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Advancing Sustainability: HRs RoleA Research Report by the Society or Human Resource Management, BSR and Aurosoorya


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Advancing Sustainability: HRs Role

A Research Report by the Society or Human Resource Management, BSR and Aurosoorya


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About This Report 1

About SHRM 2

About the Partners 3BSR 3Aurosoorya 3

Sustainability: An Emerging Area o Interest 4

Executive Summary 5

Sustainability in Action 7

Dening Sustainability 8The Sustainability Maturity Curve 9

Phase 1: Compliance 9Phase 2: Integration 9Phase 3: Transormation 10Where Are Companies In the Sustainability Maturity Curve?10

Who Is Engaging in Sustainable Workplace or Business Practices? 11Why Are Multinationals Organizations More Advanced?12Spotlight on China: Chie Responsibility Ocers, A Closer Look14

Motivations or Investing in Sustainability 17Expert View: Sustainability, the Sweet Spot and Your Business 19

Sustainability Strategy: The Role o Leadership and Organizational Culture 23Expert View: Opening Up the Sustainability Conversation at GAP Inc 26

HRs Role 29

HRs Role in Creating and Implementing an Eective Sustainability Strategy30Research Spotlight: Highlights rom the SHRM Executive Roundtable Symposium on Sustainabilityand Human Resource Management Strategy 32

Employees View o Sustainability 35Expert View: SAP and Sustainability: How Employees Can Serve as Change Agents or SustainableTransormation 37

Leveraging Sustainability to Manage Talent 40Research Spotlight: Green Jobs: Are They Here Yet? 42Expert View: Changing the Culture at The Stanord University Medical Center 44Research Spotlight: Eects o Pro-Environmental Recruiting Messages 46

Contents


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Initiatives and Practices 47

Sustainability Outreach Initiatives 48Community Outreach 48Socially Responsible Activities 49Research Spotlight: The Impact o HR Practices on Organizational Social Perormance 52

Environmentally Responsible Practices 54Expert View: HR Ensuring Success in Environmental Sustainability 56Research Spotlight: Green Workplace rom the Perspective o Employees 57

Tracking and Measuring Sustainability Outcomes 60Expert View: Sustainability ROIWhere to Start? 63

Barriers to Engaging in Sustainability 66

Case Studies 69

Embedding Sustainability into the Core Strategy at Alcatel-Lucent 70

A Global Strategy or Social Innovation at Hitachi 71

Engaging Employees in the Journey to Sustainability at Interace 73

Strengthening Dialogue with Communities at Nestl Waters 74

Focusing, Rening, and Aligning CSR with a New Strategy at Pzer 75

The HERproject: Companies Investing in Women Workers or Health and Business Returns 77

Spotlight on India: Conversations with Sustainability Experts romSustainabilitys New Hotspot 79

Conclusion 89

About the Research 91

Survey Demographics 92

Survey Methodology 93

Endnotes95

Acknowledgments 96

Additional SHRM Resources 97


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About This Report


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A Research Report by SHRM, BSR and Aurosoorya | 2

Beginning in February 2010, the Society or Human Resource

Management (SHRM), in partnership with BSR and Auro-

soorya, conducted a survey among HR proessionals in theUnited States to gather inormation on what companies aredoing to balance nancial perormance with contributions to

the quality o lie o their employees, the society at large andenvironmentally sensitive initiatives. This report presents theresults rom this quantitative survey, SHRM research resources

and quantitative studies related to sustainability, as well asglobal perspectives on sustainability and qualitative case stud-ies rom Aurosoorya and BSR ocusing on how sustainability

eorts are being initiated and managed in organizations.

About SHRM

The Society or Human Resource Management (SHRM) is

the worlds largest association devoted to human resourcemanagement. Representing more than 250,000 membersin over 140 countries, the Society serves the needs o HR

proessionals and advances the interests o the HR proes-sion. Founded in 1948, SHRM has more than 575 aliatedchapters within the United States and subsidiary oces in

China and India. Visit SHRM at www.shrm.org.


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3 | Advancing Sustainability: HRs Role

About the Partners

BSRA leader in corporate responsibility since 1992, Business or So-

cial Responsibility (BSR) works with its global network o more

than 250 member companies to develop sustainable businessstrategies and solutions through consulting, research and cross-

sector collaboration. With oces in Asia, Europe and NorthAmerica, BSR uses its expertise in the environment, humanrights, economic development, and governance and accountability

to guide global companies toward creating a just and sustain-able world. Visit BSR at www.bsr.org or more inormation.

AurosooryaAurosoorya assists people and organizations to link to pat-

terns that matter. This is particularly relevant in times oaccelerating change when existing paradigms are challenged

and easily all apart. Aurosoorya solutions synthesize hard,analytical, pragmatic and linear approaches with sot, intui-tive, idealistic and system approaches. Aurosooryas ractal

system analyses, modeling and approach are captured in itsdiscipline o Fractal Systems ArchitectureTM. Application othis discipline allows individuals, teams and organizations to

make deeper change, one pattern at a time. Such repatterningresults in greater reedom and in greater individual and col-lective power. Visit Aurosoorya at www.aurosoorya.com.


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concept o sustainability range rom the view that sustainability

is simply a ad to the belie that preserving the environmentand nding sustainable ways o living and doing business isthe single most important issue acing the world today. Nomatter what your personal opinion might be, business leaders

are realizing sustainable workplace and business practices canmake their companies more competitive in the 21st century.

Issues related to sustainability have moved to the oreront

o business, economic and political arenas globally and in

the United States. For large multinational companies orsmall local businesses, the topic o sustainability has become

important simply because the publics perception o this issuehas changed. Today, consumers are educating themselves onboth green and social issues and are considering sustainabil-

ity when selecting goods and services. For example, a recentsurvey conducted by Inormation Resources, Inc. revealedapproximately 50% o U.S. consumers consider at least one

sustainability actor in selecting consumer-packaged goodsitems and choosing where to shop or those products.i

As companies realize the concept o sustainability is morethan caring or the natural environment and going green,more and more will recognize the impact sustainability has oneconomic, social and cultural dimensions. Integrating these

internal and external dimensions is not easy, but companiesthat have incorporated them into the abric o their business arerealizing the long-term benets o sustainable business practices.

Doing so requires exceptional reach and vision needed to trans-orm people and institutions. The human resource proession is

uniquely positioned to be a catalyst in bringing about this pro-ound change. This report baselines the role that human resourcesis currently perceived to play in the corporate sustainability realm.

Sustainability: An EmergingArea o Interest

The concept o sustainability means many dierent things todierent people. The reactions and judgments associated with the


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Executive Summary

According to this survey, almost three-quarters o organiza-tions reported engaging in sustainable workplace or business

practices. Large- and medium-sta-sized organizations, publicly

owned or-prot companies and rms with multinationaloperations were more likely to engage in sustainable business

practices. Organizations were asked about the main driveror their investment in sustainability. The key drivers were:1) contribution to society, 2) competitive nancial advan-

tage, 3) environmental considerations, 4) saving money onoperational costs, and 5) health and saety considerations.

Additional Noteworthy FindingsThe top ve positive outcomes rom sustainability initia-

tives were: 1) improved employee morale, 2) more ecientbusiness processes, 3) stronger public image, 4) increased

employee loyalty, and 5) increased brand recognition.

Although the majority o companies (68%) were engaged insome orm o sustainable workplace practices, 28% o com-

panies were not engaged in any type o sustainable initiatives.The top obstacles preventing organizations rom implementingsustainable workplace or business practices were: 1) costs o

launching, 2) diculty measuring return on investment, 3) lacko support rom organizations leaders, 4) costs o maintaining

practices, and 5) lack o internal capacity or knowledge.

Companies that did not engage in sustainable businesspractices were asked about their intentions to launch anysuch practices in the uture. Only 5% o organizations

reported they had plans to launch sustainable workplaceor business practices within the next 12 months.

