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I recently revisited an old DVD festive favourite, A Miracle on 34th Street (the original starring Edmund Gwenn, not the horrendous Nineties remake with Sir Richard Attenborough) and was struck – and rather surprised - by the number of CSR themes that jumped out at me: corporate reputation, collaboration/partnerships, business ethics and stakeholder engagement to name just a few.

For those of you unfamiliar with the 1947 Oscar-winning movie, the film tells the story of a Macy’s department store Santa who claims to be the real Father Christmas and ultimately has to go to court to prove he is who he says he is.

To cap it all, the film even demonstrates CSR’s value to a business’s bottom line.

Here’s what Mr Macy says on learning that his store Santa is directing Macy customers to other stores to buy certain toys: “Imagine Macy's Santa Claus sending customers to Gimbels. Ho ho. But, gentlemen, you cannot argue with success. Look at this. Telegrams, messages, telephone calls. The governor's wife, the mayor's wife.. over thankful parents expressing undying gratitude to Macy's…We'll be known as the helpful store, the friendly store, the store with a heart the store that places public service ahead of profits. And, consequently, we'll make more profits than ever before.”

Just change that ‘friendly store’ to ‘responsible store’ and tad-ah, CSR Hollywood style. 

Wishing all our readers best wishes for the festive season and health and prosperity in 2014.

Liz Jones, editor

Stephen Howard, chief executive of Business in the Community, explains why robust CSR award schemes are powerful mechanisms for sharing best practice

The CSR agenda faces a frustrating paradox. On the one hand, there are countless businesses that have the desire and motivation to integrate ‘responsibility’ into their core agendas, and - importantly - are doing so. On the other hand, business is constrained by the lack of consumer and investor engagement on this agenda.

The reality is that the wider public, as well as many stakeholder groups, tend to default to cynicism when business speaks of its desire and capacity to be a force for good in society. And if we’re being honest, there are plenty of ‘bad examples’ in the headlines that reinforce this viewpoint.

The impact of this cynicism on those businesses that are making a tangible, long-term positive differences to local communities, their workforce, the environment, and to society as a whole, is to make it extremely challenging to communicate their achievements.
For those of us who know that business can and does deliver positive change, we need more than ever companies that are willing to stand up and say: “Actually, we’re trying and doing a pretty good job.” Which is why robust CSR awards schemes are such powerful mechanisms for sharing best practice and for communicating achievements to internal and external audiences.

Whether it’s tackling broader society issues, such as employability, helping to foster enterprise throughout the supply chain, tackling core sustainability challenges, engaging with customers or building sustainability into product lines - there is always something new businesses can learn from each other.

The sharing of good practice is absolutely critical for all businesses to help them to develop or evolve their own CSR strategies and to continue innovating. This is the case whether a company has been integrating and delivering on responsible business for a very long time, or is just starting out.

Some might ask, why hand out awards to celebrate responsible businesses? Surely “responsible” should be the norm and something that companies should try to be anyway, without the need for further recognition? There are a few reasons. First, CSR awards give cross sector businesses an invaluable opportunity to learn from companies that they may not be coming into contact with on a day to day basis. Second, awards give companies a reason and opportunity to communicate this commitment and impact to the wider public and stakeholder audiences.
Of course it is important that companies don’t simply enter these schemes as an exercise in reputation enhancement. There are a myriad of different CSR award programmes out there and limited time and resource within a business. Companies that are truly committed to responsible business behaviour as a central part of their business model should focus their efforts on those CSR awards that are robust, have a clear scoring system, and require comprehensive submission of information.

CSR awards are not just about recognising individual company success; they are also a valuable means of best practice on how to tackle some of the world’s most pressing issues. And it isn’t just awards that provide vital opportunities for shared learning.

The recent UN Global Compact report into the perspectives of more than a 1000 CEOs on sustainability highlights the importance of collaborative action and cross-sector partnerships. Greater collaboration between businesses leads to greater impact, in turn, delivering greater potential to influence wider consumer and stakeholder audiences that are unaware about the positive value of responsible business.
We also know that hundreds of businesses both small and large are already collaborating to address societal and economic challenges, ranging from youth unemployment, the UK’s skills gap, a lack of diversity in boards, to reinvigorating local economies and creating a more sustainable world by engaging with their customers.

