Schneider Electric to introduce Energy Impact Fund for Africa
Schneider Electric will introduce the Gaia Energy Impact Fund to expand energy access, accelerate the ...
We are in the era of impact investing and big pledges as companies step up to tackle the toughest environmental and social issues of our time. GM has vowed to be carbon neutral by 2040, Apple is investing $100 million in their Racial Equity and Justice Initiative, and Target plans for 100% of its owned-brand products to be designed for circularity by 2040. These types of commitments are critical because big problems like climate change and inequality require big, systemic solutions. Today’s consumers and investors are also demanding change: 71% of U.S customers want to buy from socially responsible companies, and the Intergovernmental Panel on Climate Change’s landmark global warming report is prompting investors to take more aggressive action toward lowering their portfolio’s carbon footprints.
Companies who don’t take action risk losing investment opportunities and market share — not to mention being left behind as problems like climate change become increasingly dire.
A goal-driven corporate responsibility strategy can help companies challenge themselves to think bigger and do more while also increasing their accountability to stakeholders. However, setting corporate responsibility goals is not a one-size-fits-all proposition. A large retail chain’s goals may be very different from those of a small software company’s. The key is to develop a set of goals that are rooted in your company’s brand, business strategy, and culture. This will increase your likelihood of success. If you don’t adopt a strategy that feels authentic to your customers, you risk being accused of greenwashing or performative activism; if you adopt a strategy that is too ambitious, you risk falling far short of your goals. Either way, you risk losing credibility and public trust.
Whether your company’s corporate responsibility initiatives are driven by a dedicated department or another function such as operations or public affairs, here are six tips to consider when developing a goal-driven corporate responsibility strategy that suits your organization.
Getting buy-in from your CEO and executives before developing a strategy will ensure it reflects your company’s highest priorities. Executive support of the strategy will communicate its importance to employees and other stakeholders. The executive support will also help facilitate a successful companywide implementation.
So how do you get your leaders on board? Demonstrate the business value of a goal-driven strategy by showing how it will drive positive impact and position the company competitively. Use examples to educate executives on corporate responsibility goals and how they can drive long-term value for stakeholders. Pull not only examples from larger companies but also smaller companies that are widely admired in your community. You can complement market data with proof points from your own business, such as cost-savings realized by investing in energy efficiency or an uptick in sustainability questions received from investors or customers. And consider incorporating insights from industry leaders and results from competitors’ corporate impact strategies.
The next step of goal-setting is to identify your material issues: the areas that matter most to stakeholders and where your company can deliver the most impact through its operations, products, and services. For example, setting goals related to sustainable agriculture would make more sense for a food company than a technology company. A technology company might instead focus on protecting data privacy, donating time and money to STEM education, and investing in circular design practices for their products.
Conducting a materiality assessment can define your company’s core issues and can be done either in-house or through a third party. If you decide to manage the assessment internally, a good place to start is by determining which of the United Nation’s 17 Sustainable Development Goals (SDG) are most relevant to your organization and industry. For example, an energy company that builds and develops smart grids would have an interest not only in SDG 7, Affordable and Clean Energy, but also in SDG 4, Quality Education. By committing resources to STEM education programs, the company can ensure the long-term stability of its industry and company, which will require trained experts to drive innovation and future growth.
Materiality assessments also include surveying your company’s stakeholders to determine which environmental, social, and governance issues are most relevant to them and where they see the greatest potential for impact. To develop a list of issues for this survey, helpful references include the SDGs, the corporate responsibility reports of other companies in your industry, and guides from sustainability organizations such as BSR. After your surveying, review any related internal data, such as that related to your environmental footprint or internal diversity and inclusion efforts, to see how these compare to stakeholders’ stated priorities.
After determining the broader material issues, an important next step in goal-setting is to discuss how to approach these issues in a way that is authentic to your company’s purpose, values, brand, and culture. Assemble a diverse, cross-functional, and global team for this exercise, and ask yourselves: How can we best use our unique strengths to make a difference? For Apple, financing a developer academy for underserved students fits its brand. The community can trust the company to recognize and provide quality technical education. For a small regional bank, an authentic goal could be offering free financial literacy programs to decrease gender and racial wealth gaps.