How Can Organizations Leverage Sustainability?For most organizations in todays economy, there is a needto make dicult business decisions and justiy expendi-tures. Even though determining the return on investment (ROI)or sustainability-related activities may be extremely dicult,there is no reason or organizations to ignore outcome-basedmeasurement tools. Nearly our out o 10 businesses (39%)

reported calculating an ROI or their sustainability eorts.Among organizations calculating an ROI, 47% calculated a posi-tive return on their investment, 46% reported it was still too early

to determine their ROI, 6% calculated a break-even point and,most noteworthy, no organizations calculated a negative ROI.

Sustainability is a continual practice that is more likelyto be eective when integrated into the companys stra-tegic ramework. More than one-hal o organizations(52%) engaging in sustainable workplace or business practices

For the purpose o thisstudy, sustainabilityis dened as thecommitment by

organizations to balancenancial perormancewith contributionsto the quality o lieo their employees,the society at largeand environmentallysensitive initiatives.


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reported that they had a ormal sustainability policy that

includes sustainable workplace goals and polices directly tiedto the companys strategic planning process. Four out o 10(39%) reported having an inormal policy that has no account-ability through the organizations strategic planning process,

but the organization strives to be environmentally and sociallyresponsible. Only 9% o companies had no policy in place.

It may be more dicult or organizations to make majoradvancements into sustainability without support romexecutive-level employees. This survey revealed the seniormanagement team and CEO/president were primarily responsible

or creating the sustainability strategy, whereas the implementa-tion o the strategy was the primary responsibility o the seniormanagement team, HR department and CEO/president.

Even though it is important or executive-level employeesto buy into sustainability, it is equally important or alllevels o employees to value sustainability. This surveyrevealed that boards o directors, C-suite and executive-levelemployees were more likely to view sustainability as importantthan were manager-level and nonmanagerial employees.

Organizations can leverage sustainability to attract,retain and develop employees. Forty-nine percent obusinesses engaging in sustainable workplace or business

practices reported their involvement in sustainability was

very important in creating a positive employer brand that at-tracts top talent. In addition, 40% reported the involvement

in sustainability was very important in improving employeeretention and 33% indicated the involvement in sustainabilitywas very important in developing the organizations leaders.

Volunteer community outreach initiatives related to sustain-ability are a great way or businesses to engage all levels oemployees. The top ve ways organizations involve or engageemployees in these initiatives were: 1) recognizing employee

participation in volunteer programs, 2) providing company-spon-sored volunteer events ater work hours, 3) encouraging senior

management to participate in volunteer programs, 4) providingcompany-sponsored volunteer events during work hours, and5) encouraging employees to spearhead volunteer programs.


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Sustainability in Action

The idea o sustainability developed rom the

concept o corporate accountability. The classicdenition o sustainability comes rom theUnited Nations at the rst Rio Earth Summit:

It is in the hands o humanity to makedevelopment sustainable, that is to say, seek

to meet the needs and aspirations o thepresent without compromising the abilityo uture generations to meet their own.

A more recent business-oriented denition comesrom the Dow Jones Sustainability Index, which

measures companies sustainability initiatives:

Corporate sustainability is a businessapproach that creates long-term shareholder

value by embracing opportunities andmanaging risks deriving rom economic,environmental and social developments.Corporate sustainability leaders achievelong-term shareholder value by gearing

their strategies and management to harnessthe markets potential or sustainabilityproducts and services while at the sametime successully reducing and avoiding

sustainability costs and risks.


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Defning Sustainability

The word sustainability is dicult to dene since sustainabilityis a dynamic and evolving concept. As a result, this concept

can take on many dierent meanings and represents dierentthings to dierent people. The denition also varies withindierent contexts and is sometimes conused with other concepts

such as corporate social responsibility. For the purpose o thisstudy, sustainability is dened as the commitment by organiza-tions to balance nancial perormance with contributions to

the quality o lie o their employees, the society at large andenvironmentally sensitive initiatives. Companies were asked i

their organization had an approach or dening this concept,and as shown in Figure 1, 68% o businesses said, Yes.

Several dierences emerged by organizational demographics.Large- and medium-sta-sized organizations were more likely

than small-sta-sized organizations to report they had anapproach or dening sustainability, as were publicly ownedor-prot companies compared with privately owned or-prot

companies and government agencies, and rms with multi-national operations compared with rms with single-countryoperations. These dierences are presented in Table 1.


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Table 1 | Organizations with an Approach or Dening Sustainability(by Organizational Demographics)

Organization Sta Size Organization Sector Operation Locations

Large, medium > smallPublicly owned or-prot >privately owned or-prot,government

Multinational > single country

Note: Only signicant dierences are shown.

Source: Advancing Sustainability: HRs Role (SHRM, 2011)

The Sustainability Maturity Curve

There are three phases in the Sustainability MaturityCurve: compliance, integration and transormation.ii

Phase 1: ComplianceCompliance has to do with meeting environmental and socialcodes o conduct and regulations and requently representsmandatory action required by companies. Frequently, these

regulations and codes o conduct have come into existence dueto stakeholder activism and pressure and over time became law.Compliance is viewed by many corporations as a necessary cost

o doing business and is relegated to an auditing unction with nodeemed positive impact on business or innovation. Compliance isan important rst phase in any corporations journey toward dy-namic business sustainability precisely because it introduces a cor-

poration to the environmental and social aspects o sustainability.

Phase 2: IntegrationAs the name suggests, integration is the practice o integratingsustainability into the regular unctioning o the business. Inthis practice, environmental, social and governance actors are

woven into business operations. It has been ound that operatingwith these actors in mind will allow a business to generate moreprot. This is because more customers and stakeholdersromthe public to the investment communityexpect this behavior

rom businesses and thereore reward it. Consideration o theseactors tends to minimize a variety o production and operating

32%

68%

Figure 1 | Organizations with an Approach or Dening Sustainability

Yes No

(n = 728)



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costs while also providing stimulus to redening and creating

new products. Hence, it is the business case o integration thatis beginning to drive the viability o sustainability practices andmelding them into existing business models. Integration is a vitalphase in arriving at sustainability maturity. It oten requires

that such initiatives be on an equal ooting with any othermainstream high-priority business imperative. Many corpora-tions have run into ormidable problems during this phase. A

common example that corporations have struggled with is thato dealing with the perceived contrary drivers o managingsupplier procurement costs and supplier compliance with social

codes o conduct. HR can play a key part in the integration osustainability into the corporation. It can ensure that sustain-ability is a key consideration at every point in the employee

lie-cycle, rom hiring the next generation o sustainability-savvyleaders, to managing the development o sustainability leader-

ship, to developing organizational sustainability capital throughongoing project eorts and opportunities, to maximizingcorporate learning through the mining o sustainability eorts.

Phase 3: TransormationTransormation relates to altering the primary reason or acorporations existence so that sustainability becomes a key part

o this reason. This represents the nal phase in the SustainabilityMaturity Curve and requires that leadership actively awaken tothe game-changing possibilities inherent in environmental and

social considerations. Transormation is less common preciselyor the reason that such an awakening amongst leadership isnot a common event. As a result o ully comprehending thepossibilities inherent in environmental and social actors, cor-

porations can create new products and new markets and reaprevenues an order o magnitude higher than what is possiblewith integration. Whereas in integration, environmental and

social actors are embedded into existing business processes,with transormation, the business model and business processeshave to be remade to address the game-changing possibil-

ity inherent in environmental and social considerations.

Where Are Companies in theSustainability Maturity Curve?Organizations engaged in sustainable workplace practices wereasked to report which phase rom the Sustainability Maturity

Curve best described their level o maturity. Overall, 48% ocompanies were in the compliance phase, which is the rstphase and oten characterizes mandatory acts required bycompanies. Forty-ve percent were integrating sustainability

into the everyday operations o the business, and only 7% ocompanies reported being in the transormation phasethe nalphase within the curve, where sustainability becomes a key part

o reason or existing. These data are illustrated in Figure 2.


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Multiple dierences emerged in our evaluation o the relation-ship between each phase in the Sustainability Maturity Curveand organizational demographics. Small- and medium-sta-

sized organizations, privately owned or-prots, nonprotsand government agencies, and companies with single-countryoperations were likely to be in the compliance phase. Incontrast, large-sta-sized organizations, publicly owned

or-prot companies and rms with multinational operationshad a greater likelihood o being in the integration phase.