Ultimately, the biggest lesson to be learnt from award winning companies is how the very best of them are demonstrating the bolder, longer term thinking in boardrooms, with more courageous tests of new business models, shaped by both short-term economics and customer trends, and by future environmental and social trends. Companies like Jaguar Land Rover, Business in the Community’s Responsible Business of the Year 2013, demonstrate how responsible leadership across all of these areas can lead to a bold re-imagination of what traditional business practice looks like.

The real prize in celebrating and sharing best practice is for many more companies to embrace the potential value of sustainability and take brave steps to deliver this across their company’s entire reach - from the boardroom, across the business, up and down the supply chain, to all the consumers their products or services touch. Then, most crucially, it should be shared widely across all industries.

The upshot is that better insight into the leading companies will drive more collaboration, and help more businesses to successfully combine responsible and sustainable leadership with market leading business performance. 

Martin Chilcott, ceo, 2Degrees, says that after celebrating best practice, organizations of all sizes need to see these case studies as a clarion call for more - and faster - action

I was recently asked at a Net Impact event what I thought was the most significant change in my industry. I answered that I believe we are witnessing a change in zeitgeist, as an increasing number of large corporations and cities are making real efforts to become truly sustainable. They have a long way to go and those pioneers are the ‘exception’, but they are the catalysts that will move us to the tipping point of change as they re-shape their value-chains and out-compete the laggards.

Some of those companies’ case studies are captured in this publication. Their progress and successes should rightly be celebrated, but rather than be a cause for complacency they need to be a clarion call for more and faster action.

I say this because it is increasingly clear from a number of studies (such as the MIT Sloane BCG Report: ‘Sustainability - the Embracers seize the Advantage’) and indices of public corporation performance such as the Dow Jones Sustainability Index, that companies on the sustainable business journey out-perform their less sustainable peers. They:

·        collaborate better,
·        manage their costs and risks better,
·        innovate and motivate staff better; and
·        they are constantly driving towards greater efficiency using sustainability as a powerful lens to identify new opportunities.

That seems to me to be a pretty compelling set of reasons why all companies should be getting on the journey. But there are other reasons that, illuminated by particular data, are even more compelling. We are running out of time: the natural capital that all economic activity depends upon is perilously close to exhaustion; and if corporations do not recognize this and start to act accordingly they will be punished.

Let’s start with the latter: reputation. In 1975 approximately 80% of the value of the S&P 500 was based on tangible assets. By 2012 that had fallen to about 20%.  In other words, 80% of the value of today’s S&P 500 are things like brand reputation, loyalty etc. assets that can be destroyed overnight by failures in the supply-chain, exposes of child-labour and factory fires.

As consumer awareness of sustainability issues widens, through digital media, so too does the perceived responsibility of brands. Brands are more than ever seen as accountable for the actions of their supply-chains; and as extreme weather events become increasingly connected to man made climate change (e.g. typhoon Haiyan in the Philipines) so they will be held increasingly responsible for these events too.

And if it is not the new generation of consumers who will punish brands, it will almost certainly be regulators. Brand reputation management and maintaining a licence to operate is reason on its own to accelerate the sustainability journey.

Let’s take a second set of data from the food industry. As the world’s population grows to over 9bn and the new emerging middle classes of the BRIC economies increase their per capita consumption levels then global food production is going to have to grow dramatically. By 2050 it will need to be 60% higher than it was in 2005. (I have seen some calculations that estimate that we are going to have to produce more food in the next 40 years than we have in the last 8,000 years combined!)

This is “one heck of an ask”, made even more difficult by the fact global fresh water usage will have to get significantly more efficient if we are to achieve this. At present, on average, 1 litre of water is used to produce 1 calorie. Fresh water is a scarce commodity and so that needs to fall to within a range of 1 litre per 2-4 calories if we are to increase food production as required. One last bit of data: at a global level, we currently waste 1 in 3 of every food calorie we produce.

For those food companies that can slash the waste in their value-chains, and cut the water and energy needed to produce calories, this is a huge opportunity. For those food companies that don’t and therefore don’t become more sustainable, their brands will be damaged and their rising costs will put them at a significant competitive disadvantage.

We are entering an unprecedented era of soaring demand, resource scarcity; price shocks as the new norm across every conceivable commodity; consumers more aware and demanding than ever; and governments and regulators increasingly active.

As we accelerate into this new world, there will be no such thing as the exceptional ‘sustainable business’. All businesses will be sustainable, or not in business at all. So if we want to survive and thrive, we had better get going.
 

