The past several years have tested Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) departments everywhere. From a raging pandemic to armed conflict in Europe and a climate crisis to boot, the list of global challenges keeps growing longer.
A new survey is raising alarm bells that without more leadership, new threats and uncertain times lie ahead for the world of CSR and ESG.
Leadership Is Lacking
The survey, which was published by the Association of Corporate Citizenship Professionals and YourCause from Blackbaud, sampled CSR and ESG employees from 149 different companies representing over $1 billion in community investment. The results showed a disconcerting disconnect between C-suite leaders and their departments.
While many C-suite leaders like to talk a big game about the importance of CSR and ESG, just 44% of those surveyed said their C-suite executives were highly committed to ESG, and only 39% believed their C-suite executives understood their department’s strategy. Even fewer respondents (33%) believed C-suite executives understood their company’s CSR strategy. While perceptions of C-suite commitment to CSR and ESG grew year-over-year, 46% of respondents wanted “more focus or buy-in” from C-suite executives.
Studies have shown that consumers, especially younger consumers, not only want, but expect, their preferred brands to engage in strong corporate citizenship. And millennials are willing to pass up jobs at companies that aren’t committed to strong CSR values.
If C-suite executives fail to heed these internal warning signs, bridge the divide, and invest in CSR and ESG, they risk damaging their brand’s reputation and position in the marketplace.
Resource Challenges Are Having An Impact
As corporations tighten their belts, CSR and ESG professionals are feeling the pinch.
According to the survey, 86% of respondents said their team had more responsibilities in the past year, a 6% increase from 2022. The problem isn’t that employees are being asked to do more–they also feel unsupported. Only 42% of respondents said they had enough resources to meet their leadership’s expectations. More capacity and financing are needed, according to those surveyed.
This divide isn’t just impacting employee morale, retention, and burnout–it’s also impacting outputs. At a time of growing need, grantmaking budgets are shrinking. 2023 marked the lowest percentage of companies that increased their grantmaking budget since 2020.
DEI Leadership Is In Short Supply
Diversity creates stronger, more inclusive companies. But many CSR and ESG departments are still suffering from a lack of diverse representation.
87% of survey respondents reported working on teams where less than half of the team was Black, Indigenous, or People of Color (BIPOC). One of the best ways to address this problem is to hire more people of color to senior leadership roles as teams with BIPOC leadership are significantly more diverse, according to the survey. Unfortunately, many CSR and ESG departments are trending in the wrong direction. In 2023, survey respondents reported a 17% decrease in the number of leaders of color.
One of the goals of CSR and ESG is to capture and project a company’s best values beyond. If decision-makers only reflect a certain viewpoint or perspective, they cannot advance those values effectively and equitably. Companies must recruit, hire, retain, and promote more BIPOC staff across every organizational level and department, including CSR and ESG.
Global Health Isn’t A Priority, Even Amid Covid-19
As someone who works at the intersection of CSR, ESG and global health, I’m always trying to understand what issues are motivating companies these days. Unsurprisingly, over half of all survey respondents (56%) identified environmental sustainability as a top corporate priority, followed by K-12 education (53%) and food insecurity (49%).
Yet amid a devastating global pandemic that has claimed nearly seven million lives and could end up costing the U.S. economy $14 trillion by the end of 2023, a measly 32% of respondents listed healthcare as a priority. Just 3% of respondents cited international development as a priority.
In an interconnected world where pandemics don’t respect borders, it’s clear companies haven’t learned the lesson of Covid-19. It’s only a matter of time before another pandemic emerges, and unless leaders figure it out soon, everyone could suffer the consequences.
A Glimmer Of Optimism: Volunteering Is Up
For too long, companies have shied away from allowing employees to volunteer on company time. Some companies don’t seem to understand the benefits of volunteering or have an aversion to paying employees for time that doesn’t directly raise the bottom line. These views run counter to the evidence that volunteering is both good for employees and employers.
A separate Deloitte survey found that 77% of respondents believed volunteering is essential to employee well-being. In fact, the overwhelming majority of employees felt that volunteer opportunities boosted morale more than company gatherings and parties. Leaders, think about that before planning your next “team bonding” event.
The good news is companies are catching on. According to the Association of Corporate Citizenship Professionals and YourCause from Blackbaud survey, 61% of respondents indicated that employee volunteer activities have increased. And the rise of platforms, like Rayze and VolunteerMatch, continue making volunteering easier.
More community service won’t solve every CSR and ESG challenge. But when C-suite leaders encourage employees to volunteer, they are helping build a better world and a better workplace.
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