Corporate Social Responsibility (CSR): Trends, Purpose, Sustainability, & Trajectory

Some corporate social responsibility (CSR) trends include increased transparency of businesses, local community engagement, employee volunteer programs, investments in renewable energy sources, corporate activism or active engagement in social issues, and financial and practical support for COVID-19 relief efforts. For this year and the coming years, CSR initiatives are expected to have more sustainable finance, acceleration of the energy sources transition, long-term commitments and alliances with local governments and nonprofit partners, a stronger manifestation of inclusion, diversity, and equity, and funds being transferred to support post-Covid social issues and charitable causes.

CSR Trends

1. Increased Transparency

  • One of the trends in corporate social responsibility is the increased transparency of businesses brought by consumers’ increasing demands for company disclosures. Consumers have been commonly demanding transparency among businesses.
  • This trend has been driven by the ever-increasing availability of nearly instantaneous information, in addition to the consumer’s demands. As a result, companies have been sharing more social, governance, and environmental disclosures.
  • Consumers who have been dissatisfied with some business dealings and hidden agendas are demanding to know more about company matters that are previously considered as internal issues.
  • Workers are also participating, not just consumers. For instance, workers at Google “have openly protested the company’s bid on a cloud computing contract with US Customs and Border Protection.”
  • With all these, increased transparency is a CSR trend that is expected to continue growing in the succeeding years.

2. Local Community Engagement

  • Another CSR trend is localization or local community engagement. Companies that operate globally have been recognizing the value of local supply chains and local markets. This is driven not just by the desire to “reduce carbon emissions that might be associated with transportation or supply chain costs” but also to tap into local solutions and local talent.
  • A number of companies that “have charitable arms are also prioritizing nonprofit partners that work with local leaders and local talent” rather than bringing in cookie-cutter solutions.
  • Corporations that are interested in CSR have been increasingly engaging with local communities by “donating to local nonprofits, funding the construction of things like schools in lower-income neighborhoods, and becoming engaged with civic issues that affect where they do business.”
  • Bank of the West is one of the companies participating in this trend. Bank of the West’s Head of CSR said, “Building a sustainable future involves supporting the communities we serve. That’s why we work to support women entrepreneurs, foster financial health and wellness, and promote climate resilience through partnerships with organizations such as GRID Alternatives and Grameen America.”

3. Employee Volunteer Programs

  • Another emerging trend in CSR is the corporate-sanctioned volunteer events or employee volunteer programs. These programs or events, which take place more during the holidays, allow employees to volunteer and make positive contributions to the community using minimal time commitments.
  • Employee volunteer programs don’t just make a positive impact on the corporate social responsibility programs of the company, they are also avenues for the company’s team-building activities.
  • These volunteer programs improve the company’s culture and morale. It’s also an opportunity to establish cross-departmental relationships and collaboration by putting together employees from different teams during their volunteer days.
  • Silicon Valley companies have been leading in this trend with almost half (46%) having 10 or more volunteer events annually.
  • A report from the UnitedHealth Group revealed that “81% of employed volunteers who volunteered through their workplace, agreed that volunteering together strengthens relations among colleagues.”
  • Some companies have been personalizing the experience by letting employees choose “which volunteer activity they want to partake in, based on their interests or skill sets.”
  • The US-based employees of TransUnion have a ‘Volunteer Time Off’ day that’s dedicated to working with the employee’s charity of choice.

4. Investments in Renewable Energy Sources

  • According to Anuvrat Joshi, Cleantech Solar’s India business development director, “Top corporates in India and across the world have made very substantial commitments to include renewable energy in their power mix, and they are delivering on this commitment. This trend has steadily picked up steam over the past five years, and the results are already quite evident across our customer base.”
  • A number of companies have diversified their CSR funds into solar energy not only because it’s socially responsible but also because of its economical appeal as it is expected to bring good returns in the long run.
  • Google, Lego, and Johnson & Johnson are some companies that made substantial investments in alternative and renewable energy sources.
  • Orsted, a Danish service provider, is also a company that invested in renewable energy sources. From being coal-intensive, the company developed to renewable energy production. Orsted made investments in “offshore wind farms that reduce carbon emissions by 83%.”
  • According to Henrik Poulsen, Orsted’s President and CEO, “The urgency to react to climate change served as the impetus for making environmental sustainability a priority for the company.”

