Covid-19: A chance to put social impact on the corporate agenda once and for all?
Impact-driven initiatives easily fall off the list of corporate priorities. But the current crisis could change that – and corporate foundations and other corporate social investors are uniquely placed to use their influence. EVPA's Karoline Heitmann shares four ways they can take a lead.
The coronavirus pandemic has been yet another reminder that companies can and must play a more prominent role in addressing societal challenges – and the pressure to act accordingly is as high as ever. Thought leaders like Mark Kramer have highlighted that the response to this crisis is “a defining moment [for companies] that will be remembered for decades”. Accordingly, stakeholders from the public, private and social sector closely monitor whether companies finally live up to a purpose that places society first and support the fight against Covid-19.
Many large companies seem to finally comply. According to an initial tracking of philanthropic Covid-19 responses in March, more than 85% of the total philanthropic funding came from private companies, amounting to more than $1bn. In comparison, family foundations, corporate foundations and independent foundations had collectively committed $200m at that point. Other companies provided in-kind donations, like Johnson & Johnson donating 1 million surgical masks, or Unilever donating soaps and sanitisers. Some have even redeployed their production capacities. Volkswagen and Seat started to produce medical equipment, while Prada committed to producing 80,000 medical overalls instead of luxury fashion items. Many companies have thereby demonstrated a willingness to take actions beyond a commercial interest.
But the truth is that we need companies to implement such impact-driven initiatives at all times, not only during extreme disasters like a global pandemic. Whether it is the annual $2.5tn funding gap for the Sustainable Development Goals, or the insufficient progress for global warming to remain under 1.5°C, many challenges exist beyond Covid-19 that require more than commercially-driven, old-fashioned corporate social responsibility initiatives. So the question remains: will companies keep impact-driven initiatives on their agenda even after the present threat of Covid-19 fades?
At EVPA we work with Europe’s biggest community of Corporate Social Investors (CSIs) – which include corporate foundations, corporate impact funds, impact accelerators or shareholder foundations – and we believe that these organisations now have a unique opportunity. CSIs not only have a comprehensive understanding of pressing societal challenges and necessary interventions, they also understand their affiliated company well. Through this vantage point between the social and the business sector, corporate social investors are ideally positioned to advocate for the prevailing social needs and nudge their affiliated company to pursue impact-driven initiatives beyond the current pandemic.
Yet, in doing so, corporate social investors should stay true to their DNA. The key is to find those issues that are aligned with the CSI’s social mission while also resonating with the company. Based on our recent study on strategic alignment (now available in Stanford Social Innovation Review), which revealed four ways in which a CSI and its affiliated company can align, we have identified four examples.
For some CSIs, the social mission might be aligned with the company’s purpose or long-term (inclusive) strategy. Take the example of Renault Mobilize and its impact fund, Mobilize Invest, founded by car manufacturer Renault, which seeks to create social impact through innovations in mobility. Renault Mobilize Invest financially supports inclusive mobility solutions that are commercially viable, thus ensuring their financial sustainability and continuously generating impact for people who depend on mobility to secure jobs and livelihoods. CSIs that pursue business alignment in this way might therefore be ideally positioned to advocate for impact-driven initiatives that could be addressed though the company’s value chain.
Some CSIs’ social mission might align more broadly with challenges related to the company’s industry. Trafigura Foundation, for instance, supports the welfare of seafarers, a challenge that is related to the wider industry in which the founding company Trafigura, a commodity trading and logistics group, operates. The CSI can develop new best practices that place the maritime workers’ needs at their core and thereby nudge all industry actors to implement higher ethical standards. CSIs that seek industry alignment might be ideally positioned to advocate for those impact-driven initiatives that can accelerate an industry-wide transformation.
In other cases, a CSI’s social mission may not be related to the company’s core business, but to a specific theme, SDG or core value. Take the example of Rabo Foundation, which supports cooperatives of smallholder farmers in developing countries to become more professionalised, efficient and ultimately self-reliant. The foundation is thereby aligned with a theme that is rooted in the DNA of the affiliated Rabobank, a Dutch cooperative bank that was initiated by and for farmers. CSIs that seek thematic alignment may now have a chance to remind the affiliated company of the wider value of supporting beneficiary groups that are related to the common theme, but have so far been beyond the company’s focus.
Lastly, some CSIs may have a social mission that is unrelated to the company’s activity, yet could be aligned with the geographical areas where the company is present. An example would be the network of 27 Vodafone Foundation, which all focus on providing health, education and disaster relief through the application of technology. Each foundation’s focus is therefore on a country in which the company is present. In such cases, CSIs can draw the attention of corporate decision-makers towards community-related issues that the company could proactively support in the future.
Irrespective of what type of impact a CSI advocates for, if it can repeatedly remind the company of its opportunity to create social impact beyond its immediate commercial interest, it might be able to institutionalise such thinking in the long term. If this is successful, corporate foundations and other corporate social investors may well be able to put social impact firmly on the company’s agenda – once and for all.
Article originally published on Pioneers Post (link)