That customers show a distinct sustainability behaviour-versus-statement gap is old news. Indeed it is mentioned time and over again as a massive obstacle by companies why they are not improving the credentials of their products.
The UN Global Compact (GC) report published at the beginning of September 2013, and which draws a conclusion on its achievements since 2007 (it was launched in 2000), interestingly comes up with an identical conclusion – but for corporations.
The organisation behind the GC evaluates every so often the goals reached by the signatories, i.e. the organisations that report against the GC’s 10 principles. This time around the report therefore looks back over the achievements of the past 6 years.
And the insights are sobering to say the least, as the published snapshot proves.
At the executive level still all bares well: 65 % of companies develop sustainability policies at the CEO level.
However, only 35% of companies train their managers to integrate sustainability into strategies and operations. Oops – that’s a problem.
Video: Georg Kell, Global Compact Executive Director on the insights of the 2013 report: Supply Chains are a Roadblock to Progress
Unsurprisingly, the performance is even worse when it comes to hands-on implementation in operations. The supply chain proves to be a particularly massive roadblock as the following numbers show:
- Consider GC participation by suppliers: 70%
- Require GC participation by suppliers: 13%
- Include expectations in documents: 57%
- Reward good sustainability performance: 15%
- Train procurement staff: 37%
- Assist in setting/reviewing goals: 18%
- Provide training on relevant issues: 18%
- Review remediation plans: 16%
- Give resources for improvement projects: 11%
- Self-assessment questionnaire : 34%
- Regular business review: 33%
- Audit(s) by company staff: 32%
- Review publicly available info: 31%
- Review non-public info provided by supplier: 23%
- Audit(s) by third party: 16%
- Verification of remediation activities: 9%
- Facilitate engagement with stakeholders: 16%
Now, why does this not surprise, but at the same time is evidently fairly bad news for the state of sustainability, and the seriousness with which companies take the complexity of the issue at hand?
For the first part, the reasons why it is not a surprise are exactly the same as any consumer would cite to justify the lack of enthusiasm in a store: cost, the difficulty to act based on hard data and knowing what one is doing, and that it requires a change of habit, buying procedures – in short a change to the ‘this is how we’ve always done it’. Change, also change management, is just really hard work.
The trouble is that the business ultimately undermine their competitiveness. We have analysed where the industry is going towards for 2045 – the challenges are so difficult, the difference in reality to the one we face so stark, that a lot of businesses are indeed shoveling their own grave considering the lack of results (and, invariably, commitment).
In this same realm another problem is mentioned in the report: the lack of results among SMEs – clearly indicating that the leaders are mostly large multinationals, mostly with very strong brand images and affinity.
This is further bad news: after all 80% of a nations economy in the West – considerably more in developing markets – is composed by SMEs. The gap between the results the large corporations present, and those that SMEs report comes down to a few reasons, two of the most important would be:
– We have generally done a bad job at linking sustainability with the purpose of a business. In other words: few see what the business case for it is. For SMEs the business case is a matter of survival.
– There is little practical information available for SMEs (free, or cheaply) which would help them to do a good job practically.
– And finally, the individual (lack of) clout a single SMEs has, in reality or just perceived, is important. Many of them together could change the game entirely, but collaboration is not normally popular (or feasible) – hence, the individual actions are often made difficult by the fact that they do not order, make or represent ‘big money’.
The conclusion is simple: More, much more needs doing. We are just at the beginning. It really only starts to become interesting now.
Further resources:
– UN Global Compact 2013 report.
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What is the Global Compact?: The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. By doing so, business, as a primary driver of globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere. [...] Since its official launch on 26 July 2000, the initiative has grown to more than 10,000 participants, including over 7,000 businesses in 145 countries around the world.(Source: Global Compact)
The Global Compact is the world's largest corporate citizenship initiative with two objectives: "Mainstream the ten principles in business activities around the world" and "Catalyse actions in support of broader UN goals, such as the Millennium Development Goals (MDGs). (Source: Wikipedia)