There were no signicant dierences among those in thetransormation phase. These data are shown in Table 2.

Table 2 | Point in the Corporate Sustainability Maturity Curve (byOrganizational Demographics)

Phase OrganizationSta Size

OrganizationSector

OperationLocations

Compliance Small, medium > large Privately ownedor-prot, nonprot,government >publicly owned or-prot

Single country >multinational

Integration Large > small,medium

Publicly ownedor-prot >privately ownedor-prot, nonprot,government

Multinational > singlecountry

Note: Excludes organizations that did not have an approach or dening sustainability. Onlysignicant dierences are shown.


Who Is Engaging in SustainableWorkplace or Business Practices?

Sustainability is becoming an extremely popular topic in thebusiness world. Regardless o company size or type o busi-ness, organizations are eeling the pressure rom a range ostakeholders to engage in sustainability. Overall, 72% percent

o organizations reported engaging in sustainable workplaceor business practices. These results are depicted in Figure 3.

Figure 2 | Point in the Corporate Sustainability Maturity Curve

Phase 3: Transormation

Phase 2: Integration

Phase 1: Compliance

Other

(n = 490)

Note: Excludes organizations that answered not applicable and those that did not have anapproach or dening sustainability.


45%

7%

1%

48%


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Multiple dierences emerged by organizational demographics

regarding those companies engaging in sustainable workplace orbusiness practices. Large- and medium-sta-sized organizations,publicly owned or-prot companies and rms with multinationaloperations were more likely to engage in sustainable workplace

or business practices. These results are displayed in Table 3.

Table 3 | Organizations Engaging in Sustainable Workplace orBusiness Practices (by Organizational Demographics)

Organization Sta Size Organization Sector Operation Locations

Large, medium > small Publicly owned or-prot >privately owned or-prot


Note: Excludes organizations that answered not sure. Only signicant dierences areshown.


Why Are Multinational Organizations More Advanced?There are several reasons why multinational organizations suchas Nike and Gap tend to be urther along the Sustainability

Maturity Curve as compared with other organizations.

First and oremost, multinationals are the organizations thathave been bitten the hardest and lost the most in brand value

when sustainability-related issues have suraced. Levis, Gapand Nike each aced such challenges in the 1990s, took theseto heart and have today emerged as leaders in the CSR eld.

This has accelerated a paradigm where they more rigorously seethe relationship between not engaging in a sustainability initia-tivebe it environmental, social or governance-relatedandpotential loss to brand value and thereore prots to the company.

Most multinationals thereore began to engage in sustainabilityinitiatives as a preemptive measure in maintaining brand value.

In time, though, it was realized that the sustainability initia-

tives actually increased margins by both cutting costs andeven increasing revenues. The business case or engaging

Figure 3 | Organizations Engaging in Sustainable Workplace orBusiness Practices

Yes No

(n = 583)

Note: Excludes organizations that answered not sure.


72%28%


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in sustainability initiatives thereore propelled orward-

thinking businesses up the Sustainability Maturity Curve.

Further, engagement in sustainability initiatives also wasrecognized by independent investor communities as a proxy or

good management. The rise in the number o sustainability-

related indices, such as the Dow Jones Sustainability Index,the Calvert Social Index and the Domini 400 Social Index, andurther the competitiveness and even superior perormance o

these indices relative to standard indices such as the S&P 500are testament to this act. Many companies were rewarded withadditional investments and lower costs o capital or engaging

in sustainability initiatives. This, too, caused orward-thinkingbusinesses to move up the Sustainability Maturity Curve.

Finally, multinationals also have realized that attracting and

retaining talent is oten directly related to their portolioo sustainability initiatives. Many also are recognizingthat engagement in a portolio o meaningul sustain-

ability initiatives secures their social license to operate.iii


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Spotlight on China

Responsibility and Practice in China: Chie

Responsibility Ocers, A Closer LookPatrick Ran, GPHR, MBA, Ph.D., Chie Representative o SHRMCorporation Representative Ofce in Beijing, China, an afliate o SHRM

Dr. Ran is in charge o SHRMs business developmentin China, with responsibilities that include establishingeective relationships within the government andenterprises, ormulating and implementing business

development strategy, and representing SHRM in China.

CSR (corporate social responsibility) is becoming a vogue word inChina Since the late 1990s, the concept o CSR has attracted hugeattention in China An increasing number o enterprises in China havebegun to attach importance to communication and coordinationwith their stakeholders as they make eorts to ulll their social andenvironmental responsibilities in their business practice Many critics,however, still view CSR in China as at a primitive stage o development,characterized by lack o integration o CSR with business strategySeeing CSR solely in terms o charitable giving or philanthropic

eorts or leveraging it only as a means o public relations are bar-riers to a more strategic approach to corporate sustainability

In November 2008, in order to gain an understanding o how CSRis carried out in Chinese enterprises, SHRM supported the ChinaWTO Tribune (CWT) magazine and jointly staged a program calledChie Responsibility Ocer (CRO) Meeting Room, a dialogue-style column in CWT The initial ndings o the program, romNovember 2008 to November 2009, are summarized below

The term and role o a CRO is a relatively new concept toChinese enterprises, indicating CSRs strategic importance

and the need or this position at the C-suite level The CROMeeting Room program intended to study the ollowing topicsrelated to CROs and/or the leaders o CSR in an enterprise:

The competencies o CROs

Job responsibility o the CSR unctional department

Planning and implementation o CSR initiatives

Through both open questionnaires and in-depth structuredinterviews, 18 CROs rom large enterprises in China respondedto questions on these topics Fiteen o the CROs were rom

multinational companies (MNCs), two rom private enterprisesand one rom a state-owned enterprise (SOE) Five o the MNCswere headquartered in the United States, while the othershad their head oces in Europe, Japan and Thailand

The study ound that 55% o the enterprises interviewed had estab-lished a CRO-like position within the past ve years, and only three


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o the MNCs had had a CRO in place or more than ve years Thesendings demonstrate the short history o CSR as a strategy in China

The Competency o CROs

The study ound that, in general, the CROs are high-caliber

managers with a strong degree o enthusiasm about CSR Theynot only have a vision or the organizations development butalso possess strong execution and communication capabilitiesto implement CSR initiatives Based on the results o the study,a qualied CRO in China has the ollowing characteristics:

Proessional competencya strong belie in the principles osustainable development

Managerial competencythe ability to integrate business strategywith CSR practice

Managerial experiencea solid oundation to partner with therontline managers and rank-and-le sta members

To be competent proessionally, CROs must possess a strongbelie in the principles o sustainable development They mustbe well acquainted with their organizations history, cultureand the overall business and unctional areas o all depart-ments within the organization CROs must also possess passiontoward their work and enthusiasm about the CSR cause

One o the most critical managerial competencies is the abil-ity to integrate business strategy with CSR practice A CRO mustunderstand the business strategy and possess strong execution

capabilities Communication is equally important, as CROs shouldeectively communicate with all the stakeholders and create systemsand opportunities or the stakeholders to interact with each other

All the CROs interviewed have substantial managerial experienceAmong them, 34% have worked in the current company or morethan 15 years and 22% or ve to 15 years Beore they becameresponsible or their organizations CSR unction, they were engagedin other related managerial work Their rich managerial experi-ences in business provided them with a solid oundation to partnerwith the rontline managers and rank-and-le sta members

Job Responsibility o the CSRFunctional Department

In China, a CSR unctional department is the area within the organiza-tion that plans, manages and executes CSR work in a company Thestudy revealed that only six out o 18 CROs have independent depart-ments o CSR or sustainability, while in the remaining 12 companies,the CSR unction is located within the corporate culture, general aairs,marketing or citizen and community development departments Oneinteresting nding is that the titles o the 18 people interviewed vary

rom head o business sustainability, to head o CSR, to director opublic relations and social responsibility However, none o the jobtitles were those that would be traditionally thought o as HR roles


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The study showed that although dierent industries emphasizedierent aspects o CSR, the job responsibilities o a CSR unctionaldepartment primarily include:

