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Transforming Business Culture

Transforming Business Culture

Transforming Business Culture refers to the need of scaling up a company’s efforts in the area of corporate responsibility and sustainable development in order to address systematic environmental and societal risks, challenges and opportunities.

When the discussion has moved toward s investing in, measuring  and reporting on environmental,  social and governance metrics, business culture is now working towards becoming transformational and adopting  practices where companies provide a benefit to society, and where profits enable both value creation and fair and equitable compensation for natural and societal resources.

At CERB, our emphasis is to create a nexus where establishing a business culture with a focus on sustainable development as its core is a normal practice. This can be enabled through a culture of disclosing on material non-financial indicators for a company in the same manner as material financial indicators. Hence, a transformational company culture supports acquiring both the technical expertise and policies for acquiring and maintaining the highest standards for reporting.

In the course of CERBs engagement cycle, CERB will identify the best practices in reporting and how businesses can commit to and report on the United Nations Sustainable Development Goals.

CERB will advocate the use of the highest standards of reporting. Integrated reporting is one such standard. Integrated reporting can be identified as a process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation (www.integratedreporting.org).

FAQs

How do we define transforming business culture at CERB?

At CERB, we define ‘transforming business culture’ as ‘establishing a business culture with a focus on sustainable development as its core as a normal practice’. This can be enabled through a culture of disclosing on material non-financial indicators for a company in the same manner as material financial indicators. Hence, a transformational company culture supports acquiring both the technical expertise and policies for acquiring and maintaining the highest standards for reporting.

Why is it important to change and transform company culture?

The United Nation’s Sustainable Development Goals (SDGs)  identify how we can create a sustainable world by transforming the global goals into corporate goals. According to the SDG Target 12.6, ‘Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle’. An indicator of achieving the target is 12.6.1 ‘Number of companies publishing sustainability reports’.

Therefore, good practices for any company are to transform its operations to deliver long-term sustainable impacts and come up with an integrated report that enables the integration of both financial and non-financial indicators, hence reflecting on the culture of the company.

How do I address and improve my company culture in terms of sustainability?

Businesses have both broader and direct positive impact of sustainable behavior on their bottom line. As we are aware that change always comes from the top. The top management‘s initiative to engage employees in sustainability can lead to achieve wide-reaching benefits. Some of the initial steps include doing things digitally and eventually becoming paperless as much as possible. Encouraging remote working options; carpooling can be a major contribution in reducing a company’s carbon footprint. Recycling waste and water, and using eco-friendly office material are some of the simple steps towards green corporate culture or a sustainable corporate culture.

How can strategic thinking and sustainable development be linked?

Every business has a strategy based on corporate objectives. When businesses start taking decisions in the light of sustainability, it makes them think how to improve their financial performance and contribute to the environmental health at the same time.

Start with your business case. Help your employees understand the business case that links sustainable products and processes with success. Growth for brands with a demonstrated commitment to sustainability was four times faster than non-sustainable products in 2015, according to the Nielsen Global Corporate Sustainability Report.

What hurdles are faced by transformational companies?

A transformational company starts with a vision of achieving economic growth and environmental performance at the same time. Too often sustainability gets stuck in first gear, while the need for change is accelerating. The biggest hurdle they face is that many employees do not see sustainability as a business imperative and think ‘public reputation’ as the key driver for sustainability change. Employees also deprioritize sustainability because of perceived trade-offs and absence of initiatives. Lack of resources and competing priorities are the two top obstacles threaten to derail sustainability programs.

How is sustainability different from Corporate Social Responsibility (CSR)?

CSR refers to businesses’ responsibility to act ethically and consider their impacts on the community at large. Sustainability is concerned with preserving resources and operating in a way that is conducive to long term trading. It is integrated in day-to-day operations of a business and sums up to generate higher profits in terms of reducing business risk and increased environmental performance.

What is sustainability reporting?

According to GRI Sustainability Guidelines (G4), sustainability reporting is defined as “a process that assists companies in setting goals, measuring performance and managing change towards a sustainable global economy, one that combines long term profitability with social responsibility and environmental care. Sustainability reporting mainly through but not limited to a sustainability report, is the key platform for communicating the company’s economic, environmental, social and governance performance, reflecting positive and negative impacts”.

What is integrated reporting?

As defined by The International Integrated Reporting Council (IIRC), ‘Integrated reporting is concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term’.

What are the main challenges companies can face as they seek to drive the effective integration of sustainability issues into their annual reporting process?

The most significant challenge companies can face is establishing the right internal cultural mind-set. Many employees in the management team don’t see the link between sustainability and financial performance. Mostly the finance department is not convinced of the need to move to an integrated report, as the majority of investors don’t seem to care. Companies have a challenge in getting the different departments together to place their interests in one report: the communications department wants a good story, the sustainability division wants to focus on the sustainability context, while the finance department wants to stick to the numbers.

Past Events

November 1, 2018

Transforming Business Culture in the Business Sector of Pakistan

Hosted by: CERB and PwC Pakistan (A.F. Feroguson and Co.)

October 30, 2018

Transforming Business Culture in the Business Sector of Pakistan

Hosted by: CERB and PwC Pakistan (A.F. Feroguson and Co.)

Upcoming Events

Publications

Publication

Transforming Business Culture in the Business Sector of Pakistan

By: A. F. Ferguson & Co. (a member firm of PricewaterhouseCoopers), Javeria Ameen (CERB), Nazish Shekha (CERB)

Publication

From Transparency to Performance, Industry-Based Sustainability Reporting on Key Issues

By: The Initiative for Responsible Investment

Publication

Corporate Culture and Role of Boards

By: Financial Reporting Council

Publication

Our Common Future

By: World Commission on Environment and Development (WCED)