From Top-Down Corporate Social Responsibility to a Sustainable Company Culture

This is an original article by Global Initiatives.

Corporate Sustainability in motion

Over the last couple of years, companies have begun their pursuit of sustainability as a key pillar of their business. One such way to do so is in sustainability reporting, which has seen more and more companies choosing to report on their sustainability efforts to ensure that they are accountable for their operations.

In fact, according to the Global Reporting Initiative (GRI), of the world’s top 250 companies, over 93% report on their sustainability efforts. The assurance of such information has more than doubled among these companies in the last 15 years.

The push for greater Corporate Social Responsibility (CSR) has become integral to the operations of businesses. This is in large because all stakeholders have become more cognizant of worrying trends of climate change, increasing regulatory efforts by governments and regulators, as well as environmental activism around the world. 

A top-down approach is not enough 

These new metrics and policies have trickled into key performance indices (KPIs) with many of the employees taking the direction from the key decision-makers in the company.

For example in Singapore, the National Environment Agency (NEA) has legislated mandatory reporting on new packaging metrics including the potential amount of waste created and plans to reduce packaging. 

However, while such KPIs are important and stem from good intentions, it is not enough that corporations are responding to regulatory efforts by governments. 

From a vantage point, a top-down approach often means that companies will only change practices when ‘nudged’ or incentivized, and may not make moves to embrace sustainability as part of a core company culture. 

Companies, therefore, need to acknowledge the benefits of this transition and chart its journey towards a greater sustainable culture. 

In the quest for greater sustainability, companies benefit too. For instance, businesses that brand themselves as committed to sustainability are likely to attract consumers who align with these values. In forging this image, companies can create a better social image and grow customer loyalty in their operations.

What guidelines can companies follow?

This begs the question: how does a company begin this journey? One key way is for companies to achieve the United Nations Sustainable Development Goals. 

The UN SDGs provides a guide that will help businesses understand how sustainability can benefit a company. Importantly, they also provide compelling reasons to explain why businesses should adopt sustainability efforts as part of their corporate blueprint. 

Carefully following the UN SDGs will allow companies to actively promote positive behavior not just among the corporate executives, but also the everyday employees.   

Why this is necessary

Fundamentally, there is a discrepancy between the personal beliefs of an employee and the values of the company. This hinders how much employees think they can contribute to the sustainability of a company. 

If the companies take a passive approach towards enforcing sustainable actions and behavior, employees will unlikely feel motivated to improve the situation. At the same time, employees have to collectively support and espouse the perception that sustainability is vital. 

In pursuing sustainability efforts, companies must understand that it takes two hands to clap before one can successfully inculcate a sustainable business culture.

The inculcation of CSR can be a delicate process. In the context of rising sustainability regulation requirements, if CEOs choose to fulfill these CSR regulations or practices as a painful requirement — rather than taking time to understand and embrace the ‘new normal’ — one might not fault the employees for not understanding the inherent value of practicing sustainability.

Envisioning a sustainable corporate culture

Hence, reimagining a sustainable corporate culture requires closing the gap between sustainability awareness and personal habits. However, because each company has its own unique corporate culture, it is difficult to provide a singular definition of a sustainable corporate culture towards all companies. 

One can, however, identify components of corporate culture, which is made up of key actors and values within the company — employees, management, values, and how these different components interact. 

So, why is it important to have a sustainable corporate culture? 

With a sustainable company culture, employees should be able to develop a mindset and behavioural change towards sustainability that is long-lasting and not superficial regardless of which position or role they are in at the organization.

Moreover, the sustainability efforts are not limited to the physical space they work in, but they pertain differently according to the specific industries, organization size, social influence, and existing culture. All these factors considered can affect what a sustainable corporate culture may look like. 

As Edgar Schein would say, Management Professor from MIT, “A strong sustainability culture exists if people share a belief in sustainability’s importance and behave in ways that support it.”

“Recognise each employee as a sustainability champion”
While there are no specific policies that are universally applicable to all companies, there are important guiding principles that can go behind how we approach creating a sustainable company culture:

1. Communicating and delivering a strong, clear, and inclusive vision

A strong and clear vision allows companies to know exactly the direction we are heading towards. It could include aspirations, sustainability niches, specific ideals depending on the industry or sector.

A compelling vision offers meaning and purpose while guiding strategies on a practical level. Involving each stakeholder in such a creation of the vision is important as there is a level of ownership, responsibility, and dialogue to the cause. These definitions of visions can change over time as different employees shift the overall sustainability goal through constant dialogue.

2. Creating an open platform for communication about sustainability 

Aside from a strong and clear vision, one must also identify ways to create clear communication channels to share this vision among employees. This is because different groups of people are now better able to communicate our goals, recognizing where we are at, our faults, and the possible ways to improve and change. 

With such openness can each employee engage with sustainability and feel like what they have to say will be valued. When every single member is engaged, there are greater feelings of inclusion, integration into a greater vision beyond themselves, and pride to be in the company.

One way is to recognise each employee as a sustainability champion. While the management is important, each person can demonstrate leadership by taking ownership of sustainability, creating a positive and encouraging environment where every person feels incentivized to contribute to sustainability. For example, the human resource department can be involved as the “architects” of a sustainable company culture. They choose the right people to bring ideas, energy, and collaboration. At the same time, they can serve as guardians to promote and uphold sustainable company culture on the ground.

3. Alignment between the company and the employees 

With a clear vision and communication channel, the company will allow for a greater alignment of similar shared values between the company and its employees. It can also be achieved by having a higher purpose when engaging with sustainability. As there is a purpose greater than just the company, it can slowly be shaped in their personal beliefs and sustainability as part of each person’s identity. 

Sustainability, at the end of the day, is not about what we do in the company, it is also about the way we live beyond the company. When we practice sustainability in every aspect of our lives, it becomes more and more second nature to think about sustainability efforts or actions within a company setting too.

At the end of the day, individuals make the company and what each individual believes, thinks, says, and does shape culture. Hence, what you and I do within a company can have profound effects on the company too.