Submitted by Liz Gorman

By Liz Gorman and Lesley Lammers

Part of the Consumer Perspectives: Turning Insights into Action series

With the New Year almost upon us, companies may be making some resolutions to ensure their CSR and sustainability efforts start off on the right foot in 2014. To give companies a leg up on their planning, we’ve highlighted five CSR trends that are likely to pop up on corporate radar screens and gain more traction in 2014.

1. The Search for New Materials

The gradual depletion of natural resources is occurring, but the impacts of a changing climate are accelerating this process, which should be concerning to all. This reality is slowly starting to sink in at R&D and product development labs around the world, and it’s already prompting some trailblazing companies to look to nature or their innovation centers for novel alternatives to the materials currently used in their products. We predict this trend will be more widely embraced and discussed in 2014 and beyond.

One early adopter is Nike. The company has been on the hunt for more sustainable textiles for some time, and recently went forward with its fourth Launch Challenge. It’s collaborating with some unlikely partners: NASA, the U.S. State Department and USAID, all in an effort to locate the most innovative textile fabricators that could introduce the industry to new, revolutionary materials.

Sprint has turned to biomimicry to harness the intelligence of nature when rethinking its packaging design. It has teamed up with the San Diego Zoo Center for Bioinspiration so species like the tortoise can be observed and studied. The company is hopeful the time spent studying nature will reveal some unconventional solutions. Sprint isn’t alone; the Da Vinci Index measures biomimicry’s impact in the United States and “shows an eleven-fold increase in the incidence of biomimicry in the research pipeline since 2000.”

Our takeaway is that the future will be bright for material science, and will undoubtedly be a growing specialty among product developers and sustainability professionals. If we were starting college all over again, we would be well advised to head to the engineering or chemistry departments and declare our majors in material science.

2. GMOs – The Buck for Transparency Does Not Stop Here

GMO labeling is just the latest example of consumers’ desire to know more about how their food is produced, where it comes from and what ingredients they are putting into their bodies. While the GMO issue is not new, it has recently gained traction with 28 states proposing GMO legislation just this year.

Target recently launched Simply Balanced, a product line that plans to be GMO-free by 2014. Chipotle is the first fast food chain to voluntarily label GMO ingredients in all 1,450 restaurants, while Whole Foods is the first grocery chain to commit to labeling products with GMOs by 2018.

Robin O'Brien calls this a consumer-driven “food awakening,” and those first to market will see the profit. She notes food giants like Kraft or Kellogg would kill for the kind of rise in share price that Annie’s stock has experienced, which may be partly due to meeting consumer demand for transparent products with real ingredients.

While GMOs are the current rage, we believe this cry for transparency is just the tip of the iceberg. Consumers, we predict, will be pressing for more disclosure on food labels – whether it be the labeling of certain allergens not yet on the FDA’s top 10 list, or disclosing what ingredients of concern are in food products that, while technically legal, are perceived to be unsafe for consumption.

Progressive companies will push the envelope on the transparency front and share more facts with consumers about what’s in their food. This could have a ripple effect, placing added pressure on conventional food companies to open up their kimonos and provide consumers with more transparency about what’s in their food.

3. Employee Engagement 2.0 – It's All About Choice

Employee engagement around CSR is evolving and some companies have started turning to gamification or micro-volunteerism to make engagement easy, fun and personalized. More importantly, companies that give employees some choice in how they participate or the ability to influence their company’s CSR efforts may discover they have “improved retention and ultimately, positive bottom line results,” according to Sustainable Brands. It points to two campaigns that give employees options for how to make a personal difference and/or determine the beneficiaries:  Eileen Fisher’s participation in ClimateRide and AT&T’s Do One Thing.

Gamification, or engaging employees through the use of game design, has quickly become a popular human resource tool. Practically Green's whole business model is based on this concept, using interactive tools, game mechanics and social networks to change employee behavior in order to improve the bottom line and reduce environmental impact.

But we see employee engagement around CSR as still in its infancy. Companies already know they need to find more contemporary and scalable approaches that can reach the employee across a spectrum of functions – from the manufacturing plant and distribution center, to the office environment or retail store. But old school approaches aren’t working anymore as there isn’t a one-size-fits-all-employees approach to engaging them in the company’s CSR. In today’s workplace, the need for employee engagement has never been greater.

Look for a stronger emphasis on this in 2014, and some new breakthrough programs designed around flexibility, personalization and choice, that are able to deliver higher levels of employee engagement then we’ve seen in the past.

4. The Rise of Social Entrepreneurs

Corporations would be wise to pay attention to the little guys whose social start-ups are stealing some of the best young talent from the pool of graduating MBAs and millennials – a talent pool that isn’t finding their dream jobs in traditional companies and instead are gravitating to social enterprises.

