Corporate Social Impact is Expected
Modern companies no longer treat corporate social responsibility as the province of a single vertical or department. Consumers, employees, and other stakeholders demand a comprehensive approach to corporate social responsibility. A company’s social mission should unite all business verticals and guide all business practices to create corporate social impact.
For any company-wide priority, the buck stops with the CEO. More than ever, chief executives have the opportunity to make an impact. American public trust in government is near historic lows, and more citizens expect corporations to lead on social issues.
Championing Social Impact
This opportunity is particularly pronounced for Fortune 500 CEOs who manage revenues and assets that rival those of large countries. Here are five social impact examples of CEOs who champion social impact within America’s largest corporations and corporate social responsibility programs.
Larry Fink – BlackRock
BlackRock manages over $6 trillion in assets. That’s more than the GDP of the UK and India combined. Larry Fink has led the world’s largest asset manager since its founding in 1988.
Fink’s annual investor letters reliably send shockwaves through the entire business landscape. In 2016, he recommended that CEOs stop issuing quarterly earnings guidance to prevent short-termism. In 2018, he asserted that companies must focus on their social purpose to survive and profit in the long term.
Massive corporations heeded his advice. In 2019, 180 other CEOs joined Fink in signing a statement on the Purpose of the Corporation. The statement largely echoed Fink’s calls for companies to place customers first and invest in employees and communities.
In his 2020 letter, Fink recognized the consequences of climate change and committed to ambitious sustainability measures. Those measures include exiting investments that present environmental risks and launching investment products that screen fossil fuels.
“[BlackRock] will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them,” Fink wrote.
Black Rock investments and competitors responded swiftly to Fink’s letter. State Street Global Advisors, the world’s third-largest asset manager, released similar sustainability plans two weeks after Fink’s 2020 letter. By February 2020, Microsoft, Amazon, and Delta—companies in which BlackRock holds significant stakes—announced sweeping climate plans.
While the coming decades will define Fink’s environmental legacy, his social impact is obvious in other areas. On topics like diversity and inclusion and economic mobility, Fink has put his money where his mouth is. In late 2019, Fink helped launch BlackRock’s Emergency Savings Initiative. The $50 million fund will bring together consumer finance nonprofits and companies to develop and scale savings strategies for low-to-moderate-income families.
Fink has positioned BlackRock as an example of social impact investing for its portfolio companies. He knows that social good is good for business.
“A strong sense of purpose and a commitment to stakeholders helps a company connect more deeply to its customers and adjust to the changing demands of society,” Fink wrote in his 2020 letter. “Ultimately, purpose is the engine of long-term profitability.”
Marc Benioff – Salesforce
Marc Benioff approaches social impact with a swagger uncommon among even the most ambitious Silicon Valley leaders. The Salesforce founder and chief executive embraces the title of “activist CEO.”
Benioff’s activism includes bold stands on homelessness in San Francisco. He clashed with other Bay Area tech leaders on Proposition C, a 2018 San Francisco ballot measure that would tax the city’s largest businesses to support homeless services. While Prop C’s implementation is stuck in the courts, Benioff has doubled down on his commitment to the issue. In 2019, he established the Benioff Homelessness and Housing Initiative to study homelessness intervention strategies.
Benioff championed corporate social impact before he made his billions. When he founded Salesforce in 1999, he committed the company to the “1% Principle”: Salesforce would earmark 1% of its equity, products, and employee time for philanthropy. Over 8,500 companies have since joined Salesforce in this pledge.
Benioff sees Salesforce’s corporate social responsibility as an expression of its “#1 value”: trust. The company reported over 1 million volunteer hours benefiting over 20 thousand organizations in 2019.
“Now being a CEO means that you’re taking care of all stakeholders,” Benioff told Fast Company in 2019. “That stakeholder return is as much table stakes as shareholder return.”
Michele Buck – Hershey’s
Milton Hershey baked social impact investing into his company when he founded it in 1894. Ahead of his time on the subject of work-life balance, he designed a park for his company town and made sure that factory families had access to leisure activities. In 1909, Hershey and his wife Catherine established the Milton Hershey School for orphans. The boarding school still serves over 2,000 in-need students across 14 grades tuition-free.
