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The Importance of Environmental, Corporate, & Social Sustainability
In 2022, the success of a business goes far beyond its profitability. Today’s customers expect more from the brand they purchase from; they expect that corporations are not faceless enterprises hell-bent on making a dollar; they want to know that companies are stewards of their communities and, more importantly, of planet earth. 77% of consumers are motivated to purchase from companies committed to making the world a better place.
Some critical areas of corporate social responsibility (CSR) that brands should pay attention to include the environment, climate change, diversity, equity and inclusion (DEI), and sustainability. This article will examine the trends in corporate social responsibility, how brands can leverage these trends, and show their commitment to a better future for all.
Trends In Corporate Social Responsibility
Corporate social responsibility, or CSR, refers to a business’ awareness of its impact on society. Understanding both positive and negative contributions allows an organization to take steps to minimize the negative and enhance the positive. For example, although Coca-Cola is one of the biggest users of plastic bottles worldwide, they claim that, “90% of our packaging is recyclable globally.” CSR is good for more than just negating negative contributions, it’s a good business move across the board. A 2022 study found that, “CSR can boost a business’s bottom line by creating value, increasing innovation, improving customer and employee relations, and expanding growth options,” per a recent Forbes article. Here are the top trends in CSR you should expect to see this year.
Diversity, equity, and inclusion, or DEI, practices have been gaining steam for a while. It would be difficult to find a medium or large-sized business without a DEI statement or policy in its employee handbooks. DEI initiatives, at high-level, explain how a business navigates the issues of diversity, equity, and inclusion in the workplace. An example of a DEI policy would be a company’s commitment to hiring women of color for leadership roles. After a decade of escalating racial tensions, increased awareness of disabilities and gender identities, many companies realized that they had to pay more attention to these matters to better serve their employees, customers, and communities.
In 2022 DEI initiatives will expand further, including a focus on antiracism and pay equity. There is a growing demand for companies to take on a more active role in fighting against institutional and structural racism, and pay disparities between males and females.
Carbon neutral has been a buzzword for a while now, referring to a company’s ability to offset their carbon emissions to the point of neutrality. Essentially, “breaking even” on their environmental pollution. In 2022, there will be a push for businesses to take things a step further to become carbon net-zero. While many companies have made great strides in reducing their impact, climate change remains top of mind and most scientists agree that we aren’t doing enough to avoid disaster.
Achieving zero emissions means releasing no greenhouse gasses to the atmosphere, not an easy feat. Increased efforts are needed to reverse the impending doom of climate change and companies that commit to carbon net-zero will be looked at favorably by both customers and investors alike. Hundreds of businesses have made net-zero emission pledges, such as Dell, BP, Walmart, and General Motors.
Crowd-Sourced Green Practices
As climate change continues to drive many conversations in the corporate world and available natural resources are rapidly depleting, socially responsible companies are investing in green technologies, reducing their use of nonrenewable resources, and investing in more sustainable ways to do business.
One of the ways that major brands are “going green” is by collaborating with their communities and crowdsourcing new sustainability solutions. Big brands like PepsiCo are tapping into open innovation to crowdsource solutions from global innovators. In some cases, open innovation utilizes a competition model with a prize for the best idea.
CSR teams will be turning to open innovation to connect with local environmentalists to advance sustainable supply chains. Just last year, Unilever, Colgate-Palmolive, and Coca-Cola joined ABInBev on the 100+ Accelerator to identify innovative startups with solutions for circular packaging, smart agriculture, water stewardship, climate action, and upcycling.
Accountability Over Transparency
There have been a plethora of think tank articles in the last few years covering Gen Z’s desire for business transparency. Articles from well-known sources like Forbes emphasize that Gen Z, “…demand[s] stronger communication and transparency. If you don’t provide it, they’ll move on to a business who can.” While being open and honest about where your products are made, who you hire, and how much you recycle is important, this year we’ll see a shift towards accountability. In 2022, customers want to know that the brands they purchase from “walk the walk” not just “talk to the talk” of sustainability.
Customers are going to begin seeking out information in order to hold companies accountable to their commitments. Remember that quote from Coca-Cola above about their recycling efforts? In February, their accountability was put into question. According to Retuers, “The company was the world’s worst plastic polluter for the fourth year in a row in 2021, according to the global coalition Break Free From Plastic’s annual report released in October.” With environmental groups and concerned consumers putting the soda giant on blast, they have re-committed to environmental initiatives, aiming for 25% of their packaging to be reusable by 2030.
How Brands Can Enhance Their Environmental, Corporate, and Social Sustainability Initiatives In 2022
While most companies recognize the need for change in many areas, including climate change, diversity, equity, and inclusion, and more pressing issues, it can be challenging to determine how to best integrate initiatives that will truly make a difference in the world. While there are no clear-cut answers, it’s best to start small and be realistic.
If your business has an e-commerce model, committing to sustainable packaging can make a huge difference in your carbon footprint.It’s possible to select sustainable packaging options that help your bottom line and also help preserve natural resources. Business packaging can now be made from natural ingredients like seaweed, cornstarch, or mushroom-derived products to replace harmful plastic packaging.
Moreover, the Partnership Assurance Model (PAM) is helping businesses create cross-sector partnerships to increase sustainability. Business groups can use environmental initiatives to share resources, reduce waste, and encourage cooperation to lead to economic growth. For example, The Environmental Partnership, “is composed of companies in the U.S. oil and natural gas industry committed to continuously improve the industry’s environmental performance.”
Another way to enhance CSR efforts is by instituting a Give-Back program. Give-Back programs are where businesses donate portions of their profits to charities, relief efforts, and other good causes. While it’s not always feasible for businesses to overhaul their packaging or switch vendors on the fly, giving back is a fairly straightforward yet impactful practice. Consider giving to organizations that align with your business. For example, bottled water companies may give to organizations that support water sanitation efforts worldwide.
Even companies that operate on a global level are recognizing the value of their local communities. Going local when possible, helps businesses reduce carbon emissions and tap into local talent and solutions. Purchasing ingredients from local farms, doing charitable work at local organizations, and partnering with local environmental organizations to fine-tune your business practices can be a great way to go all in on your CSR efforts in 2022.
Read about how CSR is impacting the food & beverage industry here.
Author: Dan Marzullo