In a world of rising energy prices, increased scarcity of natural
resources, rampant changes in our climate, growing competition from
emerging economies, and increased consumer concern about the quality of
life, health and safety, corporate sustainability is synonymous with
corporate survival.

Surprisingly, that message is not getting through to many CEOs.

Only
half of the businesses recently polled on a global survey of corporate
sustainability reported having a formal sustainability strategy. The
survey also showed with such strategies were more focused on improving
public perceptions or responding to increased regulation, than meeting
broader societal needs or generating revenue opportunities.

More
than 75 percent of the respondents said sustainability was an important part
of their organization’s corporate strategy, or would become so in the
future. But a string of reports indicates companies need to spend less
time thinking about sustainability and more time putting it into action.

CEOs made up the majority of respondents of the poll developed by
the Vandiver Group, an award-winning strategic communications firm, and
sponsored by PR firm Pinnacle Worldwide. This is ironic, because the
same study shows that CEOs are the primary drivers of sustainability
decisions, with communications and public affairs managers rarely in
that role.

Other facts emerging from the survey:

• More than 65 percent of companies do not have dedicated sustainability staff;
• Of
  those with dedicated staff, nearly half have fewer than five employees
  working more than half of their time on sustainability;
• "Improving perception of the company" was rated as more important than increasing revenue via sustainability programs.
• Nearly
  half of companies surveyed have less than $50,000 allocated annually to
  sustainability-related programs; only 10 percent have more than
  $50,000 so allocated.

There is a depressing similarity to
these findings and those of a 2004 study conducted by the Certified
General Accountants Association of Canada. In partnership with the
CGA-Canada Research Foundation, this study also found that only half of
the companies surveyed provided some coverage of their social or
environmental performance. Regulatory requirements (49.5 percent), stakeholder
pressure (21.4 percent), and corporate image objectives (12 percent) were the most
important factors influencing decisions on corporate sustainability
according to that report.

Sustainability Pays Off

However, a more recent report by GMA and PricewaterhouseCoopers
(PwC) indicates that companies that employ sustainability practices and
share sustainability data generally experience higher gross margins and
return on sales, higher return on assets, and stronger cash flow and
rising shareholder return.

A similar report prepared by Natural Marketing Institute
(NMI) suggested that many companies have identified very profitable
ways of being good environmental stewards, allowing environmental
issues to move from a "liability" to an "asset." The example most
frequently cited is GE’s Ecomagination campaign, which has proven that
selling green products can produce clear and substantial bottom-line
results.

GE, like many other major retailers, was quick to capitalize on growing consumer desire for sustainable products and services.

Jargon
aside, more companies are catching on to the notion that one can do
well by doing good, and catering to the sustainable market segment is
picking up steam in North America and Europe, and in parts of Asia.

But
Corporate Responsibility in its broadest sense goes far beyond the
short term market gains of catering to high end consumers that can
afford to buy environmentally sound products and services.

Companies
that are involved in major resource development activities or which are
active in the developing world see a more fundamental dimension of
corporate responsibility, namely contributing to the necessities of
life that are in short supply to over two thirds of the world’s
population -- clean drinking water, safe cities, adequate housing,
meaningful employment, access to health and education, and most
importantly stable food supply.

The U.N. predicts that by 2025,
two-thirds of the earth’s population will be living in areas suffering
from scarcity of water, due to growing populations, rapid economic
development, droughts and changes caused by global warming. Already
there are fears of massive starvation in many parts of the world due to
skyrocketing prices and plummeting food supplies, in part driven by
rising energy costs.

Responsible corporate leaders see these
conditions as a call to action simply because no one benefits from
chaos and no company can survive in conditions of high civil unrest,
destabilized government structures, inequitable markets, and
starvation.

The World Business Council on Sustainable
Development (WBCSD), a Geneva-based international coalition of leading
corporations, is committed to the proposition that free markets, the
end of poverty, environmental responsibility and corporate citizenship
are the keys to a sustainable future for mankind. This is not utopian
rhetoric, but the hardnosed reality that business can only prosper when
the world prospers.

WBCSD has its counterparts in Canada, namely the EXCEL Partnership,
a coalition of leading Canadian Corporations and senior executives that
have committed themselves to developing, integrating and improving
sustainable development principles into their corporate strategies and
practices. Established in 1996 the EXCEL Partnership is an initiative
of the GLOBE Foundation of Canada.

EXCEL’s influence has reached
beyond the corporate world and members regularly work closely with
governments on sustainability and competitiveness issues.

Are Things Changing?

Most of the reports cited earlier note that sustainability concerns
are unlikely to diminish. And certainly the work of the EXCEL
Partnership is based on the premise that the hallmarks of business
success in the future will include a transparent and sincere commitment
to sustainability principles in all aspects of corporate behavior.

Therefore,
recognizing and understanding this trend allows an organization to gain
a strategic advantage in the marketplace, according to the NMI report.
The idea may be taking hold -- at least in Canada.

In an April 2008 report released by Stratos Inc.,
a business consulting firm, it would appear that a growing number of
Canadian companies are finally getting the message. The report found
that over the past 15 years there are signs of growth and improvement
in sustainability reporting. Today, corporate sustainability reporting
is a core element in the business strategies of 47 of the 265 companies
on the Toronto Stock Exchange (TSX) Composite Index.

Similar to
both the Ipsos poll and the NMI report, the Stratos study speculates
that as sustainability reporting gets more strategic and sustainability
issues become more frequently addressed in corporate reporting,
stakeholder and consumer confidence in the numbers, procedures and
practices being reported on will grow.

"Disclosure of
information on sustainability performance is routine now among large
Canadian corporations. We expect the next few years to see dynamic
improvements with companies looking hard at how they can differentiate
themselves through their sustainability reporting," said George Greene,
Chair of Stratos.

What Does it All Mean?

Volumes
have been written on corporate sustainability, but to reduce it to its
core elements what is at stake is defining and adopting a strategic
framework that makes sustainability the core of the company’s vision
and embedding those values in every part of the business. It’s a
concept that lives through actions, not words. Walking the talk is more
than a trite expression. It is the essence of the strategy.

To
make it work, sustainability requires leadership from the top, board
level support, firm rules and guidelines to shape management decision
making at all levels, empowering people and rewarding success.

Leadership
counts. If the occupants of the corner offices or the attendees at board meetings don’t see the connection, it is highly unlikely that
those beneath them will see it either.

Most of all, corporate sustainability is all about ensuring survival is an increasingly uncertain world.