World-Class Citizenship

Dec. 21, 2004
Sustainability reports help companies make their cases.

It's always been important, of course. Leading corporations always have been evaluated not only for their performances on the bottom line, but also for their behavior as citizens of the world. But in the wake of high-profile scandals that have rocked stakeholder confidence and shamed business leaders across the globe -- Enron Corp., WorldCom Inc., Arthur Andersen LLP -- scrutiny is more intense than ever before. It should come as no surprise, then, that manufacturers are taking more pains than ever before to demonstrate their commitment to acting in a socially responsible manner. For a growing number of companies, the chosen vehicle to make their case is the "corporate sustainability report" -- a document that outlines corporate initiatives in such areas as the environment and resource management, as well as philanthropy, workplace conditions, and concern for the communities in which the companies do business. As yet there is no fixed table of contents for such reports, just as there is no fixed definition of "sustainability." Some companies call them "social responsibility reports" and cover little more than boilerplate philanthropy. Others focus solely on their stewardship of the environment. More and more companies, however, have broadened the scope to include all elements that contribute to "transparency" in their operations. "To quote the Supreme Court in another context, 'I know them when I see them,'" says Michael Stevenson, manager of information resources for the Center for Corporate Citizenship at Boston College. The international membership organization has provided research, executive education and consultation on citizenship issues since 1985. "With the recent spate of corporate scandals, the issue that's driving this is transparency in the environment and social arena," says Brad Googins, the organization's executive director. Googins adds that more U.S.-based companies recently have begun to follow the leaders of the movement in Europe. "In two to four years, it will be rare that you will find a company that isn't issuing such a report," he predicts. Promoters of the movement say the reports serve as more than mere public relations tools by forcing companies to focus on sustainability at the highest internal levels. "It definitely puts the spotlight on the issue in the company," says Brenda Pulley, vice president, corporate and government relations, for Alcan Rolled Products, a business unit of Alcan Inc., Montreal. Alcan Inc. issued its first corporate sustainability report in May 2002. At Alcan, sustainability involves seven elements: Integrating economic, environmental and social considerations into business planning. Reducing the company's "environmental footprint." Outlining challenges in managing industrial and manufacturing processes. Demonstrating how its products enhance the quality of life. Ensuring high standards of leadership. Strengthening relationships with stakeholders. Demonstrating integrity in day-to-day operations. Pulley says the report helps quantify what the company is doing to accomplish its sustainability goals. "It really is our journey to sustainability," she says. "This is part of being transparent." "To me, sustainability means we conduct our business without depleting the resources that are vital to us," says Ronald C. Kurtz, director, media relations, corporate communications, for ABB Inc., Norwalk, Conn. Zurich-based parent company ABB Ltd. published its first social policy in 2001 and held roundtable discussions with stakeholders in 34 countries about its content and implementation. The company makes its sustainability report, published in June 2002, available in English, German and Swedish on the Internet. While the report focuses primarily on environmental and ecological concerns, ABB's social policy extends to such areas as human rights and business ethics. Such concerns are among those addressed by the World Business Council for Sustainable Development (WBCSD), a coalition of some 160 international companies committed to the broad issues covered by sustainable development -- environmental protection, social equity and economic growth. WBCSD was formed in January 1995 through a merger of organizations based in Geneva and Paris. About 65,000 participants were expected to participate in the organization's World Summit on Sustainable Development in Johannesburg, South Africa, from Aug. 26 to Sept. 4. Although U.S. President George W. Bush did not participate, the summit no doubt will heighten awareness and lead to even more sustainability reports in the U.S. and abroad. Will those reports, in turn, serve as catalysts for improved performance on sustainability issues? "I think it will depend on how deep the company's commitment is," says Googins, of the Center for Corporate Responsibility. "The value to the company is only going to be as deep as its commitment to citizenship is."

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