What makes for a “high sustainability” corporation?
Robert G. Eccles, a professor at the Harvard Business School, presented findings from a study he helped conduct on attributes of high sustainability companies on Wednesday, May 7 at an event sponsored by ASSE – “Occupational Safety & Health in Global Workforce Sustainability.” The half-day meeting was held at the National Press Club in Washington, DC.
Eccles cited these commonalities:
? Top management compensation is linked to sustainability metrics in the categories of social issues, environmental management, and external perceptions.
? Corporate boards of directors are closely involved in reviewing issues such as corporate citizenship and boards have specific sustainability committees.
? Stakeholder engagement practices are emphasized and scrutinized, especially with non-financial groups such as NGOs. The boards of high sustainability companies receive feedback on engagement practices, results reporting and public reports.
? Effective stakeholder engagement is the most significant difference between high and low sustainability companies.
? High sustainability corporations are more long-term oriented. Stakeholder engagement takes time to build trust, relationships, collaborations and credibility.
? High sustainability corporations are more oriented toward long-term investments and long-term business strategies. They actively shape the type of investors they want. And they want to break away from short-term quarterly earnings investor pressure.
? High sustainability companies measure fatalities, near misses, EHS performance, customer lifestyle attributes and human resources performance indicators. They put more emphasis on measuring non-financial indicators of performance.
? High sustainability companies are much more likely to disclose non-financial data.
? High sustainability organizations are defined by board governance of sustainability initiatives; stakeholder engagement (not fear of NGOs and other stakeholders); longer time horizons for making external commitments; an emphasis on non-financial measures; an emphasis on social standards including OHS standards and national and international standards compliance; a high level of transparency in disclosing things like supply chain accountability; and finally, they enjoy superior market performance in the long term.