Causenation

A blog by Cause Consulting

Three SDG Trends Shaping CSR Strategy

by | Mar 22, 2019

The UN Sustainability Goals inform Corporate Social Responsibility (CSR) strategy.  Recently, I had the opportunity to present at and attend Harvard’s Social Enterprise Conference, which took place at the Harvard Business and Harvard Kennedy Schools. One of this year’s objectives was to highlight the recent industry trends in corporate social responsibility (CSR) for for-profit entities. Below are three trends that were emphasized across the conference and inspired me to reflect on the opportunities they create for companies as they continue to evolve their CSR strategies.  Each references a corresponding UN Sustainable Development Goal that also highlight the framework many companies are using to in their CSR reports.

1. Emphasizing the “Social” Pillar of Sustainability (SDG 8 – Decent Work and Economic Growth)

Few seem to be on the same page when it comes to defining what sustainability means. It’s a ubiquitous term, often used without being defined, and mostly in the environmental context – but it does have a wider definition that more and more companies are starting to embrace. It focuses equally on three pillars – environmental, social, and governance.  

Back in 1987, the World Commission on Environment and Development, led by former Prime Minister of Norway, Gro Harlem Bruntland, published Our Common Future, which defined Sustainable Development as “development that meets the needs of the present, without compromising the ability of future generations to meet their own needs.” This report eventually led to the Millennial Development Goals in 2000; in 2015, the Commission updated these goals, unveiling the UN Sustainable Development Goals (SDGs). The definition has come to mean that the management of environmental, social, and governance (ESG) issues (McKinsey) effectively unify the three pillars and the idea that all are equally important for prosperity.

Inherent to a company’s sustainability is its governance and financial health. More recently the environmental pillar has become important with the threats of climate change. Now the third pillar – the people or social pillar- has started to come into the limelight.

When asked what their greatest asset is, many leaders answer “their people” but in reality, people are not their greatest asset, but rather their biggest liability (Harvard Business Review). Their biggest asset is “empowering” their people. Leaders are realizing this as they face stiff competition for the best talent and the skills gap intensifies. “Talent is the deciding factor in the global scramble for prosperity as skills become even more scarce” said Alain Dehaze, co-producer of The Global Talent Competitive Index.

The Fourth Industrial Revolution is transforming work as we know it. Artificial Intelligence, robotics, and the Internet of Things are creating far more jobs than we have skilled people to fill them. This gap is expected to rapidly increase. An estimated 2.4 million jobs will go unfilled between 2018-2028, with an economic impact of $2.5 trillion (Deloitte).

The realization that a company’s prosperity is dependent on its ability to attract talent has brought the “social” to the forefront of sustainability and made it as important a pillar as the other two.

2.  Investing in women makes good business sense (SDG 5 – Gender Equality)

I had the privilege of speaking on the Tech, Art, and Design for Inclusion and Cultural Preservation panel, which explored new inclusive business models that provide access to markets and craft preservation for artisan entrepreneurs – most of whom are women (in some countries, over 80%) in the emerging world. The UN Conference on Trade and Development estimates the artisan and home-worker industry at 34 billion annually and is the second largest creator of jobs for women in emerging markets (World Bank). When people think about where their clothes are made, they assume in a factory; in reality as much as 60% of apparel is either made or embellished using artisans and home-workers outside the factory walls.

Along a riverbank, the only source of running water, sits a cluster of a hundred or so thatched-roof huts on stilts – a small rural village with no electricity, three hours from Manila in the Philippines. Here, women are using their exquisite hand-embroidery, a skill that has been handed down from generation to generation. They sit in small groups, or near their hut watching over a sleeping child, hand-embroidering clothing to be sent back to a factory, and once packed, shipped to the United States, will be sold in large U.S. retail stores.

A year later, these women have pooled 20% of their income from their embroidery to bring electricity to the village and technology to broadcast school lessons from Manila, establishing the first school in the village to educate their children.

It’s that multiplier effect – she extends benefits to the community around her. “Businesses increasingly recognize that investing in girls and women is good for society AND good for business. Girls and women make up more than half the world’s population. They are consumers, producers, reproducers and they constitute the largest emerging market—bigger than India and China combined” said Katja Iversen, CEO of Women Deliver, a leading organization that works to empower girls and women. “In today’s complex global economy, development and business success hinges, in part, on the status of the world’s girls and women. Women Deliver – and not only babies. Securing a more just and equitable future for girls and women has become tantamount to ensuring a healthy global economy. When girls and women survive and thrive, it creates a positive ripple effect throughout society: communities and economies are stronger, environments are more resilient, and overall – everybody wins.”

Long recognized as an economic driver in emerging markets, the McKinsey Global institute (MGI) recently looked at the potential effect of driving gender equality here in the US.  The 2018 World Economic Forum’s Gender Gap Report ranked the US at #51 among the nations globally, and surprisingly behind nations like Zimbabwe and Bangladesh.  In the The Power of Parity, MGI estimates that if full gender equality were achieved by 2025, the US could add 4.3 trillion to its GDP. With these economic realities, US companies are awakening to the idea that investing in women makes good business sense if they want to compete and thrive at home and in a global market.

3. Embracing Transparency as a Win-Win Strategy (SDG 16 – Peace, Justice, and Strong Institutions)  

 During her keynote titled A Matter of Power: Truth and Transparency for Consumers in the Digital Age, Marta Tellado, President and CEO of Consumer Reports, drove home the power of technology to gain truth and transparency for consumers. With abundant technology to monitor and report on behavior, embracing transparency should be a no-brainer, because the alternative can lead to the loss of trust from a company’s employees, customers, and investors.

Facebook (FB) is the poster child for the consequences of lacking transparency. When it was revealed that millions of FB customers’ data had ended up in the hands of Cambridge Analytica, and then used to meddle in the 2016 US Presidential election, governments around the world began to debate the merits of regulating social media, FB lost the trust of 66% of its customers, and their stock price plunged almost 20% after investors got the jitters.

The FB example is particularly egregious but still, leaders sometimes find it hard to acknowledge policies or practices that may not shine the best light on their company, In reality, as employees, consumers, investors, activists, and other stakeholders demand transparency to drive accountability, it’s an opportunity for the company to create a win-win strategy: acknowledge they are less than perfect, set goals on how they are going to address issues, and in the process build trust and respect from their stakeholders.

 

Click here to learn more about the 2019 Harvard Social Enterprise Conference  

 

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