18 April 2011 | Luca Del Buono
Climate Change, Legislation, Africa, Asia, Australia, Europe, North America, South America

 

Corporate social responsibility (CSR) measures have brought companies a number of important benefits including increased profitability, according to research published today (18 April) by KPMG. Businesses also show a desire for tougher international regulations on climate change.

The report found that enhancing a company’s brand reputation was the main business reason for implementing a CSR strategy but that these efforts often meant the company improved in a variety of other areas that made the business more successful.

Vincent Neate, KPMG’s European Head of Climate Change and Sustainability, said: “While most companies we spoke to implemented sustainability strategies for brand reputation enhancement and compliance reasons, those companies have also benefited from increased profitability; new and better quality products and services and improved employee morale.”

At almost 40 per cent, enhancing brand reputation was the main reason for implementing a CSR strategy.

The second being regulatory compliance, showing the carrot to be the main motivator rather than the stick.

The professional services provider’s research shows CSR to be ubiquitous in the business world but it also found, for various reasons, companies were limited in how effective their CSR measures could be.

Neate said: “It is certainly positive to see that all of the UK respondents - and the majority of the 400 global companies we spoke to - either have a sustainability plan in place or are in the process of developing one but there are still barriers to progress.”

According to the report, short-term financial requirements like keeping the business afloat are the major barrier to moving further with a CSR plan.

Companies also fear that greater emphasis on CSR will lead to a rise in costs that could benefit competitors.

There is widespread support from the executives surveyed for tougher international regulations on climate change, if they make it easier to deal with all the different rules companies face in different markets – this is something multinational companies could particularly benefit from.

Yvo de Boer, former Executive Secretary of the UNFCCC and now Special Global Adviser for KPMG’s Climate Change and Sustainability practice, believes that COP 17 in Durban must result in approvals that will enable the creation of new market-based methods to help businesses meet sustainability targets.

De Boer said: “We must work to empower the private sector to make an impact on sustainability goals, but to do so, requires leadership in the private sector, and strong support from governments.

“This is vital if we are to mobilise the very large private financial flows necessary to bring climate goals within reach.”

Neate also called for meaningful benchmarks that would improve measurability and the impact of CSR – 76 per cent of companies expressed concern about this during the survey.

He said: “With 43% of respondents saying that addressing sustainability issues has proved a major source of new innovation and a large number pointing to important boosts in profitability, efficiency and staff morale, it is important that the financial link is clear.”

KPMG carried out the research with the Economist Intelligence Unit to coincide with the establishment of KPMG’s Global Centre of Excellence in climate change and sustainability.

In October 2010, the researchers surveyed almost 400 senior executives working for varying sizes of company in a variety of industries across the world.



For further information:

Corporate Sustainability: A Progress Report (KPMG)

 

Image: Philippe Put | Flickr

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