Michele Buck became Hershey’s first female CEO in 2017 after joining the company in 2005. Throughout her tenure, she has championed sustainability practices. When Hershey’s promoted Buck to lead its corporate social responsibility efforts in 2011, the company did not certify its cocoa as sustainably sourced. According to Buck, she earned the title of “chief provocateur” by pushing Hershey’s to commit to 100% sustainable cocoa.
Under Buck’s leadership, Hershey’s Cocoa for Good initiative has thrived. In 2018, Hershey’s pledged half a billion dollars through 2030 toward philanthropic and environmental programs that affect the company’s supply chain.
Hershey’s provides daily basic nutrition to over 50,000 children living in cocoa-growing communities in Ghana. The company also supports deforestation prevention in the cocoa industry and income-enhancing programs for cocoa-farming families.
Domestically, Buck helped launch the Heartwarming Project. The Heartwarming Project provides grants for school and community-based programs that promote inclusion, empathy and kindness.
Marvin Ellison – Lowe’s
Marvin Ellison personifies the American Dream. The son of rural Tennessee sharecroppers, Ellison took his first job in retail as a part-time security guard at Target. He climbed the corporate ladder at Target and Home Depot before rising to CEO of JCPenney in 2015 and then Lowe’s in 2018. One of only four black Fortune 500 CEOs, Ellison has used his platform to advance diversity and inclusion conversations throughout the greater corporate community.
At JCPenney, Ellison announced philanthropic efforts to help minorities “close the leadership gap” and funded programs to help “underserved students build the confidence they need to stay in school, graduate high school or college, and prepare for a rewarding career.”
Taking the reins of Lowe’s in 2018, Ellison helped launch its Track to the Trades program. The employee-focused initiative provides tuition reimbursement to associates completing apprentice certifications in several skilled trades.
“I challenge people to look at my background and understand that a lot of the success that I’ve had has been through just hard work, personal development and making sure I took advantage of opportunities,” Ellison told The Charlotte Observer in 2018.
Ellison’s empathy for consumers and employees has shaped his business career, including his approach to corporate social responsibility. In his first CSR report as Lowe’s CEO, Ellison outlined safety measures and supply chain transformations designed to protect Lowe’s customers and store-based associates. Lowe’s disaster relief efforts have also thrived under Ellison. In March 2020, Lowe’s pledged $105 million to support workers and communities affected by COVID-19.
Chuck Robbins – Cisco Systems
As Forbes noted in 2016, Cisco Systems runs its CSR program “like a business, not a hobby.” The company shares transparent program goals and project reports with the public and conducts periodic assessments to optimize social impact investments.
Following Hurricane Katrina in 2005, Cisco converted its military support division into a humanitarian mission. Today, Cisco’s full-time Tactical Operations (TacOps) team responds to crisis areas and disaster zones around the world, providing complimentary communications technology to help FEMA, the Red Cross, and other relief organizations save lives.
When Chuck Robbins succeeded John Chambers as Cisco’s CEO in 2015, industry analysts were not sure whether Robbins would share his predecessor’s interest in corporate social responsibility. Robbins did not disappoint. He asked his executive team to increase public awareness of Cisco’s CSR efforts.
“If what we’re doing or what another company is doing inspires others to contribute, that’s good, but increasingly, our investors actually do care,” Robbins told CNBC in 2018. “Our customers want to know where we stand on these kinds of issues and what we’re doing. Our employees care, and frankly our future employees really care.”
Under Robbins, Cisco’s CSR efforts span a wide range of topics, including education, environmental sustainability, world hunger, and economic empowerment. Over a million students enroll in Cisco’s Networking Academy each year to receive certification in tech skills.
While Robbins is proud to celebrate Cisco’s social impact, he speculates that the term “CSR” might soon become obsolete.
“I think we’re going to move to a place where you’re not going to talk about CSR anymore,” Robbins said in 2018. “You’re just going to talk about what you do as a company.”
Taking Action with Corporate Social Impact
These Fortune 500 CEOs have unusual resources to realize their corporate social impact missions and goals, but any corporate leader can learn from their examples. The most socially-impactful CEOs tend to share several traits:
- They take responsibility and challenge the status quo.
They keenly understand the connections between their company’s brand, core capabilities, and social mission.
And they empower employees and business partners to amplify their companies’ social impact.
There is no one right way for a CEO to lead, but these traits provide a helpful framework for company leaders who seek community social impact.