Corporate Social Responsibility (CSR) has become an important buzz word in the business world. The practice of CSR has evolved and matured over time. CSR now includes strategic philanthropy, employee volunteerism, cause marketing, disaster response, peer-to-peer fundraising, non-profit board service, and even incorporating social responsibility into core business practices and offerings
The year 2019 was action-packed in terms of CSR. With the companies taking a proactive interest in improving their CSR practices, and the government encouraging them by bringing in various amendments in the CSR Act, it is being predicted that 2020 will be even more dynamic for CSR. Following are five trends that can be expected in CSR in 2020.
FOCUS ON ESG (ENVIRONMENTAL, SOCIAL AND GOVERNANCE)
More and more people are getting aware of their carbon and social footprint. And while they may not be able to indulge themselves entirely in activism, they certainly prefer to associate with brands that have a good ethical standing in terms of their ESG impact. ESG investment thus is no more only a philanthropic activity. It is more of a business feature that is a must-have for the brands if they want to sustain in the competitive market.
Thus, in the year 2020, the rise in ESG investments is certain. Climate change crisis is at its peak at present. The global community, especially the millennials, are calling for serious climate action from the businesses. In 2019, we saw several climate action movements, including the Climate Strike at the UN.
Such movements have compelled the business community as well as the governments to embrace renewable energy and reduce emissions. For example, in India, Cochin Airport became the world’s first completely solar-powered airport. Japan is leading in producing cars that use hydrogen fuel, which leaves behind only water vapour in the form of emissions. In the U.S., the state of California has passed a solar mandate, according to which new construction homes are required to have a Photovoltaic solar system as an electricity source from January 1, 2020.
Such examples and policies across the world are set to inspire more investment in developing, adopting and promoting renewable energy.
Instead of just doing philanthropic work, the companies will step forward to have a holistic CSR strategy that will be impactful and sustainable
TRANSPARENCY IN PROCESSES
Digitalisation has reduced the cases of corruption and increased transparency in the processes. This includes processes in CSR. The rising awareness among consumers will create a demand for more transparency in the CSR projects of a company. Thus, there will be introspection on how 5G, AI, Blockchain Technology, etc. can be used to improve transparency in systems.
Therefore, the companies will need to provide a transparent roadmap of activities and progress. All this will help drive collective impact.
Various studies have shown that employees prefer to work for companies that believe in a cause or has a purpose. Numerous other studies have also demonstrated that indulging employees in volunteer work for a social cause helps in getting job satisfaction and improve their retention.
In 2019, we saw that employees of popular brands such as amazon, lush, etc., participating in Climate Strike, Pride Week, and so on. In 2020, this trend is set to increase as more number of young people enter the workforce.
FOCUS ON IMPACT
Actions speak louder than words. This is why the consequences of the actions count more than the intent behind it, especially in the eyes of the critical young generation. This is why the investors in the coming year will focus more on the impact of their CSR project than on the intent. Thus, instead of just doing philanthropic work, the companies will step forward to have a holistic CSR strategy which will be impactful and sustainable.