Newsweek Magazine

Why CEOs Will Finally Put Their Money Where Their Mouths Are

BLM Protest3
Will corporations heed the lessons of the Black Lives Matter movement? Photo by OLIVIER DOULIERY/AFP via Getty Images

It was quite a year in the world of corporate activism.

In 2020, businesses and their leaders stood up like never before. CEOs and their boards halted campaign contributions to politicians who spread lies about a stolen presidential election, contributed millions to food banks to help Americans who lost their jobs as a result of the COVID-19 pandemic, and spent millions more to support social justice programs after the civil unrest that followed the deaths of George Floyd and Breonna Taylor.

And, they took a long look in the mirror.

But all that work will produce few results if business leaders don't take the next step and make good on the promises and pledges from the past year. "It's critical that the commitments made are integral to an organization's purpose and that leaders actively track progress," says Jeff Senne, responsible business leader at PricewaterhouseCoopers.

So, what's on the horizon for what's called corporate social responsibility (CSR) in 2021? What has to be done to build on the gains made in 2020? Here are the trends to track this year.

Doubling Down on Diversity

This year "will be crucial" when it comes to following through on the racial conversations started in 2020, says Dalila Wilson-Scott, executive vice president and chief diversity officer at Comcast and president of Comcast NBCUniversal Foundation. "Amid a global racial reckoning, companies were challenged to evaluate their policies, practices, philanthropy, investments." Now, she adds, there have to be results.

Lata Reddy, senior vice president of inclusive solutions at Prudential Financial and chair of the Prudential Foundation, predicts "there will be a divergence between companies that make equity a business imperative" and those that sold consumer empty promises.

Companies that are on the right side of that divide will be the ones that state meaningful action aimed at long-lasting results, says Daisy Auger-Dominguez, chief people officer at VICE Media. Hiring diverse candidates alone doesn't mean much if there's no framework to help those employees succeed. Companies that build diverse governance boards, develop products and services to meet the needs of a more diverse consumer, invest in their communities and advocate for policy to support change will stand out for putting their money where their mouths are.

We'll also see the role of reporting what's called "Diversity, Equity and Inclusion" (DEI) numbers transform as consumers take a more active interest. "People want to know the impact of those investments," says Kristen Titus, executive director of the Cognizant U.S. Foundation. One example of a new diversity "scorecard" is the 15 Percent Pledge, taken by major retailers, most recently Gap, to dedicate 15 percent of shelf space to Black-owned businesses.

The Green Economy...Continued

Last year, a number of sustainability initiatives moved into the mainstream. Companies were willingly enlisted in the fight against climate change, says Tim Mohin, executive vice president and chief sustainability officer at Persefoni AI. "With backing from some of the most influential actors in the capital markets, looming mandates from regulators, starting with carbon, will truly hit the management dashboards of multinationals around the world." BlackRock CEO Larry Fink alluded to this phenomenon as a "tectonic shift" in his annual letter this year, citing a 96 percent increase in sustainable asset investment in 2020 from 2019.

If you're looking for a company that seemed to do a 360 on the environment, consider General Motors. The Detroit-based automaker had until recently backed the Trump administration in its suit fighting California's tough new auto emission standards. But once President Biden took office, GM dropped its resistance. Furthermore, it recently announced plans to sell only zero-emission vehicles by 2035.

The Rise of Human Capital

One systemic flaw that COVID has exposed is how fragile progress towards shared prosperity really is. For example, women, particularly women of color, took the brunt of job losses, and working parents and other caregivers have not gotten the support they so desperately need.

In 2021, Dave Stangis, a sustainability and CSR advisor, predicts that we'll see a "long-overdue awakening of the role of 'People' in the economic/capital system." Strategic sustainable business advisor Mike Barry agrees that the high bar set for environmental sustainability will be matched by corporate ambition to tackle social issues. Suzanne Fallender, Intel's director of corporate responsibility, cites supporting employee health, safety and wellness as a major step toward planning for the workforce of the future.

Companies that can find ways to incorporate these goals in an organic and meaningful way will be poised to have the biggest impact. Many companies are partnering with apps like Headspace to provide mental health resources for employees; to be meaningful, these types of programs must also be matched with internal policies and commitments that address things like family leave, low wages and workplace safety conditions.

The Marshall Plan for Moms, signed by business leaders and other changemakers, is an example of a collective initiative aimed at compensating caregivers for their labor. By advocating for policy to support this group, companies make equity a priority where it matters, both in and out of the workplace. This type of leadership buy-in is essential to social capital investments: JJ Davis, senior vice president of corporate affairs at Dell predicts "more focus on—and commitment to—transparent, human-centric leadership, leaning into what it means to be flexible as the pandemic continues to have an effect on how and where we work."

Focus On Big Impact Initiatives

In 2021, companies will identify areas where they are poised to have the largest impact.

At technology company HP, one of those areas is solving the digital divide, says Michele Malejki, global head of social impact. Not only is the company donating more than $10 million in products and grants to communities impacted by COVID-19, but it's also partnering with education organizations to ideate on lasting change for Black, Native American and Latinx students and educators, disproportionately impacted by the digital divide. Through initiatives such as laptop refurbishment programs for underserved communities, the technology company can make a significant impact through the nature of its reach and influence in the industry.

Another company addressing a social issue that uniquely affects its industry is Zoetis, a company that develops and manufactures medicines, vaccines and diagnostic products for animals. Zoetis has made veterinarians' mental health a focus point of its social impact strategy, says Jeannette Ferran Astorga, head of sustainability at the company. By dedicating corporate philanthropic funds to organizations that support people in the animal care industry, Zoetis is focusing on what a world it intimately knows and, thus, can make a big impact.

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Time to Walk the Walk

The corporate activism from the past year has been inspiring to see, but we still have a long way to go. If companies aren't prepared to leverage their power to advocate for equity both in and out of the office, we'll be right back where we started.

When it comes to corporate activism and its intersection with the so-called American Dream, it's time to redesign a social contract that "meets our most contemporary and urgent needs, one that delivers long-term value for all," says Aron Cramer, president and CEO at BSR. Our chances of fulfilling the business world's full potential to do good may well rest with our ability to realize this vision.

Susan McPherson is a serial connector and founder and CEO of McPherson Strategies, a corporate social impact consultancy. She is the author of The Lost Art of Connecting: The Gather, Ask, Do Method for Building Meaningful Relationships.