CSR AND SUSTAINABILITY
Abroad view of sustainability is the ability to ‘sustain into the future.’ In the world of commerce, a sustainable strategy links business performance to a positive impact on environment, economic and social dimensions while mitigating risks.
Today, businesses are as accountable for impacts on other key issues such as climate change, depletion of natural resources, societal governance and diversity, addressing discrimination and contributing to building productivity in communities.
As Nadija Tambiah says, “from an organisation’s point of view, measurement of key sustainability metrics – environment, social and governance (ESG) – is as important as bottom line performance. Organisations should facilitate the process of developing an innovative culture, creating new opportunities and improving business reputation.”
“Today, investors actively seek information on sustainability approaches, and demand measures to safeguard the environment and community, in addition to requiring a robust governance structure in place,” she asserts, adding: “Similarly, with the digital revolution, today’s customers are closely following a corporate’s approach to sustainability and demanding greater accountability in all ESG spheres.”
The pandemic highlighted the challenges of reduced funding, increased welfare needs and immediate assistance to the government in providing medical care over long-term projects. Whilst the vision for sustainability remains unchanged, there are new challenges that have arisen and need attention, she stresses.
Tambiah observes that companies that had integrated sustainability into their business operations strategically were quicker to adapt and more agile in responding to unexpected events: “The pandemic made us focus on health, safety and wellbeing, as being central to the resiliency and sustainability discussion in a way that has never occurred before.”
“Our societies have an immense potential for collective action and change when faced with a real or perceived emergency. The pandemic opened our eyes to what the pressure points are and we can now better consider long-term plans to mitigate future occurrences,” she adds.
Tambiah opines that local organisations in general are taking stewardship of ESG factors, “but there is room for improvement. I think we can do a lot better if there is a central coordinating agency, which could monitor the different projects to avoid duplication and have a greater impact.”
She recommends a legislated mandate for a share of profits to be invested in defined corporate social responsibility (CSR) projects. In India, she notes, companies are required to allocate two percent of their profits towards CSR – and the types of CSR projects are also legislated.
“In Sri Lanka, many regard almsgiving or painting temples and churches as CSR. A coordinated strategy to improve productivity and looking at medium to long-term country needs and governance would be a welcome change,” she adds.
Over time, greater emphasis will be placed on mandatory disclosure of climate risks and improving social indicators, especially governance, diversity, equity and inclusion (DEI) across the value chain, she predicts, while innovation will play a key role in crafting initiatives that address multiple interlinked impact areas.
Coming together and forming partnerships for the greater good will in the future be with a focus on pre-competitive partnerships for sustainability.
“This involves two or more companies operating within the same industry coming together to address a shared problem or pain point that doesn’t impact direct business competition. The private sector will play a greater role in advocating for public policy and industry reforms,” she asserts.
Tambiah says: “ESG fosters a culture of innovation and focusses on leaner operations, which in turn contributes to healthy bottom lines and a better business environment. It assists in supply chain security, which is vital in a post pandemic world while helping attract, engage, and retain talent, and improve reputation and brand image. Finally, ESG helps create long-term shared value among stakeholders.”
Nadija Tambiah is the Head of Legal, Secretarial and CSR of John Keells Holdings (JKH)