https://www.forbes.

com/sites/susanmcpherson/2019/01/14/corporate-responsibility-what-to-expect-

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Corporate Responsibility: What To

Expect In 2019
Susan McPhersonContributor
Leadership Strategy
I am a connector, angel investor and corporate responsibility expert.
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Photo by Louis Smit
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As corporate responsibility continues to mature, one of the key shifts we’ve seen in recent years
is a move toward “values.” A company’s approach to impact is a reflection of that company’s
values -- and the values of its customers, employees and (increasingly) investors. It’s a shift that
has been accelerated by the current political climate, in which companies have had to publicly
stand up -- both individually and collaboratively -- for values like inclusion, empathy and
environmental preservation in the face of questionable policy decisions. The result?
Responsibility, humanity and impact are now more entrenched than ever in the corporate sector -
- and I am confident that this is not a passing trend.
I reached out to experts who are in the thick of this work to gather their insights on how
corporate responsibility will continue to evolve in 2019. Here’s what they had to say.

Investor interest in ESG will continue to swell.

Investor interest in environmental, social and governance (ESG) factors has gone mainstream,
and the experts we spoke with believe this trend will continue into 2019 (and beyond), with
socially responsible investing gradually becoming the new normal.

Tim Mohin, Chief Executive of the Global Reporting Index (GRI), explained: “In the past
decade there has been a tremendous upswing in interest coming from the financial sector. With
over 90% of the largest companies now filing sustainability reports (85% of the S&P 500), the
data is plentiful. But that is not new. What is new is the interest in using the information for
investment decisions. A recent study from Oxford University found that more than 80% of
mainstream investors now consider ‘ESG’ – environmental, social and governance – information
when making investment decisions. And the numbers are compelling - globally, there are
now $22.89 trillion of assets being professionally managed under responsible investment
strategies, an increase of 25 percent since 2014. This number is so large it needs context – it
exceeds the GDP of the entire US economy.”

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As investors continue to prioritize impact, measurement becomes a competitive advantage.

With investor interest growing, companies will need to prioritize impact measurement and work
collaboratively to establish standards. According to Daniella Foster, Senior Director of Corporate
Responsibility at Hilton: “The growth of ethical funds went mainstream in 2018 with the
establishment of the JUST exchange traded fund by JUST Capital and Goldman Sachs and a
record number of ethical funds established in the United Kingdom. This trend brings even more
quantitative data to the field of CSR, helping further develop the business case for prioritizing
social and environmental factors as an integral part of corporate strategy... In 2019, companies
that invest in how to better measure impact, both environmental and social, will lead the way in
rankings and help make ethical fund investing mainstream.”

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Mohin cited the example of the Financial Standards Board -- which was created decades ago to
coordinate and harmonize financial reporting -- as a sign of what’s to come: “As ESG reporting
becomes more central to global commerce, the consistency and quality of these disclosures will
also rise in importance and there will be similar harmonization in approach.”

Suzanne Fallender, Director of Corporate Responsibility at Intel, added: “In 2019, I expect we
will see investor focus on ESG continue to evolve, including a greater focus on the quality and
relevance of data and third-party rating, as well as the connection between ESG performance
data and financial results. In response, we also will likely see companies take a more integrated
approach to their disclosure and investor outreach activities, with tighter alignment between
CSR, investor relations, and corporate governance teams.”

Impact is here to stay in the boardroom.

This upswing in investor interest, paired with consumer and employee demand, will bring impact
to the top of the agenda at board and C-Suite meetings. “It will no longer be a choice for
companies to embed social impact into their business and brand strategies - it will be required to
thrive and compete for talent, customers and investors,” said Patsy Doerr, Global Head of
Corporate Responsibility and Inclusion at Thomson Reuters.

Foster agreed: “Corporate responsibility will increasingly make its way into the boardroom as
customers expect more from brands and new investor funds crop up exclusively for companies
with strong ESG performance. As CSR continues to mature and become a part of business
strategy, the surround sound created by customers, investors and competitors will echo through
the boardroom in 2019. The bottom line: Sustainable and inclusive growth is good business and
the companies that have aligned their business growth strategies to their ethics will be a step
ahead in future-proofing their business.”

“Boards of directors across a range of sectors are learning quickly that they need to develop
stronger competencies and strategies to manage ESG risks lurking in their business
models/practice,” added Dave Stangis, Chief Sustainability Officer and VP, Corporate
Responsibility at Campbell Soup Company.

Time’s up on meeting diversity and inclusion goals.

While most companies have caught on that diversity and inclusion (D&I) is more than just a
“feel good” talking point, most still have a long way to go when it comes to achieving their
goals.

