It used to be just the governments who set the regulations for driving sustainability. But this year, the private sector has gained momentum in actually leading it.
The transfer of leadership from government as a driver for sustainability to the private sector was evident when more than 20 US Fortune 500 companies, including Google, Apple, Nike and Microsoft, defied US president Donald Trump’s hostile response to climate change and made a clear statement in June that they were not following suit.
Investors are also increasingly setting clear expectations for corporations by factoring in environmental, social and governance (ESG) goals in the agenda, especially since global analysis shows that incorporating the UN Sustainable Development Goals (SDGs) into business practices can have a positive effect on returns.
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However, there is a caveat in this seemingly positive outlook for corporate social responsibility: As the SDGs turned two this year, an online poll to measure progress revealed underwhelming results, showing that there is still more to be done by the private sector.
Here are the top 5 corporate social responsibility stories from 2017:
1. Companies across the globe pledge billions to corporate responsibility efforts
America’s largest bank JPMorgan committed in July to injecting $200 billion into its clean energy and general sustainability projects over the next eight years, as well as shifting 100 per cent to renewable energy by 2020.
The bank also intends to invest more heavily in helping other companies and governments accelerate their transition to a low-carbon economy.
In a similar move, HSBC, whose operations are mainly concentrated in Asia, pledged US$100 billion by 2025 to help combat climate change last month.
The UK-based bank said this initiative will fund low-carbon projects, while stopping the financing of mines that produce coal for power generation. It also promised to get all of its power from renewable sources by 2030.
Meanwhile, global chocolate manufacturer Mars announced in September a US$1 billion plan to tackle climate change, poverty and resource scarcity over to fix its global supply chain and make a positive impact on the food industry in the next five years. Its focus will be to cut deforestation and human rights abuses out of its operations.
2. CSR becomes law
The United Arab Emirates’ Ministry of Economy announced in June this year that it will be mandatory for large corporations to include corporate social responsibility in their agenda.
The government wants companies to dedicate at least Dh500 million or more than US$100 million to charitable and humanitarian work, in cash or in-kind donations.
Although voluntary for private companies, this spending will be an obligatory disclosure for large corporations, which will be identified in a clear legislative regulation list, says the ministry.
As the Gulf’s second largest economy holds 2017 as a “Year of Giving”, this strategy aims to promote corporate social responsibility among businesses operating in the oil-rich nation.
3. Paradise Papers leak
A set of 13.4 million documents belonging to an offshore law firm Appleby exposing companies and individuals engaged with offshore tax havens for tax avoidance purposes was leaked in early November.
Dubbed the Paradise Papers, the document dump has implicated tech giants Apple, Twitter and Facebook, private equity firm Blackstone, Swiss mining company Glencore as well as a handful of famous celebrities and ranking government officials for using offshore companies to avoid paying their fair share of taxes.
The documents were obtained by the German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ), a global network of investigative journalists. Together with media partners around the world, they exposed a practice that cost developing countries nearly US$6 trillion between 2001 and 2010.
4. A trillion-dollar call for companies to embrace SDGs
Global sustainable business leaders informed the private sector in the Better Business, Better World Report released in January that there is a US$12 trillion business opportunity available if they align their businesses to the UN Sustainable Development Goals (SDGs). In the Asian region, this figure stands at more than US$5 trillion.
But even with this kind of incentive, a survey on 113 policymakers, campaigners and executives conducted by the Thomson Reuters Foundation about their views on the progress of the SDGs showed a less than positive response. Some two-thirds of the respondents said progress on the goals was slower than anticipated.
Half of those surveyed said they were not confident that the goals could be met by 2030, disheartening news for an initiative that turned two in September this year.
A rise in nationalism was cited as one of the main challenges, fueled by world events such as the Trump administration pulling away from global cooperation and Britain’s vote for Brexit.
The private sector was urged by the Global Impact Investing Network—a group that promotes private investment for global issues—to take on a broader, more integrated role in the development agenda, especially as the goals will require funding that cannot be provided by the government alone.
5. ExxonMobil, Shell, BP, Chevron, among multi-nationals in climate probe
An investigation into 47 companies, including ExxonMobil, Shell, BP, Chevron, ConocoPhillips, Suncor and Repsol heated up this year, when the firms were asked by the Philippines’ National Commission on Human Rights this month to attend a preliminary meeting investigating their role in climate change offenses.
This was in response to a petition filed two years ago by Filipino typhoon survivors, other communities suffering the impacts of climate change, and civil society organisations, including Greenpeace Southeast Asia (Philippines).
It is an investigation how these companies contributed to natural disasters such as syper-typhoon Haiyan, which devastated the Philippines in 2013 and left more than 6,300 dead, making it the world’s first national enquiry framing climate change as a human rights issue.
The enquiry is one of a wave of people-powered legal actions which have been taking place around the world, calling for action from companies and governments to safeguard human rights in the midst of climate change.
This story is part of our Year in Review series, which looks at the top stories that shaped the business and sustainability scene over the last 12 months.