5. Corporate Activism or Active Engagement in Societal Issues

  • Corporate CEOs have been “progressively standing up for social issues they personally care about, catalyzing a trend of corporate activism.” Business leaders such as Apple’s Tim Cook, Google’s CEO Sundar Pichai, and Howard Schultz of Starbucks, including CEOs of mid-sized and small companies, “have become very vocal on important societal issues and are wielding the power of their organizations to address those issues in how they operate and invest.”
  • Sundar Pichai, Google’s CEO, has been standing up against social issues such as discrimination.
  • Business leaders have been taking more action to verbalize support for various societal issues. This advocacy has been expressed in the forms of volunteerism and philanthropic contributions, open letters, and public statements.
  • In the summer of 2020, 21 CEOs have asked state governors to promote community safety by requiring retail shoppers to wear masks.
  • Research shows that corporate activism increases employee loyalty, hiring competitiveness, and long-term sales. Also, the Weber Shandwick survey of professionals across the UK, US, Canada, Brazil, Mexico, India, and China shows that 84% of professionals favor “CEOs taking public positions on hotly debated current issues” and 79% said that they will “be more loyal to their organizations if their CEOs took public positions on issues.”

6. Financial and Practical Support for COVID-19 Relief Efforts

  • According to the research study of Timothy Manuel and Terri Herron that was published in September 2020, “Businesses have engaged in a wide range of philanthropic CSR actions during the pandemic, likely motivated by both utilitarianism and ontological factors in response to the needs of internal and external stakeholders.”
  • In 2020, as some governments made an announcement that any amount donated by companies for the fight against Covid-19 will be counted as CSR, the majority of the companies donated to various purposes that are geared towards health protection and hunger prevention of those who were severely affected by the pandemic.
  • The research report of the Indian Institute of Corporate Affairs indicates that companies all over the world have been supporting daily wage workers as well as the front liners such as doctors, nurses, and police officers among others.
  • Agnico Eagle Mines Limited, a Canadian mining company, has provided over “1,200 N95 masks to local healthcare centers” in response to the calls for help from the government. Whisky makers have produced hand sanitizers while luxury hotels have offered to become quarantine centers.
  • Large corporations have been assisting small businesses that are struggling due to the pandemic. Amazon gave a “$5 million relief fund for small businesses in the vicinity of its headquarters, while Google is pledging $1 million to organizations in Mountain View, California, impacted by the pandemic.”
  • The senior leaders of companies, in their own way, have also been giving financial and practical support in response to the crisis brought about by the COVID-19 pandemic. Alibaba’s founder Jack Ma has donated medical supplies and coronavirus test kits to a number of countries through the Alibaba Foundation and Jack Ma Foundation. Jack Dorsey, Twitter’s founder, pledged to donate $1 billion that will be directed at efforts to tackle the existing pandemic. Bill Gates has also “been diligently encouraging global cooperation on this front.”

CSR Trajectory

1. Sustainable finance is the next frontier

  • Bank of the West, together with its parent company BNP Paribas, has been leading a new movement in the field of financial services. The company sees sustainable finance as the next frontier.
  • According to Melissa Fifield, Bank of the West’s Head of CSR and Sustainability, “In Bank of the West, I saw an institution committed to sustainable finance, and to an uncommon level of transparency around the policies that dictate what it does and does not finance. That’s a big part of what attracted me to my new role as Head of Corporate Social Responsibility & Sustainability at the bank.”
  • This trajectory is influenced by the desire to hinder the flow of money in businesses that are harming the planet. Fifield said, “Our money impacts the planet even when we think it’s ‘just sitting in the bank.’ How? Some 90% of customer deposits are sent back into the world to finance a new business. Whether that new business is Arctic drilling or solar panels depends on who you bank with.”
  • According to environmental activist Bill McKibben, as written in his article in The New Yorker 2019, “Money is the oxygen on which the fire of global warming burns.”

2. Acceleration of the energy sources transition

  • Bank of the West’s Head of CSR and Sustainability said, “Experts agree humanity’s only viable way forward is through transitioning to a renewable energy infrastructure and weaning ourselves off fossil fuels. We are already channeling $1 billion toward this transition; further steps include building out frameworks for measuring standards and tracking results while supporting innovation.”
  • According to Courtney Hadden, Corporate Sustainability Head of Akamai Technologies, “As we enter into a new Presidency and re-enter into the Paris Climate Agreement, I predict a refocus on corporate engagement with a healthy planet. Across stakeholder groups, we see investment firms like Blackrock, companies like Microsoft within their supply chain, and even millennial employees having a greater and deeper commitment to sustainability. I think 2021 will be the year that companies and their people get back to thinking about their role in the global climate crisis.”

