What's in Store for 2020
A few years from now we may look back at 2019 as the year that CSR made it into the mainstream.
With the release of the Business Roundtable’s letter redefining the purpose of corporations to “promote an economy that serves all Americans’” and an increased focus from the institutional investment community on environmental, social and governance (ESG) metrics, more and more companies are embracing CSR. Specifically, they are taking steps to fully integrate it into their operations and ethos. If that trend continues, it could have a big impact on how public affairs professionals do their jobs and evaluate their performance.
With that in mind, let’s look at three trends in CSR to watch in 2020.
Similar to last year’s protests at Google over the tech company’s handling of sexual assault allegations, employees hit the exits to voice their displeasure at company policies and business decisions in 2019. Employees at furniture retailer Wayfair staged a walkout to protest the company’s decision to sell goods to a migrant detention facility. Amazon workers took a similar step to demand the tech giant take stronger action to combat climate change.
Employees are also starting to build coalitions. Amazon workers presented shareholders with a proposal to cut back on the company’s fossil fuel consumption and released an open letter signed by more than 8,300 employees. While that effort ultimately failed, these attempts show that senior leaders will need to engage staff and incorporate their feedback into company decisions.
“Purpose” Not “CSR”
As more companies look to “live our values” we’ve seen public affairs professionals start to embrace the terminology of “corporate purpose” and move away from CSR or even CR.
The most commonly cited reason for this change is a desire to fully integrate CSR and ESG principles into all facets of the business. This is motivated in part by an increased desire from institutional investors to take these issues seriously.
In a well-publicized op-ed, the University of California’s chief investment officer and the chairman of the Board of Regent’s Investments Committee stated that they will no longer hold fossil fuel companies in their portfolio. They did this because, “we believe there is money to be made. We have chosen to invest for a better planet, and reap the financial rewards for UC, rather than simply divest for a headline,” (emphasis in original). The insistence on the perceived risk of this investment class is a warning to firms that neglect ESG reporting and monitoring.
As organizations look to fully integrate purpose into their operations, public affairs professionals can familiarize themselves with the basics of , as well as the steps involved in taking a materiality assessment.
Organizations Encountering Conflicts Between Values and Issues
While the embrace of values as a key component of corporate operations should be lauded, it could present risks for organizations that don’t do ample scenario testing. There have been, and there will continue to be, instances where a company’s values (what it believes and stands for) will come into conflict with its issues (the ways in which it makes a profit). This is doubly true when dealing with operations overseas.
The starkest example of this in 2019 was the NBA’s crisis in China over a tweet supporting Hong Kong protestors sent by Houston Rockets General Manager Daryl Morey.
The NBA is an American company and values free speech. Many of its stars’ embrace that freedom and their larger than life personalities have helped the league become one of the biggest sports organizations in the world. However, a key component of that popularity is the continued growth of the league in China. According to the NBA, 21 million fans watched the decisive game of the NBA Finals on Tencent, the league’s distribution partner in China. It had 18 million viewers in the United States.
It’s clear that the growth of the sport internationally depends on an expanding audience in Asia. That’s become much harder after the Morey incident, as China’s state-run outlets no longer broadcast NBA games, and social media chatter about the league has declined on platforms such as Weibo, the nation’s Twitter equivalent.
The NBA isn’t alone in this predicament. Global firms such as Marriott, Coach and Swarovski, to name a few, have all been accused of “hurting the feelings of the Chinese people” in recent years. The Chinese government has laid out a pretty clear path for Western companies that encounter situations such as this. The way back to a functioning relationship starts with an apology that has one key phrase “(company) respects and supports China’s sovereignty and territorial integrity.”
That puts the NBA in a difficult spot, as it would run counter to its values of free speech and expression, and likely be dismissed by American fans as a capitulation.
As it stands, the NBA is still struggling to repair its relationship with China. In addition to the state media ban, Tencent has drastically reduced the number of NBA games it has shown and has blacklisted the Rockets, formerly the country’s most popular franchise. Will time heal all wounds? We’ll find out, but for now Chinese Rockets fans are grounded and the league’s rise may be in danger of stalling out.
Whether the NBA bounces back in China or not, it’s a clear lesson that firms need to think about how things people take for granted in their home market, such as free speech, can be very expensive abroad.[/vc_toggle][vc_separator]
Book Club Next Book
Join us for an evening of networking and discussion as we explore our first CSR book club selection of 2020, “Why She Buys: The New Strategy for Reaching The World’s Most Powerful Consumers,” Feb 20 at the Beer Institute.
The book examines how organizations communicate with women. We want to hear how our members have adjusted their communications and outreach efforts to better segment and reach their various audiences. These events are informal, and if you haven’t read the book cover to cover you’re still welcome to join us and participate. If you would like to RSVP, please visit the events page.
If you have suggestions for future books, please contact John Brandt, policy communications and corporate responsibility practice manager.
Upcoming Events
Workshop: CSR Measurement and Reporting: When you measure something, it matters. Our workshop will detail how and why to set up a CSR reporting framework.
The Advocacy Conference: One of our largest conferences of the year has something for everyone. Learn the latest strategies and tactics in grassroots, communications and lobbying with us in Las Vegas.
Workshop: Diversity and Inclusion in Public Affairs: What perspectives do we miss when our public affairs teams aren’t representative of the communities in which they operate? How can you develop a culture of inclusion? Our workshop will give you the tools to build a more supportive workplace.
One Last Thing: Walk, Walk Fashion Baby
One of the most visible and frequent ways we express ourselves is through our clothing. However, according to a recent report from NPR, the fashion industry has a much larger carbon footprint than many might expect.
According to the report, the “global fashion industry emits 1.7 billion tons of CO2 per year – more than the amount produced by international flights and shipping.” Additionally, many firms don’t disclose their annual carbon footprint, with 55 percent publishing the number annually and just under 20 percent disclosing emissions within the supply chain.
To date, luxury brands have been taking the lead on sustainability. In late 2018, English fashion house Burberry announced that it would stop destroying unsold goods, a common practice among luxury clothiers. French fashion firm A.P.C. launched a recycling program in Spring 2019, which offers store credit for old A.P.C garments. French fashion conglomerate Kering, which owns brands such as Saint Laurent, Gucci and Balenciaga, has been producing an “environmental profit and loss” report, which seeks to show and quantify the company’s environmental impact around the world. Kering boss Francois-Henri Pinault has been urging his peers in high fashion to take a similar approach.
In the upper-middle of the fashion market, Marine Layer, a California-based apparel company, recently introduced its “Re-Spun Collection,” which uses recycled fabrics to create new cotton garments.
It’s at the lower end of the spectrum where many of the industry’s issues occur. “Fast Fashion” outlets such as Fashion Nova, H&M, Primark and Forever 21 produce designer look-alike pieces quickly and at bargain prices, but the companies disclose little information about how the products are made and what happens to unsold goods once their shelf-life is over. Over the long term, it’s retailers in this market segment that will have to take a strong interest in sustainability in order to improve the industry’s environmental footprint.
As sustainability is both an individual and organizational responsibility, have you given any thought to how your clothing consumption might change in 2020? Fewer new purchases? Stretching another season out of a particular piece? More consignment finds? or start a conversation in ![/vc_toggle][vc_separator]
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