1 Setting goals

2 Communicating and coordinating with other departments

3 Providing CSR training

4 Promoting and executing corporate sustainable developmentprograms

5 External communications

6 Coordinating with partners and institutions o environmentalprotection, education, charity and other organizations such asNGOs and CSR appraisal institutions

Planning and Implementing CSR Initiatives

Traditional charitable and social welare activities, such as dona-

tion o money and supplies or participation in Project Hope tohelp poor children in rural areas, are common CSR practices inChina Furthermore, this study ound that a new trend is or en-terprises to leverage their business competitive advantage totake even greater steps to meet the needs o Chinese societyThis approach starts rom the corporate value, considering whatresources, knowledge and experience the organization can bringto the society at large It takes into account the communities needsas well as the major challenges China, as a whole, is now acing

Another nding is that many o the CSR programs o the 18 enter-prises, especially those that have outreach programs to help poorcommunities and regions that have experienced the biggest impactrom environmental damage or pollution, emphasize building upthe capability o local communities or long-term results This isin contrast to the common practice o simply donating money topeople suering rom natural disasters or catastrophes In addi-tion, the enterprises encouraged all stakeholderscustomers,suppliers or business partners in other industriesto participatein CSR programs and collaborate with them to the ullest extent

The ndings rom the CRO Meeting Room program are extremelyencouraging They refect, to a large extent, the typical unc-

tions o CSR departments, the competency o CROs and CSRin practice in China Currently, the dialogue o the CRO Meet-ing Room is continuing as a SHRM-CWT joint program, with anobjective to interview and study more local enterprises


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Motivations or Investing in Sustainability

Firms were asked to identiy the main driver or theirorganizations investment in sustainability. The key drivers

were: 1) contribution to society, 2) competitive nancial

advantage, 3) environmental considerations, 4) saving moneyon operational costs, and 5) health and saety considerations

(Figure 4). Less requently cited drivers included employeeactivism (4%), market share improvement (4%), public/mediarelations strategy (4%), consumer activism/grassroots pressure

(2%), local/ederal regulations (4%), internal activism (1%), local/ederal incentives (1%) and recent corporate scandals (1%).

Figure 4 | Top 5 Drivers or the Investment in Sustainability

Contribution to society (eg, good corporate citizenship) 39%

Competitive nancial advantage 13%

Environmental considerations 12%

Saving money on operational costs 10 %

Health and saety considerations 8 %

(n = 411)

Note: Excludes organizations not engaging in sustainable workplace or business practices.


As indicated in the Sustainability Maturity Curve model,sustainability is more likely to be accepted and adopted by

stakeholders when it is woven into the organizations abric.When asked about ways their organizations demonstrate theircommitment to sustainability internally, 57% o respondents

reported that sustainability is part o the organizational goals,52% indicated that inormation about sustainability eorts ison their organizations intranet and 51% include this inorma-

tion on their organizations external website (Figure 5).

When sustainability ispracticed holistically, ithas many advantages,such as cost reduction andreputation enhancement,

and it also provides theorganizations with leadershipposition in their eld.

Niranjan Khatri, GeneralManager, WelcomenvironInitiatives, ITC Welcomgroup


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Figure 5 | Methods Organization Use to Demonstrate Commitment toSustainability

Sustainability is part o theorganizational goals

57%

Inormation about sustainability eorts is

included on the organizations intranet 52%

Inormation about sustainability eorts isincluded on the organizations website

51%

Sustainability commitment is includedin the organizations mission

35%

Sustainability eorts are covered inthe organizations annual report

31%

Sustainability is linked to individualperormance goals

16%

The organization issues a reportdedicated exclusively to sustainability

15%

Sustainabilit y seminars /training is mandatory 9%

Other 3%

(n = 290)

Note: Percentages do not total 100% due to multiple response options. Excludesorganizations not engaging in sustainable workplace or business practices.



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HR can help implement innovative sustainability initiatives in ourgeneral areas: culture change, corporate strategy, organizationeectiveness and human capital development. In turn, sustainabilityholds a sweet spot o its own or HRopening boardroom doors.

The ollowing are the key takeaways rom the SHRM SpecialExpertise Panel Forum, which explored sustainability initiativesin corporate America.

Corporate social responsibility has evolvedover the past ve decades

Sustainability is not philanthropy or volunteerism Its not aboutgiving away resources and isnt antithetical to prot goals It isabout corporate social responsibility, doing right by societyThe evolution o todays concept o corporate social responsibil-

ity was a gradual process, highlighted by pivotal events:

The 1950s. Companies worked solely in their own interestThe prevailing attitude was that companies pursuit o protswould benet the broader economy, liting all boatsandsociety would benet Companies neednt do more than pursuetheir prot goals, but some also provided philanthropy

The 1960s. A reality shit took place in the 1960s as theVietnam War and other infuences caused Baby Boomers toquestion authority as ew generations ever have The actionsand values o the system, comprising the US government

and capitalistic corporate America, were rejected Certainpivotal events made impressions on the public psycheamongthem a polluted river that caught re and a widely reproducedphoto o Earth taken rom Apollo 11, highlighting that were alltraveling together on a small planet in an immense universePollution and overpopulation became issues o public concern

The 1970s. The developments o the 1960s laid the ground-work or 1970s environmental and consumer movements,spearheaded by Silent Spring author Rachel Carson andconsumer advocate Ralph Nader The list o things companiesshould do now reads: Make money, provide philanthropy,protect the environment and saeguard ones products

The subsequent decades. A series o corporate calamities rom1978 to 2006 ur ther expanded the CSR paradigm: Love Canal,the Tylenol product tampering scare, Union Carbides Bhopalaccident, Chernobyl and other nuclear accidents, the Exxon

Expert View

Sustainability, the Sweet

Spot and Your BusinessAndrew W. Savitz, creative business leader, advisor,speaker and coauthor, The Triple Bottom Line


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Valdezs oil spill, Greenpeaces victory over Shell regarding dis-carding old oil rigs, racism allegations against Texaco, Nikeschild labor scandal, Hewlett-Packards phone tapping, Enron andother raud/corporate governance controversies, unsae China-produced goodsthe list goes on It became apparent witheach eye-opening event that consumersindeed, the world at

largeneeded more protections against sel-serving corporations

Companies now are expected to be responsible or promotingdiversity, protecting workers, preventing child labor, osteringpublic health, ensuring human rights, eradicating poverty, op-posing corrupt government regimes, providing technology,policing supply chains, engaging stakeholders, measuring andreporting, and continuously improving in general

In todays Age o Accountability, companies areheld responsible or being socially responsible

Importantly, CSR is not only in societys best interest but otenin companies as well Thats because we live in an age wherecompanies can suer immeasurable harm i theyre not sociallyresponsible Its an Age o Accountability, where responsibilityis no longer an option but a competitive necessity

Some organizations have embraced the new accountability withgusto, setting the bar or competitors even higher As a result,companies are now expected to provide services the governmentormerly provided (It wasnt the government that mobilized therst Katrina rescue eorts but Home Depot, GE and Wal-Mart)

Sustainability sweet spots are transormingcompanies and entire industries

Companies that recognize that high standards o account-ability represent the new reality o doing business are ndingways to make sustainability work or themnot just keepingthem in the game but boosting bottom lines as well

Former Vice President Al Gore addressed a conerence oadvertising agencies regarding their role in ghting global warm-ingnot the rst industry one would think o when it comes to

global warming This highlights that no industry is untouchedby sustainability-related concerns And some industries arebeing totally transormed by sustainability initiatives

Doing well by society oten dovetails with a companys own protinterestsespecially in the current business climate, where socialresponsibility is rewarded by customers and investors alike Thiscan be seen as the Dow Jones Sustainability Index has consis-tently outperormed the general stock market in recent years

When sustainability initiatives represent new prot opportuni-ties, when societys interests and a companys interests overlap,

that is the sustainability sweet spot The search or sweetspots can spur innovation and transorm entire industries

Sweet spots can be new products or services, processes, markets,business models or methods o management and reporting Thesustainability goals they serve can take myriad orms as well: clean tech-


