Corporate social sustainability

Pubblicato Wednesday, 10 March 2021

What does sustainability mean? Sustainability doesn’t exclusively refer to caring for the environment, it also extends to the social and economic dimension. The term was initially considered as a synonym of Corporate Social Responsibility (CSR), which the 2001 Green Paper by the European Commission defined as the “concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment.” The EU Commission further updated this definition to “the responsibility of enterprises for their impact on society.” It therefore goes beyond mere philanthropy: it is the ability to combine business with caring for the environment and society.

The impact of economic activity on society is such an important topic that it was also at the center of article 41 of the Italian Constitution: “Private economic enterprise is free. It may not be carried out against the common good or in such a manner that could harm safety, liberty and human dignity. The law shall provide for appropriate programs and controls so that public and private-sector economic activity may be oriented and coordinated for social purposes.” It’s a concept that has become even more relevant with the COVID-19 pandemic, which highlighted the need for everyone to move in this direction.

The 2030 Agenda for Sustainable Development

In September 2015, all the 193 members states of the United Nations approved the 2030 Agenda for Sustainable Development, which contains 17 Sustainable Development Goals (SDGs) to accomplish by 2030. Since then, the 2030 Agenda has become a point of reference for sustainability around the world. Each goal can only be achieved by keeping in mind the three dimensions of sustainable development: environmental, economic, and social. The implementation of the 2030 Agenda must be a responsibility shared by everyone: citizens, civil society, private sector and the scientific community, with a focus on developing countries and their populations.

The goals are to eradicate poverty and hunger, ensure health and wellbeing, provide quality education, achieve gender equality, guarantee clean water and sanitation, as well as access to affordable and clean energy. Moreover, they also aim to incentivize decent work and economic growth, and promote industry, innovation, and infrastructure, while also reducing inequality, making cities and communities sustainable, ensuring responsible consumption and production. The purpose of these goals is also to fight against climate change, protect life both below water and on land, and promote peace, justice, and strong institutions, while also consolidating partnerships to attain these goals. These are definitely ambitious objectives: we are almost half-way there and the road ahead is still very long.

SDGs - Enel Cuore

Corporate social responsibility in Italy: the numbers 

The findings from the “9th Report on Corporate Social Engagement in Italy” were presented on June 24, 2020. This statistical survey is a national reference point to learn about the behavior of companies in terms of social responsibility and sustainability. The survey, which was first conducted in 2001, analyzes 400 companies with over 80 employees; it shows how the virtuous behavior of businesses in this field has increased over the last 20 years. In 2019, 92% of companies invested in CSR and sustainability stocks (compared to 85% in 2017), for a total investment of 1,771 million euros, four times more than 18 years earlier. A small decrease in investments is expected for 2020 due to the COVID-19 emergency. 37% of the companies surveyed declared they had set aside a budget for CSR (35,000 euros on average) in 2020 before the health emergency, but then decided to decrease it or eliminate it altogether because of the economic crisis. 40% of the businesses stated that their expected budget (293,000 euros on average) did not change in 2020. 18% of the companies did not set aside a budget for social sustainability, but because of the emergency they then decided to allocate funds for it (153,000 euros on average). But what do businesses invest in? 66% focus on in-house initiatives (49% on staff training), 47% promote local initiatives, while only 8% invest in activities abroad. This trend confirms their willingness to improve the relationship with the areas and communities where they operate. This is done primarily by choosing to reduce their environmental footprint: 42% of the companies prefer investing in innovative technologies that limit pollution and improve waste management, while 38% invest in improving energy efficiency.

Almost half of the companies surveyed indicated that CSR also brings about an improvement in their reputation and 40% experienced a positive evolution in their relationship with local areas and communities. Furthermore, according to 49% of the managers interviewed, there has been a significant increase in how much attention consumers pay to the topic. An encouraging sign comes from a study carried out by BVA Doxa on the level of knowledge and the value attributed to the CSR policies of companies and institutions. According to their research, only one in five Italians knows about CSR; however, 33% of Italians consider it “very important” to be made aware of the social responsibility conduct of the brand of which they are customers. Moreover, this percentage rises to 84% if we include those who deem this information “quite important.”

What are the most virtuous companies?

