The trend towards bringing non-financial issues 'to the table' in boardrooms, alongside 'core' business strategy, has received much attention in recent years.
This week UK-listed Tullow Oil (a leader in recent successful exploration for new hydrocarbons assets in Africa) announces its intention to disclose project-by-project payments made to partner governments. This is in anticipation of EU disclosure rules, but includes voluntary disclosures that go beyond pending regulatory requirements.
Whatever the firm's strategy, the news underlines the tension sometimes identified between 'first-mover' advantage (when a firm moves ahead of the apparent regulatory trend, reaping the reputational, adaptation and other benefits) and the risks of assuming pre-regulatory obligations not required of one's competitors in a sector where no level playing-field exists.
This post extends the last one's discussion of 'core business' issues, where the operative word in the para above is 'strategy': unless championed by a proactive board, those working on sustainability / enviro, social and governance / responsibility issues have typically found it necessary to devise internal strategies to make their issues considered as part of wider firm strategy.
While vocabulary matters for basic cognitive shifts (such as seeing 'risk' as 'unlocking value'), this endeavour of getting sustainability (etc) issues 'to the table' goes beyond imaginative manipulations of vocabulary, or ensuring these issues are integrated into annual reporting. There is a pressure to express 'non-financial' risk issues in terms of core business value creation, beyond loss mitigation.
For example, those inside firms with global supply chains tend to advance the idea of using 'sustainability' as a lens for 'innovation'. The latter gets the attention of 'core'-minded boards more directly. It is an effort to frame sustainability as core business strategy at least in relation to supply chain systems. The new vocabulary of 'circular economies' is partly a reflection of this (and partly a reflection of common business sense, at least in the long term).
Although not everything that counts can be counted, this pressure to demonstrate value and return on investment is understandable, inevitable, and if anything promises to bring new discipline and rigour to the field of responsible business practices.
There is much talk of business and development practices in Africa 'leapfrogging' stages and bottlenecks, and turning adversity and novelty into innovation, advantage, value. There is much work to be done assessing how the continent's rise might also be a crucible for altered views of what comprises the 'core' of business strategy.
Jo
There are analogies to be drawn for in-house sustainability / ESG practitioners from a recent Accenture report on efforts in the banking and finance sector to get 'dull' risk compliance issues a 'seat at the table' ("hard to earn, hard to retain").
Plenty of guidance exists on how to go about doing this, at least in theory (there's a more heavy-going literature but here's one accessible and recent primer, there's the Harvard project on getting these issues into boardrooms, and here's another from BSR). The challenge in converting ideas into practice (or from the periphery to the core) is not necessarily different from other fields, as noted in this FT piece on the hunger for sustainability subjects in business education.
See also this recent post on this blog on corporate communications.
This week UK-listed Tullow Oil (a leader in recent successful exploration for new hydrocarbons assets in Africa) announces its intention to disclose project-by-project payments made to partner governments. This is in anticipation of EU disclosure rules, but includes voluntary disclosures that go beyond pending regulatory requirements.
Whatever the firm's strategy, the news underlines the tension sometimes identified between 'first-mover' advantage (when a firm moves ahead of the apparent regulatory trend, reaping the reputational, adaptation and other benefits) and the risks of assuming pre-regulatory obligations not required of one's competitors in a sector where no level playing-field exists.
This post extends the last one's discussion of 'core business' issues, where the operative word in the para above is 'strategy': unless championed by a proactive board, those working on sustainability / enviro, social and governance / responsibility issues have typically found it necessary to devise internal strategies to make their issues considered as part of wider firm strategy.
While vocabulary matters for basic cognitive shifts (such as seeing 'risk' as 'unlocking value'), this endeavour of getting sustainability (etc) issues 'to the table' goes beyond imaginative manipulations of vocabulary, or ensuring these issues are integrated into annual reporting. There is a pressure to express 'non-financial' risk issues in terms of core business value creation, beyond loss mitigation.
For example, those inside firms with global supply chains tend to advance the idea of using 'sustainability' as a lens for 'innovation'. The latter gets the attention of 'core'-minded boards more directly. It is an effort to frame sustainability as core business strategy at least in relation to supply chain systems. The new vocabulary of 'circular economies' is partly a reflection of this (and partly a reflection of common business sense, at least in the long term).
Although not everything that counts can be counted, this pressure to demonstrate value and return on investment is understandable, inevitable, and if anything promises to bring new discipline and rigour to the field of responsible business practices.
There is much talk of business and development practices in Africa 'leapfrogging' stages and bottlenecks, and turning adversity and novelty into innovation, advantage, value. There is much work to be done assessing how the continent's rise might also be a crucible for altered views of what comprises the 'core' of business strategy.
Jo
There are analogies to be drawn for in-house sustainability / ESG practitioners from a recent Accenture report on efforts in the banking and finance sector to get 'dull' risk compliance issues a 'seat at the table' ("hard to earn, hard to retain").
Plenty of guidance exists on how to go about doing this, at least in theory (there's a more heavy-going literature but here's one accessible and recent primer, there's the Harvard project on getting these issues into boardrooms, and here's another from BSR). The challenge in converting ideas into practice (or from the periphery to the core) is not necessarily different from other fields, as noted in this FT piece on the hunger for sustainability subjects in business education.
See also this recent post on this blog on corporate communications.
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