2011-05-20
By Rodrigo Spuri, Associate, Advisory Services

Over the last fifteen years, the world has seen the birth and development of a large number of compacts and standards, setting sustainability development principles for companies, institutions, and governments. Some well-known examples include the AA1000 Principles, the UN Global Compact, the UN Development Goals, and the Equator Principles as well as sector-specific principles such as the ICMM (International Council on Mining and Metals) Sustainable Development Framework and the IHA (International Hydropower Association) Sustainability Guidelines.

These standards establish a list of criteria and principles that should be evaluated and implemented by organizations to help them design their path to sustainable development, taking into account  their core businesses, corporate governance and social and environment risks. The importance of these compacts and standards relies on their capacity to stimulate organizations to align their operations and strategies to further sustainable development in their specific sector, or more broadly, sustainability issues which cut across all industries and activities.

In many cases, organizations simply become signatories of these compacts to comply with client requirements or export regulations, but do not have the knowledge and vision to operationalize these principles or to define priorities and set accountable goals. This situation is more common for small and medium-size organizations but are still present in large ones, as well. Because organizations typically do not consider or integrate these public commitments into their strategies and operations, their public commitment is often viewed as an empty PR gesture.

Furthermore, the lack of integration and internalization of sustainability goals means that many organizations are not prepared to deliver on their public commitments. Recently, the UN Global Compact reported that more than 2000 companies from around the world have been expelled from the United Nations Global Compact for repeated failure to communicate progress in integrating the initiative’s ten sustainability principles into their strategies and operations.

The reputational damage that results can be significant. 

To avoid this, senior management must ensure that sustainability principles are fully aligned with internal policies and guidelines. The engagement of the entire organization is critical for successful implementation of operational policies and guidelines; training should be provided on how to apply sustainability principles in their daily routine.  Putting sustainability into practice doesn’t happen overnight. Organizations must be prepared to make an investment to achieve sustainable results.

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