While corporate social responsibility (CSR) has typically been associated with companies’ efforts to reduce their environmental impact, social issues are taking center stage in 2020 amid COVID-19, protests, and upcoming elections. Companies should consider whether their current CSR initiatives are aligning with the 2020 corporate social responsibility trends and are effective enough as taking action and demonstrating transparency becomes more pertinent to employees, consumers, investors, and communities. As stakeholder expectations change swiftly, a company’s CSR initiatives can no longer rest on philanthropic contributions alone.
2020 Corporate Social Responsibility Trends
#1: Be Transparent and Thorough
With information now able to be rapidly distributed through digital platforms, CSR transparency is key in 2020. Companies must demonstrate sincerity, authenticity, and honesty, or else they risk brand damage and disapproval from consumers, investors, and employees. For example, sustainable clothing brand Reformation faced public backlash after an employee revealed how she felt the company founders acted with discrimination toward her as a Black woman among many white peers. In a similar story, an Adidas employee has been on strike to protest the lack of admission and apology she requested from her employer for racism she has experienced in the workplace. Publishing statements of intent to change is no longer sufficient; stakeholders want to see action.
Transparency and proactive demonstration of CSR initiatives will help companies build a trustworthy brand. Consumers are more aware of rhetoric that can be used to better a company’s image without translating to actionable improvements, so now the proof lies in the numbers. Therefore, external audits are on the rise to verify that companies perform true to their word. Without taking these steps to perform CSR initiatives with authenticity, companies risk losing trust from investors, losing business from dissatisfied customers, and losing valuable employees to other companies with better CSR performance.
#2: Involve Employees in CSR
Listening, understanding, and accommodating the needs of employees is paramount in this time. Employees are increasingly urging company leadership to support communities in need and to take a stand on social issues. They want their employers to promote a platform for accountability and take an actionable stance. Not only does CSR improve employee satisfaction and retention, it can also benefit a company’s recruiting efforts, especially since social impact is important to younger generations entering the workforce. Workforce diversity should also be reevaluated in recruiting processes to acknowledge calls of recent protests to eliminate discrimination and intolerance.
Organizations should include employees in their materiality efforts at the beginning of the CSR process. Employees can also be a great resource for promoting a company’s CSR initiatives, especially when they are provided with opportunities to contribute to causes they are passionate about. Paid volunteer days show support for employee interests and can also foster relationships with diverse employees across functions. Employees can even be further involved in CSR initiatives with positions implemented to manage sustainability, diversity and inclusion efforts, and social impact. Encouraging employees to pursue these initiatives will help a company maintain focus and promote daily interaction with social issues, demonstrating commitment to change and identifying issues that can be further improved upon, which can be monitored through people analytics.
#3: Center Business Activities Around CSR
In 2020, a company’s CSR initiatives must be built into the foundation of their business and demonstrated in daily operations.
Even though social issues are a major focus of this year, environmental impact is still a major concern. Zero waste is the new goal, and rather than just limiting or reducing a company’s impact on the environment, carbon neutrality is the call from stakeholders. Additionally, companies are not meeting the benchmarks expected of the 2015 UN Sustainable Development Goals, which were designed to tackle many social issues at scale by 2030. This means that private companies need to work harder on their CSR initiatives, possibly through partnerships with public entities. Consider intersectional environmentalism as a method to best approach these issues from a social and environmental lens.
Additionally, companies need to incorporate CSR into their purpose as a company. This provides a platform to inspire employees and creates an effort that customers want to support long term. As a guiding force, emphasis on CSR is non-negotiable and must demonstrate the idea that profitability is not damaged by efforts to meet social impact goals. Businesses can use their core business to create change to solve problems, but this only succeeds with an established purpose. Companies can even produce services or products aimed at solving social issues, such as sustainability and diversity. It is also important to consider how a company can effectively track and measure impact to be able to report progress and meet goals, especially for issues that require systemic change. Employee surveys are a great way to observe consistency between employee interests and company purpose to help optimize relevant core activities.
#4: Take More Responsibility for Community Wellbeing
CSR initiatives evolve as business evolves, but communities are increasingly impacted by the decisions that large companies make. This gives companies a position of power to solve issues, enabling them to make long lasting, effective change. In the context of COVID-19 prevention and policy, businesses that did not implement sufficient safety precautions had rippling negative effects on the surrounding communities, as seen in the shutdown of many meat processing and packing plants back in Spring 2020 due to COVID-19 outbreaks. Many employees were exposed to the virus, which endangered their safety and the safety of their families, caused potential profits to be lost by the meat processing companies, and reduced availability of meat for consumers. This shows how influential – both in negative and positive ways – companies have the power to be as they decide on policy and disaster management, especially when they do not consider their supply chains.
Business leaders are also taking more action to vocalize support for various issues. This advocacy has been demonstrated in the forms of philanthropic contributions and volunteerism, public statements, and open letters, as was the case this summer with 21 CEOs asking state governors to require masks for retail shoppers to promote community safety. This deep commitment and activism can be demonstrated in every aspect of business, considering partnerships, operations, and the overall company values, to show leadership within surrounding communities.
As companies continue to navigate through persistent social issues in the remainder of 2020 and beyond, it will be particularly important to demonstrate leadership, stay accountable, and create actionable solutions. Consider repositioning your CSR and diversity and inclusion strategies to best support your employees, investors, and communities through these tough times.
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Contributions by Courtney Loughran, Katerina Baduk, and Noah Bidna