New Zealand companies are getting much more involved with their stakeholders. That's the standout finding from the 2018 State of Corporate Social Responsibility (CSR) in Australia and New Zealand survey.

The study is the largest ongoing review of CSR practices in Australasia, and this year drew more than 1100 respondents, including 243 in New Zealand. New Zealand participation in the study was coordinated by Wright Communications in association with the Sustainable Business Council and Massey University.

Stakeholder engagement was the biggest mover in the survey which was released at the beginning of July. Now in its 10th year, the survey found that 89% of respondents believe a company's management of stakeholder interaction is the most important component of activity, up from 80% in 2017.

Managing stakeholder engagement is vitally important for businesses. To be successful, companies need top-level communication with investors, customers, suppliers, regulators, interest groups and their own staff.

Survey respondents also made a big plug for the environment - 83% said reducing or eliminating negative environmental impacts in their organisation in the year ahead was either a high or very high priority - while diversity got a big tick too, with the promotion of diversity in the workplace rating a high or very high priority by 80% of respondents.

Managing regulatory impacts was a high or very high priority for 75% of those surveyed, reflecting the changing regulatory environment in New Zealand. Clearly, the New Zealand Stock Exchange's (NZX) revised Corporate Governance Best Practice Code has encouraged many companies to adopt annual Environmental Social Governance reporting - a significant step forward for corporate governance in New Zealand. The Code takes a "comply or explain" approach to improve corporate disclosure focusing on eight principles relating to environmental, social and governance risks and mitigating factors.

The updated Code came into effect last October and companies must report against it for the June and September quarters this year and into the future.

It is encouraging that NZX-listed companies are adopting the recommendations of the code, rather than waiting to the last minute and being forced to comply.

The NZX promotes good corporate governance practices to ensure greater transparency for investors. This helps drive increased confidence and participation in the New Zealand market.

Top Five

The study also identified the Top 5 CSR companies in New Zealand - those with the strongest CSR management capabilities , as rated by their employees.

The assessment reflects employees' views of their organisation's capabilities in stakeholder engagement, stakeholder values harmony, dialogue and social accountability.

The Top 5 in New Zealand are - in alphabetical order: Air New Zealand, Fonterra, Tourism Holdings, Westpac, and Z Energy.

Fonterra - possibly on the back of the Richie McCaw advertising campaign and the company's milk-in-schools project - and Tourism Holdings are the new high flyers in the list, while Air New Zealand, Westpac and Z Energy have regularly filled top places.

SDGs gathering pace

The Annual Review also shows the United Nations Sustainable Development Goals (SDGs) are catching on.

There is greater awareness of the SDGs, with 28% of adult Kiwis having heard of them in 2017, compared to 23% in 2016. And 72% of them consider the SDGs are important, up from 69% two years ago.

Five SDGs gained in importance by six or seven per cent between 2016 and 2017: life below water; industry, innovation and infrastructure; reduced inequalities; responsible consumption; and climate action. These are now considered important by 67-72% of those aware of SDGs.

Companies are also using the SDGs to inform their business and sustainability strategies with a clear sign commitment is coming from the highest levels of the organisations.