The way corporations respond to social issues is changing rapidly. In recent years, corporate citizenship has transformed from a nice–to–have to a must–have for the largest multinational corporations. There is no longer any doubt whether business has a role to play in the overall good of society.
Based on recent events, including BlackRock CEO Larry Fink’s 2019 letter to CEOs and the Business Roundtable’s Statement on the Purpose of a Corporation, it is now clear that many corporate leaders believe that their organizations must assume key roles in driving change. Gladly, some of the most influential corporations are making commitments and acting on issues related to the environment, inequality, refugees, and preparing workers with the skills necessary for future success.
This was one of the insights highlighted at the “2019 Corporate Citizenship Conference: Solve Together,” an annual corporate citizenship conference hosted by the U.S. Chamber of Commerce Foundation. The event brings together global leaders in Corporate Social Responsibility (CSR) to discuss best practices, employee engagement strategies, innovative partnerships, and insights into trends, while also offering valuable opportunities to network and form strategic partnerships to deepen social impact.
Emerging from the conference, three trends became clear as leaders shared learnings from new and established initiatives designed to create social as well as business value for their companies.
Defining Purpose Unlocks Opportunity
The first was an evolved understanding that defining your purpose as an organization enables and accelerates the speed at which your organization can bring value to communities. Speaking about the emergence of this new understanding of corporate purpose, Jessica Adelman, Group Vice President, Corporate Affairs at The Kroger Co. and President of The Kroger Foundation stated, “BlackRock’s CEO Larry Fink kicked it off in his letter to investors and we were very intentional about putting our purpose at the forefront.”
For Adelman, defining corporate purpose was a critical first step to creating social value and telling Kroger’s ESG story. “Authentic purpose is a key indicator to all your stakeholders,” said Adelman. She and her team initiated the “Zero Hunger, Zero Waste” initiative to translate The Kroger Company’s commitment to end hunger in the communities in which they operate and eliminate waste across the company by 2025.
The program is also an important vehicle for telling their company’s ESG (Environmental, Social, and Governance) story. ESG criteria are a set of standards for a company’s operations that socially–conscious investors use to screen potential investments. Investors are now paying close attention to the social commitments and actions made by companies.
“A lot of capital is flowing into ESGs,” says Adelman. Her advice to other leaders was to define their company’s purpose and bring social proposals to the forefront. “Do you have the support of your board of directors? In our case, it was our board that helped us push forward our ‘Zero Hunger, Zero Waste’ social impact plan.”
Authentic and Strategic Corporate Citizenship
A second trend is increased intentionality and strategy around corporate citizenship. Joe Ruiz, Director of Humanitarian Relief & Resilience, Environment and Communications at The UPS Foundation, emphasized this point, saying, “Corporations must play to their strengths, tie into their employees, and begin with the outcomes in mind.”
Customers are playing a role in dictating corporate action on social issues. In a recent study by Deloitte, results showed that customers expect companies to focus on more than profit margins. Eighty-six percent of consumers believe that a company should do more than just make a profit and 92 percent of millennials believe that companies should have an active role in societal issues.
Reba Dominski, Executive Vice President and Chief Social Responsibility Officer, U.S. Bank and President, U.S. Bank Foundation, noted that getting more strategic with their corporate citizenship meant engaging with underserved communities. In 2018, the bank claimed 4.1 billion loaned and invested to revitalize communities, 57 million in grants and contributions to nonprofits, and roughly 131,000 individuals educated in financial matters. “Make good decisions for the business, its people, and the world.” says Dominski.
Keynote remarks were delivered by Carly Fiorina, Former CEO of Hewlett Packard Co. and one-time presidential candidate. Fiorina is now the Founder and Chairman of the Unlocking Potential Foundation. The foundation’s mission is to build the leadership capacity of nonprofit organizations and their teams by providing those leaders with tools and resources to strengthen their problem-solving skills.
Fiorina encouraged corporate leaders to engage on social issues by saying, “When HP was struggling, I turned to our foundation… Too many people are wondering what is business here for, why is business here, and there have been too many businesses that have broken trust with communities.”
New Emphasis on Impact Reporting
Finally, companies are striving to effectively measure and communicate impact. Jeff Summers, Chief Sales and Marketing Officer at CyberGrants, told the audience, “CSR has radically changed in the last two years. It’s moved from responsibility to impact, programs to investments, and participation to connection.”
For long-term sustainability, companies need to tie investments in social issues to business needs. This requirement means placing more value on communicating a company’s alignment on external goals such as the Sustainable Development Goals, ESG indicators, or the Sustainable Accounting Standards.
Companies are changing the way they approach their role in the economy, and the U.S. Chamber of Commerce Foundation provided an extraordinary environment for corporate leaders to gather, network, learn from peers, and discuss the issues material to their businesses and the world. Ultimately, the “Solve Together” conference provided hope for those who believe that business has a role to play in social change. One by one, the largest companies in the world are beginning to see the business case for doing good.
Feature image courtesy of Ian Wagreich / © U.S. Chamber of Commerce