Top 4 CSR Trends To Watch In 2021
Top 4 CSR Trends To Watch In 2021
Since the start of COVID-19 physical distancing in March 2020, we began to see consumer attitudes immediately shaped by the pandemic and their new environments. This also shifted consumers’ attention where much of their focus was (and still currently is) on all current events. The global health crisis created physical, emotional, social, and financial challenges all at once; causing many to reconsider what is most important in life.
This focus grew and amplified a business trend across the globe — consumers not only want to know what corporations are doing for their communities but expect some sort of action.
Although 2020 presented extraordinary challenges, we’ve seen plenty of hits, along with plenty of missed opportunities, that have shaped the way organizations will implement new CSR initiatives.
Here are the Top 4 CSR Trends to watch in 2021:
- Virtual Community Engagement
- Initiatives Closely Aligned with Current Events
- Closer Integration with the Internal Community (with employees) and Externally (surrounding communities)
- Stakeholders are the Target Audience, not Just Shareholders
1. Virtual Community Engagement
Working from home has become the new normal for many. Employees have had to assess and adjust to a new social norm. Before, they had the opportunity to create in-person connections with community members. While in the interest of public health, this privilege has had to change, the need for community engagement remains consistent.
In 2020, we began to see how companies were adapting to the current moment to create multiple wins for their communities, employees, and brand. Some companies, like American Red Cross or Points of Light’s All For Good, encouraged community service and developed a way to volunteer virtually. Volunteering, whether virtual or not, has always provided value for companies to connect with their community. We also saw plenty of popular annual events or gatherings pivot their programming to be offered as a virtual event instead, still giving communities the opportunity to engage with each other while respecting the CDC guidelines.
Even if we begin to see infection rates begin to decline, online events or engagements are more accessible, more scalable, and more cost-effective than their physical counterparts. We believe corporations will look at the numbers and decide virtual community engagement is better for the company long-term in 2021 and beyond.
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2. CSR Initiatives Closely Aligned with Current Events
Just being a profitable business is no longer a viable option. 85% of U.S. Gen. Z consumers believe brands should be about something more than profit, according to a recent Wunderman Thompson survey and 80% believe brands should help make people’s lives better.
Beyond one-time donations, we’ve found that consumers want to see that brands actually care and are willing to go the extra mile. A report released by GlobalWebIndex indicated that support for brands that donate to charity has grown 10% in the US since the coronavirus hit.
In that same report, 56% of respondents chose “supporting people during COVID-19,” when asked, “due to the outbreak, I want brands to put more focus on the following..” Placing support during COVID-19 as a higher priority than producing high quality products or offering value for money, points to a change in corporate social responsibility ahead.
We have also noticed that current events are huge driving factors for what consumers expect from organizations. For example, after increased environmental concern occurred over the number of face masks already appearing in the ocean, consumers expressed a desire to do business with companies that value the environment so we’ve seen an uptick in eco-friendly initiatives. Also, in the 2021 trends report released by Ketchum, 74% of respondents cited Black Lives Matter protests as a reason why they’re supporting businesses that improve diversity and inclusion. 88% of those we surveyed believe it’s now more important that companies behave ethically.
The social injustices that occurred over the summer also spurred stakeholders to ensure the corporations they supported responded leading to over $1.7 billion that was pledged to social justice initiatives. “Consumers and employees are now looking for more than corporate social responsibility. They’re looking for what [we] call corporate social justice.”
Based on these 2020 numbers and responses, we can expect corporate engagements to be more closely aligned than ever to current events in 2021 and beyond. Consumers want to see corporations prove the common 2020 quote echoed on commercials and advertisements year-round that “we’re all in this together.” Although supporting nonprofits and other key organizations are valuable contributions, it’s not simply enough for a comprehensive community engagement strategy.
3. Closer Integration with the Internal and External Communities
Along with increased virtual engagement and implementing initiatives that are closely aligned with current events, we believe we’ll see companies participating in closer integration with employees and their surrounding communities come 2021.
GlobalWebIndex found that over 4 in 10 say brands should place more focus on social causes and the wellbeing of their employees. The same report also found that the portion of consumers in North America that want brands to support local suppliers has grown from 31% in Q1 to 37% in Q2. A recent survey released by Deloitte found that when brands demonstrate humanity, employees are 2.6 times more likely to feel motivated at work.
Keeping all of these numbers and findings in mind, we can expect the “people first” mentality will become more prevalent than ever. Companies will look to take care of and invest in their own people and local community first, before pitching in to help others on a broader scale. Corporations are beginning to accelerate change that has long needed to happen in their communities — it just took a pandemic to reveal these issues and put them into the limelight.
4. Stakeholders Are The Target Audience, Not Just Shareholders
As the CEO of BlackRock, Larry Fink, wrote in his 2020 Letter to CEOs, “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. Ultimately, purpose is the engine of long-term profitability.”
In the past, we have seen that companies placed high value solely on making money for their shareholders. This started to change in 2020 when investors, workers, and consumers started to put increased pressure on companies to make meaningful input to the greater social good. According to a report by Aflac on corporate social responsibility, 77% of consumers say they would be more willing to purchase a company’s products or services if the company demonstrates a commitment to addressing social, economic, and environmental issues. In comparison to that 77% of consumers, 73% of investors agreed.
In 2021 you can expect to see more of the focus and efforts being placed towards stakeholders as well as shareholders. In that same Aflac report, almost half of the respondents said that companies need to make the world a better place. Only 37% of the respondents in comparison claimed that it was more important for companies to make money for shareholders. Regarding CSR governance, the general public can be expected to be considered an external stakeholder in 2021. For example, companies may weigh the impact of a decision on the environment versus solely making the decision on the money it will make shareholders. Instead of being the ethical thing to do, corporate responsibility becomes the expected thing to do for stakeholders.
The Future of CSR in 2021 and Beyond
2020 will forever be a year to remember, with plenty of highs and lows, but one thing remains true — 2020 will be the year that officially upended the CSR movement for most companies.
Before, corporate social responsibility was seen as a goal that felt almost out of reach for most, but now, the importance of CSR for companies takes precedence over most other organizational initiatives. Each of our estimated CSR trends for 2021 are going to take a lot of initiative and strategy from companies and their leadership teams, but all are necessary for true organizational CSR success.
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