As we prepare for our first-ever Greenbuild at Home gathering (of as many as 1,000 sustainability professionals), we’ve received some questions from our community about the topic.
Before you join us on May 12th, here are some vital facts and stats.
- What exactly is CSR? Corporate social responsibility is not a new concept. In fact, it can be traced back to economist Howard Bowan in the 1950s. CSR took hold in the 1970s when the Committee for Economic Development built widespread awareness of the “social contract” between business and society. The three basic concepts behind CSR are that for-profit organizations will:
- Not only run their businesses well but also provide jobs and economic growth
- Behave fairly towards customers and team members
- Play a significant role in the communities and environments in which they operate.
2. How Does ESG Differ from CSR? Environmental, Social, and Government (ESG) standards are a system of measuring how well businesses are doing in regard to the above efforts. In short, it is an evaluation system that investors and decision-makers use to quantify the impact of their actions. “Goodbye theory, hello action,” declares consulting firm PwC, noting board and company diversity, climate change, resource usage, and data security as some of the many areas that contribute to a company’s role in preserving our planet.
- Why Does ESG Matter? According to the Harvard Business Review, more than a third (or $30 billion in assets) are subject to ESG criteria. Investors and consumers alike are evaluating brands and companies based on the measurable actions they are taking to help their environments and communities. Government entities have also begun to look closely at how companies are tracking against ESG standards.
- Where Do We Stand Now? Today, 88 percent of publicly traded companies, 79 percent of venture and private equity-backed companies, and 67 percent of privately-owned companies have ESG initiatives in place, according to this report.
But these statistics from that same report are shocking and disturbing:
- Only 50% of people believe their company performs very effectively against environment metrics. [NAVEX Global]
- Less than 40 percent believe their company performs well for governance and social issues.[NAVEX Global]
- A quarter of companies believe that corporate silos get in the way of making ESG progress. [PwC]
- So, What Can We Do? Because ESG tracking is so critically important to the investor community, prospective employees, and customers today, we all need to learn from each other how to not only measure progress but to truly “walk the talk” as we move from concept and theory to quantifiable outcomes. We must:
- Establish reliable and easy-to-implement measurement systems
- Communicate progress to stakeholders
- Learn from best-of-class companies what actions they’ve taken and the successes they are seeing.
Please join us on May 12th for an interactive, dynamic, and timely conversation about the movement from CSR to ESG and what leaders and your peers are doing to move from theory to action.