How companies can make a social impact

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Bertina Ceccarelli is CEO of NPowera national nonprofit, rooted in community and on a mission to advance equity in the technology industry.

As Environmental, Social and Governance (ESG) Investments Grow – Up 84% to $34 Trillion by 2026, PwC estimates— so are questions, especially among consumers and politicians, about the true value of ESG strategies.

However, ESG forward investors and companies have no doubts. “Following the question of whether financial and ESG performance could conflict, nine out of ten asset managers surveyed believe that integrating ESG into their investment strategy will improve overall returns,” said PwC.

The Business Roundtable of 250 Top US CEOs agrees. “Companies should not only serve their shareholders, but also deliver value to their customers, invest in employees, deal fairly with suppliers and support the communities in which they operate,” is a company’s goal. states.

Yet the “S” in ESG, as in what companies do to make society stronger, is misdirected because its measure and value is often in the eye of the beholder.

The “E” can be quantified and measured in carbon emissions, energy use and waste generation. The Task Force on climate-related financial disclosures of the International Financial Stability Board provides standardized reporting of climate-related financial information. The “G” faces strict rules, regulations, reporting and enforcement by the U.S. Securities and Exchange Commission and others.

Because reporting standards aren’t as clearly defined for “S” as they are for “E” and “G,” companies have the freedom to report their social impact however they want. The downside is that companies struggle to draw boundaries between what they can and cannot do for society.

They are pressured to make statements about current social events without concrete actions to substantiate them. They are accused of empty promises, lack of tangible change and brand polishing. In the process, they lose faith and trust – with both employees and customers – when their actions fall short of their values.

I come from both sides of the social equation as a career director and now CEO of a non-profit organization. I believe companies can sharpen the “S” in their ESG in five key ways:

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1. Determine your route through your company.

Every company can promote a more just society through the products and services they already provide. Telecom bridges the broadband access gap. Home financing addresses the shortfall in home ownership. Healthcare brings basic medical services to socially vulnerable communities.

Tech companies that support food banks, for example, are great. Even better is finding ways to reduce the need for food banks in the first place by helping individuals secure tech jobs through training, because of the higher wages and economic mobility these jobs can bring.

2. Statistics are important.

Peter Drucker’s classic mantra, “What gets measured gets managed,” is now 70 years old. Today’s ability to collect and mine data to manage businesses and measure results is both easier and expected.

Social well-being is difficult to measure and therefore to manage. But it is possible if companies clearly define, target, track and report their social commitment.

For example, it’s not about how many corporate dollars they give, but about the tangible social impact in terms of the people and places they help. This is easier when nonprofits handle return-on-investment sensitivities and provide transparency about results for donor companies to meet their own ROI requirements.

3. Start indoors.

Social welfare starts with your people.

Establish firm DEI goals and employee engagement scores, especially among historically marginalized and underrepresented populations. It is important to keep pursuing DEI goals regardless of economic fluctuations.

Also align and combine ESG and corporate social responsibility features with corporate giving and employee volunteer programs. Too often they silos, collaborate, send mixed messages and waste valuable resources. Leverage employee passion for your mission to offer volunteering and giving options that expand your ESG goals, and set numerical stretch goals.

It has been said many times, but I still see companies talking mainly about the social importance of DEI and rarely about the business benefits. Yet Wall Street is increasingly doing business with women- and minority-owned banks, not for DEI goals, but to increase their ability to raise capital.

4. Reach out.

Find, engage, and prioritize doing business with business partners, suppliers, and supply chain providers to achieve social good goals together for a powerful multiplier benefit. Leverage buying power to encourage them and others to join you.

When companies focus on social good initiatives that try to close racial disparities, they also open up new markets to serve. It has been said many times, but I still see companies talking mainly about the social benefit and rarely about the business benefits.

A leading financial company is explicitly doing business with minority securities traders not just for DEI purposes, but to see, serve and benefit from the opening of long-ignored markets.

5. Collaborate with non-profit organizations.

There’s no one better to help you achieve measurable social goals. Non-profit organizations are at the forefront of social welfare and are aware of day-to-day real and current needs.

Giving to major national and global non-profit organizations is a safe bet. Supporting local community nonprofits with a better ear to the ground about what works can double your social investment.

You can also help build or strengthen a nonprofit’s operational infrastructure and impact, and let the expert leaders decide what to do with your generosity. Consider giving “unlimited” money to smaller community organizations and letting them spend it on areas most in need.

Sharpening the “S” in ESG with a business mindset will help both investors and the public understand that social welfare is simply good business.


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