Socio-Economics and the Single Company Part II: Coping with Macro-Trends

April 11, 2012

Editor's Note: Here's part I in this series.

If you had to define the biggest difficulty that CSR poses to the individual company, it’s that the company is often asked to respond to challenges that are bigger than just one company can handle. If you can’t single-handedly deal with all of the world’s problems, how do you prioritize? 

And how does this affect your external affairs strategy?

Companies have taken diverse approaches to these questions. Some focus on the biggest needs. Others focus on the problems that are easiest to fix. When BCLC did the first State of Corporate Citizenship survey almost a decade ago, we asked business leaders which social problem they felt affected their business the most. The answer was health and wellness. Which issue did businesses actually devote the most resources toward addressing? Education. They felt that they were better equipped to mobilize their employees and understand the issues more easily.

At Copenhagen Consensus 2008, director Bjorn Lomborg, posed the question a different way. He asked a panel of international development experts: Imagine you had $75 billion to donate to worthwhile causes. What would you do, and where should we start?

The chart shows the outcomes of Copenhagen Consensus 2008. (See this related Copenhagen Consensus project: Bill Gates for a Day.)

Rank Solution Challenge
1 Micronutrient supplements for children (vitamin A and zinc) Malnutrition
2 The Doha development agenda Trade
3 Micronutrient fortification (iron and salt iodization) Malnutrition
4 Expanded immunization coverage for children Diseases
5 Biofortification Malnutrition
6 Deworming and other nutrition programs at school Malnutrition and Education
7 Lowering the price of schooling Education
8 Increase and improve girl's schooling Women
9 Community-based nutrition promotion Malnutrition
10 Provide support for women's reproductive role Women
11 Heart attack acute management Diseases
12 Malaria prevention and treatment Diseases
13 Tuberculosis case finding and treatment Diseases
14 R&D in low-carbon energy technologies Global Warming
15 Bio-sand filters for household water treatment Water

Interestingly, solutions to malnutrition are sprinkled throughout the highest-ranked answers among this group, while a solution for global warming (for example) didn’t emerge in the ranking until #14.  

The external opportunities and threats that businesses face depend on a variety of factors, and they’re not exactly the same factors that society faces as a whole. In the United States, for example, the social and environmental pressures affecting business are different than they are for companies operating in Kenya or China.

So with all due caveats in mind, based on a wide range of interviews and data that BCLC has, I would say that, currently, this is how the top socio-economic business concerns are trending in the United States:

#1: STEM Education (rising). Some form of education or workforce development issue always ranks high. Companies invest roughly a trillion dollars in employee benefits. They obsess over skills development and professional advancement. The Society for Human Resource Management claims more than 250,000 members in 140 countries. Philanthropically, education has ranked as the top social issue companies invest in for 10 years. In the case of STEM (science, technology, engineering and math) education, several campaigns have recently launched, most notably from ExxonMobil, putting this issue front and center.

#2: Employee Wellness/Childhood Obesity (tie). The specifics vary year over year but some healthcare issue is always near the top. In some years, a particular disease such as HIV/AIDS or breast cancer dominates. In recent years, because of the leadership of First Lady Michelle Obama, many companies have been paying attention to childhood obesity. An underlying trend has been a shift towards wellness and exercise. Companies are investing in employee wellness programs that range from having chefs preparing nutritious meals to redesigned campuses that encourage employee exercise.

#3: Veterans Support. The U.S. Chamber's Hiring Our Heroes initiative has tapped into a massive concern about the returning veterans from the Iraq and Afghanistan wars. Some of the companies that have teamed up to address this issue include Capital One -- which just made a commitment to help the Chamber get 500,000 veterans jobs by 2014 -- Lockheed Martin and Booz Allen Hamilton.

#4: Jobs/Community Revitalization. The foreclosure crisis still hangs over major U.S. regions, particularly California, Nevada, Georgia, and Florida. The debt situation in California is a recurring theme. Recovery is happening in the United States, but it’s not uniform, it’s very lumpy, and it’s affecting different demographics in very different ways. This issue is actually #1 for a wide swath of developers, large employers, retailers, financial service companies, and equipment manufacturers, but it does not get as much visibility as some of the other issues on this list.

#5: Environmental Concerns/Water Crisis. Carbon is still the number-one reporting item in sustainability reports, but companies are increasingly looking at the environment like an infrastructure – for example, are the trade-offs in navigation and accessibility worth the potential costs of flood damages? If we plant trees or invest in coral reefs, will these become natural defenses that help minimize our risks due to extreme wind or water action? Water, and the lack thereof, is a huge issue in the Southwest, and increasingly, in the Southeast too.

Honorable mentions include:

  • Early Childhood Education (rising)
  • High School Drop-Out Crisis (declining)
  • Crumbling Infrastructure/Traffic (rising)
  • Disaster response (declining)
  • “Smart” cities/buildings/materials (rising with a bullet)
  • Boomer aging issues (even)
  • Millennial issues (even)

I’m sure many readers will beg to differ with the order of this ranking.This snapshot just reflects the aggregate impression that we’re currently seeing. Individual companies will rank the public issues that affect them differently.  

The point is that no single company can address these public issues, but as more companies identify how they can affect their business, the more you are going to see innovative strategies from companies about how to address them.

The result, I suspect, is that you’re going to see a lot of energy, research and analysis being poured into managing these socio-economic conditions profitably. To be continued…