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nologies, acquisitions o healthy product companies, reduced naturalresource usage, etc Some examples o sustainability sweet spots:

DuPont has recast itsel as a biology company versus a chemicalcompany

Tyson has decided to produce chickens without using antibiotics,

changing the image o who it is, what it does and how it does it

GE has launched eco-magination, making a major investmentin clean technologies rom which it expects big returns

PepsiCo improved its product portolios health by buyingQuaker Oats and Tropicana Now its healthy product segmentgrows North American sales our times aster than its traditionalbusinesses Another sweet spot or PepsiCo is diversity, which itviews as a business metric with measurable nancial benet

3M has a PPP initiativePollution Prevention Paysinwhich it replaced chlorinated solvents with water-based

solvents and saved over $1 billion in a year

Theres a sustainability sweet spot that might eventransorm HR

HR owns about 20% o the Global Reporting Initiatives (GRI) 100or so indicators These 20 indicators are either direct HR issues orissues with HR involvement, such as labor relations, human rights/childlabor, diversity, health and saety, wellness, employee satisaction,etc When a company has a good sustainability record, people wantto work there; sustainability measurably aects employee morale,recruitment/ retention, productivity, loyalty and engagement

Sustainability is on business leaders minds these days, but HR is not al-ways at the table when these discussions are taking place HR has sever-al roles in corporations today, but spearheading sustainability is seldomone o them Therein lies the sweet spot or HRbecoming a sustain-ability resource or corporate leaders There are our general areas inwhich HR can help companies make innovative sustainability transitions:

Culture change. Companies with long histories prior to the Age oAccountability oten need help understanding and embracing therequirements o the new business world Leadership may require

enlightening; stakeholder engagement may need to be cultivated;staying as customer-responsive as the competition may be achallengeHR can help with all such human-related objectives

Corporate strategy. Sometimes the strategic sweet spot lies directlyin the lap o HR Supermarket chain Wegmans has made an HR-related sustainability sweet spot central to its business strategy Thecompany, which oten tops business magazines lists o best placesto work, spends substantially more than the industry average onlabor, 15%-17% o revenues versus 12% But with associates empow-ered to help customers, their near-telepathic levels o customer ser-vice, in the CEOs words, result in sales per square oot at twice the

industry average and lower turnover-related costs (6% versus 19%) Organization effectiveness. Companies oten wonder how

best to get organized around sustainabilitywhether to hirepeople rom outside, create a department or it, etc Moreover,GRI reporting requires a ormal process HR departments


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know what sort o structures and processes work best or aparticular organization and how to implement these changes

Human capital development. When a company transorms itselto capitalize on a sustainability sweet spot, the transormationoten entails corporate mission reraming and employee retrain-ing Many companies are moving rom delivering products andservices to delivering knowledge, placing dierent demands onemployees (eg, a waste disposal company reraming itsel as aprovider o knowledge about and products or recycling/wastereduction) How companies see their mission, how employeessee their jobs, and how the two align are right up HRs alley


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Sustainability Strategy: The Role oLeadership and Organizational Culture

Sustainability is a continual practice that is likely to succeedwhen it is incorporated into the companys strategic ramework.

This incorporation is vital in ensuring that organizations arein the two highest phases in the Sustainability Maturity Curvemodel. As shown in Figure 6, 52% o organizations engaging

in sustainable workplace or business practices reported theyhad a ormal sustainability policy that included sustainableworkplace goals and polices directly tied to the companys

strategic planning process. Incorporating these elements withinthe companys strategic ramework is an essential componentor companies striving to move toward transormation, which

is the highest level within the Sustainability Maturity Curve

model. Thirty-nine percent o companies reported they hadan inormal policy that had no accountability through their

strategic planning process, but they strived to be environmentallyand socially responsible. Companies taking this steps aremore aligned with integration, which is the second phase in

the model. Only 9% o companies had no policy in place.

Dierences emerged according to various organizational de-

mographics regarding the type o sustainability policies. Theseare detailed in Table 4. Formal policies directly tied to thecompanys strategic planning process were more likely to be in

place in publicly owned or-prot and multinational corpora-

tions. By contrast, rms with single-country operations weremore likely to report having an inormal sustainability policy.

Figure 6 | Type o Workplace Sustainability Policies

No policy Inormal policy Formal policy

(n = 426)

Note: Excludes organizations that answered not sure and those not engaged in sustainableworkplace or business practices.


52%

9%

39%


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Table 4 | Type o Workplace Sustainability Policy (by OrganizationalDemographics)

Type o Policy Organization Sector Operation Locations

Formal sustainability policiesPublicly owned or-prot >nonprot


Inormal sustainability policies Single country > multinationalNote: Excludes organizations not engaging in sustainable workplace or business practices.

Only signicant dierences are shown.


Who is responsible or creating the sustainability strategy?The ormation o a sustainability strategy varies by type o

organization. Further, since there is no one-size-ts-all modelto create a strategy, careul consideration should be used inthis course o action. A company supporting sustainability can

transorm an organizational culture that encourages employees

to value and engage in sustainability-related activities. As shownin Table 5, the largest percentage (36%) indicated that the senior

management team was primarily responsible or creating thesustainability strategy in their organization. This was ollowedby the CEO/president (22%). Other areas primarily responsible

or creating the sustainability strategy were employee taskorce/committee (12%), board o directors (9%), dedicated sustain-ability department (8%), HR department (6%), public/mediarelations department (2%) and nance department (1%).

Table 5 | Groups Primarily Responsible or Creating OrganizationsSustainability Strategy

Senior management team 36%

CEO/president 22%

Employee taskorce/committee 12%

Board o directors 9%

Dedicated sustainability department 8%

HR department 6%

Public/media relations department 2%

Finance department 1%

Other 4%

(n = 395)

Note: Excludes organizations not engaging in sustainable workplace or business practices.


Implementation o a sustainability strategy can be a longprocess. To better understand which individual or group ismost likely to lead the implementation eorts, the respondents

were asked who is primarily responsible or implement-ing the strategy. The top ve responses were: 1) seniormanagement team, 2) HR department, 3) CEO/president,

4) employee taskorce/committee, and 5) dedicated sustain-ability department. These data are presented in Table 6.


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25 | Advancing Sustainability : HRs Role

Table 6 | Groups Primarily Responsible or ImplementingOrganizations Sustainability Strategy

Senior management team 51%

HR department 25%

CEO/president 23%

Employee taskorce/committee 18%

Dedicated sustainability department 12%

Board o directors 8%

Finance department 7%

Public/media relations department 7%

All employees 4%

Outside consultant *

Other 4%

(n = 390)

* Less than 1%

Note: Percentages do not total 100% due to multiple response options. Excludesorganizations not engaging in sustainable workplace or business practices.



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GAP Inc., recently voted one oTime magazines top 25 GlobalResponsibility Players, has been a leader in many dierent areaso sustainability. It was one o the rst global corporations toopenly share supplier inormation, one o the rst to createalignment between the Sourcing and Global Responsibility teamsand one o the rst to have the Human Resources and GlobalResponsibility unctions work closely together. Dan Henkle, seniorvice president o Global Responsibility, has been at GAP since 1992.

Background

I started with GAP in 1992 in the human resources area In 2001 Itranserred to the corporate responsibility area At the time, GAP wasacing intense criticism or working conditions in garment actoriesthroughout the world We needed to look at how we were thinkingo things internally and whether we were aligned in decision-makingWe also needed to think about whether we were connecting enoughwith the external communityin particular, the human rights com-munity, amongst other stakeholders In making the journey internally,we began looking at how we were communicating with suppliersWas there one message rom the Global Responsibility and GlobalSourcing teams? I messages were not consistent, we would not getresults we wanted Since the Sourcing team is placing orders, sup-pliers will listen rst and oremost to them It was really importantto collectively align with a single philosophy We did a lot o work tocome together, listen to one another and move orward together

The Power o the Personal: Attitudes,Perceptions and Belies

People are undamentally good and want to do the right thing Wewent into the conversation with the assumption that the person weare talking with is a good human being and that we are both tryingto work in a good and ethical way This opened up the conversa-tion We ramed the issue by reminding people o how we haveworked together or a number o years trying to improve workingconditions We then asked the questionswhat do you think isworking well and where do you see barriersreally trying to openup the dialog The point is, it was not just a team like mine coming

and saying, here is a set o goals, this is what you must do We werereally listening to what they had to say and where they thoughtwe were having misalignment and what we could do about it

We had a similar experience as we started to engage externallywith the human rights community and with the environmental com-

Expert View

Opening Up the Sustainability

Conversation at GAP Inc.Dan Henkle, SVP, Global Responsibility, GAP Inc.


