The ROI of CSR

To continue on the topic of Environmental, Social, and Governance (ESG) practices within businesses, I would like to discuss the benefits of Corporate Social Responsibility (CSR). A particular GreenBiz article by Ellen Weinreb titled "The ROI of CSR: How one company generated a $600 million return," demonstrates the incredible advantages that effective CSR management adds to all three aspects of a company's triple bottom line.

People
Companies with CSR programs experience lower turnover rates along with increased productivity and performance from their employees. Workers who feel good about their organization's values are more willing to go "above and beyond" to produce more high-quality work.

Planet
CSR programs can also benefit the planet, as demonstrated by IBM. IBM's Corporate Service Program "enables employees to share their professional skills with a company in a developing country." This program is not only attractive to talented individuals, but also increases retention rates while providing needed services to developing countries.

Profit
CSR programs are also capable of saving a company significant amounts of money. By implementing their Corporate Service Program, IBM "cites a $600 million return on its $200 million investment." Beyond that, "[f]or each employee that is retained, companies can save up to 90 to 200 percent of that employee’s salary." Investing in CSR programs are clearly worthwhile!

Weinreb's article also talks about a report by IO Sustainability and Babson College called ProjectROI. This report "provides hard evidence of the financial and business returns of CSR investments and, more important, discusses the company practices that can unleash them." I encourage you to go check out the key practices and findings!

A Genetically Modified Dilemma

On Thursday, the United States approved the sale of genetically engineered Atlantic salmon. The salmon was essentially given a gene from Pacific salmon for faster growth, as well as a gene from the "eel-like ocean pout" to sustain year-round growth. Although the salmon is claimed to be nutritionally equivalent to conventional farm-raised salmon, and that there is no evidence of the modified fish being a risk to human and environmental health, there is still some controversy coming from environmentalists. Beyond that, many grocery chains such as Kroger Corp, Trader Joe's, and Whole Foods refuse to sell modified salmon in their stores.


Personally, I had never really obtained a strong opinion one way or the other in terms of genetically modified food. Whether it's because of a lack of exposure to news and media about the topic, not enough research on my own part, or simply a lack of interest, I'm not sure. In this particular case, however, from the information I have, I could more easily make an argument in favor of the genetically modified salmon. As an environmentalist, optimism for such a thing feels like betrayal. However, my reasoning has a lot to do with overfishing. We are fishing at an unsustainable rate and fish populations are dwindling rapidly. In the book Ocean of Life, Callum Roberts dedicates a chapter to this particular issue. He states that, "fishers land just 6 percent of what they did 120 years ago. Put another way, fishers today have to work seventeen times harder to get the same catch as people did in the nineteenth century. The simple reason for this stark contrast between past and present is that there are fewer fish in the sea." Furthermore:

A universal rule of fishing is that when you exploit a population, the average size of the animals gets smaller. Most fishing methods are size-selective, which is to say that they catch animals whose bodies or mouths are larger than the size of a mesh or a hook. Even hand-gathered fish and shellfish are susceptible, as people tend to pick out the largest and juiciest ones first. Over time, therefore, fishing alters the balance between young and old in a population.

Evolution works to maximize the number of descendants that an animal leaves behind. Where the risk of death from fishing increases as an animal grows, evolution favors those that grow slowly, mature younger and smaller, and reproduce earlier.

Young fish produce many fewer eggs than large-bodied animals, and many industrial fisheries are now so intensive that few animals survive more than a couple of years beyond the age of maturity. Together this means that there are fewer eggs and larvae to perpetuate future generations. In some cases the amount of young produced today is a hundred or even a thousand times less than in the past, putting the survival of species, and the fisheries dependent on them, at grave risk. 

I'm optimistic that as long as the genetically modified salmon are well-managed and maintained, perhaps this could be a temporary solution to the tragedy of overfishing. Although I would much rather see improved fishing practices and stronger fishing regulations, I cannot deny that genetically modified salmon may help save other more natural populations of the fish until we get such regulation established.

Sources:

• http://www.reuters.com/article/2015/11/20/us-aquabounty-technologies-fda-idUSKCN0T826T20151120#iicoWuzrKuxhH5oU.97 
• The Ocean of Life by Callum Roberts

Trending: Sustainability Within Business

Businesses today have a tendency to avoid the topic sustainability, claiming that it is not their responsibility, that it will negatively effect their bottom line, or that their investors don't care. Yet there is overwhelming evidence to refute all of these claims.

First of all, the WRI and the UNEP Finance Initiative have created a "discussion framework for investors to weigh exposure to the risks of climate change." This framework allows investors to "evaluate a company based on climate-risk factors not directly related to physical risk." Historically, investors may have only cared about a company's book value when evaluating whether or not to invest. But the reality is that investors today care about a lot more, and now they have the framework to analyze company practices based on intangibles such as environmental, social, and governance (ESG) concerns - the Triple Bottom Line. Although this tool is designed for investors, it can also be used by businesses to perform their own risk-assessment and analyses. So why not get a leg-up? To start auditing your own performance means avoiding the loss of your investors to more ESG-conscious competitors. More information can be found in this article, "If Your Investors are Assessing Your Climate Risk, Shouldn't You Be?"

To further make the business case for sustainability, this article from Triple Pundit describes how "Target Rock found that the 16 High Sustainability Index companies as a group outperformed the Dow Jones Industrial Average and the S&P 500 for the ten-year period ending Dec. 31, 2011." The performance is depicted in this graph, where the green line represents the Sustainability Index.



In conclusion, sustainability within businesses is not only growing in popularity, it is becoming an expectation. But there is no reason to be afraid. Many companies such as GE, REI, General Mills, Apple, Starbucks, Walmart, PUMA, Timberland, and even Nike have taken on strong sustainability initiatives and seen improvement to all three areas of their triple bottom line. Sustainability is not a burden, it is an opportunity!