In August 2019, 181 CEOs from some of the most famous US companies worldwide met at the Business Roundtable, where they declared that they wanted to redefine the ultimate purpose of their companies. If their objective used to be generating profit for the business and its shareholders, their commitment has now turned to creating shared value with all the stakeholders, employees, stockholders, clients, vendors, and the society and communities to which they belong. The Enel Group has, for example, placed sustainability at the center of its strategy since 2015, and this enabled it to reach first place in the Dow Jones Sustainability World Index (DJSI World) in 2020.

How the pandemic has changed the situation

How has the crisis caused by the COVID-19 pandemic affected the issue of social sustainability? IPSOS carried out a global study for the World Economic Forum surveying 21,000 adults from 27 different countries. According to this study, 72% would prefer their life to change significantly rather than go back to how it was before the pandemic started; 86% would prefer the world to become even more sustainable and equitable with respect to the situation beforehand.

According to the findings of the World Economic Forum’s fourth Sustainable Development Impact Summit (which took place in September 2020), the changes we have seen during the pandemic indicate that a radical transformation of our economic and social foundations is possible. It has been given the name the Great Reset: this refers to joint action at global level to improve every aspect of our societies and economies, from institutions to social contracts and work conditions.

Buildings with miniature trees and two people in the background - Enel Cuore

Social sustainability is a tangible commitment

The commitment of sustainability can go beyond individual projects: it can guide a company’s entire strategy. This is the case of the Enel Group, which also redefined its Key Performance Indicators (KPIs) to contribute to achieving the SDG of the UN’s 2030 Agenda; moreover, through Enel Cuore it supports associations of the Third Sector in the creation of specific social sustainability projects, addressing in particular young entrepreneurs. Osservatorio Socialis provided a new digital platform to measure the level of social responsibility of all organizations (public and private), which also makes it possible to build a path around six macro areas in line with the new models of sustainability. These are some of the projects that have been developed in Italy:

  • The Terre Colte (Cultivated Lands) project was created by Enel Cuore in 2017 in collaboration with Fondazione CON IL SUD to recover unused or abandoned land in Southern Italy; the project intends to promote SDG8 of the 2030 Agenda regarding socio-economic development and job creation. Thanks to a 3-million-euro fund, agricultural production has been revitalized in five Italian regions, offering new employment opportunities to young people and promoting social and labor inclusion for people in conditions of hardship.
  • Another project in the field of social inclusion is Piada52, which was created by Cooperativa Paolo Bibini (the Paolo Bibini Cooperative) with the support of Enel Cuore, Fondazione Cassa dei Risparmi di Forlì, and other institutions. This kiosk in the city of Forlì’s main park is more than just a café that makes piadine (traditional flatbread sandwiches) and other local specialties from the Romagna region: it has transformed the life of a neighborhood, offering employment opportunities and social inclusion for disadvantaged people, and providing a new perspective to local youths in search of jobs.
  • The Italian Alliance for Sustainable Development (Alleanza Italiana per lo Sviluppo Sostenibile, or ASviS) was founded by Fondazione Unipolis and University of Rome Tor Vergata in 2016. Its aim is to raise awareness of the importance of the 2030 Agenda in Italian society, its economic stakeholders, and its institutions in order to achieve the Sustainable Development Goals. ASviS currently brings together 292 important member organizations, including the Enel Foundation. It is helping to define Italy’s strategy for reaching the SDGs and for creating a monitoring system to track the progress achieved in each area.
  • Since 2013, the CSR and Social Innovation Fair has been the main event in Italy dedicated to these topics. It aims to spread a culture of sustainability, to provide updating opportunities, and to facilitate networking among all the various social stakeholders. Its ninth edition will take place at Bocconi University in Milan on October 12 and 13, 2021. But the Fair goes beyond the two-day national event with the objectives of keeping the attention focused on sustainability, as well as gathering and sharing the many positive experiences: CSR’s Giro d’Italia initiative (which will take place from January to May 2021) includes 15 stops along the Italian peninsula to promote a sustainable business approach, to share positive experiences for companies and local areas, and to stimulate virtuous examples and discussions. The Extra Fair, on the other hand, will take place between May and November 2021; all the material will be available online before and after the two-day event, along with various insights, interviews, and book presentations. There’s a wealth of projects, ideas, and experiences that is enrichened throughout the year.