Richard Collins
The world has changed considerably in recent years, especially our attitude towards environmental and social responsibility. It's not just the environmental issues that we are aware of but social issues such as ‘Black Lives Matter and ‘me too’. We as human beings and individuals care about these issues and increasingly’ we want the businesses and organisations we work for to care as well.
The issue of sustainability has to be addressed by us, the employees, the stakeholders, the customers, the consumers. We need to work collectively to make significant impacts that will leave a positive legacy for future generations. Sustainability should be part of all our jobs.
There has been a global change in mindset since the pandemic, which has given us a greater sense of awareness about our own fragility and that of our planet and our communities.
This has led to change in the sustainability landscape. It seems like that landscape has become over complicated with a lot of jargon, a lot of acronyms and sector language, it can be quite confusing and intimidating.
Global Environmental Challenges
We have seen increased focus on environmental issues associated with climate change. The sustainability landscape is influenced by these pressing environmental issues such as climate disaster, deforestation, biodiversity loss, water scarcity, pollution, and resource depletion. These challenges drive the need for sustainable practices and solutions.
There has been a lot of attention given to the target of NetZero by 2050. This will have a direct impact on our businesses with regards to our carbon reporting. Approximately 80-90% of carbon emissions are part of scope 3. Scopes 1 and 2 emissions cover the Green House Gas (GHG) emissions that a company makes directly and indirectly – like energy and fuel use. But scope 3 is about the indirect carbon footprint for example from purchased goods and services both up and down the value chain. Carbon reporting will require collaboration between businesses.
Global pressure groups
Governments play a crucial role in shaping the sustainability landscape through development and implementation of policies regulations and incentives. These measures can drive sustainability practices, promote clean technologies and address societal challenges. International agreements and goals such as the United Nations sustainable development goals (the SDG's) and the Paris agreement on climate change have helped provide a global road map for sustainability efforts and have guided governments, organisations and stakeholders in setting targets and sustainability priorities.
Internal Stakeholder Engagement
We have seen the importance of how sustainability can help build a strong company culture and create a workplace that is inclusive. Employees are increasingly demanding transparency, accountability, and sustainable practices from the companies they work for.
Financial risk and opportunity
There has been an increased appetite by the investment markets to assess our sustainability initiatives with the rise of ESG (environment, social, governance).
An ESG rating is now essential for anyone looking to invest in a business. The adoption of ESG practices points to a growing understanding that a healthy profit does not have to come at the expense of people or the planet – in fact there is a direct link between profitability and simultaneously striving to make the world a better place. Investors now routinely analyse information on ESG performance alongside other financial and strategic information in order to gain a better understanding of a companies’ risks and future prospects.
Committing to socially and environmentally practices may seem overwhelming at first, especially when returns to the business are unclear or hard to quantify. However, when properly implemented, a CSR policy and good ESG performance can provide the guiding principles and measures that make commitments actionable and directly beneficial to all stakeholders.
Non-Financial Reporting
There is an increasing mandatory requirement for non-financial disclosure reporting, which has an impact on all stakeholders including our shareholders, customers, employees, investors and suppliers. An example of this is The Task Force for Climate Related Financial Disclosure (the TCFD) which is mandatory for organisations with over 500 employees or a turnover of 500 million+.
In April 2021, the EU issued a proposal to strengthen sustainability reporting and assurance through the Corporate Sustainability Reporting Directive (CSRD). This is being adopted in 2024 and will fundamentally change the way companies of all sizes need to approach social responsibility / ESG reporting. This will be mandatory for organisations with over 250 employees. And will likely trickle down to the smaller SME’s.
So, we can see that it's important to have an effective environmental and social responsibility policy and framework, now essential to every business strategy. But where do we start?
If you are struggling to navigate this increasingly complex sustainability landscape, we have a perfect solution, a relevant and holistic framework that delivers an up-to-date standard for environmental and social responsibility.
A framework that is supported by the CSR four pillars of environment, workplace, community and philanthropy. A standard that states ‘Environmental and Social Responsibility should be for every organisation’. To allow you to enrich the quality of lives for all by investing in social value as an essential part of an organisations culture. This provides purpose and impact and will ensure a sustainable and profitable business. It will help to build a better world for future generations by improving the environment and ensuring a cohesive community to live and work in.
The great thing is you are probably doing a lot of positive things already reflected in these four pillars.
Each pillar is designed to help you impact report on areas such as energy performance, recycling, staff engagement, health and well-being, community engagement and support for local and national charities. It is a process in which you collate, measure and report on your organisation’s activities. It will also provide you with a roadmap for planning future activities. The framework can be mapped to the EGS components and the UN 17 SDGs ensuring compliance across the board.
This is not a box ticking exercise, it is a blank canvas approach that allows for the individuality of your organisation to come through. By auditing what you are doing you will start to see any gaps that need addressing. The end result provides you with the information required for non-financial reporting. It will help plan environmental and social responsibility as a key business strategy. This will help show that return on investment.
The future shape of business
We believe that business should be measured by both financial and social value. This framework will enable you to show return on social investment (ROSI) in terms of staff engagement/productivity, retention, recruitment, tendering, investment and reputation.
It will also deliver important emotional investment showing a social return of investment (SROI). CSR is a profit centre.
You can then use your Environmental and Social Responsibility strategy to address ESG compliance, prepare for the race to Net Zero, build a culture that empowers employees to do environmental and social good, attract new talent, win tenders and improve brand reputation.
Furthermore it provides the structured information required to achieve CSR Accreditation.
By achieving accreditation businesses can demonstrate that they are creating shared value for owners, employees, shareholders, stakeholders and the communities in which we live and work. Above all it independently validates and recognises your sustainability claims and proves your organisation is genuine in intention.
CSR-A provides a comprehensive sustainability benchmarking toolkit. This tool-kit is designed to provide the inspiration and information required to prepare you for accreditation application. It delivers a thought prompting breakdown of activities across the CSR Four Pillars framework to guide your thinking a help plan for future success.
XLNC MAGAZINE | No. 11 | Spring 2023