During times like these, when we question everything, we can look at the role of companies through a lens of a larger aperture. Newman’s Own gives all their profits to charity. It’s how Paul Newman founded the company and what drives its mission today. “Let’s give it all away” was the clarion call from Paul in 1982 as he launched the company. When asked about his philanthropy, he often spoke about luck: “I want to acknowledge luck; the chance and benevolence of it in my life, and the brutality of it in the lives of others.” The “lucky” companies, those that have been spared the worst, can, as Paul also said of corporations, “do more”.
Hence his founding of CECP in 1999 along with a group of prominent CEOs to encourage and empower the world’s leading companies to be a force for good in society. Last summer’s Business Roundtable Statement on the Purpose of a Corporation, which includes meeting the needs of multiple stakeholders, was signed by more than 180 CEOs as a testament to how far this movement has come.
Today’s unprecedented challenges represent a vast opportunity for companies to dig deep to invest in society when it needs it the most, and from our perspective at CECP, leading companies are doing so. That’s why Edelman research indicates citizens surveyed in 8 of 10 countries believe business is being more responsive than government on Covid-19 and that employers are seen as a more trusted source of pandemic news than either the government or media.
Unfortunately, the New York Times chose to focus on isolated cases in their recent article, “Big Business Pledge Gentler Capitalism. That’s Not Happening in a Pandemic”. Not only did they focus on just two companies, but they also picked one (Amazon) that has seen demand surge and is hiring 100,000 workers in the wake of record unemployment, while the other (Marriott) is facing a dramatic drop in demand and has cut CEO pay to zero and slashed dividends since the virus hit–though the article decided to report on pre-Covid actions.
The New York Times failed to mention the leading companies are stepping up to support their key stakeholders. For instance,
- Employees: Hormel Foods is providing a $4 million bonus to plant production team members. Sam Adams is making grants to unemployed restaurants and bar staffers. Walmart, Pepsi, Mondelez, General Mills, CVS, and Amazon are hiring and/or adding to salaries of employees. And the big banks have guaranteed jobs through 2021.
- Customers: Allstate, MetLife, State Farm, Travelers, and others are reducing rates and refunding premiums to policy holders, while companies such as Johnson & Johnson, 3M, and GE are running around the clock to meet a massive change in demand.
- Society/Community: Netflix created a $100 million fund for those in the creative community who are out of work. Unilever is donating the proceeds of all products manufactured on May 21, its national day of service. Colgate is donating $20 million worth of hygiene products. Supporting their education focus area, Equitable is committing $1 million, including $500,000 to DonorsChoose’s Keep Kids Learning. The Allstate Foundation is contributing $5 million, including their focus area of domestic violence. Virgin Group and Virgin Unite are supporting Crisis Text Line and others in a mental health crisis.
There are many tough choices companies must make given current challenges, but it is encouraging to see many leading companies stepping up to invest in stakeholder needs. A CECP Pulse Survey, which we run weekly to track company actions, found that despite the biggest downturn in years, 46% of companies have increased or will increase their societal investments in 2020 due to Covid-19. Another CECP Pulse Survey found that 86% of companies have changed their grant making policies, procedures, or criteria in response to Covid-19.
We encourage those companies than can do more during these unprecedented times to do so by levering their core expertise and resources to meet the additional needs of their key stakeholders: ensuring the safety of employees, supplying the changing demand of customers, taking care of the most vulnerable in their supply chains, and investing in the needs of community and nonprofit partners. To help amplify this work and scale innovations, CECP has launched a Partnership Finder and is using our platforms to share best practices.
As the world thinks about recovery and the new normal, leading companies are redefining how they invest in society. While no company is the same, and one may have more “luck” than another, each company is at a different place, this will be a time that companies will be remembered more for being a force for good in society that can drive sustainable value rather than reporting a one-time short-term gain.