When visiting a company’s website, you are likely to run into the following terms. Corporate Sustainability, Corporate Social Responsibility (CSR), Environmental policy, and/or the certification ISO14001. Or so we did while doing market research across businesses in Finland, Sweden, and Estonia.
These terms were mostly communicated via sustainability pages, which more and more companies are adding to their websites. A positive development. However, due to the lack of standardization, content about sustainability varied widely. In this article, we try and demonstrate what these terms mean. What does their usage entails, and what your company can communicate through them?
A broad umbrella term that defines an organization’s approach towards building value around social, environmental, and economic parameters. It defines how a company sets, strives and strategizes for achieving long-term sustainability goals.
Oftentimes, corporate sustainability is inferred or referred to only in terms of environmental impact mitigation. However, its scope spans a wide variety of topics. These are: upholding labor standards, stakeholder engagement, whistleblowing and anti-bribery policies and mechanisms, and transparent governance and ownership structures.
Another important element of corporate sustainability is transparency. And the primary tool that organizations use for transparent communication of their sustainability data is sustainability reporting. (Read more about sustainability reporting and Corporate Sustainability Reporting Standards in a Nutshell). Through a sustainability report, your organization can communicate all its sustainability data in one place and according to internationally recognized standards. Additionally, the data in the form of a sustainability report is easily accessible and available to all stakeholders.
Corporate Social Responsibility
The European Commission defines CSR as ‘the responsibility of enterprises for their impact on society. This comprises everything from compliance to environmental and social impact to be responsible with regard to all stakeholders. As the name suggests CSR is about being more socially responsible, primarily keeping stakeholder interests in mind.
Stakeholder engagement forms a big part of CSR. (Read more about Stakeholder Engagement). And transparency forms a key element here as well. An organization that makes pertinent information, particularly about its impact on society and environment freely available to its stakeholders, is in a position to have in place a functional stakeholder engagement system.
CSR and corporate sustainability have very often been used interchangeably. And the definitions do overlap to a great degree. However, it is also important, specifically for corporate organizations, to see where the term differ so their usage can be more targeted and accurate.
Corporate Social Responsibility (CSR) is business’s contribution to sustainable development. Today, corporate behaviour must not only ensure returns to shareholders, wages to employees, and products and services to customers, it must also respond to societal and environmental concerns.
Organisation for Economic Co-operation and Development (OECD)
This is a document, signed by the upper management, which outlines the guiding principles, values, and policies regarding the environmental impact of an organization. At its minimum, it showcases how a business looks at the environmental impact of its operations and the aims it has of improving that impact. However, environmental policies aren’t just limited to that. They can be detailed roadmaps for the future based on in-depth environmental impact assessment. They can outline measures, ambitions, reviews, systems, etc, thereby allowing a real insight into how a business handles and strives to better its environmental impact.
ISO 14001 is part of the ISO 14000 Family of Environmental Management standards. It provides a framework to organizations to build their environmental management system around. All organizations regardless of their size, industry, or sector can use the standard. According to the International Organization for Standardization (ISO), “ISO 14001:2015 is intended for use by an organization seeking to manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability.”
Environmental Management System
A means of ensuring effective implementation of an environmental management plan or procedures and compliance with environmental policy objectives and targets. A key feature on any effective environmental management system (EMS) is the preparation of documented system procedures and instructions to ensure effective communication and continuity of implementation.
European Environment Agency (EEA)
Usage of Corporate Sustainability terms
While all these terms build around corporate sustainability, as demonstrated, what they mean, in and of themselves, is quite specific. So is their purpose and how they are used. From showing intent to certifying the existence of environmental management systems to comprehensive disclosures along Environmental, Social, Economic, and Governance parameters.
If used effectively they convey not only awareness but also a clear understanding, and therefore sincere intent to incorporate corporate sustainability.