James Epstein-Reeves, president of Do Well Do Good, is a Chicago-based expert on corporate social responsibility, philanthropy, and cause marketing. A corporate philanthropy veteran and author, Epstein-Reeves and his company guide leaders in for-profit and non-profit organizations and recently reported on consumer trends in cause marketing and climate change. I recently spoke with him about the state of CSR and what to expect in 2012. What follows is an edited version of that interview:

When we look back on 2011, and a really big-picture look at corporate sustainability, every day there’s more companies reporting, there’s increased consumer awareness and consumer desire for that reporting and for that accountability. But then on the flip side, you’re seeing that voters are disengaged from climate change. … Looking at all that, it seems that there’s been progress made in getting that sort of buy-in to CSR. What’s been the biggest success or has there been a step back?

I think, talking super-big picture here, is, “Why are companies engaged in sustainability?” And so I see six reasons why companies should be doing sustainability … first one being innovation, the second one being customer engagement, third being employee engagement, the fourth is kind of more of a long-term thinking and long-term approach to business, the fifth is brand differentiation, and the sixth is cost savings.

And so I see the last two, brand differentiation and cost savings, that’s the early stage of CSR and sustainability. That’s where most companies got their start in justifying why they should focus on sustainability. And, to some extent, particularly brand differentiation, that motivator is becoming increasingly more difficult, as you noted, because of the number of companies that are continuing to issue CSR reports, and people are reading them.

It’s those first four that are really starting to become the differentiators for companies now involved in using sustainability as more of a legitimate business driver to see those business results that can arrive out of those motivations for sustainability. The trend that I see is that companies are starting to articulate and starting to become clearer about their ultimate motivations [and] brand differentiation is not as strong a case.

There’s really a good case to be made that sustainability is a business strategy as opposed to a program that the small office off in the corner handles.

Are there any areas that have seen a lack of progress or even a step back?

We looked at some of the press releases that have been coming out from companies, and what we found was that a number of them are addressing greenhouse-gas emissions and carbon dioxide emissions and things like that but aren’t necessarily being explicit in their discussion of climate change. And I think that’s a miss.

I understand why some companies are reluctant to make statements about climate change — particularly U.S.-based companies. I can empathize with why they may be hesitant to do so; I don’t necessarily understand it because at a certain point we just have to call a spade a spade. It’s just odd to say you’re reducing your carbon dioxide but ignore the underlying reasons why you want to reduce your carbon dioxide emissions.

A large company can really — just by engaging in the issue and calling a spade a spade and saying this is a fact, climate change is real, as far as the science tells us — that would have huge power for the discourse. On one hand, it’s great that companies are actually looking at their carbon emissions as a forcing function for some of those motivators, but that’s something that I would like to see changed.

Say a business comes to you and asks, “Hey, we know we have to get on this bandwagon. What’s the first thing we need to do?”

The first step is to understand why you want to do this — why you want to do sustainability. Is it because you’re getting pressure, if you’re a public company, from shareholders? Is it because, if you’re a business-to-consumer company, that your customers are asking for it? And, if you’re business-to-business, same thing. Some customers on the B2B side are definitely asking companies to get on sustainability. Or is it that the CEO has gotten wind of it and he or she wants to see some changes? Understanding where the motivation is coming from is crucial.

The second step is to identify why you should be doing this and what are the unique talents and points of differentiation that you can bring to a broad-based sustainability program. If you have products that have specific environmental impacts that need to be managed, that’s probably where you should be focusing your time.

[The third step,] if you look at the Global Reporting Initiative — which is the guideline and benchmark for any company to report on their CSR/sustainability efforts — there over 80 … core indicators to report on, and that’s extremely overwhelming for a company that’s new to this.

At a certain point, you have to realize what you are going to do and what you aren’t going to focus on right now. The single most strategic thing any company can do is define their own terms of sustainability.

Image courtesy of Do Well Do Good.

This question-and-answer session was produced as part of SmartBrief’s 2011 Best Of reports, which capture the year’s most important stories in each industry. Sign up now for SmartBrief on Sustainability to get tomorrow’s report on the top must-read stories from the sustainable business industry.

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