Corporate social responsibility related to the organization’s regulatory, ethical and purpose-led commitment to its stakeholders. With the pandemic having a significant impact on the world’s economy and with recovery taking longer than anticipated, organizations need to revisit their priorities, operate differently and manage resources frugally. These trends, approaches and perspectives are important as corporate social responsibility takes a new turn in the post COVID-19 world.
There are upsides and downsides to the pandemic as reported by a study on the UN Sustainable Development Goals (SDG) with poverty, well-being and hunger losing steam while climate action, responsible consumption and life on land seeing partial relief. It is heartening to know that among the 130 India based organizations, of the total CSR spend by eligible listed companies in fiscal 2019, nearly 80% of the total CSR funds were spent. Over two-thirds of these spent 2% or more of their net profits, while ~10% spent 3% or more. The pandemic has also put the spotlight on values. Those organizations which have profiteered from the crisis have seen their brand image and reputation dented. While others who have stayed true to their values and supported the communities they serve, have seen more appreciation come their way. In a poll to gauge how people perceived actions taken by companies during this time, three in four Americans say they will remember the missteps in their response to the pandemic and over four in five – believed they will recognize those firms that cared for workers’ safety and protected jobs.
Key issues that surfaced during the pandemic are migration (internal migration is 2X that of international migration; in India 40 million migrants are impacted), poverty (about 71 million could be pushed to poverty in 2020 alone), inequality (half of lower-income parents struggle to pay for internet connections and worry about children not having access to education online), mental well-being (a 1% increase in unemployment rates is known to push up suicides rates by 1-1.6%), sustainable tourism (decline of 58% to 78% in international tourist arrivals for the year) and consumerism (60% of global consumers have changed their shopping behaviors). The need to invest in the healthcare system and train caregivers served as a catalyst for most of the funding from corporates during the start of the pandemic. Environmental, social and governance is also now in the forefront as countries realize the importance of impact investment for the local communities. However, a study on impact investing shows that investors in emerging markets focused on growth-stage organizations (49%) as compared to venture or seed stage ventures, indicative of the emphasis on firms to scale up.
The fallout of the pandemic also had positive effects on how people perceived the world around them. According to the 2020 Deloitte’s study among millennials, three-quarters of respondents believed the pandemic opened their eyes to fresh issues and made them more sympathetic to others’ needs not just locally but around the world.
Many recommendations were shared on how the government funds raised could overcome the crisis through emergency income support, creating a database of those losing jobs and improving healthcare facilities. However, it falls short in addressing long term value such as changing the mindset among the public towards such crises, revisiting skills needed to survive in the future, investing in social innovation and multidisciplinary collaboration ventures. Here are trends that will shape the future of corporate social responsibility.
- Charity begins at home: Due to the pandemic, there is greater awareness of human values and a negative sentiment towards materialism. There will be increased pressure on organizations to first take care of their own staff and for nations to consider their citizens first before pitching in for others. More effort will be taken to be ‘local’ and ‘origin of source’ will play a big part in consumption patterns. Taking care of the well-being of people is foremost for leaders in organizations and those who lead countries even before tackling external stakeholders and their experiences.
- New ways to measure success: Organizations and nations will need to revisit their operations and what they value the most. New Zealand, for example, is investing in their peoples’ wellbeing and mental health with a budget earmarked for it, a first for a nation. Bhutan, for example, values Gross National Happiness as an indicator of their citizen’s wellness and nation’s progress. Measurement of CSR success will also need to be real-time rather than annual as disruptive changes occur more frequently.
- Skilling for a new normal: Engaging in a VUCA world means having the mindset and agility to think creatively and meaningfully. Adaptive leadership is the need of the hour and organizations will have to invest more in reskilling employees and leaders on staying resilient for the future. These skills can then lead to newer and better forms of volunteerism – digital volunteering will be key going forward although the infrastructure needs at the beneficiaries’ end is as crucial as those wanting to pitch in.
- Social innovation for the future: Apart from pivoting to support ongoing needs such as community based screening, creating PPE kits and supporting vulnerable communities, social innovation in the future will mean co-creating and crowdsourcing more from stakeholders. Open and social innovations will mean facilitating approaches to co-operation and crowdsourcing via digital platforms.
- Increased accountability and partnerships: Stakeholders will demand greater transparency and involvement in how CSR is conducted. A majority of people surveyed globally (85%) believe the crisis has revealed issues and is accelerating change that needed to happen anyway. Partnerships and alliances will grow in strength. One of the observations from how organizations operated and continue to operate is their willingness to co-opt and collaborate, rather than compete. One interesting case is of organizations sharing resources like staff to mitigate the crisis. Another example is of organizations coming together to help each other find and place workers who lost jobs in this environment.
The pandemic has surfaced issues we probably never considered important till now. How we approach the challenges and opportunities as citizens, leaders and practitioners will determine what our world will look post-COVID-19 in relation to corporate social responsibility.
Have thoughts on these trends? Any other trend in corporate social responsibility that you spot? Do share it here.
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.