1. Going Global: The relentless march toward globalization will continue to stretch the scope of corporate responsibility. Corporate social responsibility leaders will be increasingly accountable for responsible behavior all along their supply chains.
2. The Triumph (or Tyranny) of Transparency: The pressure for ever increasing levels of transparency and disclosure will build in 2012. Last year, according to CorporateRegister.com, more than 5,500 companies around the world issued sustainability reports, up from about 800 a decade ago. Also, the “Rate the Raters” report from SustainAbility.com found that more than 100 sets of ratings measure which companies are the most responsible. All the big four accounting firms are expanding their practices to audit all of these disclosures and are also sponsoring the expanded fourth edition of the Global Reporting Initiative Guidelines, which outline standard CSR disclosures. In 2012 a promising new initiative, the Global Initiative for Sustainability Ratings, will endeavor to standardize the ratings framework.
3. Employee Engagement Emerges: The connection between CSR and engaged employees continues to grow. A Hewitt & Associates study looked at 230 workplaces with more than 100,000 employees and found that the more a company actively pursues worthy environmental and social efforts, the more engaged its employees are. The Society for Human Resources Management compared companies that have strong sustainability programs with companies that have poor ones and found that in the former morale was 55% better, business process were 43% more efficient, public image was 43% stronger, and employee loyalty was 38% better. Add to all that the fact that companies with highly engaged employees have three times the operating margin (Towers and Watson) and four times the earnings per share (Gallup) of companies with low engagement, and you’ve got a compelling business case for this trend to continue into 2012 and beyond.
4. Political Pitfalls: The elections will dominate the public conversation in the U.S. in 2012, and corporations will be alternately described as greedy, polluting, untrustworthy political puppet masters and job-creating paragons of virtue—with little room in the middle. Beyond the rhetoric, candidates won’t be able to resist highlighting company success stories featuring economic, environmental and social benefits. CSR leaders should choose what they promote wisely and set clear boundaries to avoid becoming political footballs.
5. Collaboration: As CSR becomes more of a differentiator, companies will both compete and collaborate on CSR issues. I devised the term collaboratition in a 2011 speech to describe how companies both compete and collaborate on CSR at the same time. The numerous CSR ratings, together with data from the Reputation Institute’s 2011 “Pulse Survey,” which indicate that CSR is responsible for more than 40% of a company’s reputation, lay the basis for CSR competition. On the other hand, there are a plethora of associations and multi stakeholder networks that foster collaboration on CSR topics. Groups like the Electronics Industry Citizenship Coalition demonstrate how competitors can partner on CSR issues like conflict minerals. Why would they? Such issues are so massive that working together is clearly more efficient. On the other end of the spectrum are initiatives like GE’s ecomagination program, which furthers competitive advantage. “Collaboratition” means that companies can and will collaborate on CSR efforts when that is more efficient, while continuing to compete on their signature CSR programs.
6. Sustainability Shoppers: Consumers are increasingly tuned in to sustainability when making their buying decisions. “Green labels” have been around for a long time, but Wal-Mart’s sustainability index is taking it up a notch. Already driving WMT suppliers to improve performance, in the future the index could appear on a point-of-sale label for products. Expect green marketing in 2012 to up the ante based on the successes of campaigns like Timberland’s Earthkeepers line (“Nature Needs Heroes”). Perhaps the high water mark for eco-minded advertising was Patagonia’s brilliant “Don’t Buy This Jacket” messaging. Its Common Threads Initiative asks customers to pledge to only buy what they need and instead repair, reuse, and recycle their clothing. Nothing inspires confidence in your eco-values more than telling customers not to buy your products. Independent certification schemes like the GoodGuide will continue to proliferate, as will “cause marketing,” for the simple reason that it works. Cone Communications reports in its 2010 Cause Evolution Study that “even as cause marketing continues to grow, consumers are eager for more. In fact, 83 percent of Americans want MORE of the products, services and retailers they use to support causes.”
7. Occupy From the Inside: PriceWaterhouseCoopers has found that 88% of millennials, or “echo boomers,” choose employers based on strong CSR values, and 86% would consider leaving if the companies’ CSR values no longer met their expectations. As a new generation goes to work in corporate America, it is bringing strong social justice values with it. At the same time, companies are under increasing pressure to “go green.” So despite the popular view that corporations are in a race to the bottom, 2012 will see more jobs created for CSR professionals who want to change business from the inside out. Companies of all kinds are looking for people to help improve their environmental, social, and ethical performance throughout their value chains. There are recruiters like Ellen Weinreb and Martha Montag Brown who specialize in CSR jobs, and the big recruiters have caught on too.
8. Social Media Rules: Facebook and Twitter are now essential communications tools for any serious CSR program. Social media is not a replacement for hefty annual CSR reports, but those reports are increasingly static reference documents, used mainly for looking up facts and grading performance. Social media opens a way for stakeholders to interact directly with a company’s CSR program. Through social media, companies gain a following of people who are interested in their CSR performance and can keep tabs on stakeholder sentiment on any emerging issue. These tools are still very new, and no company has perfected their use, but it is clear that social media is a game you cannot afford sit out.
9. Human Rights: Since the 2008 publication of the “Ruggie Report” on human rights and transnational corporations, companies have been waking up to human rights issues across their value chains. For example, the major Internet search companies are embroiled in basic human rights questions ranging from the protection of free speech during the “Arab Spring” to being compelled to identify dissidents in repressive regimes. In a time of globalization, hyper-transparency, and increasing expectations among informed stakeholders, the risk in even tacit complicity in human rights violations is growing. Wise companies will take a hard look at their human rights policies and practices in 2012 and act to mitigate any liabilities.
10. Earth at Seven Billion and Growing: In 2011 the world’s population topped seven billion people. Even at seven billion we have averted a Malthusian catastrophe—so far. But as more people compete for the Earth’s resources, the need to be more efficient will continue to increase. Everything from energy efficient semiconductors to electric cars to water conserving plants will find new markets in 2012 and beyond. The imperative to stretch resources ever further will make sustainability a central design principle for the winning corporations of the future.
Original article in Forbes
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