Enterprise Briefing

 

 

"Most CFOs believe sustainability can lead to cost savings, increased revenues, greater customer retention and a competitive advantage, so clearly this is an opportunity that can not be ignored," says Lauralee Martin, Global Chief Operating and Financial Officer at Jones Lang LaSalle.

 

Sustainable development has come a long way since the term was first introduced in the Brundtland Report in 1987 which paved the way for the 1992 Earth Summit and the subsequent Kyoto Protocol. The UN report defined sustainable development as “the ability of the present generation to meet its own needs without preventing future generations from meeting theirs.” This thinking, which embraces environmental, social and economic activities, has lead to the recent convergence of CSR and the drive to “green the business.” Today, 81% of the FTSE100 produce standalone CSR reports.

 

“There is considerable pressure on companies to act more responsibly,” says Axel Haentjens, Vice President of Marketing at Orange Business Services. “And we’re not just talking about reducing energy bills. Look at other aspects of sustainable working, such as telecommuting, which can improve employees’ work life-balance and make them more loyal and productive. Or extending the life of PCs. Do you really need to replace them every two years, and when you must dispose of them, why not do so in an ethical way? Companies can also educate staff about better environmental practices such as printing less."

 

 

The push towards the ethical corporation comes from multiple stakeholders: customer, suppliers, employees, investors and regulators. “Increasingly, consumers are voting with their feet and turning away from brands with a poor reputation for environmental responsibility,” says Haentjens. A survey by Cooperative Bank (http://www.co-operativebank.co.uk/images/pdf/ethical_consumer_report_2007.pdf) found that the market for ethical products is estimated to be worth £32 billion in the UK alone, up 9% on 2006, and three out of five consumers recognize the Fairtrade mark. It also found that 57% of people boycotted a product on the basis of a company’s reputation.

 

Employees also judge employers by their reputation and commitment to social and environmental causes. A recent Ipsos Mori survey (http://www.ivci.com/pdf/corporate-environmental-behaviour-and-the-impact-on-brand-values.pdf) found 80% of respondents across 15 developed nations would prefer working for a company that has a good reputation for environmental responsibility. “If you want to hire the most talented young staff, you may find that many now expect to work for ethical, responsible companies. They will want to know about their potential employer’s sustainable development policy,” adds Haentjens.

 

There is also increasing pressure from investors to disclose environmental and social behavior. They do not want to be lumbered with an investment with skeletons in the closet. One of these initiatives is the Carbon Disclosure Project, which works with 3,000 of the largest businesses in the world to help them make carbon reduction an integral part of their business, and is backed by 315 major banks and institutional investors with $57 trillion under management. Each year, a ranking is published of those who have done the most to cut their carbon emissions.

 

And this does have an impact on corporate performance, hence the CFO opinions at the beginning of this article. And with good reason – in 2006 a Goldman Sachs study that established a link between good governance and share price performance. Companies that were well governed outperformed by 5% to 10%.

 

 

Companies can take several courses of action to fulfill their corporate citizenship responsibilities. They can create a better working environment that supports flexible working and career progress, while fighting against discrimination. They can be more intelligent buyers, sourcing only from fair-trade suppliers and sustainable sources. What company, for instance, could justify the use of child labor by its manufacturing subcontractors? Products should be designed that use less raw materials and with their end of life in mind.

 

“Becoming a good corporate citizen is about much more than just reducing the carbon footprint,” says Haentjens. “By influencing employee behavior and the behavior of suppliers and customers, each company’s actions can have a snowball effect on the natural and societal environment. But it has to come from the top. We’re seeing more CEOs take the lead and drive the green agenda.”

 

 

Orange is at the forefront of corporate social responsibility through its commitment to find a fair balance between economic competitiveness, social progress and environmental preservation. Orange takes responsibility in three key areas: reducing its ecological and environmental footprint, helping its customers develop their own sustainable development actions, and encouraging all staff members to take their social and environmental and social responsibility seriously. It is a signatory to the UN Global Compact and the ETNO Charter, and is a member of the Global eSustainable Initiative (GeSi), UN World Union Alliance and the Mobile Phone Partnership Initiative.

 

In 2007, the France Telecom group saved 200,000 tons of CO ₂ emissions through a combination of renewable energy, adoption of green vehicles, increased use of conferencing and collaboration tools at the expense of business trips, and IT consolidation. Orange has also been implementing paper-free workflows, optimizing vehicle fleet management, deferring IT hardware renewal, and using recycling schemes for its mobile handsets. Greening the supply chain has also been a key carbon reduction strategy. Over 1,000 vendors and suppliers are selected on sustainable development criteria.

 

These combined efforts were recognized by Frost & Sullivan in the award for European Green Excellence in Production Innovation, the Green Fleet Manager award by Fleet Europe magazine, and French Environment & Energy Management Agency’s prize for Clean & Economic Technologies. To learn more about Orange’s sustainable development initiatives and how they are helping multinational companies, go to: http://www.orange-business.com/content/greener/responsible-growth.html

 

Orange’s sustainability goals and achievements: