Discovering the Possible Downside of CSR ..............................................
Still, sustainability has its share of skeptics in the business world. They point
to a lack of empirical evidence of its effectiveness. Indeed, many of the argu-
ments in its favor are theoretical and anecdotal. It’s difficult to measure con-
structs, such as brand value or corporate reputation and tie them to
sustainability initiatives.
In addition, costs are easily quantifiable whereas benefits of sustainability are
more elusive. You look at the budget and see you invested $1 million on sus-
tainability, but how does one measure the payoff in customer loyalty? More-
over, the benefits of sustainability initiatives often appear after a time lag.
Companies that take a purely pragmatic approach may focus excessively
on the downside of such initiatives — their cost — and underestimate their
benefits.
Even worse, sustainability can backfire if not implemented wisely. If you’ve
billed yourself as a green company and then get exposed for violating your
own standards, you’ll be branded as a hypocrite. The Center for Responsible
Business at the University of California at Berkeley found that when social ini-
tiatives are not aligned with corporate objectives, CSR can “actually become
a liability and diminish previously held beliefs about firms.” Reporting must
withstand the scrutiny of being audited. Under the watchful eyes of stake-
holders around the world, corporations need to prove that their reporting is
more than whitewash or — as it’s known within environmental circles —
greenwash.
Managing Sustainability Performance .......................................................
After you’ve decided that sustainability is worthwhile, now comes the tough
part: actually doing it. Unfortunately, managing corporate sustainability is
largely a work in progress and standards and measures continue to evolve.
These methods are still manual, time consuming, inefficient, and costly.
Worse, the information gathered and reported often is not transparent or
auditable. In short, these practices simply are not sustainable.
Sustainability is a global trend, but not a uniform one. Part of this rests on
confusion about the meaning of sustainability itself. Businesses often are con-
fused by new demands. They have trouble devising sustainability targets and
aligning social and environmental objectives with financial ones. In the afore-
mentioned EIU survey of more than 1,200 executives, only 53 percent of com-
panies claimed to have a sustainability policy in place — and only half of
those extended it beyond internal operations into their supply chains.
258 Part IV: Managing the Flow of Information
