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.
"Corporate social investors should stay true to their DNA. The key is to find issues that are aligned with their own social mission and resonate with the company"
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.
Read here the full article published on May 15, 2020 on Pioneers Post.