Corporate accountability goes beyond a company’s financial activities. It includes acknowledging issues like sustainability, corporate governance, and social responsibility. Businesses are now held accountable, especially by Gen Z customers, for their approach to treating employees or caring about the environment, which is why corporate accountability has become a trend in the global industry.
Unfortunately, while some companies are taking it seriously, others have found ways to appeal to the public while ignoring the efforts to actually reach these goals. One example is the practice of greenwashing, in which enterprises fake their green campaigns or make customers believe they invest in sustainability. Some of the biggest companies in the world called out for greenwashing include FIFA, Volkswagen, and Ikea.
Therefore, companies must improve their corporate accountability strategy and pursue more transparency. Here’s how.
Develop values and stand by them
Having company values beyond profit is what sets reliable businesses apart from unreliable ones. Those interested in innovation, integrity, and inclusion are more likely to pursue them and actually care about their impact on society.
For example, the Middle East is becoming increasingly concerned about sustainability, with ambition and action as its core goals. More companies are accessing green loans, have a Chief Sustainability Officer in place, and have a formal sustainability strategy that emphasizes recycling using baling press machines.
On the other hand, European countries publish regular reports on current challenges and address the activities most detrimental to humanity while approaching various methods to minimise their impact on people.
Insist on transparency
Transparency is one of the most essential elements in the business industry, as it paves the road to customer trust. If companies are honest about their activities, even if they’re not perfect, they can earn more respect and trust from people than those who pretend they’re something they’re not.
Therefore, transparency is needed to promote growth, increase sales, and maintain overall efficiency without much hurdle. If we were to look into the industries that value sustainability more and are actually pursuing it, we would find that electrical equipment, waste management, and machinery manufacturing are the leading contributors to carbon productivity, sustainable revenue, and gender-diverse board of members.
Of course, there’s always room for improvement, but switching from relying on cheap and easy-to-manufacture products to investing in long-lasting and environmentally conscious practices and materials still counts.
Have a competitive spirit
Business competition is what sets so many companies apart from others. An organisation’s competitive spirit can be efficient in many cases, as it pushes for innovation and making a difference. However, in other instances, competitiveness can cause some leaders to make the wrong decisions.
Competition can spur innovative practices and products in this sector as well since firms have the drive to approach eco-friendly strategies, as long as competitors agree on specific policies that would benefit them as well. In the UK, for example, suppliers and retailers in the fishing sector agreed to provide mackerel only caught through sustainable practices.
Dominant companies should approach this movement more often, but some fear they might be seen as abusive, as they might have too much of a competitive advantage. However, setting the tone for sustainability when you have the resources and possibilities to make a difference is important.
What are the challenges in corporate sustainability?
Sustainability is still not taken seriously, considering how many people don’t even believe in climate change. Therefore, the first and most impactful difficulty is the lack of awareness and education present in communities and industries. There’s still a lot of confusion around the subject, as implying a change would mean more investments and a sudden shift of behaviours, which is usually frowned upon.
That’s because consumers have the freedom to change their preferences quite fast when it comes to processes and services. This trend has been more visible in fashion, where companies produce new collections at least twice a week, so people might be tempted to buy something more often.
Finally, the high costs and investments in sustainability are what keep most companies away from it. The world is already struggling due to conflicts, political disagreements, and slowly fading resources, so allocating more money for sustainability instead of other categories, like IT, seems counterproductive for some enterprises.
Can companies balance profitability and ethical obligations?
Corporate accountability is also about being ethical and not caring more about profits than the actual employees. Unfortunately, many organizations seem to forget these crucial aspects when it comes to rising competition, leading to underpayment, working overtime, or gender pay gap.
History shows how establishing ethical guidelines has contributed to a better world, having companies operate with integrity and caring about the impact of their actions. The role of ethics in governance is to promote transparency and have codes of conduct led by a moral compass.
However, modern companies seem to face serious challenges in implementing corporate accountability, such as the following:
Navigating global business practices that include local customs and cultural sensitives. Each business must be wary of labour practices and environmental regulations specific to the region; Balancing profit with ethical obligations means not overshadowing short-term profits with ethical concerns, especially when it comes to cutting employee salaries;
Overcoming resistance to accountability measures is also tricky, especially for companies whose operations lasted for decades;
Luckily, society is pushing social responsibility onto organisations, thus making it the norm for the future. Corporations are getting there, but the process is multifaceted, and being completely transparent, sustainable, and ethical can pose various challenges. We’re all addressing them at the moment, so businesses must follow customer dynamics and update their approaches.
Final considerations
Corporate accountability isn’t something new in the industry world. However, it has been subject to so many changes and social shifts that it has become a multitude of unclear strategies. Still, a growing number of companies are concerned about the matter, whether it’s from the sustainable side or the ethical part. These aspects are important for companies to contribute to healthy and flourishing societies, so pushing for spreading awareness is essential.
