Corporate Purpose in 2021: Key Trends for Authentic Stakeholder Engagement
In 2020, the Covid-19 pandemic drove “five years of digital maturation compressed into five months.” Multiple vaccines were developed and approved for Covid-19 in under a year; previously, the fastest vaccine ever developed and approved – for mumps – took four years. While 2020 was undoubtedly a difficult year, it also drove unprecedented acceleration of progress in a number of areas. One such area is the movement around corporate purpose, where not only the global pandemic but also the reckoning with racial injustice and inequality helped hasten an already building consensus.
As companies were called upon to put employees first, as corporate leaders had to consider the connections between community health and business viability, the theoretical case for sustainable business and stakeholder capitalism quickly became tangible. And with younger generations demanding more of companies in this regard, the imperative is now quite clear – businesses and brands must address the priorities of a broad range of stakeholders – focusing not only on shareholders and profits, but also on the needs of employees, communities, suppliers, and the planet.
As we look forward to corporate purpose efforts in 2021, the needs before us are not new, but the urgency and energy behind them perhaps finally match the scale of the opportunity. We believe 2021 will be defined by action the following key areas.
Diversity, Equity & Inclusion (DE&I)
In September 2020, Citigroup published a study which estimated that the U.S. economy has lost $16 trillion dollars over the past 20 years due to discrimination against African Americans. In the midst of the Covid-19 pandemic, women are losing their jobs at a rate 1.8 times greater than men, globally. In light of these truths, 73% of companies’ DE&I budgets will increase in 2020/2021.[i]
As resources pour into DE&I, these efforts should not be siloed to human resources. The greatest opportunity lies in pulling a commitment to DE&I throughout the entire business strategy. To unlock the greatest value, companies will need to take a cross-cutting approach, applying a DE&I lens to products and services, marketing, and community investments, in addition to internal culture and workforce development. From Microsoft creating the Xbox Adaptive Controller to make its products more accessible to consumers with disabilities, to Union Pacific Railroad’s partnership with The Manufacturing Institute to inspire more women to pursue modern industry careers, the path forward involves pursuing equity across all facets of the business.
More than ever before, employees are leading vanguards of your brand. Pre-pandemic, there was already a growing expectation, particularly among Millennials and GenZ, for purpose at work. Employees want to work for a socially responsible company, and they want to see the connection between their work and the greater good. Following a year where the term “essential employees” took on new meaning, this perspective is sharpened.
In 2021, employees will be key partners in activating purpose-led business. This will mean both supporting their overall wellbeing – more and more companies are offering benefits like workplace financial wellness programs – and empowering employees to pursue their passions and priorities in a variety of ways. In 2021, leading companies will offer employees time off to vote and volunteer for civic engagement activities; they will provide opportunities for employees to learn more about important social and environmental issues and discover local organizations addressing them; they will even provide resources and tools for engaging and educating their kids in these issues. The tapestry of potential engagement opportunities is quite rich, if we consider the full spectrum of employees’ lives in the workplace, the community and the world.
A Year for Action & Commitment
We are at an inflection point for purpose-led business. The public wants business with purpose, but trust is waning. 75% of Americans think companies’ citizenship claims are more talk than action.[ii] Short-term and one-off campaigns won’t meet the moment. Companies must develop clear plans to act on their stated purpose, across the business, over the long term. This will mean setting priorities and KPIs, developing partnerships and programs to achieve them, and sharing that progress with stakeholders.
Need help bringing your business or brand’s purpose to life? Contact Brian Crimmins, Global Managing Partner at ONE HUNDRED, to discuss how we can help.