This past year, we saw a shift in acceptance and valuation of CSR programs. Many of the issues and concerns that used to be optional for companies are now part of how they are judged by investors, customers and employees.
Announcements made by the business roundtable and the CEO of BlackRock, the world’s largest asset manager, has brought issues addressed as part of a CSR strategy to the forefront. With growing importance also came growing risk of how well companies were tracking and communicating their work to their stakeholders.
As we move into 2020 these are five trends to watch.
- Environment is no Longer an Externality
Since the publication of “Silent Spring” in the 60s, we have been wrestling with environmental concerns. There have been many ways people have tried to apply costs of pollution to polluters, but it was left to regulations and opt-in programs. As businesses and municipalities start to feel the effects of climate change, investors have taken notice. In a letter from Black Rock CEO Larry Fink, he identifies climate risk as investment risks seeing high impact on municipal bonds but also in business planning. It is difficult to know if investors will demand the type of reporting that drives positive outcomes or just questionnaires that satisfy their transparency demands. Either way, publicly-traded companies will need a plan to respond to these new demands.
- Diversity & Inclusion Outside of the Fortune 500
There is business value in diversity, and it also creates a great work environment. A McKinsey Study found a strong correlation between a diverse workplace and strong business performance. One way to increase diversity in your recruiting pool is to show diversity on your company social media and website. Community events are a great way to connect with different audiences. A smaller or medium-sized company may want to offer more opportunities to their employees of different ethnicities, genders and cultures, but those groups are currently underrepresented in their workplace. This is a great opportunity to partner with a nonprofit. Whether it is United Way of Greater Atlanta’s African-American Partnership (AAP), OUT Georgia Business Alliance or The Hispanic Chamber of Commerce, there are ways to be inclusive through partnership while you build diversity in your workforce. If you need help starting this conversation in your workplace this is a great article with practical tips.
- Shareholder to Stakeholder
Last year, the business roundtable announced a shift in focus from the shareholder to the stakeholder. This expanded the limited view of corporate responsibility to include investors, employees, suppliers, customers and communities. Why this change? Each group has become empowered to disrupt your business in unique ways. Empowered consumers can be your strongest critics and your best defenders. Highly-skilled employees may demand that you not take a government contract. A large company may want to review your supplier network to weed out child labor concerns. Whether you are customer facing or B2B, you will need systems in place to tell a story your stakeholders want to hear and the metrics to prove it. Click here to explore this further.
- CSR in KPIs and Employee Reviews
You may have noticed a trend in these trends. There will be greater demand for you to deliver on your corporate or brand promise. Your mission, vision and goals around CSR are going to come under more scrutiny by all of your stakeholders. How do you connect your business strategy to everyday actions and performance? You use Key Performance Indicators; this will help drive your CSR goals systemwide. This will also connect your employees’ everyday work to your goals. In many ways this is where the rubber meets the road on all of the promise CSR can deliver for your company. It will refresh the commitment to mission, create a framework to understand what sustainability means and tie into your strategy for community outreach and investment. Bea Boccalandro, of Vera Works, encourages companies that sustainability can be a powerful tool to add purpose to employees’ work and create better management systems. This is an older article from Bea whose time has arrived.
- Data for Impact
Capturing and applying data is revolutionizing the private sector and companies and foundations are wanting to invest in data collection and sharing for impact. There are startups, large foundations, nonprofits and companies all working to solve data issues in the social sector. Mastercard and The Rockefeller Foundation partnered to create the ‘Data Science for Social Impact’ initiative to help drive shared data. Also, foundations and some companies are starting to look at funding impact studies to see how effective a program is. This has been common practice for government grants especially with international aid.