Corporations and Their Evolving Roles in the Social Good Economy

 

By Kim Lynes

For most companies today, a philanthropic arm of the business is not a nice-to-have—it’s a must-have. This is because social responsibility efforts now influence four key areas that corporations rely on for success: consumer purchasing behavior, employee retention and acquisition, attractiveness to investors, and business growth. To be considered an organization that is sustainable both now and in the future, you need a comprehensive, strategic corporate social responsibility (CSR) program. A successful CSR program reaches across an organization, with all departments focused on improving the triple bottom line (social, environmental, and financial goals) and showing tangible, meaningful impact. In this paper, we will explore what drove this transformation and shift in expectations for corporations and their social actions and how it has positioned corporations as a key player in the broader social economy.

Changes That Caused This Shift

We can explain the shift in the public’s expectations of CSR programs with one word: accountability. There has been a growing trend across all sectors (government, public, and private) where sitting on the sidelines as global issues and concerns grow is no longer an accepted practice. A large driver of this change is visibility brought about by social media, and the ability of the public to not only directly interact with organizations, but hold them accountable as well.

We’re seeing corporations react to these shifts. In 2015, countries around the world committed to a global action plan with the Paris Agreement, aimed at taking steps towards avoiding hazardous climate change. The private sector played a role in the negotiations of this agreement and will be a primary player in ensuring that the new goals are reached when the agreement goes into effect in 2020. Several global companies have pledged to reduce greenhouse gas emissions, with more than 150 corporations signing the American Business Act on Climate Pledge (“How the Paris Climate Agreement Impacts Corporate Sustainability and the Private Sector,” Business Wire). The conclusion from these commitments is clear: Corporations need to be including corporate sustainability goals in their business goals and maintaining transparency about their successes. Both the government measures as well as public scrutiny will require this level of accountability.

In the United States, when the White House announced its intention to exit the accord, private sector engagement with the agreement remained strong and public. After this, 25 major companies released ads in newspapers to announce their continued commitment to their sustainability pledges. (“Climate Change is Real’: Many U.S. Companies Lament Paris Accord Exit,” New York Times).

Another key initiative driving more accountability from corporations and their CSR programs is the United Nations Sustainable Development Goals (SDGs). This initiative is important because it provides something new for corporations: a framework that companies can follow for creating and scaling their corporate responsibility strategy that also considers their business goals (“How Companies Can Champion Sustainable Development,” HBR). The SDGs contain 17 goals—an overwhelming amount for most. However, corporations have begun to identify those areas most relevant to their operations and commit their resources to affect those specific goals. IMPACT 2030 was also developed by the private sector to help guide corporations in achieving the SDGs through employee volunteer programs. Finally, the United Nations Global Compact is an initiative created by CEOs, so companies can align their strategies and operations with certain societal goals. Dubbed the “world’s largest corporate sustainability initiative,” by UN Global Compact, it is yet another way global companies have taken steps toward incorporating CSR into their core business practices.

This theme of strategizing CSR efforts and focusing efforts where it makes sense for your organization is one that has risen with the evolution of corporations’ roles in the social good economy. Why? Again, accountability. It isn’t good enough anymore to treat CSR as an aside that is separate from your core operations. Not having a CSR strategy or not following through on your CSR goals can negatively affect your brand value with consumers, potential employees, and investors.

Excerpted from Corporations and Their Evolving Roles in the Social Good Company

Kim Lynes is Sr. Marketing Manager (Content), Blackbaud

 Photo: Blackbaud

Distributed by 3BL Media and originally published by Blackbaud.