Bangkok--2 Oct--Grant Thornton
A survey of 2,500 businesses in 34 economies finds that businesses are being driven towards more socially and environmentally sustainable practices not simply by brand building or altruism, but because it makes good financial sense. The research, from Grant Thornton’s International Business Report (IBR) also shows that an increasing number of companies report on sustainability while a majority now view integrated reporting as best practice.
The IBR reveals that the top driver towards more sustainable business practices globally is cost management, cited by two thirds of respondents (67%, up from 56% in 2011). It is a particularly dominant driver in Latin America (77%, up from 68% in 2011) and North America (76%, up from 45%). While client/consumer demand is the biggest driver in Asia Pacific (72%), BRIC (68%), Eurozone (72%) and Thailand (67%).
Tom Sorensen, the Partner leading Thailand’s People and Culture at Grant Thornton said, “Our research provides compelling evidence that CSR and broader business objectives are becoming more aligned. The findings suggest that benefits of adopting more environmentally and socially sustainable business practices are becoming even more tangible, for example through tax relief on charitable activity or lower energy bills due to efficiency measures being introduced.”
Tom continued, “Strong social and environmental credentials can also create customer loyalty and enhance a reputation, which has become even more important with the rise of social media. We live in an increasingly digital world characterised by instant customer feedback, so businesses need to be mindful not just of what they are doing, but of how they are doing it. Companies that gain while the local population or environment loses can quickly find that demand for their products or services erodes.”
"We are very mindful of how our Gen Y use social media in their engagement with CSR activities. The recent "ice bucket challenge" is a fantastic example of how a relatively simple idea can be so powerfully communicated and have such incredible participation around the globe. The results speak for themselves - The ALS Association, which had raised $64 million in all of 2013, raised more than $10 million on one day alone, on Thursday August 21st, as a result,".
"In Thailand we have been actively involved in CSR activities since we were formed in 1991. It is our belief that doing business in the community also means giving back. We know this is important to our employees and ultimately also accrues to our brand value." Tom concluded.
The IBR data shows that the number one CSR initiative implemented globally over the last 12 months is donating to community causes/charities, cited by 68% of business leaders. Two thirds (65%) said they had participated in community/charity activities, while 65% also said they had improved their energy efficiency or waste management. Products or services donation is the most popular CSR activity in Thailand (58%).
According to the research from Grant Thornton, at present just under one third (31%) of firms globally report on sustainability initiatives, either combined with financial reports or separately. However, a further quarter (26%) plans to begin reporting externally on sustainability matters in the next five years. And overall, 57% agree that reporting on non-financial matters, such as sustainability, should be combined with financial reporting.
Francesca Lagerberg, global leader for tax services at Grant Thornton, commented, “For business leaders, commercial drivers can no longer be viewed as separate from social or environmental ones. During the lean times of the global financial crisis, cutting costs became the norm – but improving energy efficiency or sourcing local products also makes financial sense when economies are growing. In an ever more crowded and competitive marketplace, we’re seeing businesses use CSR to differentiate themselves and unlock new potential for growth.”
Francesca added, “Integrated reporting can play an important role in encouraging businesses to demonstrate how they are performing not just financially, but also within the wider social, environmental and economic context. Not only does it offer businesses a more robust assessment of the strength of their operating model but it also better informs the decisions of key stakeholders and investors.