The rise of global citizenship

Corporate sustainability reporting is gaining ground – there are benefits…..

United Nations reports some 12,000 firms and non-business organizations, now report their environmental, social and sustainable governance measures. (greenhouse gas emissions, workforce diversity and benefits, and community programmes). From FedEx to Citigroup to Hewlett Packard.

India in 2014 passed a law requiring companies to carry out mandatory corporate social responsibility reporting. In Singapore, the local bourse Singapore Exchange announced in January 2016 a new ‘comply or explain’ reporting rule that is paving the way for more environmental, social and sustainable governance.

The benefits are many, as for FedEx with customers in over 170 countries it was able to meet a target of improved fuel economy of 30 per cent earlier than expected some five years earlier than expected. FedEx achieved this through a “Replace, Reduce, ReUse, RePurpose, Revolutionise” strategy, which involved reducing overall mileage with much better route planning; replacing vehicles with newer more efficient models; and adding alternative fuel vehicles.

In a globalized world many multinational firms ask to see data from suppliers when they procure goods and services. This has had a  ripple effect all the way through the supply chain.

High external Corporate Social Responsibility (CSR) ratings, by watchdogs like Paris-based Vigeo Eiris, are a measure of trustworthiness, that potential employees are willing to work for socially responsible companies – at lower salaries. MBA students surveyed were willing to sacrifice EUR 2,500 ($3000) of annual salary for every ten units of CSR score their employers could provide. Most would not work for a tobacco company or no social responsibility program.

Half of potential employees would take 12 to 18 per cent less earnings to work for what they viewed as a more socially responsible company, while research by Assistant Professor Albert Tsang at the Chinese University of Hong Kong has found that auditors actually charge lower fees to clients with higher CSR scores. Auditors made the assumption that companies with higher CSR scores have more social “integrity” and as a result the auditing experience is smoother and holds lower risk.”

Future Ready Singapore

 

Poverty is Caused by a Failure of Ethics, Not Economy – Dr. Jeffery Sachs