As part of the UN’s sustainable development agenda entitled Transforming our world: the 2030 Agenda for Sustainable Development, countries have adopted a set of 17 Sustainable Development Goals (SDGs) to transform our world. In a recent UN Global Compact-Accenture Strategy CEO Study, 49% of CEOs believe that business will be the single most important factor in delivering these SDGs.
The report was the largest ever CEO study on sustainability and included more than 1,000 CEOs, more than 100 countries, and more than 25 industries. This follows the 2013 study, in which the OECD reported that 93% of CEOs believed that sustainability would be important for the future success of their businesses.
With 89% CEOs stating that commitment to sustainability is translating into real impact in their industry, Agenda 2030 provides a fantastic opportunity for businesses to rethink and reset their approaches to sustainability in line with responsible business conduct and potential moral and legal expectations towards businesses to ‘do the right thing’. 88% of CEOs surveyed believe that greater integration of sustainability issues in financial markets will be essential to making progress, and so this is a valuable opportunity for European Risk Managers to be aware of and take advantage of.
The 17 SDGs form a universal roadmap for action which business leaders have accepted as a mandate for radical change, with 70% CEOs seeing the SDGs as providing a clear framework to structure their sustainability efforts. It is encouraging to see that the number of companies able to accurately quantify the business value of their sustainability initiatives increased by more than 20% since the previous study, which presents a prime opening for risk managers to make a difference to their company and ultimately strengthen their own role.
The business case for corporate responsibility is clear.
Firstly, consider the cost and risk reduction, not just in financial cost but in reputational and opportunity cost too. As demonstrated by the Volkswagen emissions scandal of 2015 and the BP Deepwater Horizon oil spill as covered in this recent CultBizzTech article, the consequences of corporate irresponsibility can be significant.
Secondly, there is the concept of “shared value”. Initially developed by Harvard Professors Michael Porter and Mark Kramer, this take on Corporate Social Responsibility (CSR) explores the ways that companies can extract value and tangible benefits through their CSR programmes, providing a mutual and long-term benefit to partners involved. This FT article highlights the shift in these programmes, with businesses taking notice of the importance of CSR and realigning efforts accordingly to initiate engagement and activity between the corporate and the partner, rather than relying on one-off charity donations.
Thirdly, there is the element of competitive advantage and legitimacy. Responsible business practices can contribute towards a positive corporate culture and image, which can lead to retaining existing employees, attracting new employees and consumers, increasing productivity, and in-turn boosting brand appeal and market strength. Evidence of this is shown in CSR being listed as one of EY’s top priorities for European Boards last year, and a study by Horizon Media’s Finger on the Pulse finding that 81% of millennials want companies to be good corporate citizens.
According to Accenture, “more than a decade of research on sustainable business suggests that companies mature through common stages, with similar motivators and opportunities to create value for the company and for the world.” There are various way in which businesses can work towards making the world a better place.
Climate change is a topic that will feature heavily at our seminar in Antwerp this October. Corporate risk managers have an opportunity to support their organisations in embedding climate logic into the business, which will help reduce the impact of weather-related events in terms of physical damages as well as business interruption, thus adding value and attractiveness to the company as well as the world.
Risk mapping is another area of opportunity, and something else high on the agenda for our seminar. Covering new French law on the duty of corporate vigilance and the British Slavery Act, we have a fantastic line-up of speakers for our risk mapping workshop to help European risk managers understand and integrate the new requirements in order to create value for their companies and the world.
Corporate Responsibility and Sustainability is one of our key themes for this year’s FERMA Seminar. The Seminar is organised by and for European risk managers and will examine in depth some of today’s most pressing risk issues.
Find out more and register here to attend the two-day programme, with Day One focused on Corporate Responsibility & Sustainability.