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Corporate responsibility is evolving across three dimensions and goes far beyond a single issue. Photograph: Graeme Robertson
Corporate responsibility is evolving across three dimensions and goes far beyond a single issue. Photograph: Graeme Robertson

Thinking about corporate responsibility in 3D

This article is more than 12 years old
The corporate responsibility movement is no longer about a single issue but now extends to overlapping areas from sustainability to governance

Corporate responsibility is evolving across three dimensions: horizontal accountability, vertical responsibility and longitudinally across time.

The corporate responsibility (CR) movement continues to evolve, and is slowly but surely shifting from single issues to broader and deeper consideration of sustainability, accountability, and governance concerns, taking in increasingly converging problems such as climate change, water scarcity, and human rights.

Similar to quantum physics, we visualize three dimensions of intersecting axes in perpetual motion.

Horizontal = accountability

A horizontal plane contains expressions of accountability, where companies communicate outwards through their sustainability reports on environmental, social, and governance (ESG) issues, while external stakeholders engage inwards on their concerns about sustainability goals and impacts.

On the disclosure front, sustainability reporting continues to proliferate. More than 5000 reports were published in 2010, according to Corporate Register. It is also evolving, as SAP has shown, and standards and guidelines are maturing.

Meanwhile, stakeholders – and particularly shareholders – are engaging companies from the outside-in, for example calling for a say on political spending and using the so-called "fifth analyst call" to engage with management and boards prior to company annual meetings.

Vertical = responsibility

On the vertical axis, company responsibility increasingly reaches up into supply chains, and beyond them to the use of products while in consumers' hands. For example, Social Accountability International recently launched the social fingerprint methodology, a "measure and improve" approach to supply chain management that goes beyond the auditing model by engaging suppliers in a meaningful dialogue.

Sixty companies in 17 countries – including AkzoNobel and GE – are also road-testing new Scope 3 accounting and reporting standards from the green house gas protocol to measure their supply chain carbon footprints.

In addition, some of the road-testers are using the protocol's new product life-cycle accounting and reporting standard to analyse the downstream impacts of their products during distribution, consumer use, and product end-life.

This development provides a glimpse into the burgeoning field of extended producer responsibility (EPR), which promotes corporate accountability for sustainability impacts throughout a product's entire life-cycle adn particularly at the end.

The As You Sow Foundation, which has a dedicated program on the topic, filed the first-ever shareowner resolution asking General Mills, one of the world's largest food companies, to consider adopting an EPR policy, citing the success of such programs at Coca-Cola, PepsiCo, and Nestlé Waters North America.

Longitudinal = time

In terms of the temporal, sustainability stretches in opposite directions. The first encompassing real-time and ongoing engagement via social media, and the second the long term, looking to future generations – an inter-generational perspective which is embedded in the definition of sustainability.

Last year we documented the trend toward online engagement in a report for the Harvard CSR Initiative. The trend has continued to expand, with more companies using social media for stakeholder engagement. For example, Guardian News and Media encourages stakeholder participation on its web-based sustainability report – as well as on every post in its sustainability blog, which the company frames as an extension of its sustainability report.

Going one step further, the report's assurance provider, Two Tomorrows, provides "rolling" assurance of all comments, verifying the accuracy of data posted – and sometimes questioning information. Guardian Sustainable Business also hosts online discussions on sustainability issues, such as employee engagement and sustainability reporting, where a panel of experts field questions and stimulate debate over a two-hour period.

Similar sustainability-focused online discussions occur regularly on Twitter, such as the #CSRchat hosted bi-weekly by Fenton. Outlets for longer-form discussion (unbound to Twitter's 140-character limit) allow for dialogue to unfold more organically are also cropping up, for example the monthly sustainability chat on OpenEyeWorld, an online platform for sustainability expert engagement.

Meanwhile, on the other end of the timeline, the "tyranny of short-termism" that plagues markets – what McKinsey's Dominic Barton calls "quarterly capitalism" – is slowly giving way to a more expansive view, encapsulated in the title of Barton's Harvard Business Review article: "Capitalism for the Long-Term." In it, Barton highlights the need for integrating environmental, social, and governance factors into core business strategies to foster more long-term decision-making.

Barton's "long-term capitalism" seconds the call to lengthen our economic perspective articulated in the Aspen Institute's 2007 report, principles for long-term value creation.

These initiatives tap into the core vision of sustainability: to create resilience and prosperity in perpetuity, preserving and enhancing the world we enjoy for our children and their children and their children's children—an inter-generational pact to nurture the earth that sustains us.

Revolving around this undulating timeline, the corporate responsibility movement is simultaneously climbing up and down the responsibility ladder covering the full life-cycle of products, while also reaching outward and inward to take greater accountability for sustainability impacts.

Bill Baue is a senior research fellow with AccountAbility. He also teaches an MBA in managing for sustainability in Malboro College, Vermont

Marcy Murninghan is co-founder and editor of the MurninghanPost.com. For 30 years she's worked as a thought leader, scholar/educator, and practitioner on corporate and investor accountability issues, concentrating on civic moral values and the public interest

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