Corporate Responsibility On the Minds of CEOs
Thought I should report on some analysis we did with Planet2050, Weber Shandwick’s corporate responsibility and sustainability arm led by my friend Brendan May. As you know, annual reports often begin with a Letter from the CEO and/or Chairman to company stakeholders. When it comes time to learning about companies, I always read the CEO Letter since it encapsulates what is on the minds of company leadership and the business environment overall. These Letters always contain some clue as to what might is important in terms of company priorities.
Since corporate responsibility is increasingly in the news, it seemed that we could determine how permanent corporate responsibility really was from reading Letters to Shareholders. It would be interesting to discover whether the world’s largest company CEOs were acknowledging corporate responsibility initiatives now vs. several years ago. To just underscore the growing importance of sustainability in shaping corporate reputations today, think about this week’s announcement that KKR, the private equity leveraged buy-out firm, is teaming with Environmental Defense Fund to incorporate sustainability measures into its business operations and practices. This action is a continuation of KKR’s smart efforts to listen carefully to environmentalists as it did when it bought Texas utility TXU last year and reduced the number of coal-burning plants to minimize environmental harm.
Back to the Shareholder Letters, what did we find?
- Corporate responsibility mentions in CEO Letters to Shareholders increased 18 percent from 2003 to 2007. I agree with Brendan when he said, “Clearly, CEOs in the second half of this decade have embraced corporate responsibility as a critical driver of business strategy and reputation-building.”
- Interestingly, broad environmental issues were the most frequently mentioned corporate responsibility initiatives mentioned back in 2003 CEO Letters to Shareholders. In 2007, energy efficiency and carbon emissions were the most common corporate responsibility agenda initiatives. Volunteerism, a topic featured in 2003 CEO annual report Letters, appeared less frequently in 2007.
When I used to review the findings from the Fortune Most Admired Companies survey a decade ago, I would be distressed that corporate responsibility was always the least important factor in driving corporate reputation. Now we see that is permanently on the CEO agenda. That’s a good thing.