The research provides evidence that a paycheck is no longer enough for this generation of workers; they want meaningful work with a purpose. Business schools are increasingly incorporating social entrepreneurship into programs, says Harvard Business School, because they know students are attracted to social enterprises that use a business model to deliver a positive societal impact. Just look at the Hult Prize, the start-up accelerator for social entrepreneurship, which received more than 11,000 applicants this year, compared to 1,000 applicants four years earlier.

Corporate executives may want to consider acquiring social enterprises, assuming they can be bought, as they often act as non-traditional R&D centers and change-catalysts that are increasingly reshaping the marketplace. Companies may also want to rethink their old models for innovation and incorporate a social intra-preneurial approach that can unleash a whole new paradigm for creating products that are sustainable, marketable and profitable while delivering an added benefit to society.

5. More Focus on Climate Change Adaptation

While it’s now standard practice for companies to address the environmental and carbon impacts resulting from their operations and products, the time has come for companies to take a hard look at how climate change could impact the company from the outside in and across their entire supply chain. A few companies are already on this and incorporating climate resiliency plans into future business strategies.

Issues like water scarcity, extreme storm systems, floods and wildfires have already caused disruptions for some companies, including their ability to source raw materials reliably and sustainably. This inconvenience should be prompting all companies to assess their climate risks now so they can reinforce systems and infrastructure in preparation for future climate-related uncertainties and realities.

The Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP) have been urging companies to report on their climate change risks and opportunities, while groups like BSR are putting out new guides like this one to help companies plan for climate adaptation.

One client we work with, Green Mountain Coffee Roasters, has a strong focus on supply chain resiliency, which includes efforts to address climate-related impacts on its coffee supply. For instance, one climate impact is the spread of a disease known as coffee rust or “la roya,” which affects the viability of coffee trees. The company was ahead of the curve to recognize the longer-term effect this issue may have on farmers’ livelihoods and assurance of its own supply.

The five trends outlined above are just a few that we spotted as gaining traction. There are undoubtedly other emerging trends and issues you believe companies should be paying attention to and communicating about in 2014. We’d love to hear what you think. This is what CSRwire Talkback is all about – so please, we invite you to share your perspective and "talk back."

Pharmaceutical giant GSK is radically altering its global sales process in order to build greater trust and transparency. Gone are individual sales targets with sales professionals, who work directly with prescribing healthcare professionals, to be evaluated and rewarded for their technical knowledge, the quality of the service they deliver to support improved patient care and the overall performance of GSK’s business.

Sir Andrew Witty, ceo of GSK explained: “We believe that it is imperative that we continue to actively challenge our business model at every level to ensure we are responding to the needs of patients and meeting the wider expectations of society. Over the past five years, this has seen us take significant steps to increase access to medicines in developing countries and to be more transparent with our clinical trial data.

“Building on this, today we are outlining a further set of measures to modernise our relationship with healthcare professionals. These are designed to bring greater clarity and confidence that whenever we talk to a doctor, nurse or other prescriber, it is patients’ interests that always come first. We recognise that we have an important role to play in providing doctors with information about our medicines, but this must be done clearly, transparently and without any perception of conflict of interest.”

The company also intends to begin a consultative process towards stopping direct payments to healthcare professionals for speaking engagements and for attendance at medical conferences. At the same time, the company will increase its focus on developing its multi-channel capability and alternative approaches to enable it to continue to provide appropriate information about its products and to support medical education for healthcare professionals.

Picture credit: © Falko Matte | Dreamstime Stock Photos

Business engagement with schools is a crucial aspect to overcoming youth unemployment, but must be channelled in the right way, says CIPD, the professional body for HR and people development in the UK.

As youth unemployment continues to show few signs of falling, the CIPD is urging UK businesses to channel their engagement with schools via established programmes, such as the Inspiring the Future initiative. With 70% of state secondary schools in England now signed up to Inspiring the Future, it provides a free and easy method for businesses and schools to connect.

The research, conducted by the CIPD as part of its Learning to Work programme, revealed that many employers have increased the number of access routes into their organisations for young people, a crucial step towards overcoming youth unemployment.

However, the data also revealed that, despite the increase in the number of access routes, too few employers were receiving applications from young people aged 16-24.

