No profession has remained untouched by the three crises of 2020: the COVID-19 pandemic, the resulting economic downturn, and the reckoning with racial injustice. Corporate Social Responsibility (CSR) is no exception. This past year shined a bright light on the increasing importance of corporations redefining their value to society and expanding their commitment to all stakeholders - customers, employees, regulators, investors, and the communities in which they work. Over the past several years, the focus on corporate responsibility has grown as data demonstrates that long-term financial success is inextricably linked to how companies respond to both social and market shifts.
2020 drastically accelerated the speed of change. The expectations of these stakeholder groups have increased and sharpened, and companies have adapted their strategies or created new ones to address their key constituents. With healthcare disparities, access to education, racial equity and justice, unemployment, hunger, and economic hardship all continuing to be at crisis proportions, the unique partnership between companies and their employees and communities is taking a new shape.
What changes are likely to continue as we move through 2021? Here are four key trends to watch:
- Corporations will continue to meet the moment and go deeper into issues most relevant in the wake of 2020. According to an ACCP/Rocket Social survey of corporate citizenship leaders conducted in 2020, 68% of respondents are funding new focus areas in response to the COVID-19 pandemic and the racial justice movement and many are significantly increasing existing funding to address heightened social issues. Companies are concentrating funding for organizations and initiatives focused on mental health, digital access in education, and small business development. They are sharpening their equity lens on issues they have previously funded to ensure their support reaches BIPOC populations; they are increasingly supporting community partners led by people of color; and they are approaching their work in new ways with a renewed goal to root out systemic racism.
The Capital One Impact Initiative is a strong example: In October of 2020, the company announced an initial $200 million, five-year commitment to support growth in underserved communities and advance socioeconomic mobility. Early investments supported nonprofit organizations who demonstrated innovation and pivoted existing programs to address the rapidly changing landscape presented by COVID-19. The Impact Initiative builds upon Capital One’s core mission to change banking for good, and the company’s priorities around racial equity, affordable housing, small business support, workforce development, and financial well-being.
- Corporate citizenship is permeating all departments. In the not-so-distant past, corporate philanthropy and social responsibility were siloed in a centralized department insulated from the frontlines of the business. That is no longer the case. Most departments, including human resources, marketing, sustainability, and finance now incorporate social purpose into their work and the lines of business are engaged in both developing and executing strategy. In recent months, we have seen a dramatic increase in job postings for corporate diversity, equity, and inclusion executives to activate on the rash of declarations to advance racial equity announced by companies in 2020. We have also seen an uptick in demand for environmental sustainability experts. To achieve meaningful and measurable outcomes in either discipline, these experts are recommending strategies that cut across multiple business areas, require internal collaboration, and depend on mutually beneficial community partnerships for success. As the work of CSR, Environmental Sustainability, and DEI are becoming more interdependent, the ownership of initiatives among different reporting structures is more diffuse, and therefore more complex. However, the criticality of the mission, alignment of goals, and measurement of impact is demanding that new corporate structures permeate the culture.
To address this reality, GoDaddy created a CSR steering committee, to have the greatest collective impact on key focus areas. Led by c-suite executives, the steering committee brings together department leaders from across the business to collaborate on CSR initiatives, develop shared goals, and encourage teams to think about their work differently while aligning to the same set of priority issues and impact measurement strategy.
- Employees have a growing voice. Employees are catalyzing change within their companies in ways never seen before. In recent years, there has been a fundamental shift in how corporate executives value and engage employees. In today’s economy, a company’s intellectual property and competitive edge often resides within its diverse employee base. Recruiting and retaining high-performing employees who bring a range of experiences and thinking styles to the company is critical for long-term success. According to a 2020 study conducted by Cone Communications, 88% of employees believe it is no longer acceptable that companies work just for money; they must also make a positive impact on society. Employees are demanding corporations lead with purpose and corporate executives are responding.
Employees are exercising their growing influence through employee resource groups (ERGs), social media, and websites that rate and review workplaces. ERGs initially created as internal affinity groups have shifted to become an empowered critical feedback channel that provides direct communication between employees at every level and the most senior executives. ERGs are now frequently called on to provide insight and recommendations to corporate grantmakers who are seeking to fund with an equity lens. The instantaneous impact of social media also offers employees, along with other stakeholders, an unfiltered channel to either lift up or critically question a company’s business practices. Finally, websites like Glassdoor offer potential employees an unfiltered view of a company’s culture and values from its current workforce.
Accenture creates space for the employee voice through Building Bridges, an ongoing opportunity for open and meaningful dialogue. In June of 2020, one Building Bridges webcast gave a platform to African American and Black Accenture people to share their lived experiences with racism. In addition to a learning opportunity for the Accenture community, this dialogue revealed to Accenture's African American and Black community that they were not alone, and they were supported by their colleagues and by leadership—including CEO Julie Sweet and Jimmy Etheredge, North America CEO, who both participated in the session.
- Corporations are building more authentic community partnerships. Executives in the c-suite are listening to the corporate citizenship experts within their teams who are calling for a fundamental change in their approach to building community relationships. Rather than using their business knowledge and positions of power to dictate community solutions, they are beginning to see wisdom in prioritizing community voices and seeking answers from civic leaders who are steeped in the community’s culture. Companies are engaging community leaders as experts and equals– with tactics that build trust and bring civic and nonprofit leaders into leadership roles and decision making.
T. Rowe Price Foundation was an early corporate adopter of what is a growing discipline in philanthropy known as trust-based philanthropy. The company’s roots are in Baltimore and following the uprising that occurred after Freddie Gray’s death in 2015, the Foundation spent a year listening and participating in community meetings to learn what was most important to Baltimore’s community members. One key goal identified by the community was to increase access to fresh food. Accordingly, the Foundation supported the No Boundaries Coalition and its goal to increase access to fresh and healthy food for West Baltimore residents, and to diminish the area’s designation as a food desert. The foundation learned valuable lessons from this model of trust-based philanthropy, which they will continue to apply to their grantmaking in the months and years ahead.
What is clear is that there is no turning back to a world in which CSR lives on the sidelines of what matters most to corporations. Employees, customers, investors, and community leaders will continue to hold companies accountable for their renewed commitment to corporate purpose. 2020 has forced companies to build opportunity in the face of crisis and accelerate their rate of progress against difficult challenges, and the strategies of yesterday are no longer adequate to meet the rising tide of increasing expectations. From my view as leader of an organization serving corporate citizenship professionals from more than 200 leading companies, I have seen corporations evolve their approaches and change their corporate social responsibility strategies – some because it is the right thing to do – but more certainly because future success depends on it.