While a fundamental role of business is to meet society’s needs with new goods and services, a growing number of leaders in the corporate world, finance and philanthropy are recognizing that helping to meet the social, environmental and health needs of the communities they serve is not only good for society, but is also good for the bottom-line.
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Today’s most effective CEOs can “see how valuable those purpose-driven decisions are,” Brewster said, and act on them. “Companies who run their business for the long term, take care of their key stakeholders, will perform better over time,” Brewster said.
CECP was founded in 1999 by actor and philanthropist Paul Newman and other business leaders, and it seeks “to empower companies to drive their sustainable success through positive social impact,” Brewster said. The organization now comprises more than 200 of the world’s largest companies, with a collective $11.2 trillion-plus in revenues and $23 billion in community investment among them.
Business is now also the most trusted institution in America, Brewster noted, ahead of others like government and media, according to measures like the Edelman Trust Barometer survey.
When it comes to making a positive impact on society over the long term, “if there’s an opportunity to add value to your company by engaging these issues, we also ignore them at our peril,” said Lata Reddy, senior vice president of inclusive solutions at Prudential Financial and chair of the Prudential Foundation.
The COVID-19 pandemic offered many organizations an opportunity to take action and invest in community well-being and vitality. “Those companies that were thinking about stakeholders and really preparing and understanding how to solve for that made a huge difference in the lives of those that they serve,” said Eileen Howard Boone, senior vice president of corporate social responsibility and philanthropy and chief sustainability officer for CVS Health, as well as president of the CVS Health and Aetna foundations. That kind of investment includes taking care of their own employees, the needs of customers and clients, and community needs related to the social determinants of health and health disparities.
Indeed, CECP recorded a 41% increase from companies “investing in society” during 2020, Brewster said, including COVID relief and response and social justice issues. “I think if you looked at all that spending of those companies, it would be basically the equivalent of a Fortune 100 company” being invested in communities, he said. “It really was a time when business stepped up.”
Flexibility was a key component of success, Howard Boone said. “We let people reallocate” funding toward personal protective equipment, COVID relief or whatever local pressures they were feeling, she said. Reddy noted that Prudential, which owns buildings in Newark, New Jersey (where the company was founded), has forgiven rent owed by its other tenants so they could use that money as they needed it.
Profit still drives business, of course, and measuring the impact of social engagement in terms of return on investment isn’t straightforward, the panelists noted. “It is sometimes hard to make the case in your institution about supporting things that may not pay off for a period of time,” Reddy said.
Howard Boone said that CVS is thinking “holistically,” with a clear sense of both business value and societal value. For example, CVS’s 2014 decision to stop selling tobacco in its stores allowed the company to say that “we care about health so much that we have removed this product,” she said, even if it meant losses in sales. Howard Boone said that the decision was driven by collaboration with other stakeholders, such as the American Cancer Society and the Campaign for Tobacco-Free Kids, which helped center this as “a change in how we do business,” not just a public relations move.
Measuring that impact in terms of reputation versus stock price, for example, can be hard to quantify. “Some of these changes we’re talking about take generations” to have an impact, Brewster said. But the research is pretty clear, he added, that, over time, companies that invest in their communities outperform those that don’t.
Prudential has been investing in redeveloping Newark in several ways, Reddy said, including changing the definition of a community “anchor institution” to include businesses along with health care and education. They also invested capital in “people and place” – things like job training, grocery stores and more. Howard Boone noted that CVS has invested in meeting food and housing insecurity and removed a requirement for high school diplomas for some store employees, among other efforts.
The panelists advised others looking to increase involvement to research their potential partners and build strategic relationships rather than small transactional investments. Creating “two-way, ongoing dialogue” with government leaders is also important, Reddy noted, both to strengthen public policy and also to understand barriers to progress. “You have to get to ‘yes.’ How do we get to ‘yes’ in a way that’s meaningful for the community, meaningful for us and how we can really effect change,” Howard Boone said.
In today’s highly politicized environment, Brewster added, businesses need to find “not red solutions or blue solutions,” but rather “red, white and blue solutions.” Those are easier at the local and state levels, less so nationally, he said. Data can help find local needs that stakeholders agree on, Howard Boone said.
One of those needs, especially in the wake of the pandemic, is mental health. Howard Boone said CVS worked to support stressors like a lack of PPE for front-line workers and created a program called Here 4 U, helping young people trapped at home find safe spaces to talk. The pandemic has offered “a wake-up call” to recognize mental health’s importance in overall health, she said.
As COVID wanes, will corporate involvement wane as well? Brewster said he thinks it will stay strong, especially in the realm of social justice. “Companies are really recognizing that’s where the fut
ure is,” he said. “If they don’t have a strategy and a plan around that, they’re missing out on half the population,” which is certainly not good business. “Social justice is an issue that has been with us for centuries, and it’s one that we need to address.”