CSR: Year in Review

As a new year approaches, questions arise about what the coming year will bring as notions of responsible business, sustainability and Corporate Social Responsibility gain traction.

Recent years have seen the emergence of new concepts such as Shared Value, along with steady growth in sustainability reporting and new and innovative approaches by Governments and regulatory bodies.

One expert forecasting for 2015 is Dr Leeora Black, the founder and managing director of the Australian Centre for Corporate Social Responsibility (ACCSR) and a globally recognised CSR and sustainability expert with more than 30 years experience in helping organisations adapt to their changing environments.

ACCSR’s own State of CSR in Australia Annual Report is set to be released in February and will focus on the Chief Sustainability Officer, including how and to what extent they assert influence in their organisations.

Pro Bono Australia News spoke to Leora Black in the interim about her predictions for the coming year and what really needs to happen for Australian companies to make meaningful progress in addressing Corporate Social Responsibility.

The Australian Picture

Reviewing the Australian CSR picture as it stands, Leeora Black is cautiously optimistic, but stresses that multiple stakeholders, particularly Government, need to come to the table.

“I think for the most part, Australian organisations fall short of international best practice in terms of their failure to set really long term goals – goals that are big enough to require significant rethinking of the organisation, “ she says.

“They’re all incremental progress goals, rather than really ground-changing or scene-setting goals, but nevertheless I think there are a number of organisations that have done well in the past year.

“The property development and construction sector and banking and financials sector continue to develop. In both of their sectors it’s an incremental improvement and they kind of egg each other on to be better within each of those industries.”

Black would like to see a similarly proactive approach from the Government, following on from the review she undertook earlier in 2014 of the Australian Government’s policy approach to CSR since 1997.

“The big takeout from that was that although various Governments have done things on aspects of Corporate Social Responsibility and sustainability, none of them have ever taken a coherent view – a coherent, whole-of-Government view. We just don’t have any clearly articulated approach,” Black says.

“The Government is light years behind business and I would like to see Government articulating a clear view. Business just cannot rely on signals from Government, whatever progress they make, they’re getting signals from other businesses and the civic sector, they’re not getting them from Government.”

Black has been encouraged this year by the response of universities to Corporate Social Responsibility issues in Australia.

“We will continue to see higher education sector develop its response,” she says. “One of the great things we’ve seen this year from the higher education sector is that more universities are issuing sustainability reports.

“Worldwide there’s fewer than 20 universities presenting GRI Reports and three of those are Australian. I think that’s fabulous.”

Emerging Trends

Black forecasts a number of CSR trends to continue into 2015, including the politically charged issue of climate change and an ongoing focus on more strategic community investment.

“Firstly, I think more and more companies are beginning their journey in CSR, or are starting to think about pulling together what they’re already doing and taking it to the next level,” Black says.

“We’re seeing a lot of interest in better performance management in the area of community investment, so we expect to see continuing rise and interest in taking a more strategic view of community investment and developing formal approaches to measuring community investment, including measuring its impact.

“We think the focus on sustainable supply chain is going to intensify again next year. It’s the evolution of the issue – there are more and more people beginning to understand it and ask questions about their own organisation.”

Black says the new G4 guidelines issued by the Global Reporting Initiative (GRI) will continue to shape CSR practice.

“Those organisations starting to transfer from G3.1 to G4 will need to complete their plans and make that full transition by the end of next year. We’re seeing a lot more interest in materiality under G4 and we think that we’re going to see an increasingly sharp and strategic focus on materiality, using it not only for reporting purposes but also for the overall business strategy,” she says.

“I think climate change is also coming back on the agenda. Those companies who have hastened to let staff go because climate change tended to go down in levels of interest over the past year or two are going to be rueing their poor decisions.

“[Companies] are going to be needing to come to grips with climate change regardless of Federal Government policy. The world takes it seriously and therefore so must any business that expects to operate internationally in any way.”

A Global Future

2014 was marked by some major global developments in the CSR arena. In India, legislation came into effect mandating that companies of a certain size spend a minimum of 2 per cent of their net profits annually on CSR activities.

In Europe, the Council of the European Union formally adopted the Directive on disclosure of non-financial and diversity information by certain large companies. The Directive introduced measures to strengthen the transparency and accountability of approximately 6000 companies in the EU, including a requirement to report on environmental, social and employee-related, human rights, anti-corruption and bribery matters.

“We’ve seen various Governments mandating different types of reporting. I think the most significant one is the European directive on reporting – more significant even than the Indian government mandating spending on CSR,” Black says.

“I think it’s too early to see any impacts from the [Indian legislation] whereas the European directive on reporting was very specific and I think we’re going to see that flow through to other parts of the world, including Australia. Firstly through those companies headquartered in Europe with operations outside of Europe, but then more broadly as well. I think it’s a good example of the bar being raised.”

Black says the ongoing debate around the scope and meaning of terms used in the sector like ‘CSR’, ‘corporate responsibility’ and ‘sustainability’ can only serve to generate useful discussion around the issues.

“The terminology landscape is like the shifting sands in the desert, always changing. There are good definitions of each of these terms available, but how they’re used in practice can differ significantly, and there is crossover in these terms.

“I view the terminology wars as simply – it is what is – to the extent that we are still talking about what this means, means that we are still thinking actively about what it means for our organisations and what we should do about it – so I see it as a good thing. I’m in no hurry to see a resolution to this because I think it keeps people on their mental toes.

“I’m looking forward to 2015,” she adds. “I think we will see continuing maturation of the Australian business understanding of corporate responsibility and what it entails.

“I don’t know if one single factor will be the thing that makes a difference.

“It’s a journey of a thousand steps.”