…is reputation management. Sustainable corporate development only makes sense when company’s social engagements are reasoning its own conviction. Companies are often motivated by outside-based reasoning: popular media themes, pressure from certain groups or new regulations. Such an approach leads to blurring of lines between the company’s development and its responsibilities in terms of sustainability. In addition, companies notice that not all initiatives have real contribution to the strengthening of their business. Why is that so? The sort of activities only make sense when they are in line with the company’s principles. No universally-relevant aspects exist that require immediate, at-all-costs company action to be undertaken as solutions.
Reputation management is sustainable only when it supports the integrity of the company
The point is: reputation management is sustainable only when it supports the integrity of the company – it relates to the integrity of the individual: I should not act just because it is socially-expected but because it is what I believe in and it matters to the people I care about. A company will ultimately suffer a loss if it engages in waste management, for example, without knowing how exactly such an activity will generate real business and social benefits. The goal should be to understand which from the surrounding aspects are directly connected to the company activities and its success. To be connected with yourself is the best thing that you can do for the world. This is what drives good reputation. A McKinsey Global Survey (Sustainability’s Strategic Worth: McKinsey Global Survey Results, July 2014), we see that the management of diverse “sustainable” aspects varies in term of industry. This means that not every company can decrease the amount of energy it consumes and thus, become universally sustainable. There are various challenges. For example, the mining industry focuses on optimization in terms of creating company-added value as well as investment in local communities. On the other hand, the financial industry sees greater value for itself in the support and volunteering of its employees.
What are the activities that companies initiate, after all?
- Reputation Management (whatever such activities may be, something better left for another article)
- Changes of major business practices
- Stakeholder Relations Management
- Transparent reporting of activities
- Communicating sustainability activities with customers
- Implementation of ethical business practices
- Local Community Investment (in places where companies operate)
- More investments in society
- Company leaders initiating public debates on ecological, social and economic aspects
- Support for employee volunteering
- Sponsorship of events and organizations focused on sustainable development (We also don’t understand this one! Really!)
Sustainable development has much more to do with the risk management.
What we can say is the following: sustainable development activities will look and sound like those mentioned above if reputation management continues to be perceived and understood mainly in the context of public communication. Sustainable development has much more to do with the way a company is managed and the way risks relating to their business environment are being identified. The company’s reputation is further developed based on the way such activities are actually executed, not just based on how they are communicated.
Our expectation is that companies will more and more perceive the thorough research and meaningful consideration of their business environment as the most sustainable option: reconsidering the connection between the values that motivate their business with their business context. Such an approach will lead to analyzing every single aspect, coming from the business environment instead of just following modern tendencies.
In our opinion, the management of sustainable development aspects carries a benefit to a company’s reputation when it is focused mainly on the analysis and management of business-related risks, in accordance with the company’s values (working on yourself) instead on mere initiatives that are common and preferred by many companies today.