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Reposted from: LinkedIn

Warning: Ideas discussed here are ahead of time. And yet, better be 20 years ahead than 20 years behind.

They say ships don’t sink because of the turbulent oceans in which they find themselves. Ships sink because of cracks that let the ocean within. Cracks form due to a number of reasons (captain’s inadequate judgement, team that is misaligned, and/or ship infrastructure that is poorly maintained – all of these intimately related).

Whatever the reason, a strong ship takes you through the storm, and a weak one takes you right to the bottom.

Similarly, companies do not go out of business because of challenging and shifting economic conditions, insufficient resources due to climate change, or poor integration into cultural and social landscapes. Companies go out of business because they are not fit within themselves to adapt to changing economic, social and environmental circumstances.

Just like people, companies need to build capacity on the within in order to stay afloat of adversity.

As Credit Swisse points out in their 2015 report: ‘Aiming for Impact: Credit Swisse and the Sustainable Development Goals‘:

‘the private sector is starting to realise the benefits of contributing to the Sustainable Development Goals (SDGs)’, those being the agenda to transform the world from 2015 until 2016, and which can be considered as the one and only path to the sustainability of our planet and the preserving of its biodiversity.

As Credit Swisse rightly points out, the private sector has been increasingly pressured by the public and all other stakeholders to include social, environmental and governance (ESG) factors in not only the reporting on the business, but also the business strategic planning, business model and operations.

Meanwhile, the private sector is – as always – expected to grow. However,

growth needs to be rethought in the context of the SDGs!

Innovative business models need to be found, such that create shared value for all business, society and the environment. And this can be incredibly tricky. Why? Because for businesses to do so, they need to work with all stakeholders, those being the United Nations System in its appropriate bodies, civil society, indigenous peoples, governments and regulatory forces. In fact, all these parties need to reach out and collaborate for sustainable growth, one that keeps profits on the rise but also preserves and enhances the biodiversity of the planet.

If businesses want to stay ahead of the game and afloat of current climatic and social adversities, this is the one and only way for them to do so and be here in another – let’s say – 100 or more years from now. And is it not what we all want, an agile yet profitable business that stays afloat and not only leverages, but also drives sustainability for growth?

What such a business-public sector-government-civil society collaboration means, ultimately, is not just a series of agreements between stakeholder groups, public statements, philanthropic gifts, etc. Such a transformative collaboration can not be achieved by planning and tools we have been using so far. It can only be achieved by innovation.

For businesses to truly stay ahead of the game, and afloat of current economic, social and environmental challenges, by embarking on a journey of growth that is profitable and sustainable, they need to transform on the within in terms of business models, operations, culture and collaboration practices. This is what makes them fit for the long-term.

In other words, businesses need to develop an internal fitness, or resilience, that puts, takes and grounds them on a path of sustainable and profitable growth.

Sounds good. How to do this?

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Corporate sustainability reporting is the elephant in the room here. In a recent post on Corporate Sustainability Reporting: the Case for Change I explored the leveraging of corporate sustainability reporting as a change management tool that takes companies on a path of sustainable growth. And having further explored this with Albor360 (Sustainability Services for the Chemical Industry) and Meier Marketing Global (Helping Brands Stay Meaningful, Relevant, Flexible, and Happy), we can say the following:

  • Companies should do much more with their sustainability reports than what they are doing currently. Staring with a business materiality assessment based on the SDGs, engaging stakeholders and reporting on sustainability is only the first step. The real opportunity to transform on the within and get the business on a journey of sustainable growth only comes afterwards.

To leverage this opportunity, companies should leverage the sustainability reporting exercise as an innovative journey of conversation, knowledge sharing and communications on the within and without of the business with key stakeholder groups.

  • Innovative and powerful content marketing approaches and practices should be leveraged for internal communications, to ‘sell’ key messages to key stakeholder groups and achieve engagement and bottom-up action. Meanwhile, the same can be done on the outside to reach out and engage external actors and forces, not only to enhance the company brand image but also pave the way for its profitable yet sustainable transformation.

The corporate sustainability report targets and KPIs should be used to transform operations and integrate sustainability on the within of the business, that way making it fit and resilient.

  • KPIs should measure performance at different levels, including cross-unit/department/division, as well as within units/divisions/departments. This way, the very fabric of the business is innovated for sustainable growth, not just pieces of it. This makes for a healthy and well-connected business and a sturdy ship that stays afloat of current challenges.

Qualitative and quantitative measurements should both be used.

  • Examples of the former are stories and testimonials: they capture cause-effect relationships and make evident the heuristics that underlie performance, which heuristics in turn – by their engaging nature – create conditions for learning and innovation across the entire business to take place.
  • Knowledge sharing and organisational development tools such as social network analysis (of the type developed by a partner company, Innovisor) should be further leveraged to determine who the key influencers in the inside and outside of the company are, and then work with those champions to design and speed up corporate change efforts. Why? Because transformational change ultimately starts, ends, and works (or not) because of people as change agents, not because of systems, processes, or other mechanisms. In this sense:

Design thinking approaches that look to co-create strategies and forge an emotional and spiritual connection between the business and those who make it happen, as well as those who determine its relevance and those who depend on it, should also be increasingly used.

