raw materials. These resource trends are increasingly top of mind for business leaders, and efforts to increase resource efficiency are expanding.
- Supply Chain Pressures. Executives surveyed by Deloitte see a multitude of supply chain risks that directly affect their businesses, including climate adaptation, regulatory pressures and the unethical practices of certain business partners.
- Social and Mobile Enablement. A Deloitte risk management survey of 192 U.S. executives found that social media ranks among the top five most important sources of risk for companies. With social and mobile technologies becoming pervasive globally, any questionable business practices have no place to hide.
In January of this year, I laid out five CSR trends to watch in 2013. Many of them relate to the pressures noted above. These CSR trends are:
- Growing importance of skills-based (or pro bono) volunteering as an additional way of fostering employee engagement in communities and social issues. Expanding volunteer efforts and utilizing the business skills of employees to help communities and causes is one of the unique features of corporate citizenship and a great way to build trust in companies. Volunteering allows a company to put a personal face on its CSR efforts.
- Growing recognition of employees as key stakeholders in sustainability efforts of companies. Increasingly, employees are being seen as the main "customer" of a company's environmental and sustainability programs because their behavior and level of commitment to environmental goals are critical to a company's ability to innovate through new, eco-friendly products and services as well as the ability of a company to reduce its own carbon footprint.
- Growing involvement of corporate boards of directors in corporate social responsibility activities and programs. The growing importance of CSR to a company's reputation and bottom line makes it a business imperative and natural component of a board's strategic planning and oversight function.
- Growing acceptance of "shared value creation" as part of a company's social responsibility portfolio. There's a definite trend toward finding ways of generating measureable profits with socially responsible behavior, although stakeholder pressures and concerns over possible criticism through social media may mitigate this trend somewhat.
- More looking forward, less looking back. As the economy continues to improve in many parts of the world, many eyes will be on what new ideas and innovations will drive growth and sustainability for the coming years, which gives companies – and their employees – license to think differently.
What do you think of these global trends? Are companies responding to pressures in ways that will enhance their reputations, generate trust and advance business objectives? Let us know what you think by clicking here. Alternatively, follow me on Twitter at @timmcclimon and comment there. Thanks for following and sharing.
P.S. CSR Now! is going on summer hiatus until September. Look for a new posting the week of September 1st. Enjoy the rest of the summer (or winter for our Southern Hemisphere readers)!