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munity Again, the key emphasis was, did we really understand whatthe criticism o the company was and where they were coming rom,and were we open to a new way o doing the work that we were doing?We really did a listening tourand not just listening, but truly under-standing, with an open-mindedness, that perhaps something wouldneed to change So it was a similar journey internally and externally

We spent a lot o time talking to colleagues in similar positions at othercompanies One o the things I believe is that you have to have internalalignment beore you can make progress externally I you are talkingout o both sides o your mouth internally, this is going to come out loudand clear when communicating externally Where are you not aligned?Where are you sending dierent messages? How do you resolve thesemisalignments? How do you take that aligned message externally asyou are talking to all your dierent partners outside the company?

One o the things I learned in coming into this kind o role was that in mostchallenges the business conronts, you create a solution to that challengeand then execute And in many instances, you can say, we accomplishedthe goal and can check it o the list When you are talking about socialand environmental changes and progress, it is not so simple We neededto make sure that we were not looking at how you make progress in thenext week or month or quarter We were really talking about how we willput things in place that will stand the test o time and ideally will be inull operation when one leaves the company, when one retires In manyrespects, I needed to go through my own personal journey o gettingrom the immediate x, to stepping back and with patience looking at theenormity and complexity o some o these social and environmental chal-lenges, and then urther understanding how to take that complex picture

and break it into pieces o a puzzle The next step was to prioritize buildingthe puzzle so that it is digestible or people making it happen This was apretty big thing, and the rst quote I used in our rst social responsibilityreport was: There are no simple answers to complex societal issues Allo us, as human beings, like simple answers We love it when we can getto the bottom o things very, very quickly, nd a solution and be able tocheck something o the list This is not what this work is about It is trulyabout putting many, many issues together to try to create a better uture

Building A CSR Program:

The Basic Five ComponentsWe have a very comprehensive and sophisticated program inplace We have a team o over 120 people in 20 dierent countriesthroughout the world who are ocused on improving working condi-tions in actories that we are placing business in Over the years, asyou are trying a number o dierent approaches in this work, youlearn a lot along the way, and sometimes you try things that dontworkso you learn rom them and you retool your program

We have been in this or 15 years, we have learned a lot along the way,and I think we have a program that is very successul This is true o our

environmental program as well The basic ve components o our journeyhave been:

The importance o internal alignment and having thesupport o the leadership team and the board o direc-tors We have been very ortunate to have that


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The importance o having a strategy when you are look-ing at this type o work There are limitless opportunities orprogress on the social and environmental ronts You have to re-ally understand what is the best use o resources as a companyI cannot emphasize enough the importance o strategy

The importance o really staying connected with the externalcommunitythe human rights and the environmental com-munities They truly are the experts on the ground They havea lot more inormation than we have, and we should be listen-ing to guidance they are giving us on an ongoing basis

It is critically important or companies to share their learnings,and not in a public-relations kind o way but in a social reportingkind o way, so that you can say, Here are some o the things wehave challenges with, here is the progress we are making Butalso here are the challenges that we continue to encounter

And then, nally, it is critically important to be sel-refective and not

ever believe that you have stumbled upon the ormula or successThere is no such thing in this kind o work There are things that canget you to a better place But you have to constantly be evaluatingi the way you are going about the work is exactly the way it needsto happen, given all o the dierent complexities you are encounter-ing and the way the world is shiting on a day-in day-out basis

Values and Value Creation

Fundamentally, there has to be an overall cultural value around trying to dothe right thing I am the rst one to say that almost every company is goingto say that But this cultural value has to be there I you take it as something

that must be there, then take a close look at our experience: when I startedin this role in 2001, we were getting a lot o criticism And when you arebeing criticized and there are campaigns against your company, you arein more o a reactive mode You are basically deending and reacting Itis not an incredibly powerul place to be I I look back a decade ago, Ithink we were in this mode o being deensive and being reactive Andwhat was incredibly clear was that we needed to move to a much moreproactive place I we could rechannel all that energy that was goinginto deending and reacting and so orthchannel that into proactivestuwe could begin to actually improve working conditions It wouldbe less about deend and react and more about how you actually move

things in the eld That was the journey we were on We have gone rombeing deensive and reactive, as we became more open to what externalcommunity was saying and have become more aligned, to being muchmore proactive And we have also gone into a place o saying that we willnever have all the answers, and we have to continually be soul-searchingto determine what the next ve, 10, 15 years look like or the company

Another raming o it is as a journey rom risk mitigation to value creationtaking a challenge and turning it into an opportunity I you think about it,even the rame o mind when you are looking at something as a risk or chal-lenge, it is a negative raming o the issue I looking at it as something that

can add value to the corporation, it changes the dynamic and discussionand that is what we have been trying to do in a much more signicant way

Source: Aurosoorya, transcribed podcast (2011)


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HRs Role


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HRs Role in Creating and Implementing

an Eective Sustainability StrategyThe results rom this survey revealed somewhat o adisconnect between HRs involvement in creating and

implementing the sustainability strategy in their organiza-tions. While HR was much less likely to be involved in thecreation o strategic sustainability programs (6%), it was

more involved in the implementation o strategy (25%).

Sustainability is an issue that is good or business because itpositively aects a companys culture, employees, customers

and brand proposition. It is a call to action or the HR proes-sion to take a greater role in the strategic planning processand display leadership on this important topic. SHRM queried

its Corporate Social Responsibility and Sustainability SpecialExpertise Panel about possible reasons or the disconnect betweenHRs involvement in creation and implementation o sustain-

ability programs. Panel members were also asked how HR canbecome more involved in creating sustainability strategies.

Nancy C. Nelson, SPHR, principal consultant o HRProse,

LLC, says: Although HR is more involved in sustainability

eorts today than several years ago, I believe sustainabilityis still viewed and dened primarily as within the purview

o public relations, investor relations, regulatory or envi-ronmental compliance unctions. We have some distance togo beore sustainability is truly integrated into the abric o


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the organization and is part and parcel o an organizations

identity, rather than a check the box activity. Until thishappens, HR and other unctions will continue to ocus onimplementation o action items rather than strategy creation.

Scott S. Criqu, HR manager o Trinity In-Home Care, says:

From my experience, the disconnect stems rom HRs in-ability to orm strategic partnerships within their companies.HR departments and executives are seen by other top execu-

tives as a tool and not a resource or strategic planning. []HR executives need to be community and business leadersand not just HR leaders, which means learning the language

o business owners and what it means to be a leader.

Gerlinde Herrmann, C.Dir., CPHR, GPHR, president, TheHerrmann Group Limited, says: Oten, sustainability is not

seen as HRs responsibility. However, companies with thismindset are missing the boat. It is people that are the driverso sustainabilityboth within the organization and in terms

o how it interacts with the communities in which it operates. Ialso believe that HR, as the keeper o an organizations values,needs to drive some o that to the management and executive

team. There is much inormation available that shows thelink between a triple bottom line approach and sustainabilityo an organization. I believe that HR needs to grab a hold o

this and champion it. It is oten not about investing a lot omoney but rather changing how one looks at the business.


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This symposium brought together knowledgeable and passionatesustainability and HR management experts rom around the world.The group examined the impact o sustainability on the business worldin general and on the HR proession in particular. The participantsalso looked at the role o HR proessionals in participating in or,in some cases, leading organizational sustainability eorts.