  • Last but not least, the right systems, in terms of infrastructure, IT and measurement, should be developed, co-created as appropriate and mainstreamed throughout the business in a participatory and engaging manner, leveraging content marketing and social media approaches and tools, and putting people at the centre.

With all this in place, a business is in for a journey of sustainable growth for the long term with a number of benefits: improved brand image, enhanced profitability, sustainable business models and systems, happy stakeholders, to say the least, and a lot more that can not be even projected to start with.

And, with all this in place, there is a growing and evolving conviction on the part of employees and stakeholders that this business, by growing, also develops the society and preserves the environment where it operates, in an ESG kind of a fashion.

The more the business can continually strike an ESG balance, and the more it uses the corporate sustainability reporting exercise as one key and integrative lever on this journey, the more we are convinced it is the kind of a business that is in it for the next 100 years at least which is, as you can imagine, very, very appealing to customers, consumers and investors. It is good for you now and it will be good for you tomorrow. And not only that, it makes you feel good too, no?!

Do you share these ideas? Myself, Albor360 and Meier Marketing Global would love to hear from you if you do. Do you have better ideas? Do you want to get on a sustainable growth journey? Please contact me.

We can travel with you, answer your questions and discuss opportunities for your business sustainable growth.

With you, we design and operationalise corporate social responsibility change management programs that leverage the various stages and opportunities of sustainability reporting. We empower you to get on a path of transformational discovery of what sustainable and profitable growth means for your business, and how about we do this for the 100 years from now?

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Reposted from: https://www.linkedin.com/pulse/corporate-sustainability-reporting-case-change-nadejda-loumbeva

Companies of all types and sizes are increasingly being asked to produce non-financial (sustainability, corporate social responsibility, or called else) reports. Despite that this is not yet a legal requirement, it will be so in the European Union starting 2018. According to a new EU Non Financial Reporting Directive, all companies of more than 500 employees will be required to disclose ‘relevant and useful’ information about environmental, social, employment, human rights, anti-corruption and Board-level diversity topics as of 2018 (for 2017). (Source: https://www.ab-reporting.com/blog/got-teeth-eu-non-financial-reporting-directive/)

And even if not yet a legal requirement to disclose non-financial information, investors are clearly more and more interested in the non-financial aspects of company performance being reported, rather than only company financial information. Investors know and increasingly favour non-financial reporting frameworks like the Global Reporting Initiative (GRI) and Integrated Reporting Framework (IRF). This is because non-financial information about sustainability and corporate social responsibility is a much stronger predictor of future performance whereas financial information, as much as it is important, captures only the present and communicates nothing about the future.

If companies want to be taken seriously, and inspire confidence and trust about their future direction, they need to invest time and resources in the preparation of non-financial, or the usually called corporate sustainability (so called henceforth) or corporate social responsibility reports.

However it may not always be obvious to stakeholders what the value of such reports and the activities that go with them may be. Are companies getting the full benefit of their efforts?

Because, there is one extra mile that companies of all kinds and sizes do not yet walk with regards to corporate sustainability reporting: the CHANGE mile.

In other words, corporate sustainability reports are not only there for investors to judge about the potential of the company to remain profitable and stay in business for the long-term. These reports are – also – not only there for company management to reflect on past performance and strategise about future direction.

Corporate sustainability reports are importantly also there to be leveraged as a change management tool, through internal communications, business process redesign and content marketing directed at internal and external stakeholders.

And, what makes corporate sustainability reports particularly attractive with regards to being used as a change management tool is that the additional investment needed to leverage them as tools for change is small compared to the investment required to create them.

Take, for example, the 2014/15 Sustainability Report of the Danish company BESTSELLER – ranked as the best CSR report for 2015 by CSR Reporting.

One reason why it is indeed an excellent report according to CSR Reporting is because it not only presents a range of non-financial information (such as employee engagement, customer satisfaction, etc), but it does so in a way that appeals to a wide range of stakeholders. And, by doing so, it gives the reader a clear sense that BESTSELLER is on a ‘journey of sustainability’, that is constant change and adaptation in order to remain relevant as a business, use resources sustainably and yet ensure profitability and growth.

In other words, when a business communicates non-financial information in an Authentic, Material and Impactful (AIM criteria used by CSR Reporting to select best reports for 2015) way, it actually positions the report into a tool that can be used to market the need for change, internally and externally.

This makes for the Corporate Sustainability report to reach to all stakeholders and creates pertinence and urgency for BESTSELLER to realise the full value of their business.

And yet, is this all? It is a good start, but no, it is not all. A nicely written report does not do the change trick, and it does not yet take companies on a journey of sustainability.

What companies need is a system, guided by a framework, that allows companies to drive sustainability change throughout the company by using information and KPIs defined in the Corporate Sustainability Report.

We (myself and Albor360) are developing a Corporate Sustainability Reporting change management framework to meet this need. I will explore this in future posts … Meanwhile, please stay tuned and feel free to contact me for more information.

 

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