There are a variety of reasons why companies are driven to focus on social impact. Corporate citizenship/volunteerism is a good start, however organizations are seeking ideas about how they can do more. In June, Conveners.org Member ONE WORLD hosted a roundtable thought leadership lunch in Palo Alto with social impact leaders and experts to discuss the state of corporate social responsibility in Silicon Valley, exploring challenges and best practices.
Corporate Social Responsibility in the Silicon Valley
Scott Saslow from ONE WORLD started the conversation by stating, “All organizations of all sizes and types can drive social impact. We think it can be brought to the next level, it can be synergistic, and it can scale and be taken mainstream via cross collaboration.”
Leading companies such as Adobe, Cisco and Intuit tie what they do in social impact with their business and corporate values. This is great to see since during a down economy, they are still committed to social good. Some smaller companies sometimes struggle with where to get started. They are enthusiastic, but perhaps there is less priority to take it beyond employee volunteerism.
Geoff Trotter, Founder and Managing Director at KMPact, shared how an organization’s growth in sustainability evolves in a 1-4 stage process:
Stage 1. Doing basics (e.g. energy efficiencies, cost savings)
Stage 2. Being compliant
Stage 3. Recognizing benefits for employee engagement (such as talent recruiting)
Stage 4. Having a full sustainable strategy evident in the boardroom with Sustainability Officers reporting into the Finance Office.
Geoff added, “In addition to philanthropy, companies are now recognizing there are new revenue markets associated with doing good.”
Brian Thomas, Chief of Staff, Equinix noted that, “Social Impact is often a pre-read, but not on the board agenda yet.” Some customers aren’t aware about their carbon footprint.
A common issue discussed was how to measure success of social impact. Ellen Martin, Director of Impact and Growth, Closed Loop Partners commented that she was seeing more and more matchmaking between capital funding and social impact via a corporate impact fund. However, organizations need to get smarter about reporting to the investment committee. They are looking for financial return but also wants to see positive impact on business efficiencies and the value to the system.
Furthermore, in many organizations, it’s not clear what the return has to be. In addition, investors have different calculations for ROI on social impact. However, one large corporation gave their employees the freedom to make decisions to do small contributions to affect the culture. The corporation had a different standard for how quickly the money has to be returned (a concession) versus their other budgets.
When organizations want to do more creative non–profit impact, what can hold them back is setting the right time to focus on employees. A 5 yr. program would be effective with a model example since the board would be interested in grants, modeling, investing. Ellen commented, “I’m seeing more and more matchmaking between capital funding and social impact via a corporate impact fund.”
Brian Thomas also noted, “When a customer wants social impact, the CFO will pay attention.” This is what it took to help their organization to move forward with their efforts.
A second issue discussed by the group was how to teach the importance of social contribution.
For example, one German corporation’s main customers deal with sustainability (pollution levels, carbon footprint, chemicals etc.) The corporation does the basics around carbon footprint. However, their culture doesn’t always support additional efforts towards giving back. In Europe, a lot of the programs are government or company led vs. employee led.
As well, charitable giving might not be the norm for other cultures such as Asia.
Best Practices: Ways to Increase Employee Participation
Although employee engagement/volunteering shouldn’t be confused with social impact, when companies fund philanthropic causes, it inspires employees to think more about social impact.
Employee engagement and volunteering Ideas suggested included:
- Make social contribution more “fun” through gamification or friendly employee competition. Tie results to employee of the month recognition.
- Use social impact to encourage recruiting talent. A company’s social impact can be as important as benefits when new graduates consider joining an organization.
- Create a PR campaign to middle management to consider social impact for team building, so it didn’t feel like a burden.
- Tie career skills building to non-profit volunteer work. Middle management can volunteer on boards for career building.
- Have an executive sponsor to drive participation.
- Relax rules around philanthropy. Give more freedom in employee grants for volunteerism. Also ask the general public (not just employees) how your company technology can help a social cause.
Best Practices: Channel and Venture Partnership efforts
Scott asked the participants if it is better to work with larger impact projects. With our political climate, is there a need to shift the responsibilities to corporations to make a difference in diversity and inclusion? The Fortune Magazine article recommended for reading: 175 CEOs pledging to come together to work on diversity and inclusion.
To bring social impact to a higher level in an organization, one needs to solve: What are the issues that are material to the business that can be addressed. For example, single-use packaging for consumer package goods companies. This is more impactful that reporting ESG measures. Another example with agriculture supply chain, a large retailer wanted to decrease footprint, so they trained farmers (whether they sold to the retailer or not) for free so they could have higher quality produce.
One startup that helps track sustainability over time is True Value Labs. Their service “crawls” the Internet to view a sustainability index over time. It is interesting to see their stock prices overlaid on this are matching.
The group concluded that It is important to share widely corporate social impact successes but also to learn from failures as focus shifts beyond philanthropy. The participants agreed that they need to find success stories as examples to bring awareness to the executive level to truly change an organization’s culture. There also needs to be a discussion around profit and loss and return on investment in order to have a long-term focus on corporate social impact. Impact fund managers need to be investing in these companies.