Cecily Joseph, Vice President of Corporate Responsibility at Symantec, thinks employees will
start to put the pressure on. She said: “I think a broad range of stakeholders are a little fed up that
change around diversity and equity is not happening at a faster pace. This issue is not going away
in 2019. We will see employees getting more vocal and demanding their employers take action
on diversity related issues. We have already seen this with some companies in 2018 like Google,
but I feel more employees will feel empowered and expect more from their employers in this
regard. Investors will continue to see diversity as an indicator of a company’s long term success
and its ability to attract the best talent and be more innovative and competitive, and will use their
influence to push harder for gender and racial/ethnic diversity.”

Added Shannon Schuyler, Principal and Chief Purpose Officer at PwC and President of the PwC
Charitable Foundation: “When a company isn’t meeting its employees’ needs on topics such as
diversity and inclusion, expect employees to find new ways to encourage action by staging
walkouts, starting social media conversations, and writing op-eds/blogs about how their
employer is at fault.”

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Employees take the wheel.

It’s not just D&I where employees will continue to shape companies’ impact strategies. Hilary
Smith, EVP of Corporate Communications and Social Impact at NBCUniversal, explained:
“There is a growing trend for companies to craft their corporate social responsibility strategy
around their employees’ passions, first and foremost, as opposed to focusing mainly on their
external brand reputation. Today, employees, particularly millennials, expect to work for a
company that gives back. But they want to give back on their own terms and have a say in what
causes their company supports and how and when they volunteer their time. It is important for
companies to survey their workforce and forge relationships with non-profits in areas that their
employees are passionate about, and with charity partners that allow you to customize employee
engagement opportunities.”

In a blog post, Daryl Brewster, CEO of CECP: The CEO Force For Good, provided more context
for this trend: “Low unemployment rates and the ongoing war for talent have created a new focus
on the needs of the employee to bolster recruitment, training, and retention efforts. At the same
time, people are finding opportunities to speak up in support of their purpose and values….The
intersection of these two trends is employee power. Leading companies are listening to and
supporting the needs of their employees, and providing tools and resources to elevate those
voices.”

And get ready for the conversation to shift from millennials to Gen Z, says Symantec’s Joseph.
“We talk a lot about millennials, but in 2019 we will also be talking more about Gen Z (born
from 1995 on) and its impact on the workplace culture and society. It will be interesting to learn
more about this generation’s views on climate change, diversity and the role a corporation should
play with respect to social and environmental issues.”

As part of this shift, we are also seeing companies move from “diversity and inclusion” - which
can come off as corporate speak - and toward the idea of “belonging,” which is less about
checking boxes and more about shifting the culture to create an environment where everyone can
thrive and feel engaged.

It’s the age of radical transparency.

Transparency has become the expectation for companies, and investor interest will accelerate
action on this front. With that comes the opportunity for collaboration, says Foster: “In 2019,
companies will be asked to provide even more transparency into their strategies and public
goals—from the Dow Jones Sustainability Index to the Just 100 Index, companies will
increasingly be ranked on their public transparency and disclosure. Companies that provide a
transparent roadmap of progress—and challenges—will be poised to help drive collective
impact. New industries will continue to rise to the challenge.”

New technology will make radical transparency possible. Campbell’s Stangis explained:
“Accelerated digitization (IoT and the ensuing data) of the supply chain and marketplace will
continue to advance radical transparency to uncover new risks, but also key opportunities.”

Fallender of Intel underscored this point: “We expect there will be increased focus in 2019 on
opportunities to apply technology to help a range of industries drive smarter decisions and
greater resource efficiency, develop circular economy solutions, and improve supply chain
responsibility and human rights practices. We also expect to see increased discussions of how
technologies such as artificial intelligence, internet of things, and 5G can be leveraged by multi-
stakeholder groups to advance progress toward the UN Sustainable Development Goals.”

Companies must step up to address the opportunity gap.

The future of work has arrived, and with it a number of challenges. Schuyler explains:
“Companies will digitally accelerate to address the opportunity gap and prepare a more diverse
workforce. Demographics are shifting and companies can no longer ignore the business
imperative to build a more diverse and inclusive workforce. By 2030, majority of young workers
will be people of color; Gen Z is the most racially diverse generation in American
history: Almost half are a race other than non-Hispanic white. At the same time, there will be an
estimated 1 million more open computing jobs than applicants in 2020. Business leaders must
step up to help educate a more diverse group of students with the digital skills they will need to
fill these open roles or their businesses will not survive.”

Aron Cramer, President and CEO of BSR, echoed this point: “2019 will (again) be a year when
business will be well advised to assume leadership in creating and advocating for an economy
that works for all. For business, it will be necessary to live intensely in a challenging present and
a fast-arriving future….My one ask of the private sector in 2019 is that business leaders get more
deeply engaged in creating 21st century social contracts that are properly designed to enable
economic opportunity and also security at a time when the world of work is changing fast;
technology is reshaping our lives, and demographic change demands new models for the social
safety net.”

What do you think is in store for corporate responsibility in 2019? Share your comments below
or send a tweet to @susanmcp1.