Consider how team members across business units and time zones could work together toward a common cause. For example, if your technology company has a strong culture of volunteering, an attainable and measurable goal could be committing 1% annually of employees’ time to volunteering with local STEM organizations.
At NI, we looked for ways to develop a strategy that was true to our values: be bold, be kind, be connectors. We decided to set a goal to achieve Zero Waste at NI-owned buildings and reduce waste at leased facilities by 2030. This goal offers every employee at NI a tangible way to make a difference each day, whether by switching to reusable products, connecting with a working group, or working on solutions like a new composting program. Setting goals that reflect your company’s values will create greater employee engagement, which is an essential element of any successful corporate responsibility program.
Once you determine your specific goals and ensure they align with employee, customer, investor, and executive priorities, you’ll want to establish a framework that organizes and communicates the goals in a memorable, effective way. One approach is to organize goals into a broad framework around areas of impact such as People, Communities, and Planet. Or, to keep both internal and external stakeholders focused on your company’s ultimate vision, you could develop a more results-oriented, industry-specific framework. For example, at NI, we reframed “people” as “Changing the Faces of Engineering” to reflect the desired outcome of diversifying the engineering industry.
It is also a good practice to create a framework with goals that range in difficulty and level of ambition. While it’s human nature to want to set goals we know we can achieve, sometimes big problems require big solutions. Challenge your organization to include one or more moonshot goals, such as a net-zero emissions target or a bold diversity goal, that push you to think bigger. The rest of your goals can be a mix of challenging-yet-attainable targets and ongoing commitments. For example, LEGO has committed to making all of its core products from sustainable materials by 2030, which is challenging the company to create new alternatives to traditional plastics. LEGO complements that moonshot goal with more attainable targets such as bringing learning through play to 8 million children annually through its local community engagement programs in 26 countries.
Achieving corporate responsibility goals requires consistent effort and collaboration across an organization. Working toward a waste reduction goal may require your facilities managers to assess waste management contracts, your procurement teams to buy fewer disposable products, and your employee resource groups to organize education campaigns. To keep everyone on track, it’s helpful to create a governance system.
A concrete approach to creating a company-wide implementation and accountability system is to establish a corporate responsibility council of executives and senior managers that is accountable to the board of directors. Identify one or more “goal owners” for each goal — employees that will be responsible for developing and managing the company-wide implementation strategy and reporting progress to the council. For example, the head of research and development might be the goal owner for a company’s circular design goal and would assemble a task force of product and packaging engineers to create a road map for producing and shipping products with less waste.
When developing a communications plan to announce a corporate responsibility strategy and goals, focus on three principles: honesty, transparency, and repetition. Be honest about where your company and industry have come up short, whether that’s workforce diversity or greenhouse gas emissions levels. Be transparent about your plans to address these issues and work toward your goals. And look for every opportunity to repeat your messaging, especially among employees, who are your chief ambassadors and implementers.
For example, as Dell Technologies worked toward its Net Positive goal (to contribute more to the world than it takes out) over the last decade, the company regularly and publicly talked about the challenges of measuring such a goal. It worked with other companies to advance the nascent field of Net Positive measurement. And the company now has a new bold yet measurable goal: achieving net zero emissions by 2050.
These same three principles apply to corporate responsibility reporting. Publish your goals and then regularly and publicly report challenges and progress, no matter how incremental. Decide how progress is communicated and how often, and set that expectation with your stakeholders. An annual corporate responsibility report is the most traditional means of sharing updates, and you’ll want to choose the global reporting framework most appropriate for your metrics and audiences (such as GRI, Global Reporting Initiative, or SASB, Sustainability Accounting Standards Board). Additionally, a steady drumbeat of messaging throughout the year will help raise awareness and being honest about both your wins and challenges will build public trust. Think about creative, effective ways to reach your audience, including through social media, blog posts, or investor Q&As.
Finally, don’t forget to be proud of the work you’ve done and what you’re building. While you may not have a $100 million budget to pledge, remember that you have something just as valuable to share: an authentic, research-based corporate responsibility strategy. No matter how big or small the company, we can all use our unique gifts for good. Imagine the impact we can make together.
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