Brave Moves in a Complex World
Date: December 14, 2016
As this tumultuous year comes to a close and pundits prognosticate about the implications, there is a great deal of uncertainty about how governments will act with respect to climate change, improving conditions for workers, embracing diversity and inclusion, international cooperation and other major geopolitical challenges. CECP’s view is that the world’s leading corporations have emerged as a potentially steadying presence, and remain uniquely qualified to continue to drive progress against these challenges and be a force for good.
Thought leaders are publicly embracing this view, such as Richard Edelman, CEO, Edelman (and CECP Board Member) and Susan McPherson, founder and CEO, McPherson Strategies, who outline vital roles for companies in this new paradigm in these excellent essays.
Sourced from its work with 200+ companies, hundreds of monthly discussions, its proprietary surveys, and conversations with leading experts and on-the-ground practitioners, CECP: The CEO Force for Good has identified a number of emerging trends and programs we are offering to help companies continue their progress despite these uncertain times.
LONG-TERM THINKING: The short-term mindset remains dominant, but 86% of CECP CEOs stated that they are too short-term oriented (1). Strategic investors and leading companies are in agreement that the time is now to begin to shift capital to companies committed to a sustainable future. BlackRock, Vanguard, Common Sense Corporate Governance Principles, and others are calling for companies to share long-term plans, and integrate environmental, social, and governance (ESG) issues into investment decisions, with specific ESG financial impact metrics.
What we’re doing: CECP’s new Strategic Investor Initiative (SII) leverages our network of 200+ companies, representing US$7 trillion in revenues and investors, representing US$15 trillion in assets under management, to fundamentally change the conversation between CEOs, Boards of Directors, and investors from short-term profits to sustained long-term corporate performance. SII will convene select leading CEOs to present their long-term plans to major institutional investors at the inaugural CEO Investor Forum on the afternoon of February 27, following CECP’s 12th annual Board of Boards.
ADVOCACY AS STRATEGY: According to a Public Affairs Council study, pressure to engage on social issues in the last three years has increased for 60% of companies. In areas such as workforce, environment, and diversity and inclusion, leading companies like AT&T, Target and Patagonia are taking brave steps, with CEOs playing statesman-like roles on issues ranging from race relations to living wages and supporting environmental organizations.
What we’re doing: CECP gathers 50 CEOs each year at the Board of Boards — coming up on February 27, 2017 — to discuss advocacy as a business imperative, and counsels CEOs year round on ways to create open feedback methods (e.g., social media, town halls) to ensure the company’s actions reflect an awareness of those groups’ desires.
LEVERAGING ASSETS: CECP data show that 91% of companies are “doing good” that is not counted through current measurement methods. From impact investing, to data, to intellectual property, to brand and logistics, leading companies are solving societal challenges by leveraging their many skills and assets. For example, Anthem uses community-level health data to identify needs and target solutions; Nielsen’s Data for Good works with the World Food Programme to track hunger in hard- to-reach communities and deliver aid; and, through impact investing, Campbell Soup acquired Plum Organics to meet consumer demand (Investing with Purpose, CECP, with support from Prudential).
What we’re doing: CECP is transforming its measurement process to capture this “good beyond giving” through its Social Scorecard and the What Counts: The S in ESG report, in partnership with USAA, both to be released in 2017.
GLOBAL CHALLENGES, GLOBAL COLLABORATION: While many governments are looking inward, leading global companies are connecting their core business strategy to solutions in the areas of poverty, health, economy, climate, and more. CECP’s Giving Around the Globe report shows that North American companies determine where to invest in support of ESG internationally based on various factors, including employee footprint, areas of need, engagement, competitive advantage, and growth opportunities. Companies understand the importance of high-impact collaborations to find solutions, such as the We Mean Business initiative, which signed on 400 companies making carbon reduction pledges; the White House Call to Action on the global refugee crisis, which signed on 51 companies including Citigroup and Google; and, the CDC Foundation, which recruited companies such as 3M and Merck partnered with to help stem the spread of the Zika virus.
What we’re doing: CECP will help companies in 2017 through its Global Exchange, a new outreach and response structure of CECP-like organizations companies can tap as they work to find such collaborative opportunities globally.
EMPLOYEE ENGAGEMENT 2.0: CECP companies are enhancing employee engagement through efforts that are more personal, flexible, targeted, and peer-based. Alongside traditional volunteer initiatives, innovative companies are also making room for employees to live their passions through work, and leveraging human resources and demographic data to personalize engagement offerings. CECP CEOs said the greatest benefit to expanding societal engagement is strengthening human capital (63%, up 9% YOY1). The employee volunteer rate, as captured through CECP data, has risen 10 percentage points over the last 8 years.
What we’re doing: In 2017, CECP will guide companies on this next wave of employee engagement through a virtual community, specifically focused on communicating to employees.
PURPOSE DRIVEN: While “purpose” was the buzzword of the year—media mentions of “purpose-driven” increased more than eight-fold over the past year, leading companies are taking it from platitudes to robust business strategies. Purpose is the path to reaching vital stakeholders, providing the rallying cry to unite under a common theme. Employees who take part in the companies’ social programs are more “purpose oriented”, and report higher fulfilment through work and are more likely to be in leadership positions, and are less likely to leave the company. And purpose-oriented staff serving as advocates connect with those less engaged.
What we’re doing: Through our support of companies’ social strategies, CECP is helping companies identify authentic purpose statements, relevant case studies, and actions.
CECP looks forward to 2017 with cautious optimism. The world is changing. Business is expected to lead, but do so smartly. Let us know how CECP can support you and your team to make the world a better place through business.
Daryl Brewster is CEO of CECP: The CEO Force for Good. CECP is a CEO-led coalition that believes that a company’s social strategy—how it engages with key stakeholders including employees, communities, investors, and customers–is a determining factor in company success.
(1) 2016 CECP Board of Boards, live polling