5 things a sustainable business should do

Sustainability is now firmly on the corporate agenda worldwide and more companies are joining the movement daily. But what does a sustainable company look like, and how can we measure the impact of a company’s sustainability commitments?

Since the establishment of the United Nations Global Compact (UNGC) 15 years ago, the corporate sustainability movement has made huge strides and companies around the world are increasingly adopting sustainability principles such as the safeguarding of human and labour rights and environmental conservation.

From a voluntary group with 44 founding members, the Compact has grown to become the world’s largest initiative on corporate responsibility. Today, more than 8,300 companies across 156 countries – including 66 in Singapore as part of a local network – are signatories.

Among them are some of the world’s largest companies such as Danish shipping firm Maersk, Chinese oil producer Sinopec, Swiss food company Nestle and British-Dutch consumer goods giant Unilever.

Companies that sign on to the Compact agree to operate within United Nations’ principles on human rights, labour, environment and anti-corruption, among others. They also have to support their local communities and report transparently on their efforts to comply with the principles each year.

While it is encouraging that the number of signatories is increasing, there may also be confusion around these commitments, said Ursula Wynhoven, the UNGC’s general counsel and chief of governance and social sustainability at a recent event in Singapore.  

For example, they may need guidance on how to create a sustainability agenda, or on understanding what a sustainable corporation should look like, she said.

Speaking at the opening of the 2015 International CSR Summit in Singapore on August 25, Wynhoven said that corporate sustainability is increasingly essential to long-term corporate success and for ensuring that markets deliver value across society.

“In a nutshell, to be sustainable, companies must operate responsibly in alignment with universal principles and take actions that support the society around them,” she said.

“Then, to push sustainability deep into the corporate DNA, companies must commit at the highest level, report annually on their efforts, and engage locally where they have a presence.”

With business activity, investments and supply chains reaching all corners of the earth, companies increasingly realize that they cannot thrive when the world around them is deteriorating.

Ursula Wynhoven, general counsel and chief, governance and social sustainability, UN Global Compact 

The event was organised by the Global Compact Network Singapore – the local branch of the UNGC – and gathered business leaders, government officials, CSR practitioners, and civil society leaders over two days at Suntec Singapore Convention & Exhibition Centre to exchange ideas and discuss the latest developments in CSR.

The Five Things

According to Wynhoven, a sustainable business – regardless of size, location or complexity – should have five attributes: a principled business, a model that strengthens societies, leadership commitment, progress, and local action.

Firstly, a principled business is one that operates with integrity and respects fundamental principles in the areas of human rights, labour, environment and anti-corruption.

Secondly, sustainable companies look beyond their own walls and take actions to support the societies around them.

“Poverty, conflict, an uneducated work-force, and resource scarcity are strategic issues affecting business success and viability,” Wynhoven said. “With business activity, investments and supply chains reaching all corners of the earth, companies increasingly realize that they cannot thrive when the world around them is deteriorating.”

Thirdly, a company’s leadership must send a strong signal throughout the organization that sustainability counts.

Leadership also means taking action in key areas such as board ownership of the sustainability agenda, adjusting policies and practices to align with this agenda, training and motivating employees to engage in sustainability, and pushing sustainability into the supply chain.

Fourth, sustainable companies value long-term relationships that are based on trust and transparency and they provide their stakeholders with a robust account on what they are doing to operate responsibly and support society. They also understand the importance of engaging constructively with critics, Wynhoven said.

Finally, sustainable companies should also understand that they exist and act within nations and communities that have different ideas about responsible business.

“They understand that the issues a company faces and how it can actively support local and national priorities range greatly,” she said.  

In this area, being part of a local sustainability network such as Global Compact Network Singapore can be useful in helping a company create a sustainability programme that is tailored to local conditions, challenges and priorities.

Companies are also able to access tools and resources that can support them in their CSR initiatives, Wynhoven said.

The exciting thing about sustainability is, there’s a lot of talk about risk management, but there is also a lot about seizing opportunities. And some of the challenges that we face can be turned around to become opportunities for business.

Ursula Wynhoven, UNGC

All the help you can get

One such tool is called ‘Growing into Your Sustainability Commitments: A Roadmap For Impact and Value Creation’.

It is a report by UNGC and sustainability advisory firm AccountAbility that helps companies better understand the challenges and opportunities they face with sustainability commitments. It also provides guidance to companies on how to select which commitments to make and how to get the most value from those commitments, she said.

“The proliferation of sustainability initiatives in recent years can be overwhelming for companies,” Wynhoven said. “Sometimes we even hear about CEOs increasingly facing fatigue.”

Another useful tool is the recently-launched Global Opportunities Report, which identifies and ranks 15 sustainability opportunities that have arisen from five top global risks, namely lack of fresh water, unsustainable urbanisation, continued lock-in to fossil fuels, chronic diseases and extreme weather.

The report authors – from multinational DNV GL, the UNGC and Scandinavian think tank Monday Morning Global Institute – surveyed 200 sustainability experts and 6,160 business leaders in 21 countries late last year on their views on building a safe and sustainable future. They were also asked about solutions to tackle the top risks during workshops and meetings.

Examples of the opportunities are water efficient agriculture, encouraging consumer to make green choices, fresh water production and investments in extreme weather resilience.

“The exciting thing about sustainability is, there’s a lot of talk about risk management, but there is also a lot about seizing opportunities,” Wynhoven said. “And some of the challenges that we face can be turned around to become opportunities for business.”

While corporate sustainability has made great strides over the past 15 years, much more needs to be done. Globally, more than 80,000 big multinationals and millions of smaller companies are yet fully engaged in sustainability, Wynhoven said.

New examples of human rights abuses, worker exploitation, environment destruction and corruption by business are constantly being revealed around the world, she noted.

The world also faces global health crises, conflict, mass population displacement and climate change, which are all impacting business, she added.

This means business needs to take its stewardship role “more seriously”, Wynhoven said.

“Sustainability has become the greatest project of our time,” she said. “Let’s seize this moment in history and become part of the solution by being principled, reconnecting with a broader social purpose, and by recognising that the well-being of society and the planet is core to business success.”

Advertisement
blog comments powered by Disqus
Advertisement

Most popular

View all news

Industry Spotlight

View all

Supporting Organisations

ABB
Asia Plantation Capital
Diamond Energy
Basf
City Developments Ltd
DNV-GL
Geocycle
Sindicatum
Olam