The latest IPCC (Intergovernmental Panel on Climate Change) report has never been so alarming, natural disasters are multiplying, and more and more climate refugees are fleeing their lands. The current context pushes citizens and companies to act for the planet in view of the political inaction that a large part of the population considers. 76% of people agree that CEOs should take the lead on change rather than waiting for government to impose it (an 11-point increase from the 2018 study). But what role do companies have nowadays in the face of the climate emergency?
I. CSR, the unavoidable extra-financial criteria
In 2015, the adoption of the 17 Sustainable Development Goals of the United Nations and the Paris Climate Agreement created a new global dynamic including Social, Societal and Environmental performance.
European companies listed on the stock exchange and with more than 500 employees must mandatorily establish quantified and realistic CSR objectives. They refer in particular to the ISO 26000 standard of 2010 which identifies concrete and applicable solutions for organizations to contribute to sustainable development. Every year, an annual report (Non-Financial Statement Report) is communicated to shareholders and other company stakeholders. More and more, CSR is a determining extra-financial metrics for investors. Indeed, they are aware of the new consumption trends.
According to the QIMA and Cone Communication studies “94% of Generation Z agreeing that business should be socially responsible and 90% of shoppers globally more likely to be loyal to brands that take their pro-social objectives seriously.”
These standards seek to make ecology complementary to economy.
II. Understanding Why a Business Company Should be Sustainable
Corporate responsibility indicators are expected by all the company’s stakeholders (employee, client, investor/shareholder, supplier and civil society).
– Employee Engagement: People want to work for a company that reflects their values. If a company’s CSR approach is sincere and concrete, employees will notice and become more willing and involved in the missions they are given.
– Welcoming new talent: Since containment, the rate of professional retraining has never been so high. The “loss of meaning” is one of the first arguments for reconversion. A company that considers its employees and the environment is likely to attract committed and resourceful talent.
– Attracting investors: Sustainability of investment is now requested by individual and corporate shareholders, . Being part of companies with sustainable and responsible goals can only stir up the interest of current and potential investors. And institutional investors are now required to include sustainable financial products in their portfolio.
– Customer loyalty: Customers are loyal to brands they trust. A company with a true CSR build trust. Customer satisfaction accelerates word-of-mouth, which leads to a larger customer base. In addition, client companies are also required to evaluate their suppliers according to CSR criteria.
– Newspaper press that make sense: If a company is committed to moving with the times and adapting to new needs, then it is current and respectable. Sensible to interest journalists!
–Brand perception: Employees want to work for a company that makes sense. Customers want to buy responsibly and are attentive to the commitments of the brands they consume. Finally, investors want to be associated with sustainable companies. A company’s CSR strategy must truly be taken seriously.
– Suppliers and their CSR performance are taken into account in the company’s sustainability assessment.
– Civil society: the company plays a major role in society and its initiatives give credibility to its CSR commitment
III. Sylvie Podetti Interview
Sylvie Podetti is Senior Financial Communications & CSR at Axway Software. For the past two years, she has devoted half of her work time to CSR at her company. CSR indicators are gradually being integrated into financial communication, so she is the one who insisted on integrating it into the heart of the business strategy.
What is your company’s business?
Axway is a software editor, an international company based in 18 countries that develop B2B software (programming interfaces, secure file transfer, etc.). We handle international requests.
Did you know that CSR was going to be part of your mission when you were hired?
I’ve been working at Axway since ten years. At the time, the subject was not at all topical. Digital sector was not requested to publish any CSR metric. Then, 5 years ago, as I was in charge to follow the financial communications regulations, I saw the CSR becoming more an more important. I shared the formal requirements with my management. It was really new to imaginate to include climat impact or societal commitment in our mission. I guess some people saw me as an idealist. But 2 years ago, the European regulation changed as you know and now in Axway as in any other serious company, we build our social, societal and environnement commitments. Today, I devote half of my working time to it. We have rebalanced my missions.
What are the CSR reference tools?
When I started out as CSR manager, I first educated myself personally, by reading a lot, keeping up to date with current events, etc. I learned the basics of CSR and how to use them. The 17 UN Sustainable Development Goals are the base ; each goal has its own definition, it is important to know each of them and to adapt our business objectives to them. But I also use some other best practices and benchmarks in digital sector. Global Compact is also a tool that has helped me enormously to clarify my questions and to establish a strategy with full knowledge of the facts.
What was your first thought in order to embody CSR?
Basically, the Corporate responsibility, so it means that you have to take stock of the company’s impact on society in general. What pollutes, what doesn’t, what employees like and dislike, and measure their feelings. The scheme is simple: measure, reduce and compensate. The goal is not to stop everything when something goes wrong. Compensation is a very effective solution!
Do you think CSR is a new trend?
CSR is not a trend, it is a new piece to include the companies in the social changes and environnemental challenges. To integrate these assets in their business model. That improve the confidence of the stakeholders.
How to spot companies that practice green washing?
For that, the consumer has to inform himself on his side, to get informed. He can for example refer to the labels and certifications that the company has. Many brands surf on the wave of ecology without really knowing what it is. But these brands betray themselves by their reference frame. Today, several laws require companies with more than 500 employees and all those listed on the stock exchange to respect environmental directives. These are European directives. These are declined according to each country. Every year, these companies must establish a financial reporting so that they can be evaluated. Today, extra-financial criteria (such as respect for the environment, equal pay, etc.) are as important as economic performance criteria. If the extra-financial criteria are too bad, investors will be more and more cautions of the company in question. I think that the greenwashing actors do not have a very long life span.
Could you tell me a few companies that you think are mastering CSR?
I would share public informations and ranking in CSR as Wavestone, Michel & Augustin, Zoo de Beauval, So bio, Nature & découverte; these companies are in industries involved in CSR for a while. The digital sector started more recently, but now it’s going fast.
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