Prepare for CSR ‘mega-trends’ or risk reputational collapse

Companies must not only build greater transparency into their sustainable business models, but develop an explicit social purpose if they are to prosper in the future, new research has revealed.

Four ‘mega-trends’ have been identified that businesses need to embrace or risk facing reputational collapse “within minutes” – these trends reflect rising concerns over resource scarcity, operational transparency, social values and the ideology of emerging world economies in countries such as India and China.

The study by CSR consultancy Corporate Citizenship has mapped out what organisations need to do to future-proof their businesses over the next 10 to 20 years in light of rising population growth, new digital platforms, shifting global power and declining trust in corporations.

If these ‘mega-trends’ were to accelerate and become mainstream, this could have serious repercussions for businesses unless they start preparing for such scenarios, it argues.

In terms of resource scarcity, companies will have to start identifying, securing, processing and reusing key commodities in highly novel ways. The study maintains that sustainability will be about the “efficient stewardship of scarce resources” to ensure a firm’s long-term success.

As businesses start to focus their investments on producing more value with few resources, this will result in economic dematerialisation which could see companies begin to compete on the resource efficiency of their processes and products.

This could create “protectionism of resources” with a focus on reclaiming end-of-life materials. “The most nimble organisations will develop new business models, such as closed loop systems,” the study predicts.

“The idea of a circular economy is not new, but companies will place renewed emphasis on security of supply and re-capturing end-of-life materials, particularly in the extractive and technology sectors.”

The research also maintains that companies will become more decentralised and flexible as they adapt to such pressures within their global supply chains.

Multinational corporations in particular could find themselves navigating an increasingly hostile and challenging operating environment if these trends play out.

“The overlapping challenges presented … will mean that companies will need to plan for more than one issue at the same time – such as how water scarcity, food security and climate change will coalesce and affect the company, its supply chain and consumers,” the study notes.

Interestingly, it also forecasts that those businesses ahead of the curve will start to offer expertise in resource management as part of their core service offering.

Maxine Perella

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