3. Long-term commitments and alliances with local governments and nonprofit partners

  • According to Jonathan Reckford, CEO of Habitat for Humanity, “The housing affordability crisis combined with the unacceptable home ownership gap for minority households will lead to bold partnerships between local governments and the private and social sectors. A year of ‘having to stay home’ for those with assets will bring long-needed attention to those who have no safe, affordable home in which to shelter. More than ever, consumers and top talent will choose to do business with and work for companies that are investing in their communities and putting their values into action.”
  • According to Mollye Rhea, CEO and Founder of For Momentum, “Marketplace events in 2020 have heightened societal focus on issues of economic inequity and racial inequality. As a result, companies are re-evaluating their social impact strategies and exploring alliances with nonprofit partners who can deliver immediate, mission-critical support as well as long-term transformational change.”
  • Mollye Rhea added, “Coupled with 2020 shifts in consumer behavior and purchasing habits, we anticipate an increased focus on genuine, multi-dimensional, thoroughly branded partnerships which are more fully integrated than short-term cause activations. In 2021, look for long-term commitments with multi-faceted activation strategies across both consumer and employee segments.”
  • According to Chris Hortinela, Associate Director of Sustainability at Vitamin Angels, “2021 will be the year when the private sector really starts digging deep into SDG impacts and targets via partnerships. If 2020 has taught us anything, it’s just how connected we really are, from social unrest to weathering a global pandemic, working together is essential. So it makes sense that businesses will find new ways to work with governments, NGOs and even competing firms under the common language of the SDGs to manage risk, ensure equality, and contribute to a sustainable and accessible world for all.”
  • A global research survey reveals that the majority of people or 85% of those who were surveyed globally believe that the pandemic has revealed societal issues and has accelerated changes that needed to happen anyway. Business World predicts that “partnerships and alliances will grow in strength.”

4. Stronger manifestation of inclusion, diversity, and equity

  • Share Our Strength’s Chief Revenue Officer Jill Davis said, “In 2021 we will see a stronger manifestation of diversity, equity, and inclusion actions by companies, especially when it comes to cause and CSR. This stems from consumers expecting businesses to show a greater alignment with the needs and values of a more diverse population.”
  • Davis added, “This approach will include companies providing more flexibility in their nonprofit funding restrictions and reporting metrics to give themselves the space to build trust, be authentic partners, and adequately serve underrepresented populations. We will also see nonprofits and companies alike tighten their values-based expectations of formalized partners and vendors.”
  • According to Mark Feldman, Managing Director of Cause Consulting, “The increased importance of environmental, social and governance (ESG) and diversity, equity and inclusion (DEI) are driving demand for substantive signature programs and strategies that address business and social objectives. Companies are architecting impact-driven issue leadership, CSR, HR, and community initiatives that intentionally address equity challenges within health, education, and economic opportunity. This work is simultaneously creating new value for communities, investors, employees, and other stakeholders.”

5. Funds will be transferred to support post-Covid social issues and charitable causes

  • According to Carol Cone, CEO of Carol Cone On Purpose, “Citizen-focused purpose actions will focus on a more explicit tie to the company’s products, services, and overall resources. This is fine as long as it advances valid stakeholder needs identified post-Covid-19. Some funds will be transferred from advertising/marketing to support highly relevant, post-Covid social issues.”
  • Cone added, “My predictions of such issues: diversity, equity and inclusion, healthcare, social justice, fast-tracking new medicines and medical research, personal safety and overall welfare, mental health support, community resilience, support for small businesses, STEM education to promote ingenuity and innovation and climate change as the pandemic proves we are all connected.”
  • According to Maggie Hureau, Director of Social Impact at Harry’s Inc., “If 2020 has taught us anything, it’s that mental health is a wildly under-resourced cause area. With increased awareness of the cause, we think that brands will start to not only talk about mental health but also financially support the nonprofit organizations that have come up with real solutions and are making an impact every day.”
  • According to Karen Wu, Partner at Perlman & Perlman, “The explosion in technological innovation designed to facilitate charitable giving, combined with the recent mandate that all businesses operate responsibly with respect to all stakeholders, including their communities, is leading to ever-increasing opportunities to support worthy charitable causes while engaging in the most routine of daily activities.”

