CECP’s 2020 Look Ahead

By Daryl Brewster, CEO, CECP

As companies settle in this world of “corporate purpose”, 2020 will focus on what those purpose statements mean—moving from words to action. Strength will be in solutions, not rhetoric. Stakeholders will be the golden thread of corporate purpose, requiring companies to understand what matters to them, meet their needs in line with the business, work with partners to get the work done, measure in more robust ways, and engage them in meaningful work. The themes of the 2020 CECP Look Ahead are:

  • Purpose Advocacy: Companies will identify and support issues that are middle of the road yet have broad support, tied to their purpose.
  • Stakeholder Capitalism: Businesses will build their strategies around stakeholder needs beyond just the shareholder.
  • Collaborative Action: Addressing time-sensitive global issues, companies will move quickly together for mutual benefit.
  • Metrics that Matter: Expanding the rigor of measurement to show impact of business on society, companies will increasingly utilize environmental, social, and governance (ESG) metrics as core practice.
  • Reskilling America: Matching the pace of change of global business, companies will upgrade the skills of the workforce to engage greater numbers in the jobs that will define the economy.

Purpose Advocacy

While leading companies will continue to define themselves through the issues they address, the rules for engagement will change. In an election year, leading CEOs and companies will be walking the line in their advocacy to straddle both sides, red and blue, to find the issues and solutions that are red, white, and blue, such as voting, U.S. Census, veterans, job training, infrastructure, the opioid crisis, healthcare, education, retirement, and diversity, equity, and inclusion (DEI). Companies will continue to select issues that are connected to business outcomes as they will be more likely to be embraced employees, customers, communities, and shareholders. We will continue to see CEOs live out their statesperson roles, yet with increasing caution, less of the “savior CEO” mentality, and more of a company-wide response.

The public will continue to look to companies for the facts. Edelman and Ipsos consumer research tells us that people trust companies to share information on their sustainability efforts, sourcing, how they deliver fulfillment to their employees, and more. Companies need to value and honor that trust relationship by continuing to share information with those audiences that increasingly want to understand how the world–and corporations–works.

“We’re in a world where we need leaders to improve the state of the world, not just the state of the bottom line,” said Marc Benioff, Co-CEO, Salesforce. “You have to deliver performance in your business,” Benioff said. “That’s table stakes.”

“Companies, and by extension their management teams and their CEOs, have a moral obligation to try to be a force for good,” said Dan Schulman, CEO, PayPal. “I don’t think there’s any way that we can shirk that responsibility, and I don’t think there’s any way to fully stand away from the culture wars around us.”

What Purpose Advocacy will look like:

  • Authentic
  • Stakeholder minded
  • Business and society focused
  • Focusing on issues that cut across beliefs and demographics
  • Realistic and fact based, grounded in data; not relying on opinions
  • Multi-channel; effective ways of communicating face to-face and online

Suggestions for your work on Purpose Advocacy:  

Come to CECP for:

  • Essential Services: Fast-track support on company strategy and corporate purpose questions; guidance in identifying when to act and how to engage on tough issues; assistance in distinguishing a company’s vital stakeholder issues.
  • Communications Audits: Looking internally and externally, is the company communicating its corporate purpose in a way that breaks through and highlights what it does best?
  • Investing in Society findings: Companies are creating and committing to statements of purpose that address a broader list of significant stakeholders. According to a CECP Pulse Survey in October 2019, 76% of companies have changed their corporate purpose statement in the last five years.
  • Diversity & Inclusion in Corporate Social Engagement report and 2020 Diversity, Equity, and Inclusion Accelerate Community. See more, here.
  • Defining your corporate purpose: CECP’s guidance through our Strategic Investor Initiative’s (SII) proprietary Long-Term Plan Framework to craft an authentic corporate purpose statement.

Stakeholder Capitalism

Building off the Business Roundtable’s Statement on the Purpose of a Corporation, companies will continue to pivot to a system that recognizes the needs of a broader set of stakeholders. Traditional business terminology, such as “growth”, will be redefined. It will not just be growth for growth’s sake, but instead “inclusive growth”. And this view will be a part of the core business strategy because it is leads to sustainable business success.

