Needed: Sustainable Finance Leadership
The environmental and societal issues that concern us all don’t have to be at odds with the bottom line, and the growing consensus is that they need to be part of the mission of organizations large and small. Social responsibility isn’t just a feel-good adjunct to business as usual. Shareholders, employees, consumers, and the general public have come to expect it of businesses whether they’re small nonprofits or giant corporations, public or privately-held.
Institutions that want to keep pace with the 21st century challenges of operating successfully while coordinating those goals with positive social impact need leaders who are skilled, knowledgeable, creative, and flexible.
How Can I Benefit?
Education is key to preparing yourself to be a leader in the field. A master of accountancy degree can give you more than practical knowledge. It can give you an understanding of the global environment and the critical role of creating and maintaining a sustainable and adaptable long-term business model within that environment.
Which Companies Are the Best?
A study by Reputation Institute, a private global consulting firm based in New York, found that 42 percent of how people feel about a company is based on their perceptions of the firm’s corporate social responsibility.
As gathered from a variety of sources, the updated list of companies operating worldwide whose CSR reputations rank highest are, in alphabetical order:
– Daimler (Mercedes-Benz)
– LEGO Group
– Survey Monkey
– The Walt Disney Company
– TOMS Shoes
These don’t include the national and international companies whose missions revolve around social responsibility, but organizations whose revenues are dependent upon providing for-profit goods and services. The way they go about their business, however, considers the environment and the positive impact of their operations on the people they serve and the public at large. The long-term value of ethical financial practices is that it brings both financial and social rewards.
How Does It Actually Work?
Jettisoning a company’s primary mission in order to align itself with an ideal of corporate social responsibility does no one any good. On the other hand, a recent article in the Harvard Business Review describes current pressures to demand that every CSR initiative delivers business results. The article outlines a systematic process for bringing coherence and discipline to CSR strategies that put them in sync with a business’ purpose and values.
In the course of a ten-year study, the Harvard Business School determined that most companies practice a mix of strategies ranging from pure philanthropy to the active pursuit of shared value. Well-managed companies, the report claims, appear less interested in integrating CSR with their business strategies and goals than they are in devising a program of social responsibility that, while not operating in lock step, is complementary to the company’s purpose and guiding principles.
Perhaps the easiest route, and the only one feasible for an organization, is to focus social responsibility on the basis of philanthropy, including donating money or equipment, participating in local community initiatives, and supporting employee volunteering. These programs aren’t designed to improve business performance or profits directly, though they add to a business’ image and standing in the community.
A more hands-on approach involves modifying a business with sustainability initiatives that conserve resources, reduce waste or emissions, and improve employee working conditions or health and education benefits. These programs certainly enhance a company’s reputation and may definitely have a positive effect on the bottom line.
Going even further, a company can reconstruct its business model entirely, with the purpose of achieving specific social or environmental results while keeping to its core mission. Companies whose products or services are compatible with this type of dramatic transformation reap rewards in both profitability and a glow on their CSR standing.
Of paramount importance is a leadership group that understands what social responsibility means, and has the will and know-how to pursue it while building and maintaining a healthy business.
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