How Consumers Pursue CSR, Purpose, and Sustainability

1. Consumers have been demanding company disclosures

  • A research study by Hyun-Hwa Lee et al. notes that “consumers are demanding more critical information regarding how companies manage social issues, such as forced labor and human trafficking, in supply chains.”
  • Research from Cone Communications reveals that “89% of consumers expect companies to use both websites and social media to communicate CSR practices, and 93% want companies to provide additional CSR information through a website.”

2. Consumers purchase a product from a company that supports an issue of interest

  • Research conducted by Cone Communications shows that over 60% of Americans are hoping that businesses will drive environmental and social change without government regulation. Almost 90% of surveyed consumers said they would buy a product from a company that supports an issue they care about.
  • In addition, almost 75% of consumers stated that “they would refuse to buy from a company if they learned the company supported an issue contrary to their own beliefs.”
  • A research study reveals that 90 million Americans see themselves as ‘conscious consumers’ and 72% of surveyed consumers stated that they will “actively seek a brand that aligns with their values if price and quality are equal.”
  • Research by Mohr and Webbs reveals that “many consumers value CSR more strongly than the prices of the products when making purchase decisions.”

3. Consumers prefer sustainable products over conventional alternatives

  • According to Susan Cooney, head of global diversity, inclusion, and equity at Symantec, “Consumers deserve to share in the good feelings associated with doing the right thing, and many surveys have found that consumers are inclined to purchase a sustainable product over a conventional alternative.”
  • A Nielsen survey reveals that “more than 50% of consumers are willing to pay more for a product or service if the business prioritizes sustainability.”

4. Consumers have been buying more locally produced products

  • The research study of Hongwei He and Lloyd Harris published in the Elsevier Public Health Emergency Collection notes that the pandemic has caused consumers to buy more locally produced products instead of foreign-produced.
  • According to this research study, “The issue of buying domestic vs. foreign products is not only simply an issue of availability, quality, and cost but an issue relating to consumer ethics in the sense of whether is the right (or wrong) thing to do. The Covid-19 pandemic will catalyze a renewed interest in this field. More research needs to be conducted to investigate the trends of consumer nationalism, ethnocentrism, animosity, and how they impact consumer ethical decision-making. The ethical dimension of consumer decision has become salient during the pandemic, which is also likely to shift consumers towards more responsible and prosocial consumption.”

5. Consumers hold corporations accountable

  • According to Business News Daily, “Consumers, employees, and stakeholders prioritize CSR when choosing a brand or company, and they are holding corporations accountable for effecting social change with their business beliefs, practices and profits.”

How Employees Pursue CSR, Purpose, and Sustainability

1. A company’s sustainability strategy is a big factor in employees’ choice of workplace

  • According to Susan Cooney, Symantec’s head of global diversity, “a company’s sustainability strategy is a big factor in where today’s top talent chooses to work.”
  • Cooney added, “The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet, and revenue. Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back.”

2. Workers choose companies that advocate for societal issues

3. Employees have openly protested

  • An Adidas employee who experienced racism in the workplace went on strike to protest the lack of apology and admission she asked from her employer.
  • Clarkston Consulting notes that stakeholders such as employees seek to see action and not just published statements of intent to change.
  • Amazon workers have also protested because of “unsafe conditions such as not having adequate protective equipment and working among many that have tested positive, or even died, from COVID-19.”

4. Employees have been volunteering

  • Research from Cone Communications reveals that 74% of employees find their job to be “more fulfilling when given the opportunity to make a positive impact at work.
  • AXA employees have been volunteering and giving their skills and time to charitable projects. More than 2,400 AXA employees globally have collectively donated over 2,000 hours to 55 different projects during the Virtual Day of Giving. The volunteer activities “ranged from writing to isolated senior citizens, reading to children via video to improve literacy, giving career advice to young people, to tracking animal movements for zoological research.”
  • The research report from Vigeo Eiris also notes that the medically trained staff of biotechnology and pharmaceutical companies such as Merck & Co. and Pfizer have also been volunteering to help fight the pandemic.

5. Employees become more engaged and committed when their companies have CSR initiatives

  • The Center for Creative Leadership (CCL) reports that CSR initiatives increase employees’ engagement and commitment to the company.
  • CCL’s Retiring the Generation Gap research study reveals that “most working adults, regardless of their generation, want the same things at work — and are committed to their organizations for substantially the same reasons.”