Ginni Rometty, CEO, IBM, stated “While most…companies provide very generous paid leave, there is a need for economy-wide action; fewer than 17 percent of workers have access to paid family leave through their employers, and fewer than 41 percent of private sector workers have medical or short-term disability leave. Legislation should provide uniform standards that apply to all covered employees and that adhere to the federal Family and Medical Leave Act requirements. Doing so would benefit employees…and businesses…”

Jamie Dimon, CEO, JP Morgan Chase, stated, “About five years ago, we decided to conduct a thorough review of our philanthropic efforts. We learned that…we weren’t really moving the needle on pressing economic issues facing our communities. We refined our approach to more fully draw on and leverage all of the firm’s resources—including our data and our people’s expertise—and developed significant, long-term initiatives focused on creating more inclusive economic growth. Now, we’re investing approximately $250 million annually in…jobs and skills, neighborhood revitalization, small business expansion, and financial health.”

“By presenting Voya’s long-term strategy to investors at the Strategic Investor Initiative’s CEO Investor Forum, I was able to share a comprehensive story that included our ESG results, which are increasingly important to all stakeholder groups and speak to the character of our brand,” stated Rod Martin, Chairman & CEO, Voya Financial “I believe that this bigger picture of who we are – how we’re building our culture, serving the unique needs of people with disabilities, and fostering an ethical, and inclusive, workplace – is a significant differentiator for Voya.”

What Stakeholder Capitalism will look like:

  • Listening to and meeting the needs of vital stakeholders
  • Collaboration between sectors
  • A recognition that a focus on stakeholders is a competitive advantage
  • A sustainable business strategy that prepares a company for the long-term, allowing it to see around corners and address its growth, strategy, and risk
  • Using the skills and resources of the business, including tech and data, to meet society’s needs

Suggestions for your work on Stakeholder Capitalism:

Come to CECP for:

Collaborative Action

Collaboration takes work, but 2020 will see important advancements in coming together around causes as global issues require swift action and leadership by many to make headway. Companies will see that the spotlight is not finite, and they can make notable progress in partnership with other companies. Business has an opportunity to see real results on issues such as climate and workforce through strength in numbers.

Michael L. Corbat, CEO, Citigroup, stated, “We consistently assess Citi’s role in response to three questions: What are we doing to help create inclusive and resilient communities? How can we use our voice to help drive dialogue toward solutions? Is Citi walking the talk — are we doing the right things within our own firm? The short answer to all three of these questions continues to be the same: that we can and should do more.”

Eileen Fisher, Founder and Chairwoman, Eileen Fisher, stated, “I have a clear memory around focusing the company on sustainability, when we created VISION2020. I just said, ‘Yes, we have to do this.’ I realized that my voice mattered in that moment. I didn’t do the hard work that got us to that point—it’s the people in the company who were out there doing it every day—but saying ‘yes’ made all the difference. What matters is how each of us shows up and brings our unique voice into the moment.”

What Collaborative Action will look like:

  • Data-based
  • Companies focusing on local issues, tapping local leaders to ladder up to success on global causes
  • Logos and egos to the side
  • Finding the middle ground on issues to find room for movement, ending gridlock
  • Agreement on problem statement together at the outset
  • SMART goals and accountability

Suggestions for your work on Collaborative Action:

Come to CECP for:

  • Board of Boards: 50 global corporate CEOs gather to discuss strategies to build corporate purpose and meet broader stakeholder needs.
  • CECP Summit: Brings together 300 corporate leaders who drive social strategies at the world’s largest companies to engage and learn together, offering powerful insights on trends, partnerships, and the impact of business to advance companies’ role as a force for good in society.
  • Research on effective collaborations, such as the group of companies that gathered to inform STEM Education through CECP’s Systemic Investments in Equity, Talent, and Tech

Metrics that Matter

Companies and investors will continue to tire of pursuing myriad metrics, rankings, and ratings, and put energy into identifying “Generally Accepted ESG” (environmental, social, governance) metrics. Companies will slow down their chase, as they determine what’s material to the company and share their own numbers with those who seek them.

