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2016 Trends in Corporate Social Responsibility

January 4, 2016

It's that time of year when I try to predict what trends will impact Corporate Social Responsibility in the near future. Last year, I listed the following:

  • An improving global economy
  • An increasing commitment to sustainability
  • An increasing focus on income inequality
  • A fresh look at conscious capitalism
  • A serious look at disruptive companies

While the global economy may not have improved as much as was predicted at the beginning of the year, there is no doubt that income inequality, sustainability, capitalism and disruption were all words and concepts that were hotly debated and memorialized in speeches and writings around the world. And, they aren't going away anytime soon.

The World Economic Forum cited Deepening Income Inequality as its number one global issue, and other highlighted issues like Persistent Jobless Growth, Rising Pollution in the Developing World, Weakening of Representative Democracy and Increasing Occurrence of Severe Weather Patterns were consistent with the trends that I identified.

This year, there's nothing to indicate that these trends aren't continuing to be important, but there are others that impact the ability of companies to manage and enhance their corporate responsibility and sustainability programs. Five of them are:

  • CSR will go from voluntary to required. Following the adoption of CSR laws in Mauritius and India (where companies are required to donate 2 percent of their in-country, pre-tax income to CSR activities), as well as CSR disclosure rules in Singapore, Denmark and France, the European Parliament has adopted a directive (to be transposed into national legislation by EU countries in 2016) requiring companies to disclose information on environmental policies, social and employee benefit programs, respect for human rights, anti-corruption and bribery transgressions, and diversity of their boards of directors.
  • Materiality is the new black. Rather than trying to report on dozens of different aspects of a company's good citizenship activities, the emphasis will be on reporting on those things that are either required (see above) or that are considered critical to a company's business. Materiality assessments will become de rigueur for determining what issues are important to various stakeholders (customers, shareholders, employees, regulators) and which are not. Expect to see fewer annual CSR reports that look like sales pitches and more that look like management and financial reports.
  • The lines they are a-changin'. With the recent announcement that Facebook founder Mark Zuckerberg and his wife, Dr, Priscilla Chan, will establish a for-profit LLC to manage their global philanthropy rather than setting up a traditional foundation, and with social enterprises and B corps popping up all over, it's getting harder to figure out what's a for-profit firm and what's a not-for-profit organization. And, increasing one has to ask: does it matter? Outside of tax laws, which treat these kinds of firms differently, for-profit companies are increasingly seeing themselves as vehicles of social good, and not-for-profit organizations are increasingly seeing themselves as businesses that need a more sustainable business model. Expect more ambiguity going forward.
  • The bar keeps getting raised. In a Twitter chat a few months ago, David Stangis, chief sustainability officer for Campbell's Soup Company, wrote that "CSR practitioners will need to be on their toes - constantly learning" and "leaders are expected to deepen their business acumen, political savvy and negotiation skills daily." Shannon Schuyler, principal corporate responsibility leader at PwC, suggested that success in CSR requires the focus of the entire organization: "True CSR alignment and success comes when all stakeholders and employees (from top to base) have buy-in, contribute and participate." In other words, CSR jobs will become harder and more complex going forward.
  • Reports of CSR's death have been greatly exaggerated. Despite several academics and activists asserting that the days of CSR are numbered as more integration with lines of business occurs, just the opposite is true. As CSR grows up - and in many countries becomes required - the importance of good CSR practitioners will only expand, not contract. The old adage that "what gets measured gets managed" will ensure that CSR departments - and the professionals who staff them - will be around for many years to come.

Those are my predictions for 2016. If you have a question or comment, please follow me on Twitter at @timmcclimon and post it there. Thanks for reading and sharing this blog posting with your friends and colleagues.


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