Top brands in corporate responsibility and mastering emerging risks
For 400 American companies, the new year is starting off with a welcome accolade: they have been named to the Newsweek 2021 list of America’s Most Responsible Companies.
The second annual list singled out brands for being good citizens and giving back to the communities in which they operate based on a detailed analysis of environmental, social, and corporate governance (ESG) factors. Newsweek partnered with Statista Inc. to review the 2,000 largest public companies by revenue in the U.S., spanning 14 industries.
The companies on the final list were selected based on publicly available performance data and a survey of 7,500 U.S. consumers on how each company’s corporate social responsibility activities are perceived—both in general and in the three areas of social, environmental, and corporate governance.
Our own recent consumer survey showed that attitudes toward companies are affected by the brands’ ability to demonstrate a sense of shared values by engaging across their owned social media channels and communicating a clear sense of purpose. This undoubtedly influences their ability to become one of the country’s most responsible.
The top 10 companies with the highest scores are:
- Cisco Systems
- General Mills
- Dell Technologies
A broad analysis of company responses shows, above all, a measure of pride in being a role model as corporate citizens. A number of company leaders also acknowledged the unique challenges and lessons learned during 2020, vowing to continually adapt to counter those challenges.
Corporate responsibility takes on a new significance for brands
In an extraordinary year that thrust corporate responsibility into the spotlight, the role of brand purpose has taken on a new significance with forever-changed rules of online engagement and appreciably higher expectations of consumers. In a new marketing reality, the business reasons for committing to the values and principles that guide an enterprise have become abundantly clear.
“There is no way to avoid paying serious attention to corporate citizenship: the costs of failing are simply too high,” said Michael Porter, economist and professor at Harvard Business School. “The goal is to leverage your company’s unique capabilities in supporting social causes and improve your competitive context at the same time. The job of today’s leaders is to stop being defensive and start thinking systematically about corporate responsibility.”
Poll after poll of both consumers and enterprise leaders show that responsible business is good business. In addition to building a loyal customer base and attracting and retaining employees, “doing the right thing” by acting responsibly can help build value for firms and their shareholders.
Responsible companies and brands are up to 50% more likely to successfully expand into a new market, and 85% of executives believe that being a purpose-driven company drives profit. Consumers are six times more likely to rally around a company against public criticism when they think a brand has a strong purpose.
Ethical factors are three times more important to consumer trust than brand competence. According to a recent study 71% of millennials expect brands to take the lead on the social issues they find important and 83% of millennials want their values to align with the brands they support.
Investors and financial markets increasingly acknowledge that integrating broader societal concerns into business strategy and performance are evidence of good management. Brands are expected to step up and demonstrate a sense of corporate social responsibility with decisive action, not empty platitudes—a strategy backed up by recent surveys of consumers.
“I am convinced that we are entering a new era, in which companies will increasingly be judged by their overall impact on society and the environment,” said Isabelle Kocher, former CEO of ENGIE. “Companies that refuse to assume these responsibilities are doomed.”
The new reality for brands is steeped in ESG and predicting risk
The pandemic has shown that brands cannot disconnect themselves from society and has underscored the threat posed by emerging risks stemming from social issues and unrest. The new reality is characterized by heightened expectations for societal engagement and corporate responsibility, and radical uncertainty about the future.
"The importance of being prepared for such a seismic shift was affirmed in my book, “Gloom to Boom,” says Andrea Bonime-Blanc, the founder & CEO of GEC Risk Advisory and Crisp advisory board member. "This shows enterprise leaders how to effectively identify and manage their top risks to avoid organizational crisis, scandal, and value destruction. For those who are prepared, resilience enables brands to transform ESGT risk into opportunity and value for stakeholders."
Business for Social Responsibility, a global nonprofit, is one of many organizations calling for increased attention on the need to align the purpose of business with essential societal needs—an overhaul, essentially, of the social contract between individuals and institutions based on more inclusive models and practices.
Darren Walker, president of the Ford Foundation, said, “It is more critical than ever that businesses in the 21st century are focused on generating long-term value for all stakeholders and addressing the challenges we face, which will result in shared prosperity and sustainability for both business and society.”
They say the true test of character is what you do when no one is watching. What you do when everyone is watching is even more telling.
To protect your brand from cynical consumers and instigators who aim to undermine your corporate responsibility efforts with labels such as “wokewashing” or “greenwashing”, you must first team up with a risk intelligence partner to give you the earliest possible warning of these issues.
Simultaneously, maintain transparency about priorities as you openly engage with consumers and draw a straight line from values to actions. The brands that succeeded in these emotionally charged times — including those that ended up on the list of America’s Most Responsible Companies—never lost sight of their commitment to the well-being of their customers and communities.
What will distinguish the next list of most responsible companies?
Corporate responsibility is not a finite achievement; it’s a process of continual improvement while being constantly alert to new issues and considerations. Any of the leaders of the 400 Most Responsible Companies named by Newsweek could tell you that sustainable development and corporate responsibility are elusive goals that cannot be accomplished by one-time activities and decisions.
While the idea of aligning behind common values to “do the right thing” is compelling and admirable, pursuing ESG performance comes with its downside. One person’s angel is another’s devil when it comes to deciding what is responsible behavior. That atypical view can mean an increase in atypical risks in the form of harmful digital chatter.
With an early-warning risk intelligence solution, brands can anticipate, identify, and disarm harmful content with real-time risk detection and rapid response, giving communications leaders the ability to pursue a commitment to corporate responsibility that melds company values with those of their customers.
Perhaps the most valuable lesson learned by successful brands in 2020 was that an agile approach to crisis readiness coupled with authentic purpose-driven marketing can safely build online engagement and loyalty while ensuring long-term resilience. We’ve learned that enterprises that use advanced data, analysis, and intelligence to protect from any business-critical incidents and issues will outperform their competitors.
The actions of businesses have an undeniable effect on customers, employees, customers, communities, the environment, partners, and others. By considering the effect they have on the world at large when they make decisions and take action, companies can contribute to both their own bottom line and to the overall good of society.
One thing’s for certain: when the pandemic passes and things return to a new normal, it will be clearer than ever which brands have a genuine commitment to corporate responsibility and which ones are still in denial.
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