“Business can and should play a significant role working with others to help rewire social and environmental systems for the benefit of all,” stated Kathleen McLaughlin, Chief Sustainability Officer, Walmart; and President, Walmart Foundation. “Businesses can accelerate progress on tough societal problems through holistic strategies that combine grant making, convening, and advocacy alongside business initiatives that draw on the company’s capabilities such as human capital, physical infrastructure, operational know-how, and technology.”

“Through responsible, sustainable business practices and a focus on continuous improvement, we remain committed to connecting key ESG best practices with our core purpose as a company,” said Julia Wilson, Vice President, Global Responsibility and Sustainability, Nielsen. “This is a journey without a single destination, but one in which we see continued opportunities to deliver value for all of our stakeholders over time in new and existing ways.”

What Metrics that Matter will look like:

  • Not a new requirement, but a way to solve business challenges across business units, namely lack of time and ways to build stronger relationships internally and externally
  • ESG-focused, with a stronger emphasis on social measures, including diversity, equity, and inclusion, which will be as important as financial measures, in bonuses, ratings, and investment decisions
  • Providing the “what’s next” after the Business Roundtable Statement

Suggestions for your work on Metrics that Matter:

  • Just Capital’s ranking of the most Just Companies in the U.S.
  • Drucker Institute’s Measure of Corporate Effectiveness
  • Impact Weighted Accounts Initiative piloted by Ronnie Cohen and Harvard Business School to pull together rating systems
  • CFA Institute’s development of a standardized way for asset managers to report their ESG performance, hoping to mirror the success of the CFA’s Global Investment Performance Standards (GIPS)

Come to CECP for:

  • Strategic Investor Initiative, CEO Investor Forums, and Long-Term Plan Framework that help companies identify the material financial and ESG metrics that communicate growth, strategy, and risk over the long term.
  • CECP’s Corporate/ Social scorecards practice that helps to determine the vital few metrics that signal progress.
  • Business Impact Measurement Accelerate Community: CECP is working with companies this year to identify the metrics that matter including employee engagement scores, brand measurements, minimum wage increases, employee wellness, inclusion, and more. See more, here.
  • Investing in Society findings: Although more large companies realize the importance of creating Long-Term Plans in addition to disclosing short-term milestones, there is room for growth in terms of consensus of measurable metrics. In 2019, CECP’s Strategic Investor Initiative released a new framework for companies seeking to develop Long-Term Plans with the aim of delineating specifics themes and metrics that buy-side investors are looking to understand.
  • Giving in Numbers: 2019 Edition data: Forty-three percent of companies measure the business value of community investments through employee metrics, levering an existing employee survey to track effectiveness of community investments.

Re-Skilling America

We will need nothing less than a New Deal for the 21st century in 2020 as the rapid change in workforce demands–augmented reality (AR), artificial intelligence (AI), 3D printing, Internet of Things (IOT), and driverless cars–runs the risk of abandoning today’s workers.  Opportunities to improve wages, up-skill workers, and engage talent are critical to sustaining a robust and inclusive economy. And companies have the potential and need to lead the way. 

Tae Yoo, Senior Vice President, Corporate Affairs and Corporate Social Responsibility, Cisco states, “The concept of skilling, reskilling, and lifelong learning is not new. What is new is that the pace of disruption is faster than ever; educational and career pathways are less defined; and the need for perpetual learning is the new normal. In this model, universities play the role of orchestrators in the talent ecosystem…Together, they create new relationships with employers and industry.”

Barbara Humpton, CEO, Siemens USA, stated, “My optimistic outlook is that this is a time to focus on collaboration and knowledge transfer. I’m focusing on the synergies that happen when people of different ages and backgrounds work together, as I believe these synergies are exactly what organizations pursuing digital transformation need. That’s in part because I’ve seen how multigenerational teams at Siemens have helped drive our innovation agenda rather than dampen it and because the parameters of a career over a lifetime are being redrawn. Careers are now lasting 30, 40 and 50 years or more.”

