Decade in Review

The past decade has seen an acceleration in practical action by business. Companies have invested in eco-efficiency to find ways to “do more with less,” they have adopted ambitious environmental and social performance targets and managed them as part of the business, and they have opened up with reporting on performance and collaboration with a broader range of stakeholders, from the UN to local communities.

For GE, this is our seventh annual citizenship report, and it has been six years since we launched ecomagination, our first companywide strategy. Our citizenship reports have charted our performance each year, reflecting the development of increasingly robust internal systems and an evolving shift in thinking from a philanthropic focus to incorporating social and environmental issues at the heart of business strategy. This shift has not been cosmetic; over the past decade, GE has repositioned its portfolio through divestitures representing 50% of the Company to focus on key global themes such as energy, water and healthcare, and to build strength in the core businesses by providing the infrastructure and financial services needed for growing economies.

It is not a journey that we have taken alone. Accompanied by many other companies, we have collaborated with organizations such as the World Business Council for Sustainable Development, the UN Global Compact and the Business Leaders Initiative on Human Rights. The Milestones in Citizenship timeline charts some of these developments.

Much has been achieved. There is an increasingly clear recognition that companies have to serve two roles. We have to drive economic growth, but we also have to be a force for change.

Leading companies have recognized that they can help to create the world they want to see, not only through community engagement and philanthropy, but through the way they manage their business, the products and services they develop and the public policy positions they advocate.

Alongside GE’s ecomagination and healthymagination goals, Walmart, Dow Chemical, Procter & Gamble, Unilever and the Coca-Cola company are just some of the companies that have set ambitious targets for energy efficiency, renewable energy, waste and water use, and sustainable products.

Businesses have come together with governments, investors, NGOs and other players in collaborations, such as The Global Fund to Fight AIDS, Tuberculosis & Malaria and The Extractive Industry Transparency Initiative to solve intractable problems of healthcare, corruption and climate change.

The debate about business and human rights has come a long way through the work of the UN Secretary General’s special representative John Ruggie, who has worked to identify and clarify standards of corporate responsibility and accountability regarding human rights. The “protect, respect and remedy” framework developed through this work has been adopted as part of GE’s own human rights policy.

Experimentation in how to assess and communicate the impacts of products and companies on people, communities and the environment in order to drive better decision making has been critical to the development of corporate responsibility. Key initiatives have included the Global Reporting Initiative, the Carbon Disclosure Project and UN Principles on Responsible Investment. We remain a long way from the ideal of integrated reporting, but it is clear that metrics and measures must continue to improve and show the linkage between social, financial and environmental performance.

We have learned many things in our journey so far, not least the importance and difficulty of listening, learning and collaborating with stakeholders. But we have also learned that the challenges are greater, and more fundamental than first imagined.

As GE Board member Sam Nunn says of his own work in reducing nuclear dangers, the global quest for sustainable development is a race between collaboration and catastrophe. Events such as the devastation of Hurricane Katrina, the Gulf of Mexico oil spill and the financial crisis highlight what happens when the problems outrun the solutions.

The urgency of the challenges—innovating products and services to enable better lives for more people within the bounds of the earth’s natural resources, creating societies that protect people from oppression and poverty and enable them to achieve their potential, and creating frameworks of disclosure and regulation which ensure that capital markets direct investment for long-term value creation—mean that the corporate response must shift up a gear, to the next level of rigor, ambition and scale. The complexity of the issues, and risks, in different regions and sectors means that every part of a business must become involved in understanding risks and opportunities related to social and environmental issues.

Rachel Kyte, vice president for Business Advisory Services at the International Finance Corporation of the World Bank, has served on GE’s Citizenship Advisory Panel in recent years. As she puts it, “We are on the edge of something transformative, but we have reached the limits of what can be achieved by continuing on the same path. Businesses will need to be fully integrated around sustainability, with it driving the innovation agenda. Key constraints are not just carbon and water but accessing talent. Corporate citizenship won’t be about value add, but creating shared value.”

In starting to develop our corporate citizenship strategy for the next decade, GE invited practitioners and thought leaders on corporate responsibility to tell us where they think the future is heading. The trends that they highlight are increasing complexity, the need for greater ambition and the continued need for collaboration and transparency.