Large organizations are putting in place strict procedures in order to measure and steer the quality of their processes, products and business performance. Based on recent research by the Dutch magazine Kwaliteit in Bedrijf, it appears that managers are paying more and more attention to benchmarking their organizations against clear standards, such as ISO 9001, ISO 14001 or ISO 50001. This is a great news, but at the same time, accreditation does not answer the question to which degree companies fulfill societal rules and norms.
MVO/CSR Nederland, a center of excellence for more than 2,000 Dutch companies that are striving toward corporate social responsibility, has published its 2017 Trends Report outlining the actions companies are taking to put sustainability ambitions and achievements against an external benchmark. If a company’s progress cannot be measured against a generally accepted vision on what would be needed for a sustainable society, one cannot assess whether businesses add value in this area or not.
Consequently, if a global company claims that it develops 81.6 percent of its products in line with ecological standards, is that satisfactory? And if 7.1 percent less energy is being consumed, is that then enough? No single ‘official’ certificate, rating or ranking makes that clear.
Calculate ‘fair share’
In order to determine whether an organization is part of the problem or of the solution, its sustainability track record might be a good indicator. As an example, more than 140 companies signed last year’s Paris Agreement, pledging to help limit the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees . This objective leads to fairly accurate calculations that quantify reasonable carbon dioxide (CO2) emissions.
With more advanced analysis, one can define the ‘fair share’ of a country, a sector or a company. What is the CO2 quota that a particular company in a particular sector with a particular footprint can exhaust?
A similar measure for societal success can be found in the United Nations’ Sustainable Development Goals (SDGs) and a growing number of companies are using those goals to gauge their objectives. The SDGs outline 17 planetary goals, including “responsible consumption and production” (no. 12), as well as “acceptable and clean energy” (no. 7). The goals are recognized as huge opportunities for “transforming our world” and call upon companies to play a part in driving change.
Ideally, in the event each company does its part, those 17 planetary goals would be reached in a reasonable time frame and the warming of the planet would be significantly decreased. In fact, it is not necessary to await legislation imposing a ‘fair share’; companies can already take the initiative. More and more organizations are doing so, often driven by another trend: environmental and sustainability ethics in the boardroom.
For companies, it is more important than ever to make clear their primary values and standards. Purely financial or technical arguments to defend potentially doubtful activities do not work any longer. More than ever, stakeholders assess businesses based on moral and ethical justifications, adding pressure to play a role in solving global challenges.
Don’t lean back
So managers cannot lean back when putting the ISO certificate on marketing brochures or promoting high scores from rating agencies. They will also have to show that their company fulfills the quality requirements of society at large, and that they are sensitive to moral and ethical criteria. This is surely more demanding than implementing technical standards, but it’s critical.
It’s time to make a start.
And contact Schneider Electric for guidance on setting and implementing sustainability goals.
Contributed by Jos Reinhoudt and Annemarie Teuns, Knowledge Managers at MVO Nederland, and Kurt Verstraelen, International Consultancy Manager for Schneider Electric’s Energy and Sustainability Services business.