Sustainability and Social Responsibility, Now Mainstream Concepts, Remain Difficult to Achieve at Both Country and Corporate Levels

“Sustainability” and “social responsibility” have entered the mainstream vocabulary over the last two decades. Sustainability is a “second generation” term, having morphed into a more generalized concept from its narrower meaning in the phrase “sustainable development” that gained the world’s attention during the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro in 1992. The most widely cited definition of sustainable development came in Our Common Future (also known as the Brundtland Report) published in 1987: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Social responsibility has had a parallel development. Early on, the term often appeared with the prefix “corporate,” but recognition that social responsibility is an obligation of institutions and governments as well as corporations has broadened the term’s application. A draft international standard, ISO 26000, embraces the broader context with its title “Guidance on social responsibility.” The ISO document defines social responsibility as “responsibility of an organization for the impacts of its decisions and activities on society and the environment through transparent and ethical behavior.”

If only it were as easy to achieve sustainable development and social responsibility as it is to define the terms!

Delegates to the follow-up conference to UNCED, which met in Johannesburg in 2002, generally voiced their disappointment that more progress had not been made to achieve the goals set out in the Rio Declaration on Environment and Development called Agenda 21. In the nearly eight years since 2002, some progress has been achieved on coordinating action to combat climate change, but as the results of the December conference in Copenhagen shows, the world is still far from agreeing on a set of binding commitments to make the changes scientists say are needed to keep the Earth’s average temperature from rising more than 2° Celsius by the end of the present century.

In the meantime, some countries (Denmark, for example) have demonstrated that it is possible both to grow their economies and reduce their carbon intensity while adding “green” jobs. Other countries have taken on the binding commitments defined in the Kyoto Protocol, though not all will actually achieve their targeted reductions.

Many of the largest and most visible corporations commit publicly to operating in socially responsible and sustainable ways. Some acknowledge that the commitments help them preserve what they call their “social license to operate.” This means taking voluntary, proactive action to meet or exceed legally required actions in areas such as worker health and safety, environmental protection, and social impact mitigation. Corporations may promote sustainability in decision making not only to develop new or preserve existing lines of business, but also to manage risks and derive public relations benefits.

The Great Recession of 2008-2009 refocused the attention of many citizens on the bread-and-butter issues of jobs, income security, and the risks associated with rising government indebtedness. In the near term the political will to address climate change in the United States appears to have diminished as short-term costs of transitioning to a low-carbon economy take precedence over long-term questions of intergenerational equity.

The old adage that “a rising tide lifts all boats” no longer rings so true on Main Street. Ordinary citizens are distraught over persistently high unemployment in their communities and the financial challenges facing state and local governments. Many question the fairness of the apparent rebound of the Wall Street institutions that some say were principally responsible for the near collapse of the world economic system.

As painful as the Great Recession continues to be for individuals and families directly impacted by it, early shoots of recovery are visible in the United States. Will economic recovery shift attention to the need to act sustainably and in a socially responsible fashion? There are reasons for optimism. Sustainable development principles now are given consideration in the planning processes of many governments and are recognized by private sector actors. Social responsibility is defined and its concerns inform the planning and operations of many leading corporations. Results are measurable, and accountability is possible, if not always through legal mechanisms, then in the court of public opinion.

In the end, nearly everyone shares the common goal of leaving our children and grandchildren a world at least as good as the one we inherited. Demonstrating social responsibility and achieving sustainable development are important barometers for measuring the success of our generation’s stewardship of the Earth we inhabit.

© Futurepast: Inc., 2010.

Top Five New Year’s Climate Change Resolutions for Organizations of All Types and Sizes

New Year’s resolutions may date back millennia, perhaps as far as early Babylonian times. In the modern era individuals may make solemn commitments to lose weight or exercise more. Meanwhile, organizations set about to achieve quality and environmental objectives while maintaining or improving financial performance metrics. Fortunately, when it comes to climate change resolutions, organizations—and individuals—can often achieve win-win outcomes. In this spirit Futurepast offers its Top Five Climate Change Resolutions for Organizations in 2010.

We rank as number five the establishment of an organizational inventory of greenhouse has emissions. For leading organizations, GHG inventories are not new. However, getting one is the place to start for organizations that have put off formal consideration of the carbon intensity of their operations and products. An inventory allows companies, governmental units, and other types of organizations the chance to quantify how much carbon dioxide equivalent gases they emit on an annual basis. The inventory is broken down by type of emission, such as Direct Emissions from stationary and mobile combustion, as well as process and fugitive emissions. Another category is Energy Indirect Emissions, which acknowledge how an organization’s demand for purchased electricity or steam frequently causes utility companies to combust fossil fuels to produce the energy an organization needs. A third category of accounts is Other Indirect Emissions which includes emissions associated with both the upstream supply of raw and processed materials an organization uses as well as the downstream effects of the products and services it furnishes to the market. Transportation of these materials, goods and services typically are also included in the upstream and downstream calculations. Definitely, if your organization doesn’t already have one, now is the time to establish an accurate and verifiable GHG inventory.

Number four on our list of resolutions for the New Year is to obtain information from your supply chain about the carbon intensity of their inputs to your organization’s activities. Leading companies like Walmart have pioneered in this field, and more and more market leading organizations understand the importance of doing so. It comes down to sustainability. Simply put, organizations that are not able to reduce their carbon footprint in the coming years run the risk of falling behind their competitors and losing market share. This is bad for them, their customers, and other stakeholders. Now that market leading organizations have inventoried their carbon emissions and considered ways to reduce them, the next logical place to look is in the upstream part of the value chain.

Our number three resolution is to use the organization’s inventory to set emission reduction targets. An inventory allows organizations to see clearly where their most carbon-intensive operations or activities lie. Armed with this information, objectives for performance improvement can be set. This typically occurs at the highest level of the organization during periodic exercises known as “management reviews.” Top management sets the direction, assigns responsibilities and time frames, and allocates the resources necessary to achieve the targeted improvements.

Futurepast’s second most important resolution for organizations this year is to communicate its GHG performance and improvement objectives to stakeholders. The audience for this communication is both internal and external. Employees must understand the message so they can take needed actions to meet the organization’s climate change objectives. Suppliers need to know what part of the value chain the organization has identified as bearing the highest potential for targeted emission reductions, so they may rise to the challenge and deliver them. Customers are an important audience as well, because increasingly they will make business-to-business or consumer decisions based upon least intensive carbon options, when all other factors are equal. Last but not least, the investor community has a growing desire to know how the organizations they own are meeting the climate change challenges of the twenty-first century. Indeed, in some cases, climate change disclosures may already be called for in securities regulations in those cases where a publicly traded company has determined that a reasonable person could be influenced by its climate change risks and management’s decisions about how to address them.

This year we cap our suggestions for resolutions with our number one recommendation: Reduce the carbon footprint of your organization’s activities and products. Implement actions that reduce consumption of energy, squeeze carbon emissions from the upstream supply chain, and reduce the carbon footprint of products over their life cycles. Increase the efficiency of lighting and heating/cooling systems, optimize distribution networks, reduce packaging, and improve recyclability. Encourage employee car-pooling, transit use or biking to work. Like the individual that goes on a diet and exercises more, organizations that produce equivalent products and services that use less materials and energy will gain an edge in the competitive marketplace and augment its appeal to customers. And in the classic win-win way, it will achieve these benefits while benefiting the organization’s bottom line.