In order to overcome this, and ensure that young people are made aware of the many work opportunities on offer and how to access them, the CIPD has joined forces with Inspiring the Future, a free national initiative set up by the Education and Employers Taskforce to match volunteers from the world of work with local state schools and colleges.

Peter Cheese, chief executive of the CIPD, commented: "Employer contact has a significant impact on young people, and should form part of wider efforts to help overcome youth unemployment. However, it's important to recognise that schools can be bombarded with individual requests from businesses. Inspiring the Future provides a mechanism that allows schools to reach out to employers as and when they need them."

To find out more about Inspiring the Future, click here.

Picture credit: © Dana Rothstein | Dreamstime Stock Photos
 

Companies operating across the Middle East must uphold human rights according to a new report by an international human rights organisation.

The new report, released in Arabic, English and French by the Business & Human Rights Resource Centre to mark Human Rights Day, examines how Middle Eastern companies and international firms operating in the region across a range of sectors are meeting – and failing to meet – their responsibility to respect the human rights of workers and communities.

The report highlights positive steps taken by some companies, such as an initiative by the founder of delivery company Aramex and involving telecommunications firm Zain, in Jordan, to generate youth employment and efforts by recruitment agency Glowork to empower women in the workplace in Saudi Arabia.

But the new report also flags a string of abuses, including the alleged involvement in torture by private security firms in Iraq; the creation of pollution that harms the right to health; and the denial of workers’ freedom of association.

Cases in the briefing include a protest against mobile network Orange in Jordan, alleging it helped the government temporarily shut down 300 online news websites; allegations that Saudi Aramco dismissed workers for participating in political protests; and concerns that companies involved in the Bahrain Grand Prix were turning a blind eye to human rights abuses by the Bahrain government.

Executive Director of the Business & Human Rights Resource Centre Phil Bloomer said: “For too long, human rights have been ignored by too many businesses operating In the Middle East and North Africa. Sacking female employees for being pregnant or failing to pay migrant workers for months of labour are things that we still see too frequently.

“But there is hope that the tide is turning, and scrutiny of business conduct is on the rise in many countries. “

For the full story see the January issue of Ethical Performance.

© Foto_jem | Dreamstime Stock Photos
 

The world's largest palm oil trader, Wilmar International, which supplies to hundreds of high street brands has announced that it has committed to a ‘no deforestation’ policy.

The new policy means that Wilmar, which supplies household brands like Gillette, Imperial Leather and Dettol, will stop trading palm oil bought from companies that are destroying the rainforest.

The change in its procurement policy follows years of pressure from Greenpeace and other NGOs which have pressurised the company to adopt a more ethical and sustainable approach to the production of palm oil.

Richard George, forest campaigner at Greenpeace UK, said: “Over half of the products on our supermarket shelves have palm oil - yet many companies simply aren’t doing enough to ensure that the palm oil they use doesn’t come at the expense of the rainforest. If the world’s largest palm oil trader can commit to protect these forests, then household brands like Gillette and Dettol have no excuse not to make their own commitments to protect Indonesia’s forests and tigers.

Over the last seven years, Greenpeace has repeatedly exposed Wilmar’s role in buying palm oil grown illegally in national parks.

Bustar Maitar, head of the Indonesia forest campaign at Greenpeace International added: “Wilmar’s policy shows that the sector has a massive problem, and while this policy is great news for forests and tigers, its success will be judged by Wilmar’s actions to implement and enforce it. Our challenge to Wilmar is this: will it now immediately stop buying from companies such as the Ganda Group, which is closely linked to Wilmar and is involved in ongoing forest clearance, illegal peatland development and social conflict.”

The palm oil sector is the greatest single cause of deforestation in Indonesia. Ministry of Forestry maps show that Indonesia is losing some 620,000ha of rainforest every year between 2009-2011. Palm oil’s expansion into New Guinea and Africa is already threatening forests, according to Greenpeace.

Picture credit: © Johanna Goodyear | Dreamstime Stock Photos
 

Submitted by Guest Contributor

By Eileen Howard Boone, Senior Vice President of Corporate Philanthropy and Social Responsibility, CVS Caremark; President, CVS Caremark Charitable Trust

Chronic disease is the leading cause of death and disability in the United States. It’s an important health care issue that communities across the country are facing every day.

In West Hawaii, a region with limited access to medical care and a growing population of approximately 65,000 people, the West Hawaii Community Health Center (WHCHC) strives to provide affordable health care services including chronic disease prevention and management to all residents regardless of their ability to pay.