Tom Wilson, CEO, Allstate, stated, “Raising the minimum wage for existing jobs will certainly help, but some jobs simply do not create enough value to be high paying. More jobs with higher sustainable wages are needed. This need is going to increase over the next decade as automation and artificial intelligence affect every job in America. When I ask my peers whether they consider this an important issue for society, they emphatically say yes. When I ask them whether they discuss this at board meetings, they say no. The blame for this inconsistency is usually placed on investors’ demands for profits.”

What will Re-Skilling America look like?  

  • Seeking talent in overlooked places, such as people with criminal records or no four-year degrees.
  • Employee activism will play a role as a company’s workforce has a massive network and instant access to a megaphone to share their feelings.
  • Building on the success of the STEM education movement, companies will focus on re/upskilling the middle class and rural workers to address the 4th industrial revolution that will transform factories beyond machinery to AR-AI-3D-IOT.
  • Effective programs will also start at the beginning with youth skill development, anticipating the needs of the next generation of workers. Companies know what’s ahead and educational programs will tap into that innovation, in partnership with industry.

Suggestions for your work in Re-Skilling America:

  • KPMG’s Lifelong Learning focus: A foundation of education and lifelong learning can be the key to unlocking potential and sustaining communities through workforce readiness. Developing next generation leaders through a long-term strategic investment addresses an essential societal need and fills the talent pipeline with leaders who will be uniquely prepared to embrace the challenges of a global marketplace.
  • The Good Job Institute: The Good Jobs Strategy creates superior value for employees, customers, and investors by combining investment in employees with operational choices that increase employee productivity, contribution, and motivation.
  • University Ventures’ Last Mile Training: Investing in innovative last-mile training models that connect education to employment and create pathways to great jobs in growing sectors of the economy.
  • National Organization on Disability’s Look Closer Campaign: Business needs talent to grow and thrive–people who are innovative, results-oriented, and flat-out know how to get things done. Twenty million Americans with disabilities are ready to work.
  • JP Morgan: Giving people with criminal records a second chance by supporting their reentry into the workforce, the community, and local economies.
  • Deloitte New World, New Skills: Digitally upskilling the entire workforce and all students and teachers, and increasing automation to allow people to focus on higher value insights for clients and colleagues.
  • Talent Rewire and Participant Media’s American Factory
  • EY/Coalition for Inclusive Capitalism: For companies to fully measure their value, they must focus on and measure talent and the way companies manage their human capital when it comes to compensation and benefits, recruitment, training and development, diversity and inclusion, and well-being and creating a purpose-driven culture of engagement.

Come to CECP for:

  • Giving in Numbers: 2019 Edition data: CECP can see from our data that industries are focused on their future workforce: the tech industry is investing in higher education, the financial industry in community and economic development, and the industrial sector in K-12 education. The Giving in Numbers Survey asked companies specifically whether they were or were not focused on four top social issues. “Workforce” was selected by 71% as highly important.
  • CECP’s Equity, Talent, and Tech Accelerate Community’s reflections.
  • Investing in Society findings: Companies have taken big steps to do more social investing, engage their employees, and improve equitable and inclusive practices, simultaneously creating stronger connections with their customers.
  • SII’s Long-Term Plan guidance on human capital to help define what companies need to think about for the workforce of the future.

What’s next?

  • CECP looks forward to tracking these predictions with you in 2020.
  • What topics do you want us to continue to explore as we look at new Accelerate Communities in 2020?
  • Do you have a story to tell that supports these issue areas? Share with CECP so that we may build awareness for your work.
  • Attend the CECP Summit or any of CECP’s upcoming events to learn more.
  • Read Giving in Numbers: 2019 Edition, Investing in Society, and SII’s Long-Term Plan Framework to turbo charge your strategy.
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