Gap Between Firms’ Sustainability Talk, Actions

A significant gap exists between what companies say and do about sustainability with 65 percent developing policies at the CEO level and only 35 percent taking action, such as training managers to integrate such commitments into operations, according to a survey by United Nations Global Compact.

The Global Corporate Sustainability Report 2013, which includes survey responses from 1,712 companies from 113 countries, reviews the actions taken by companies to embed responsible practices outlined in the Global Compact Management Model into their strategies, operations and culture. The survey provides a snapshot of how companies are addressing sustainability issues including human rights, labor, environment and anti-corruption.

When companies do take action it is typically on environment and labor-rights issues (see graphic). For example, half of the companies surveyed perform risk assessments on the environment, compared to 21 percent on human rights, 36 percent on labor and 25 percent on anti-corruption.

Moving from making a commitment to taking action often requires a greater investment of company resources and time, the UN report says. The longer a company is committed to the Global Compact, the more action they take.

Larger companies are twice as likely to evaluate their environmental performance or have a human rights complaint system, while smaller firms lag behind. Small and medium-sized enterprises cite a lack of financial resources and knowledge as their primary barriers to taking action on sustainability issues. However, the survey found smaller companies are increasingly taking steps to catch up.

The survey found supply chains are among the biggest challenges companies face when attempting to improve their sustainability performance. Some 83 percent of companies consider adherence to the Global Compact principles by suppliers, but only 18 percent help them set and review goals. Just 9 percent of companies try to verify remediation by their suppliers.

The UN Global Compact announced in July it had expelled 99 companies in the first half of 2013 for failure to communicate progress for at least two consecutive years.

The 99 global companies represent 3 percent of the 3,288 participants due to submit a communication on progress (COP) within the first six months of 2013. During the same period, 2,233 companies did submit a COP, of which 130 achieved the GC Advanced level, which the Global Compact says is an unprecedented number reflecting an increased commitment to transparency.