Lessons from Silicon Valley in Sustainability Reporting
We've all heard how Millennials are purpose driven, favoring companies which model their values – Silicon Valley is rife with Millennials. And so is Canada, with 8.9 million Canadians born between 1981 and 2000. Like Silicon Valley, cities like Toronto are home to start-ups, young companies situated to take advantage of IoT and other sustainability technologies. And, of course, with social media, viral videos, blogging, eye-catching websites, producing CSR reports must be second nature.
While much has been made about whether Silicon Valley corporations, start-ups and tech giants are or are not models of sustainability, CSE provides the first systematic research on Silicon Valley companies' sustainability efforts by analyzing their current state of sustainability and corporate social responsibility (CSR) reporting. During a webinar featuring research from CSE on sustainability practices in Silicon Valley, attendees indicated a widespread perception that Silicon Valley is strongly in tune with sustainability practices. Toronto makes the same claims as a large, dynamic and innovative technology hub with 14,600-plus tech establishments employing nearly 160,000 people.
What lessons can the start-up scene in Canada learn from Silicon Valley? The ground breaking report Sustainability Trends in Silicon Valley from the Centre for Sustainability and Excellence (CSE) addresses this perception. The research examines whether Silicon Valley companies follow sustainability best practices and whether or not they are sustainability role models to other sectors. Over 78% of the Global Fortune 500 produce a sustainability report (many receiving training from CSE); 61% when looking only at the Fortune 100. So, Silicon Valley companies should be in that 60-80% range.
Surprisingly, only 29% have sustainability reporting though the research found that 61% have a sustainability professional, weighted in favor of large companies over SMEs. Some of the 100 companies examined are global leaders such as Adobe, AMD, Apple, Cisco, Dolby, eBay, Facebook, FICO, Google, Intel, Intuit, PayPal, Oracle, SunPower, Tesla, Twitter and Zynga. Industries covered include automotive, computer and internet, entertainment, financial services, medical, renewables and telecommunications. The research breaks down sustainability practices into five categories: community, environment, employee, ethics, supply chain and philanthropy. Only 21% of the companies studied address all six practices, each showing greater or lesser emphasis on particular categories. Finding Google on the list is no surprise, while Apple is notably absent.
Many of the companies are leaders in their field. They are not necessarily the leaders in Sustainability that many people expect!
Overall, the companies to do not appear to have a clear strategy to address stakeholder concerns or expectations. With the exception of those strongest companies such as Adobe, Applied Materials and Cisco, corporate strategy seems to be focused on one or two elements of sustainability, rather than a systems approach. Low emphasis on reporting could be due to a lack of resources – time, budget, mandate. Perhaps Silicon Valley culture is still short-sighted. Who worries about sustainability when quarterly returns are due and an exit strategy in place? These are universal concerns, whether California or Quebec.
Another reason given is that they lack the know-how. While doing admiral work on environment, social and governance (ESG) issues – 95% claim to focus highly on ethics, 63% on environment, 51% on community and employees – when it comes to reporting accomplishments, companies need to do more than post a few feel-good bullets on their websites. For example, in this political climate where ethical behavior is gravely in question, the computer industry, across the board, as well as entertainment, financial services and telecommunications demonstrate a heavy emphasis on Ethics. This contradicts perceived malfeasance and reported unethical behavior. The report raises the question of how an industry can show significant ethical conduct in-house (governance) while having a reputation for misconduct toward customers and consumers at large.
There is a process to good CSR reporting – accepted practices, ever changing guidelines and regulations. Without a well-trained and dedicated staff, at best CSR reporting falls to the wayside. At worst, it can fall prey to greenwashing. CSE's research furthers its commitment to high caliber training in sustainability for corporate executives and sustainability managers worldwide. Branding and reputation are critical for building positive stakeholder relations, whether customers, investors or the global community. Consumers and clients need to ask for transparency via CSR reporting. Every company, whether in Silicon Valley or Thunder Bay, should offer this look into their own progress toward sustainability. Let's make sure reality aligns with perception!
CSE offers advanced training to improve CSR and sustainability reporting within a company with its Certified Sustainability Practitioner (CSR) Program. The 2017 Advanced Edition will be held in Toronto, April 5-6, 2017. The challenging two-day training provides the latest practical tools and resources required to implement or upscale corporate sustainability in order to drive initiatives to the next level by generating value and creating effective strategies. Executives from Fortune Global 500 companies, local governments and academia have trusted CSE and participated in our advanced training including Pan American Silver and University of Toronto. Click here to see the training agenda. Based on report findings, the training will answer questions such as:
Where are the disconnects and opportunities to inform stakeholders about sustainability programs?
Where should companies place emphasis on sustainability and reporting within their own corporate culture?