For years, teams devoted to diversity and inclusion, sustainability, corporate social responsibility and philanthropy have been considered “nice to have,” but not required within a company. But that’s all changed. I’ve seen it firsthand during my evolution through the investment bank sector, from JP Morgan to Credit Suisse and now, at Thomson Reuters. These issues have become critical factors that can significantly contribute to a company’s success – or to its failure. With increased globalization, companies are being tasked with greater accountability when it comes to environmental issues, gender issues, political issues. It’s no longer just about “doing good,” and it’s having a profound impact on the world.
But why have these issues become so essential for companies to consider?
These issues have become key to profitability and long-term growth because they can help your company align itself with the values of your core stakeholders, therefore engaging them and generating mutual loyalty. The customers, investors, analysts and employees you have now, as well as the ones you’ll have in the future, want to partner with, invest in and work for companies that are moving the aligned agenda forward.
Customers are becoming increasingly more and more aware of what the businesses that they support are doing behind-the-scenes. They care about corporate responsibility, an issue once gone unnoticed that can drastically shift the public’s perception of your company and cause major damage to its bottom line. Customers want to work with companies that will be around for the long-term. Investing in sustainability, in a diverse and talented workforce and driving a progressive agenda all mean that a company has its eye on the future, which is very attractive to customers. How do I know? Because I talk to our customers every day and the data shows it. And not only do they care about how we conduct our business, but they also want to learn best practices for themselves in order to improve their own stats and metrics.
In turn, investors and analysts are now factoring in these areas when they look at investing in companies. What factors could help, or more importantly, hurt a business if not handled well? We are all under a microscope now and “doing good” is not simply icing on the cake, it’s key to the health of a business’s future. Social responsibility investing is on the rise, with firms set up specifically to invest in companies that behave ethically. At Thomson Reuters, we’ve been at the forefront of this from the get-go, introducing measurements and tools to assess a company’s future in these areas, and investors are taking notice. Their clients are increasingly seeing new research and stats that indicate that companies with diverse employee populations perform better, are more creative, bring new ideas to the table and help build innovative cultures that thrive in every market cycle and help bring bottom-line growth. These are the companies best suited for long term sustainability and that make the best long-term partners.
Likewise, the future of your employee base relies on engaging in ethical business practices and creating a culture of responsibility. Study after study shows that millennials (the future workforce), want to care about their work and believe they are making a difference through their professional lives. They want to be proud of what they do and who they work for, and consider deeply a company’s culture and values in their employment search. As the first generation to grow up with the idea of corporate social responsibility as mainstream, millennials expect companies to behave ethically and in ways that protect and improve the environment and their communities, so it’s in a company’s best interest to foster a culture of accountability.
There are several key things that corporations can do to get this right:
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Engage with senior leaders and build the business case for pushing the agenda forward is the first step towards building a successful CR&I program. A comprehensive strategy that is well articulated and measurable is essential for success.
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Educate managers and leaders at every level within the organization is critical — without their support, programs and policies will not be successful.
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Last, partner with clients and customers on thought leadership opportunities – conferences and events are meaningful to build bridges, gain momentum and drive the change we need.
Committing to rigorous accountability objectives, while definitely a good thing, is no longer just about “doing good.” Focusing on these objectives is imperative to attract talent, entice investors and forge relationships with customers – which ultimately affects bottom-line growth, profitability and long-term success. Companies that not only understand this but embrace it will be the stand-out companies of tomorrow. And the ones who miss the boat, well, may not exist.