Communicating Corporate Responsibility

Edelman and its research partners, Boston College Center for Corporate Citizenship, Net Impact and the World Business Council for Sustainable Development (WBCSD), recently assessed the market in order to identify current Corporate Responsibility (CR) communications trends. This study was driven by data from the 2007 Edelman Trust Barometer, an annual global survey of opinion leaders' views of corporate credibility now in its 8th year. It also included data from Net Impact's 2007 member survey, along with in-depth interviews with senior executives at Fortune 500 Companies, global NGOs and socially responsible investment funds.

The study found companies can no longer simply manage risks on certain global issues such as climate change, human rights or poverty alleviation. Stakeholders expect companies to take the initiative on these issues even if they don't directly relate to a company's core business.

The Trust Barometer

As a part of Edelman's 2007 Trust Barometer research, 3,100 individuals from around the world were asked to rank the issues they believed were most crucial for global companies to address. Eight priority issues emerged, with climate change and human rights topping the list.

Today's challenge for companies is prioritizing the issues they must address. Should the top priority be an issue directly related to the company's business? Should it be an issue in an area where the company can make a significant impact? Or should it be an issue that has global implications?

It seems there is always room to do more. It is merely a matter of understanding how to allocate resources to maximize impact. Because in order for any initiatives to be sustainable, they must make a positive contribution to society and to the company's own bottom line.

Corporate Responsibility or Just a Case of Greenwashing?

Climate change has unquestionably become the most visible CR issue in public discourse in the past year. Many companies are now responding to the "green" fervor by making substantive business changes to minimize their environmental impact. A November 2007 New York Times special section, the "Business of Going Green," reported that companies have progressed to "Phase 3 of the greening of corporate America." Many companies have moved far beyond office recycling programs and carpools to proactively create more sustainable operations.

But companies should think twice before issuing a press release announcing a major environmental change in their operations. Unless the company is leading the way with innovative solutions, touting environmental efforts will often be dismissed as "greenwashing."

According to the Edelman 2007 Trust Barometer, the majority of global opinion leaders believe global business plays a role like no other institution in addressing major social and environmental challenges. Just the same, less than half of those opinion leaders actually trust companies to "do what's right."

Effective Response to Stakeholders

It's clear a strong disconnect remains between responsibilities stakeholders bestow on companies and their beliefs those responsibilities will be upheld. Smart companies are hearing this skepticism in their stakeholders' voices and responding with actions that build links between power and responsibility. Not only are those companies improving and increasing responsible and sustainable activities, but they are doing the same with their communications around these activities. While many companies originally engage in CR to protect their reputations, the smart ones are beginning to understand that responsible and sustainable practices enable companies to effectively manage risks and create new business opportunities.

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