Reducing Healthcare Costs

Chronic disease care costs the U.S. $1 trillion each year. Having diabetes or prediabetes puts patients at increased risk for heart disease and stroke. To put it in perspective, 17 people died of a shark attack in 2011—but 600,000 people die from unmanaged heart disease in the U.S. every year. In Hawaii in 2005, the total charges associated with hospitalizations due to a primary diagnosis of cardiovascular disease amounted to more than $604 million.

Breaking Down Barriers to Care

The West Hawaii Community Health Center and CVS Caremark share in the belief that care coordination is the key to achieving better health outcomes, especially among patients living with chronic disease. The CVS Caremark Charitable Trust and the National Association of Community Health Centers (NACHC) are proud to provide an “Innovations in Community Health” grant to the WHCHC to further enhance their coordination of care efforts. Through the grant, the WHWCH will be able to extend care from the Center’s four walls to patients’ homes and community organizations. They will bring together behavior health specialists, nurses and patient navigators to work together in addressing each patient’s health issues. And they will also offer patients group medical visits with a medical provider and chronic disease self-management classes. All of these health care services are customized to each patient’s individual needs to help identify and break down barriers to care.

Chronic Disease Impacts Everyone

More than half of Americans suffer from diseases that limit their lifestyle. The past 20 years have seen dramatic growth in the percent of the population diagnosed with diabetes and cardiovascular or chronic heart disease, driven in large part by increased rates of obesity. The incidence of stroke is rising, in large part because more people are surviving to old age. Rates of pulmonary disease have also risen in recent decades. And reported cases of mental disorders, including depression, are growing, too.

To help alleviate the negative impacts of chronic disease, such as diabetes, at the West Hawaii Community Health Center, a care coordinator will offer 90 diabetes patients an intensive two-pronged care approach, combining in-home care coordination and management services with group medical visits and disease management classes. And, the Center is tracking patients’ participation and progress. This new program has already made a positive impact in patients’ lives as you’ll see illustrated in this video.

The mission of our partnership with NACHC and the “Innovations in Community Health” grant program is to help increase access to quality health care and produce better health outcomes while reducing costs for patients and health care systems. We’re proud to support the West Hawaii Community Health Center and their mission to help people live healthier lives.

For more information about the CVS Caremark Charitable Trust and National Association of Community Health Center (NACHC) partnership, please click here.

Related:

• Misconceptions About Health Care: CVS Caremark Charitable Trust Launches New Video Series
• Creating Access For All: CVS Caremark Sets Ambitious Goals

About the Author:

Eileen Howard Boone is Senior Vice President of Corporate Philanthropy and Social Responsibility at CVS Caremark. In this role, she leads a team responsible for implementing a broad range of communications, philanthropic and CSR programs that align with the company’s purpose to help people on their path to better health.

Howard Boone is also the president of the CVS Caremark Charitable Trust, the private foundation of CVS Caremark. In this role, she oversees the foundation’s charitable giving and is responsible for creating and managing strategic partnerships with non-profit organizations that share in the Trust’s commitment to provide greater access to health care in communities throughout the country.

More companies than ever before are investing in ethics programmes, according to the latest survey from the Institute of Business Ethics (IBE), citing seven out of 10 respondents investing compared to five out 10 in 2010 (68% of UK and 82% of Continental European respondents) .

What is more, 87% of UK respondents stated that a member of the board of directors took ultimate responsibility for the ethics programme. This suggests that the embedding of ethical values is being given a higher priority at this level, says the IBE.

However, ethics is only a regular board agenda item for 65% of UK respondents and 70% of other European companies.

Simon Webley, IBE’s research director said: “When you consider the cost of ethical failures to a company’s reputation, it is a cause for concern that more boards are not assessing their company’s ethical performance.”

Nearly two thirds of respondent companies stated that ethics plays a part in their company’s recruitment processes (63% up from only 38% in 2010); two thirds include ethics in some way in staff appraisals, and three quarters say that a breach of their company’s code of ethics has led to a disciplinary procedure during the last three years.

Despite the increased investment in ethics programmes, a fifth of companies seem to offer training only once to general employees and managers, and only a third routinely train staff and managers once a year and (24%) of FTSE 350 respondents offer ethics training to the board only once.

Simon Webley commented: “For training to be effective and the information retained by employees, it needs to be repeated. Without regular refresher sessions it is unlikely that employees will gain the necessary acumen and sensitivity. As a result, the risk of an ethical lapse occurring in their business conduct is more likely.”

Picture credit: © Theodor38 | Dreamstime Stock Photos