ITL #409 Decisive moment: CSR drives resilience for covid-19 recovery1 year, 5 months ago
The year of the pandemic may have been a watershed for CSR. But a gap remains between what people want companies to prioritize, and what companies do. By Daniel Silberhorn.
There’s a book called Decisive Moments in History which describes moments that defined humanity. 2020 proved such a decisive moment for CSR. As a result, companies have to review their culture, values and purpose.
The global covid-19 crisis arguably provides the international community with one of the biggest challenges in generations, at least on a par with the 2008 financial crisis. This also means one of the biggest corporate responsibility challenges to date and a decisive moment for CSR – for three reasons.
Good corporate citizens in demand
First of all, the sheer global scale of the pandemic required all societal players to contribute. Governments and authorities around the globe needed corporate citizens to help shoulder the task. And while some companies set ethics aside to seek unethical profit, an amazing number rose to the global challenge to help combat the virus and its effects. We have seen Apple and Google join forces to come up with a corona virus tracking system. McDonald’s helped out Aldi with temporary employees to cope with virus-induced stress on the retailer.
Chemical companies like Dow and INEOS started producing sanitizers – giving medical and wholesale staff priority. A number of companies, among them carmaker BMW, produced face masks. Heating and refrigerating manufacturer Viessmann designed mobile care units. And there are many more positive examples. The scale of creativity and range of support over months was almost breathtaking.
While many initiatives were driven by a true wish to do something, all this engagement makes sense for reputation and business. A firm’s genuine and authentic CSR builds stronger rapport among its customers and the public – as they have formed an expectation from leading brands to do something in combating the virus. On the other hand, consumers feel proud of the brands who help. But CSR is about more than ‘Doing good’. It‘s about taking responsibility for your impact. In the covid-19 health crisis, responsibility focused on people.
Challenge: caring for your employees
With the pandemic, responsibility for employees has never been this big at any single time and on such a truly global scale. And rarely ever this challenging, as companies came under pressure financially and with regards to business continuity.
Care while you struggle is a huge CSR test – but it’s something that’s clearly expected from employers, as the global FleishmanHillard survey ‘The Covid-19 Mindset' suggests. More than half of the respondents described employers taking better care of their employees as “very important” in early 2020.
A key expectation of course is to do everything in your power to secure jobs, also through measures such as executive pay cuts. Beyond securing jobs, protecting the health and safety of workers is the main concern, mainly by reducing exposure to covid-19 in the workplace. The task was to identify the right balance of measures to protect workers and stop spreading the virus – all while keeping essential services going.
OSI Foods, a global supplier of value-added food products, for example, rolled out a Covid Assessment and Control Plan across production and administration early on – for more than 3,000 employees across eight countries in Europe alone. And as thousands were sent home to work remotely, companies were also challenged to provide leadership and uphold corporate culture.
Here, RB, a global consumer goods company, just won a European Excellence Award with its ‘RB Give Time Variete’ initiative, helping its employees to stay connected. Allegion, a global pioneer in safety and security, also won recognition for its thoughtful leadership-driven internal communication.
As the pandemic dragged on, wellbeing and work-life balance moved into focus. Leading companies such as global software firm SAP recognized a need for more flexibility and asynchronous work. Cawa Younosi, Head Of People Germany SAP, even added to his email signature: 'My working hours do not have to match yours. Please do not feel obligated to respond outside of your normal working hours.'
Resilience through strong CSR
The third reason why 2020 was a decisive moment for CSR is because the crisis impressively demonstrates: A responsible organization is also a more resilient organization.
For example: The health crisis needed strong health and safety management to protect people and act quickly. Also, recognizing that hiring and training new employees is always costly, it makes sense to find ways to keep them and have a good social dialogue. Which is also key for keeping up motivation among employees.
On a big scale, covid-19 has exposed how vulnerable global value chains can be. In Bangladesh, for example, 1,150 factories reported 3.18 billion USD worth of order cancellations by October 2020 – many are at risk of closing; but will be needed again later. So, it’s crucial to work with suppliers to keep them in business.
At the same time, investors trusted responsible companies to do better in the crisis. On the stock market, products with a focus on ESG did better than others, especially at the start of the global pandemic.
With a view to recovering from the pandemic, the OECD argues that visible good CSR performance will help to move businesses beyond the pandemic, pointing to increased investor interest in environmental, social and governance (ESG) issues as a result of the crisis, and arguing responsible companies will both be better positioned to access governmental support and new capital, and face lower legal risks. The OECD also expects a noticeable positive effect of responsible behavior on reputation and brand going forward.
Correspondingly, observers like the OECD argue that embedding CSR into crisis management is likely to translate directly into long-term value and other benefits. And indeed, companies do recognize the value of responsible behavior – and currently drive CSR/ESG programs not in spite, but because of the pandemic. Not surprisingly, for example, more than half of US CFOs plan changes to make their supply chains more resilient, according to a PwC survey.
So what’s the conclusion? All in all, the corporate world is doing well in this decisive moment for CSR. However, there’s still a gap between what people want companies to prioritize, and what companies do. FleishmanHillard research shows that as a result of covid-19, a staggering 91% of employees want their company to take a fresh look at culture, values and purpose to reflect new expectations.
With a stronger focus on CSR/ESG likely going forward, communicators have a valuable role to play. Both as a link and facilitator between companies and stakeholders in efforts to align the corporate world more with societal expectations, and by ensuring CSR reporting and communication keeps the authentic commitment visible.
As a result of the pandemic, the rules have changed. It’s time for the playbooks to be rewritten. And the new playbooks have CSR written all over them.
Daniel Silberhorn is Senior Advisor ESG & Sustainability Transformation, SLR Consulting and Chair of the IPRA Climate Change Chapter.mail the author
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