Sustainability, a Fiduciary Responsibility?

Intel made news when it recently amended the Company’s bylaws and created a “Board Committee on Sustainability.” The move now places sustainability squarely on the Board of Directors’ agenda and ranks corporate responsibility and sustainability reporting a “fiduciary duty of company directors.” On the surface this may seem a no-brainer. After all, isn’t CSR and sustainability good for business? What may not be immediately apparent is the impact Intel’s decision and others like it are having on CSR and sustainability’s evolution from ‘nice-to-haves with marketing benefits’ to ‘corporate imperatives with significant repercussions for getting it wrong.’
Over the past 12 months, U.S. investors filed 95 shareholder resolutions against 82 corporations seeking a range of concessions from improved sustainability reporting to greater energy efficiency. That’s up 40% from the previous year. Unavoidably, increased shareholder activity and greater Board-level oversight will have a significant impact on marketing and communications. Not only must programs be accurately tracked and reported, marketing and communications professional must now understand the higher-level of clarity and transparency required of their environmental, CSR and sustainability claims and statements…think RegFD and quarterly earnings announcements. It’s clear that risk-conscious investors and the attorneys that protect them are paying close attention to sustainability issues and that penalties for inaccurate or inflated claims will no longer be simply black marks on corporate reputations, customer dissatisfaction or the ire of watchdog organizations. Shareholder suits and real dollar awards may be just over the horizon.

Matt Rose