Please see below selected recent intelligence about responsibility. This is a synthesis of major recent developments at corporates, business schools, thinktanks, media, commentators, and other key influencers.
Q3 (July-August-September 2016)
- Deloitte US is collaborating with the World Economic Forum and the Logistics Emergency Team is learning how leading companies are contributing to complex crisis response. Their research has highlighted that forward-thinking companies are now looking to bring their core skills and capabilities to humanitarian action and are establishing partnerships before the crises occur.
- See also a Financial Times special report on Responsible Business - Financial Times and another related report, Responsibility – Big Brand Redemption.
- McKinsey says the investment community is failing to deliver on corporate social responsibility, “Institutional investors face a moment of truth about their commitment to environmental, social, and governance (ESG) factors. Many have long realized that these issues—including climate change, workplace diversity, and long-standing corporate concerns such as executive compensation—can drive risks and returns. Many large institutional investors have publicly committed themselves to integrate ESG factors into their investing. The UN-backed Principles for Responsible Investment have been signed by more than 1,500 investors and managers, representing nearly $60 trillion in assets under management. Yet look a little deeper, and it’s clear that many investors have struggled to convert their commitment into practice. Less than 1% of the total capital of the 15 largest US public pension funds is allocated to ESG-specific strategies. Many institutional investors continue to treat ESG as a sideshow rather than an integral part of their investing. While ESG and corporate-governance teams are commonplace, they are often held at arm’s length from core investment activities. Faced with rising stakeholder demand for meaningful action, institutions that get out in front of the growing wave will be the first to reap the benefits of sound ESG investing: better returns, lower risk, and a more sustainable world.”
- More and more firms are making a point of releasing an annual report about their social responsibility practices via their own websites or a third-party assessor, according to strategy+business. In just one example, the number of companies that documented their sustainability initiatives with the widely respected nonprofit Global Reporting Initiative (GRI) — which provides a publicly accessible and comprehensive framework for evaluating corporate responsibility activities, surged nearly five-fold between 2012 and 2015, according to GRI’s data.
- See PwC's New CEO Insights blog by Nigel Wilson, CEO of L&G: Why government and business must tackle big social issues together.
- PwC's own responsible business practices - from culture and values to environmental impact and transparency - achieved a five star rating in the Business in the Community's (BITC) Corporate Responsibility Index for the second year running. BITC is the UK's leading voluntary benchmark for responsible business. PwC scored over 99% on their index of some of the country’s leading companies.
- The EY Foundation is challenging employers to do more to support disadvantaged young people into work, labelling the failure to take more targeted action as ‘socially and economically wasteful’, and saying companies should offer more paid work experience and broaden recruitment criteria. The foundation, a charity set up by EY in 2014 to help young people disadvantaged in the labour market find alternative routes into employment, education or enterprise, was responding to a recent House of Lords social mobility committee report, ‘Overlooked and left behind: improving the transition from school to work for the majority of young people’.The report found that 53% of young people (in the UK) do not follow the ‘traditional’ academic route into work. It said this majority are significantly overlooked in their transition for work by the education system, while the focus on apprenticeships is not suitable for everyone.
- Management theorist Michael Porter says business is entering a new, third stage in its relationship with society. First, there was philanthropy: Companies made money doing bad things, but then gave some of their earnings to good causes. Second, there was corporate responsibility (or minimising harm): Companies tried to do fewer bad things. And now companies are working (or should work) on actual solutions: products and services that serve social problems.
- Consulting and IT services firms were among the 131 companies recognised by Ethisphere on its 2016 World’s Most Ethical Companies list and at its Global Ethics Summit. The firms included Accenture and Capgemini. The World's Most Ethical Companies designation recognises organisations that have had a significant impact on the way business is conducted by fostering a culture of ethics and transparency at all levels. The framework attempts to portray related performance metrics in an objective, consistent and standardised way. The five weighted components are an organisation’s ethics and compliance programme (35%); corporate citizenship and responsibility (20%); culture of ethics (20%); governance (15%); and leadership, innovation and reputation (10%).
- Corporate boards have begun to form committees to focus on ethics and values as well as corporate responsibility and sustainability, as part of a move to tackle non-financial risks more effectively, according to a new survey by the UK Institute of Business Ethics (IBE) in collaboration with ICSA, the professional body for governance, and Mazars. The research showed that 55 companies in the FTSE 350 have formed such committees with published terms of reference, and that over half of them (67%) were specially charged with advising the board on ethics and values and how these can be embedded within the company. Most (69%) have an independent non executive director as chair. The research found that committees serve a number of different purposes. Broadly these range from reputational issues around corporate responsibility to compliance with non-financial regulation such as health and safety and legislation to do with bribery.
- The responsible business community spends so much time talking to itself, it is convinced it is winning the argument, but it isn't, warned the RSA. Instead of ducking the hard questions such as executive pay, tax dodging, unsustainable consumption and the sheer dysfunctionality of most massive corporate bureaucracies, it needs to own them.
- A surge in socially responsible investments to $59 trillion globally over the past decade is nudging Asian firms to change a notoriously insular management style to one that actively addresses corporate governance concerns, claimed Reuters. As earnings growth and China's economy slow, corporate executives are becoming more receptive to the investment messages from funds committed to environmental, social and governance principles.