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Nice Girls Don't Finish Last

Nice Girls Don't Finish Last

Business Week

The EIU did not collect historical data on corporate financial performance and corporate responsibility practices, so it’s not clear if last year’s performance was an aberration. But asked to cite the biggest benefits to the company from sustainability practices, the ones mentioned most, by around one-third of respondents, were drawing customers, boosting shareholder value, and increasing profits. Only 6% agreed with the statement: “No benefit expected beyond compliance with regulation.”’

Executives Seek Uniform Regulations

Such belief in a financial-performance link partly explains the remarkably strong support for a commitment to sustainability, a buzzword that became common in Europe more than a decade ago but only recently gained traction in the more bottom line-obsessed U.S. A full 53% of executives surveyed say their companies already have sustainability strategies of some sort, and another quarter say they plan to develop one. In other words, only one in five companies say they have no plan and do not plan to have one. “It is overwhelmingly clear from this response that senior executives cannot afford to ignore this issue,” says Lofthouse.

What’s more, there no longer seems to be much of a “continental divide” on key sustainability issues. Roughly 40% of executives in both Europe and the U.S. said that more regulation is required for key social and environmental issues. Around half said they prefer voluntary measures by companies, but agreed that some tougher regulation is required. Fourteen percent of American execs said no more regulation was needed, compared to only 10% globally.

Whether the corporate world is motivated more by genuine conviction or by self-interest is another matter. The main reasons executives would like to see stronger government regulation, Lofthouse figures, is that they want greater policy consistency and a better understanding of what will be expected of them in the future. Currently, environmental rules in the U.S. can differ radically from state to state.

There also is some evidence that corporations are concerned mainly about their images. Asked to name the highest priority of their corporate responsibility programs over the next five years, 61% cited communicating their practices to investors and stakeholders as either a “leading” or “major” priority. “That means a lot of companies still think of this in terms of public relations,” Lofthouse says. Nevertheless, clear majorities also cited reducing environmental damage from their products and developing products that help reduce social problems as top priorities.