Key Discussion Themes

In the business community, sustainability lacks leadership

Many organizations are claiming that they are engaged in sustainability-ocused activities However, on the whole, participants elt that mostprot-driven senior executives still see sustainability as a nice to doversus a need to do Participants were in agreement that sustainabilityis not a one-time organizational initiative It is a way o thinking, actingand operating, and it must permeate the abric o an organization

Sustainability is very much an HR issue, though itsnot necessary or HR to own sustainability

Sustainability is a people issue It aects a companys culture andbehavior It aects the messaging that companies use in recruiting, howcompanies engage and retain employees, how they train employees andhow they interact with customers, as well as a companys brand and valueproposition For these and other reasons, HR must be deeply involvedin any organizations sustainability activities Many participants see theabsence o leadership around sustainability as creating a void and believethat the HR proession should seize the opportunity to demonstrateleadership on this critical strategic interest I sustainability is not on anorganizations agenda, HR must make the case to elevate sustainabilityas a priority However, symposium participants didnt nd it essential thatHR act as the organizational owner or sustainability on an ongoing basisRegardless o whether HR is the owner, HR will help develop guidelinesand set strategies, develop training programs, lead employee com-munications and be involved in establishing metrics or sustainability

Many HR proessionals are not yetready to lead on sustainability

While sustainability is a natural t or HR and presents an opportunityor HR proessionals to demonstrate leadership, many in the proessionare not yet ready to seize this mantle They lack knowledge aroundsustainability, the ability to ormulate a compelling business case,and tools and resources to change an organizations culture

Research Spotlight

Highlights rom the SHRM Executive

Roundtable Symposium on Sustainabilityand Human Resource Management Strategy


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How Is Sustainability Infuencingthe HR Proession?

Beore looking at how sustainability aects HR, rstlook at sustainabilitys impact on the business

In general, how the business community is approaching sustainabilitycan be seen in reviewing a companys annual reports The vast majorityo an annual report is devoted to the companys business results, witha separate mention o the rms sustainability initiatives This showsthat sustainability is not yet integrated into all business activities

To become a business priority, there mustbe a business case or sustainability

Several participants commented that senior business leadersview making a prot as their primary responsibility Thereore,or sustainability to get on the corporate agenda and become

a priority, there must be a compelling business case

For sustainability to take hold in an organization,it must be woven into the abric

For organizations to truly become quality organizations, qual-ity had to be driven into the organization Quality wasnt a stand-alone project or a department, it permeated the entire companyThis could eventually also be the case with sustainability

Because sustainability must be woven into an

organizations abric, it is very much an HR issueParticipants were in strong agreement that sustainability is unda-mentally a people issue and, thereore, an HR issue As a result,HR proessionals must play a signicant role in developing thebusiness case or sustainability, creating the organizational cul-ture and leading their organizations sustainability eorts

Sustainability will aect the HR proession in multiple ways

Participants are already seeing sustainability aect the HRproession and envision multiple ways that sustainability willmake an impact on HR going orward, as outlined below

A changing employee contract. People today care more aboutthe planet and about corporate citizenship They want their work tohave purpose and meaning, and they want to work in organizationsthat are purpose-driven and value sustainability This emphasis onmeaning aects HR proessionals in communicating this trend tomanagement and in working to create an organizational culture thatappeals to those who are seeking more meaning in their work

Recruiting. Sustainability will have a huge impact on recruit-ing Younger employees are knowledgeable and passionateabout sustainability and will be drawn to work or companies thatare highly committed to sustainable workplace practices

Brand. Sustainability will aect companies brands, bothexternally and internally How companies discuss sustain-ability in the course o their recruiting eorts will play asignicant role in how these companies are perceived


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Engagement. The companys mission and values must be consid-ered an important a actor in attracting and retaining employeesAnd, it is important to give employees a way to act on theirinterests in promoting social and environmental responsibility

How people work. As organizations seek to reduce their carbonootprint, it will orce HR proessionals to completely rethink howwork takes place

Accountability and measurements. HR proessionals must beable to develop an internal business case or sustainability, incor-porate sustainability into key perormance indicators and createreporting mechanisms that hold the organization accountable

Training/leadership development. The HR proession will alsobe aected by having to incorporate sustainability in organi-zational training and leadership development curricula

How Might HR Infuence Sustainability?

There is much potential or HR to infuencesustainability and, through it, corporate strategy

Oten within corporations there is no clear owner or sustainabilityParticipants agreed that HR can ll this void; sustainability presents atremendous opportunity or the HR proession to demonstrate leadershipon a critically important issue

Beore the HR proession can really begin to infuencesustainability, it needs to be equipped to lead

Many HR leaders do not have a good understanding o what sustainabilityis and they do not see the potential leadership role o HR in sustainabilityThis makes them ill-equipped to infuence sustainability strategies in apositive way Leading in the area o sustainability means that HR needsto step up

HR can help dene what sustainability meansin their organizations

While there was not agreement among participants regarding a consis-tent set o terminology or sustainability, participants commented thatHR proessionals can help dene sustainability to t in with their own

organizational culture

HR can demonstrate that sustainabilityis more than compliance

True sustainability entails ar more than simply complying with lawsLegal compliance is just the lowest common denominator

By emphasizing the people dimensions osustainability, HR can demonstrate thatsustainability goes beyond the environment

Participants observed that sustainability is not limited to beingenvironmentally riendly; it includes subjects such as poverty, AIDS,water and other social issues

Visit www.shrm.org/trends to download the ull report


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Employees View o Sustainability

Companies are unlikely to deliver the long-term sustainabilitybenets i employees are not engaged or do not recognize the

advantages o their companys initiatives. Programs that engage,

inspire and connect employees are vital to organizations tryingto tap into the ull potential o their sustainability outcomes.

Respondents were asked how sustainability is viewed by dierentemployee groups within their organization. As shown in Figure 7,the board o directors and C-suite and executive-level employees

were more likely to view sustainability as being very importantcompared with manager-level and nonmanagerial employees, whocomprise the majority o the workorce in most organizations.

These ndings are consistent with research conducted in early2010 that revealed an organizations commitment to corporatesocial responsibility and to a green workplace were rated by

employees as two o the least important contributors to employeejob satisaction.iv However, there is some evidence that youngeremployees entering the workplace are more likely to value

sustainability, boosting its importance in the years ahead.v

Since manager-level and nonmanagerial employees are less likelythan their higher-level counterparts to be engaged in planning

and implementing the sustainability strategy at their companies,they may be less likely to be engaged or interested in such initia-tives. The ndings suggest that i all levels o employees are able

to participate in these activities, then their view o sustainabilitymay become more positive. HR will play a critical role in pro-moting this kind o broad employee involvement. For example,

Scott S. Criqui rom SHRMs Corporate Social Responsibilityand Sustainability Special Expertise Panel has organized anemployee sustainability committee at Trinity In-Home Care.

The committee helps engage all types o employees. It is opento all employees and is managed by the employees themselves.

Figure 7 | Importance o Sustainability as a Business Practice (by Organizational Groups)

Board o directors

C-suite and executive-level employees

Manager-level employees

Nonmanagerial employees

Very unimportant Unimportant Important Very important

(n =307389)

Note: Excludes organizations that answered not applicable or not sure and those not engaged in sustainable

workplace or business practices.Source: Advancing Sustainability: HRs Role (SHRM, 2011)

2% 5% 45% 49%

1%4% 49% 46%

1% 9% 64% 26%

2% 19% 62% 17%

The good news or thoseinvolved in sustainability eortsis that so many employeesexpect their employers totake a leadership position

in sustainable businesspractices. Sustainability,thereore, becomes acompetitive advantage inthe search or talent.

Nancy C. Nelson, SPHR,SHRMs CorporateSocial Responsibility andSustainability SpecialExpertise Panel Member


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The original goal was or the committee and management team

to work jointly on putting into practice employee wants. Theemployee committee continues to work on employee wants, buthas evolved and is now working on eorts to mainstream thecompanys budgeting practices and better serve its customers.

When the perception o the importance o sustainability wasanalyzed by organization sta size, employees rom all levelsin small- and medium-sta-sized organizations were more

likely to view sustainability as very important than weretheir counterparts rom large-sta-sized organizations. Thisis interesting since larger organizations are more likely to

engage in sustainable workplace or business practices. Sus-tainability may present a substantial opportunity or smallbusinesses to enhance how they connect with current and

uture employees. These results are displayed in Table 7.