6. Resignation because of disagreement with the company’s way of handling pandemic concerns

How Companies Pursue CSR, Purpose, and Sustainability

1. Companies have been investing in alternative and renewable energy sources

  • Lego, the toy company, has been reducing its environmental impact by investing millions of dollars into reducing wastes and addressing climate change. Some of its other environmentally conscious efforts include the use of sustainable materials, reduced packaging, and alternative energy investments.
  • Johnson & Johnson also seeks to reduce its environmental impact by investing in different alternative energy sources. The company also works to provide safe, clean water to communities.
  • Google has also demonstrated its commitment to the environment through its investments in sustainable offices and renewable energy sources.
  • In December 2020, Vanguard Renewables has launched a Farm Powered Strategic Alliance with food manufacturers and retailers that seek to repurpose food wastes into renewable energy. According to Business Wire, “Unilever, Starbucks, and Dairy Farmers of America have joined, committing to food waste reduction and repurposing, and decarbonization goals.”

2. Company profits are being donated to charitable causes and to COVID-19 global fund

  • TOMS has donated one-third of its profits to different charities that support educational opportunities as well as mental and physical health. As of April 1, 2020, the company has directed to the TOMS COVID-19 Global Giving Fund all of its charitable donations.
  • Last December 2020, Amazon donated $2.25 million for the preservation of home ownership of hundreds of Nashville-area residents who have faced housing insecurity due to the unprecedented challenges of the past year, which include tornado recovery, the ongoing COVID-19 pandemic, job loss, and tax increases. Through this donation, “The Housing Fund will launch the Housing Resiliency Fund and will make financial grants to help ensure that low- and moderate-income families can keep their homes and maintain critical, long-term financial stability.”
  • Procter & Gamble is also donating tens of millions of dollars for COVID-19 relief endeavors. The company has also made a commitment to do 2,021 acts of good for this year (2021) “starting with its next major wave of contributions of health, hygiene and cleaning products, personal protective equipment (PPE), and financial support.”
  • According to Marshall Crawford, The Housing Fund’s CEO, “Amazon’s donation will help us keep more families in their homes, which is always our ultimate goal because home ownership is the key to long-term wealth building. Across Middle Tennessee, there is a growing divide between wages and housing costs, forcing moderate-income families to make unprecedented decisions about the future of their living conditions. For these families, these grants will be game-changing. We hope it spurs additional local partners to step up and donate because everyone benefits when more people can pay their bills.”

3. A socially responsible hiring process has been implemented

  • According to Business News Daily, “Starbucks has implemented a socially responsible hiring process to diversify their workforce.” Starbucks has been focusing on hiring more refugees, veterans, and young people who are just starting their careers.
  • Starbucks has been excellently creating job opportunities for various social groups. The company hired “thousands of war veterans while opening dozens of military family stores in the US.” The company cooperates with the UN Refugee Agency in order to continue hiring thousands of refugees in the coming years. Also, Starbucks has prepared over 10,000 positions to help young people get their first jobs.

4. Sustainably-sourced materials are being utilized

  • In December 2020, Business Wire reported that “Gap Inc. has joined the U.S. Cotton Trust Protocol and Textile Exchange’s 2025 Sustainable Cotton Challenge as part of its integrated sustainability strategy and to help it achieve its commitment to use only 100% sustainably-sourced cotton by 2025.”
  • According to Alice Hartley, Gap’s Director Product Sustainability, “Continuous improvement is important to Gap Inc., which is why we have decided to begin sourcing more sustainable fiber through the U.S. Cotton Trust Protocol. As part of our commitment to address climate change by aligning with the best science and industry practices, we have ambitious targets across metrics to lower carbon emissions and preserve precious natural resources like water.”
  • Hartley adds, “As an American company with purpose-led brands committed to sustainability, joining the U.S. Cotton Trust Protocol makes perfect sense. With two-thirds of U.S. cotton not using any irrigation at all, this allows us to further our commitment to sustainable cotton and enables us to support U.S. cotton growers.”

5. Healthcare initiatives have been in place

  • Pfizer has started some healthcare initiatives such as providing accessible health services to children and women in need and spreading awareness about noninfectious diseases. These healthcare initiatives are reflections of the company’s focus on corporate citizenship.
  • The IICA research report notes that the partnership of companies and the public sector has brought investments in many strategies for medical research, mass testing, and hand-washing campaigns. Companies have also “made efforts in capacitating and training health care providers using technologies across hospitals in direct consultation with the government department.”
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