CSRHub Blog Research on ESG metrics and comments on sustainability best practice

By Cynthia Figge

Fast Company recently named Apple #1 in its ranking of the world’s most innovative companies. But when it comes to corporate social responsibility, Apple falls short of its innovative reputation.  (Full disclosure: I own an iPhone and also have iPad 2 envy.) Yet despite Apple’s lack of a corporate level sustainability report (they do offer environmental information on selected products), transparency of social actions, despite their non-reported charitable contributions – nothing available on their website or reported to The Chronicle of Philanthropy-- and despite their below average corporate social responsibility (CSR) rating, millions of us keep buying their products.

When one thinks about product companies that consistently delight their customers, certainly Apple comes to mind. Assuming many Apple customers care about sustainability, is it realistic to think that they (we) could influence the company by demanding greater corporate responsibility beyond the economic benefits to Apple and other companies in their ecosystem? Of course they have an obligation to be continually financially successfully, but do they also have an obligation to improve their CSR performance, and be more open about their progress?  How might customers exert influence?  This is an open question that I will leave to the marketplace.

However, there is another potential source of powerful influence – Apple’s thousands of employees. It is hard to know as an outside observer how employees value sustainability at Apple and whether they could or would influence policy.

Microsoft, on the other hand, seems to have more integration of employees and CSR policy. At a Net Impact Seattle event on February 17^th, I heard Dan Bross, VP of Citizenship at Apple’s competitor in Redmond, discuss Microsoft’s corporate social responsibility work. Yes, it’s an uphill battle, but they are making progress. Dan said that Microsoft’s annual employee survey covers a range of issues, including the question: “Are you aware of and do you agree with Microsoft’s work in CSR?” A staggering 93% of employees are aware of and agree with Microsoft’s CSR work, the highest rating of any question in the survey.

Here are Apple and Microsoft ratings on CSRHUB:

If Microsoft employees have anything to say about it, and I believe they do, it is likely that Microsoft’s sustainability performance will continue to improve. Dan Bross defines CSR as a set of corporate activities that add business value while addressing social issues. This bodes well for us all.  Perhaps Apple’s internal stakeholders can help exert similar influence to improve company sustainability performance. When employees get involved in driving CSR, they provide leverage not only internally, but impact customers through a virtuous circle. 

By Lorinda R. Rowledge

What most captured my intellectual curiosity -- and feelings of hope -- in 2010 was the daunting challenge and tremendous opportunity inherent in engaging employees in and through sustainability and corporate social responsibility.

As part of a major EKOS project, I interviewed internal leaders at P&G, SAP, 3M, BT, Microsoft, Interface, Toyota, Eileen Fisher, and other companies about their approach, and reviewed hundreds of articles, research findings, webinars, and academic papers on employee engagement.

In the end, I was struck by a renewed -- and urgent -- sense of optimism, an emergent "reframed" worldview about the fundamental relationship between employees, companies, and society, and an exciting array of guidelines and best practices that can be customized to simultaneously drive business performance, engage employees, and accelerate the transformation to sustainable business.

Below I introduce some key "warp and weft threads." Over the next few months I will weave a tapestry with some colorful stories and in-depth analyses in a series of short articles.

One of our greatest business leadership challenges may be creating the organizational culture and social context that optimizes the collective intelligence and collaborative effort of the entire workforce -- both for organizational effectiveness and innovation in general, and for advancing transformation to environmentally, socially, and economically sustainable business.

Despite clear data showing employee engagement is a key factor in business performance -- with "high engagement" companies having higher operating income, revenue, earnings per share growth rate, retail sales, profit margins, customer retention, safety, and employee retention -- studies from major global research firms like Gallup, TowersWatson, and Blessing White find that only 20-30 percent  of employees are actively engaged, meaning the vast majority of the workforce are coasting at best, actively disengaged or destructive at worst. Enlightened executives are increasingly seeing employee engagement as one of the most pressing strategic priorities. For example, a study by the Corporate Executive Board found employee engagement was one of the top two priorities of human resource leaders for 2010.

The good news is that this need for innovation in and increased commitment to engaging employees is occurring simultaneously with the requirement of sustainability/CSR implementation for much deeper integration and more intense innovation.  The synergies between CSR and engagement set the stage for a step-leap improvement in response to both elements of this leadership challenge.

Proactively pursuing sustainability/CSR is a significant, largely untapped, solution for engaging employees' passion, initiative, and search for meaning and contribution in their work. Advancing employee engagement in and through sustainability can propel a powerful virtuous circle contributing to dramatically improved business performance and ever more legitimate sustainability breakthroughs.

Employee engagement drives improvements in business performance; sustainability/CSR drives increased employee engagement; engaging employees accelerates sustainability integration and innovation; sustainable business innovation drives both superior business performance and more positive impact in the world.

Both research and direct experience among the leaders underscores this synergy.

The latest Sirota and Hewitt research into employee engagement and sustainability indicates:

• Employees satisfied with their company's sustainability performance (compared to those who are dissatisfied) are more highly engaged, feel their employers are more interested in their well-being, rate senior managers as having a stronger sense of direction, and feel their companies are more competitive in the marketplace (all factors central to employee engagement);
• The vast majority of employees at companies with high engagement say their employer is socially and environmentally responsible.

Sustainability provides what most people in today's workforce, from baby boomers to Gen Ys, are looking for in their work:  deeper meaning and a sense of purpose, opportunities to contribute and make a positive impact on the world, work in an organization with a good reputation in the community, and opportunities to develop knowledge and skills and advance their careers.

With the increasing consensus that sustainability/CSR is a business imperative, and that improvements and investments in sustainability/CSR yield cost savings, increased corporate reputation and brand value, new products and markets, and innovation, the majority of Fortune 500 companies as well as many smaller organizations now have corporate responsibility programs and reports. Most, however, are also a long way from reaping the benefits of engaging employees in sustainability.