Let’s go down the history lane, exploring the birth of corporate giving and how it has evolved into the sustainability movement and the all-important ESG considerations that are driving businesses toward sustainable growth. In this article, we will explore:
- Corporate giving and its century-old evolution
- How corporate giving is changing social contact between business and community
- The importance of ESG for business success
The evolution of corporate giving: from philanthropy to ESG
If you are one of the old hands, the experienced Corporate Affairs and Public Affairs professionals, you will remember “Corporate Philanthropy.” The term was widely used to describe the generous giving of famous American philanthropists, such as Andrew Carnegie, John D. Rockefeller, Henry Ford, to name a few. Corporate Giving has always been an important part of the private sector’s support of religion, education, healthcare, fine art, and the preservation of artifacts.
In the 1970s, Corporate Giving evolved into a “social contract” between business and society. It became more organized, systematic, and more broadly defined. As a result, a new term, “Corporate Social Responsibility (CSR),” was coined. Under the new social contract, businesses are extending their support beyond financial means to include renting expertise, resources, and network to help solve “challenges” facing the society where they operate.
In 2011, Harvard’s Professors Michael E. Porter and Mark R. Kramer published an article titled “Creating Shared Value” in the January issue of Harvard Business Review. The article created a new movement that marked yet another iteration of corporate giving – “Sustainability.” The authors argued that societal challenges should be recognized as business opportunities. By mobilizing resources and expertise to address challenges, businesses remove obstacles to social progress while unlocking new market opportunities to create sustainable growth conditions in the long run.
A successful ESG strategy must be constantly tracked and reported
Corporate giving will continue to evolve at an accelerated speed in response to changes in social expectations. Environment, Social, and Governance (ESG) is the new kid on the block. It expands the concept of sustainability to involve a broader set of stakeholders. It requires businesses to demonstrate and report their commitments, and be more agile in responding to the rapidly changing business and environmental landscape that is increasingly affected by climate change.
As the impact of climate change intensifies, governments worldwide will respond with more initiatives and regulations to encourage all stakeholders to take action toward climate change. Consumers will demand the opportunity to participate in the quest to keep the temperature increase below 1.5 degrees Celsius by 2050. They all will expect the private sector to lead and contribute proactively.
Businesses must be equipped with ESG capabilities
Businesses must quickly build new capabilities and be prepared to reinvent strategies and actions to respond to these new sets of expectations. Without clear visibility on the climate risk, a deep understanding of the rapidly changing regulatory landscape, and the ability to closely monitor consumers’ psyche, businesses can be at a significant disadvantage to stay relevant, competitive, and be able to capture future growth opportunities.
Although 2050 seems far away, the impact of climate change is already felt today. As a member of the business community, we believe that we can play our part to help advance the community’s understanding of sustainability, ESG, and climate change and prepare us to respond to the challenges and capture the future opportunities effectively and at scale.
In conclusion, if you aspire to lead and contribute toward sustainable social solutions, including climate change, we’d love to hear from you. We welcome the opportunity to share our perspectives, tools, and network to help integrate sustainability and ESG into your growth strategies and priorities to ensure that your business delivers positive social and environmental impacts. Staying on top of all the moving parts in the world of sustainability and ESG requires tremendous efforts, resources and network. Our Horizon Scanning tool is a highly customizable system designed to keep you updated on the latest sustainability and ESG players and issues. The system enables you to gain clear visibility on the regulatory landscape, align your business strategies and priorities with social expectations and make long-term informed business decisions.