How Companies Can Become More Socially Responsible in 2015

This article is by Paul Klein, founder and president of Impakt.

In a recent article I co-wrote with Milinda Martin, In the Future, Companies Will Only Survive if They Help Solve Big Social Problems, we predicted that “2015 will mark the beginning of a long-term transition of the role and purpose of the world’s largest public companies and the value chains they control” and suggested that “the new imperative for business leaders will be to embrace the idea that the viability of their businesses depends on solving the world’s most pressing societal issues.”

The vision for the future we illustrated was based on input from corporate leaders who have observed that most of the ways in which businesses currently contribute to social change aren’t very effective for companies or communities. We suggested that in the years ahead leading businesses would abandon tokenistic corporate social responsibility, commit to bold social goals, and integrate social change in all aspects of their operations.

In responding to comments from readers, I realized that we missed an opportunity to help corporations become more effective agents of social change by providing specific ideas for what they should start to do differently in 2015. So here are seven ideas to help executives move their businesses towards a more compelling long-term vision and improve their performance in 2015.

1. Pick a big issue, declare a clear goal, and mobilize your resources. Corporations become successful because they identify problems, allocate resources to uncover and deliver solutions, and are accountable for what happens. The role of business in social change should be no different. Tyson Foods, one of the world’s largest producers of meat and poultry, has a social goal of ending hunger. Through its KNOW Hunger program, Tyson donates to food banks and increases awareness of hunger issues on a large scale. At the end of 2010, Tyson had donated 78 million pounds of protein—enough to serve one meal to every American citizen.

2. Make more effort to engage the millennials in your workforce. Employees of this generation want to be rewarded in ways that go beyond compensation and expect their employers to support their interest in social change. These employees also want to apply what they know to issues that they’re passionate about. This means reduce or eliminating activities that have employees doing menial tasks that don’t contribute to measurable social outcomes. For more about this, refer to MSLGroup’s excellent report, The Future of Business Citizenship.

3. Engage your naysayers. Corporations that include the perspectives of advocacy organizations create opportunities to make meaningful changes. “Nestlé has been engaging much more systematically with stakeholders, even constructively critical ones, to ask them what they expect of us,” said Paul Bakus, that company’s president of corporate affairs, in a recentForbes.com interview. “This has led to the development of 35 forward-looking commitments covering every area of our business—nutrition, water, rural development, sustainability, and compliance.”

4. Begin to allocate some of your company’s philanthropic giving to social purpose businesses and/or social enterprises. This will establish a base of social investment the results of which can be quantified while you preserve philanthropic commitments that are meaningful to employees and stakeholders. Based on 2013 figures from the Giving USA Foundation, reducing philanthropic contributions by approximately 50% of what they are today would create an annual pool of social finance capital of approximately $8 billion in the U.S. alone.

5. Ensure that all strategic investments in social issues include credible ways of measuring and evaluating performance. No significant use of business capital is made without a way to assess its value, and social investments shouldn’t be an exception. In some cases, this may mean increasing or changing your support to give your social partners more capacity in the area. In others, it could mean reducing support for organizations that don’t have clear plans to solve specific social issues, or don’t show interest in measuring the results of their work.

6. Reduce cost and improve efficiency. Eliminate separate corporate social responsibility reporting. This has been widely discussed for the last few years but remains a staple of CSR communications, despite its high cost and low value. (For more about this, read “What Gets the Worst Marketing ROI? Your Corporate Social Responsibility Report,” inAdvertising Age.) You can also increase internal capacity by only requiring charities that receive major support to submit accounts of how charitable funds are used. Nonprofit organizations spend too much time preparing these reports, and corporations spend too much time reading them.

7. Be disruptive. Oil and gas companies could begin transforming some of their stations into local centers of sustainable transportation. Banks could start crowdsourcing platforms to help social entrepreneurs access capital. Grocery retailers could help stimulate local agriculture and provide consumers with healthy food choices by hosting famers markets. What can your company do to be disruptive in 2015?

My advice is think about these ideas in January and write a media release dated December 31, 2015, outlining your company’s vision for the future and what you’ve done during the year to bring that vision to life