Corporate Consumer Responsibility Defined
Last edited: Aug 17, 2022
What is CCR?
It’s no secret that the ESG landscape needs advancement and innovation to reach the climate goals we have as a society. While new technologies, products, and services are crucial, the necessary progress in this space requires more. To realize this needed change, at Sustaio, we have created the concept of Corporate Consumer Responsibility (CCR), a new guiding principle in the drive to tackle this massive issue.
Broadly, CCR is the responsibility of corporations to help their collective consumers, including both their employees and their customers, reduce their impact by providing incentives as well as tools to measure and track it over time. Note that for the remainder of this article the word “consumer” will refer to this collective consumer base (both employees and customers).
CCR isn’t about placing an undue burden on corporations, but rather empowering them to use their unique reach, extensive resources, and agility to take a leadership role on the road to a more sustainable world. This comes as measuring and managing the externalized impacts of corporations are rapidly coming into focus.
For those familiar with the ESG space, this may sound similar to Extended Producer Responsibility (EPR), a framework in which companies are responsible for the impact created by the sale of their product. EPR focuses on packaging and “end-of-life” material management, and while this falls under the purview of CCR, it is relatively limited. CCR is concerned with more than a company’s own product, as it is a recognition that companies have the capacity to promote change far beyond their own product.
You can’t manage what you can’t measure—especially when it comes to externalities. CCR places an emphasis on quantifying reductions through meaningful measurement of impact. In that vein, a CCR program revolutionizes a companies’ ESG efforts by extending the reach of impact quantification significantly further than previously possible. This means companies can provide shareholders, employees, and customers with concrete metrics demonstrating progress toward their ESG goals.
Beyond measuring, a CCR program provides incentives, tools, and education to their consumers to adjust their habits for the benefit of both the environment and themselves. A CCR program makes living a sustainable lifestyle easy and attractive for individuals. In tandem with more complete data, individuals and corporations can get attribution for making these changes.
Why is CCR necessary?
CCR seeks to capitalize on the treasure trove of unrealized potential impact reductions that are achievable solely by the individual. Many efforts to reduce human impact have come in the form of macro-level policy, such as climate laws from governments or CEO pledges and changes made by corporations. These are absolutely crucial, yet there are 7+ billion people who leave a footprint just by living their lives–this is especially true in the United States, where the per capita carbon footprint is three times the global average. Macro policy programs do not address this perpetual, latent impact of the compounding collective. CCR shines a light on this and seeks to address it.
Beyond pursuing a new path to tackle climate change, CCR is part of a needed evolution in the Corporate Social Responsibility (CSR) space. CSR was first coined in 1953 and changed our understanding of the relationship between corporations and society. In the decades since, the problems facing the world have significantly changed, as has the way we do business. Unfortunately, the guiding definition of corporate responsibility has not kept up. If we are to meet the challenges that the 21st century will present, our understanding of corporate responsibility needs to evolve.
Macro policy programs do not address this perpetual, latent impact of the compounding collective. CCR shines a light on this and seeks to address it.
Many companies have CSR departments and are beginning to create ESG roles. However, contrary to the belief of most executives, many people feel that corporations are falling short. This is indicative of the mixed legacy of the last 70 years of CSR. The negatives of this legacy are exemplified by what is known as greenwashing. Major brands have often undertaken PR campaigns to paint themselves as eco-friendly while simultaneously being some of the worst polluters, creating a massive amount of waste, or sourcing their materials in unsustainable ways. This is exactly why our understanding of corporate responsibility needs innovation. For far too long companies have largely used CSR and ESG as talking points and have taken very little material action.
Lack of accountability is one of the primary issues that CCR addresses. One of the pillars of CCR is that by being provided real-time data on the impact of their people, companies will have a new way to be transparent with their efforts. This transparency will create new ways to hold companies accountable, something that has so often been lacking in ESG efforts.
To keep and attract the best talent, companies must show that they are taking action on the most important problems facing our society.
Consumers weigh the social and environmental impact of the businesses they buy from more than ever before. CCR not only allows businesses to demonstrate that they are making progress on important issues, but also allows them to be a part of their consumers’ journey to sustainable living. This gives companies a new opportunity to engage with their customer and employee base in a powerful way. Consumers who want corporations to make meaningful change will get to live it.
CCR and the Future of Work
The world of work has undergone drastic change and embracing CCR can help businesses to excel in this new environment. COVID-19 left a lasting impact, hybrid and remote work are now ubiquitous. As employees do more work away from the office, the climate impact of each company expands into their employees’ homes, creating a gray area in (or rather an expansion of) the impact of business’s operations (Scope 2 emissions). CCR gives companies the opportunity to get ahead of reporting requirements in managing the impact that their employees have while working from home.
Beyond this, the labor force is experiencing an unprecedented level of voluntary turnover. Much like consumers and discretionary spending, employees are increasingly basing the decision of where they work on the environmental and social impact of the company they work for. To keep and attract the best talent, companies must show that they are taking action on the most important problems facing our society. As mentioned above, CCR gives companies the platform to show the action they are taking. A comprehensive CCR program also helps employees make more sustainable lifestyle choices, having them actively participate in impact reduction, rather than merely telling them about it.