As we enter the last months of 2020, it’s clear this year will be remembered as a year of upheaval and change. While the global pandemic and subsequent lockdown dominated the news, this was also a year of devastating racial injustice and environmental catastrophe. The pandemic emphasized social inequality at every level, created economic uncertainties, and altered the ways we live and work – perhaps forever.
It also had an enormous impact on the types of business we support, what we expect from them, and the kind of working relationships we want. In terms of corporate social responsibility (CSR), this year has changed everything. But why is CSR so topical right now? And what has made it suddenly seem so important?
Deloitte defines corporate social responsibility as a “business’s approach to sustainable development by delivering economic, social and environmental benefits.” It’s about operating in an ethical and sustainable way, delivering economic and social benefits, and taking responsibility for an organization’s effect on society and the environment. But this year, for the first time, the focus of CSR has transcended these issues.
42% of people’s perception of a company is based on its corporate social responsibility activities – Forbes
As the world grapples to adapt to post-COVID-19 life, and the fight for racial equality intensifies, people are placing a new focus on how organizations treat their employees and what steps they’re taking to help the community. As customers become increasingly discerning about which companies they want to support, employees are becoming increasingly discerning about which organizations they want to work for. Now, it isn’t just about whether businesses are operating in an ethical and sustainable way – it’s about how well they’re prioritizing the wellbeing of their employees, and to what extent they’re engaging with communities.
From a business point of view, the importance of CSR can’t be minimized. A 2020 report published in Forbes magazine found that 42% of people’s perceptions of a company is based on their perception of its corporate social responsibility activities. And, it should be noted, this survey was published in February – before the pandemic truly hit, before lockdown, before the death of George Floyd. As we saw in the aftermath of Floyd’s death, countless companies released statements and publicly showed support for the Black Lives Matter movement. From this, we can tell that business leaders understand that it’s vital to engage with social issues, to align their company with a cause, to show they’re socially responsible, and to get on the right side of history.
But in 2020, it isn’t just about demonstrating that your company has values and purpose. CSR is also enormously important for employees. By 2025, millennials will make up three-quarters of the workforce. Back in 2016, a Cone Communications study found that 75% of millennials would be happy to take a pay cut to work for a socially responsible company. For millennials and generation Y, finding purpose and meaning in their work isn’t a perk – it’s a necessity. The incoming workforce simply doesn’t want to work for an organization that doesn’t have strong social responsibility practices; they want to work with companies that truly care about making a positive change.
So in terms of recruiting and then retaining employees, CSR is instrumental. It’s also incredibly important for employee engagement, happiness and wellbeing. And this is another area where CSR has been altered by the events of 2020. One of the most damaging effects of lockdown, social isolation, enforced remote working and experiencing such an extended period of uncertainty has been on our collective mental health. Feelings of stress, loneliness, depression and anxiety have rocketed, and work burnout is at an all-time high. As a result of this, how organizations treat their staff has also taken center stage this year.
Relationships between organizations and their employees are becoming more human-centric. People don’t want to support companies that uphold starchy structures, divisions and hierarchies; they want to support companies that recognize the individuality and humanity – and by extension, the vulnerability – of their employees, and go out of their way to support them. Particularly in times when they may be struggling.
Employee wellbeing has never been so important, and though we still have a long way to go, mental health has also never been talked about so openly. We now expect employers to play a bigger part in the financial, physical and mental wellbeing of their employees – whether that’s by offering enhanced sick leave, child care provisions or remote work stipends. Companies can no longer just say they care about their staff, the environment or racial equality; they need to prove it. Empty gestures no longer cut it, and in 2020 and beyond, people want to see meaningful action. This is what the new CSR will look like.
“Employees and prospective candidates will judge organizations by the way in which they treated employees during the pandemic” —Gartner
While the events that brought about these shifts to CSR were unequivocally negative, the evolution of CSR is a big positive. Businesses will increasingly be trying to make decisions that align with their values. Consumers will be inspired to do business with a company that’s authentic. Employees will remain loyal to organizations they identify with. And as a society, we’ll support the organizations that did all they could to help their staff stay afloat during the most challenging times.