Table 7 | Importance o Sustainability as a Business Practice (byOrganization Sta Size)

Board o directors Small, medium > large

C-suite and execut ive- level employees Small, medium > large

Manager-level employees Small, medium > large

Nonmanagerial employees Small, medium > large

Note: Figure represents very important responses. Excludes organizations not engaging insustainable workplace or business practices. Only signicant dierences are shown.

Source: Advancing Sustainability (SHRM, 2011)


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Prior to joining SAP AG, Nicolette van Exel led anddeveloped sustainability strategy and responsible supplychain management work with BSRs network o retailers in

the ood, agriculture and consumer products industries.She also worked as a senior CSR manager at Intertek and asenior manager at Forrester Research in the United Kingdom.Nicolette is now director o Corporate Social Responsibilityat SAP. Below is her overview o SAPs internal sustainabilityeorts as viewed through the lens o the human dimension.

What Does Sustainability Mean at SAP?

Building on SAPs 38-year heritage o providing solutions that helpcompanies address business eciency, SAP continued down this path

by elevating sustainability into a strategic, long-term corporate initiativein 2009 We declared our commitment to enabling sustainable busi-ness, both or customers through our sotwareSAP as an enabler osustainabilityas well as internally as a sustainability practitionerSAPas an exemplar o sustainability Our goal was to ocus on addressingeconomic, social and environmental impact opportunities that leveragethe strengths o SAP This strategic commitment was urther demon-strated in March 2009 when the company announced a new cross-unc-tional sustainability organization led by SAPs rst chie sustainabilityocer The organization was created to drive and coordinate SAPsinternal and external social, economic and environmental sustainability

eortsrom the creation o solutions that enable sustainable businessprocesses or customers, to SAPs own sustainability operations Theorganization orms a matrix with SAPs existing corporate unctionsand thus ensures consistent execution o all sustainability programsand eorts As a practitioner o sustainability, SAP also lives up toits social responsibilities through IT-led innovation that can driveeconomic development and parity through resource-ecient growth

What Does Sustainability Mean to theAlmost 50,000 People Working at SAP?

This depends on many actors, including culture, origin and rolewithin the company I you ask SAP employees why sustainabil-ity matters, you will nd people who want to give back to societythrough a donation o time or money You will nd people whowant to do something against global warming And, you will ndpeople who are concerned about lead in their kids toys All othis is what sustainability is about We aim to align these interests

Expert View

SAP and Sustainability: How Employees

Can Serve as Change Agents orSustainable Transormation

Nicolette van Exel, Director, Corporate Social Responsibility, SAP AG


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against the company goals We dene sustainability as ollows:Increase short- and long-term protability by holistically managingeconomic, social and environmental risks and opportunities

How Do Employees Drive Behavioral Change?

For SAP to reach its long-term sustainability goals, we need to drive alasting cultural change that embraces all o our employees As part oa large-scale transormation and change management program, SAPlaunched a global network o Sustainability Champions in 2008, consist-ing o 125 champions worldwide All major SAP locations in the USA, theAsia Pacic region, Germany and Canada are represented within thisnetwork Part o their work time is reserved to dedicate purely to raisingsustainability awareness, mobilization and education The networktouches the hearts and minds o people At SAP, we are convinced thatbehavioral change can only happen when peoples passion is channeledtoward positive change Peter Gra, chie sustainability ocer at SAP,

addressed employees recently to call them to action by launching the100,000 Steps to Sustainability program Through this eort, Sustain-ability Champions develop great ideas or participation that are driventhroughout the organization every two weeks via our social networksonline There are our core areas o ocus: energy reduction, travel(business and commuting), paper reduction and social sustainability(micro credits, health and diversity) We drive ideas like green yourPC or bike to work or participate in the regular volunteering daysconducted by SAP Each step signies a behavioral change throughwhich employees change their perception, decision-making, attitude,understanding and motivations toward a more sustainable SAP Wecan have an impressive impact i each o those 50,000 employeestakes only two steps: 100,000 positive behavioral changes a year

Sustainability Champions are an invaluable part o SAPs sustainabilitystrategy They drive change through eedback to the sustainabilityorganization by executing programs worldwide and by giving theirexpertise Considerable credit goes to [their] eorts to drive culturaland behavioral transormation that will make SAP a role model orsustainability, says Peter Gra, SAP chie sustainability ocer

How Do We Achieve Transormation

and Change?Everything starts with creating clarity and transparency around our coreocus topics We tell stories about our experiences through our onlinecommunity, and we provide inormation on topics that employeeswish to engage in Showing how people can create impact createsawareness and shows the individual where he or she can personallymake a dierence Awareness avors engagement o individuals andgroups, be it by local initiatives, global campaigns or role modelingand multiplication Engagement aects behavioral change And i thechange persists, the objective o sustainable change has been met

This is a journey, and SAP, like many other companies, still has away to go However, we learn through our experiences Throughlaunching the Sustainability Champions program as well asthe 100,000 Steps to Sustainability, there are three lessons wehave learned in our journey so ar that are worth sharing:


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1) Change is about the individuals journey: It cannot be instruc t-ed top down; each and every individual needs to be engagedand mobilized

2) One size does not t all: Regions, countries, cultures andmindsets dier, and there is no one global set o instructionson what it takes to change There are as many backgrounds,

knowledge levels, attitudes and intrinsic motivations towardsustainability as there are ways to meet these aspects and dealwith them in the most human way Every individual has his orher own starting point and maturity level about sustainabilityWe provide guidance as expansively as possible to meet thevarious requirements

3) Provide local answers to global issues: For this, we have builtdashboards on printing, commuting and energy consumptionthat create transparency on the respective realities in theregions and locations The Champions are thus enabled toanalyze the local implications and identiy local ocus topics

and to direct local initiatives toward remediating these

We have a unique ability to create value that is durable and leads to asustainable society, says Vishal Sikka, SAPs chie technology ocer,as quoted in SAP Worldemployee magazine in December 2009 WhenI think o the uture o business, and o our role in helping shape this,I invariably think o all the newcomers into this world: young peopleentering the workorce with new experiences and new expectations,new economies that change the rules o the game, and the under-privileged societies that are nding their place in a world o tradeand prosperity[]The piece o sotware you touch, that we deliver,may just have helped change someones lie And that, my riends,

is our unique purpose and our unique privilege in our company

Source: Aurosoorya (2011)


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Leveraging Sustainabilityto Manage Talent

Sustainability programs can provide a vehicle or increasingjob satisaction and engaging current and new employees.

Companies such as Pzer and Hitachi (see Case Studiessection) are committed to aligning their sustainability and CSRstrategies in ways to help deliver more eective recruitment

strategies and outcomes, reduce employee turnover, improvemorale and develop a leadership pipeline. Companies wereasked to indicate the importance o their involvement in

sustainability when it comes to attracting, retaining anddeveloping employees. As shown in Figure 8, 49% o rmsreported their involvement in sustainability was very important

in creating a positive employer brand that attracts top talent,

40% reported it was very important in improving employeeretention, and 33% indicated the involvement in sustainability

was very important in developing the organizations leaders.

Multiple dierences emerged by organizational demographics

regarding companies involvement in sustainability to manageselect talent management activities. Overall, when analyzed byorganization sector, publicly owned or-prot and nonprot

organizations were more likely than government organizations tocreate a positive employer brand that attracts top talent. Non-prot rms were also more likely than government organizations

to use sustainability to improve employee retention. Comparedwith large-sta-sized organizations, medium-sta-sized compa-nies reported a greater likelihood o developing the organizations

leaders through sustainability. These data appear in Table 8.

Figure 8 | Importance o Sustainability in Attracting, Retaining and DevelopingEmployees

Creating a positive employer brand thatattracts top talent

Improving employee retention

Developing the organizations leaders

Very unimportant Unimportant Important Very important

(n = 375381)

Note: Excludes organizations that answered not sure and those not engaged in sustainable workplace or businesspractices.


1% 9% 40% 49%

1% 14% 45% 40%

2% 17% 48% 33%

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