The world needs corporate activists
The world needs corporate activists. As a part of their Pioneers of Change Summit, World Economic Forum has published an article on corporate activism Sfääri founder Antti Kerppola has written together with Juha Leppänen, CEO of Demos Helsinki on how to become one.
The world needs corporate activists. With these 5 steps you can become one
This article is part of the Pioneers of Change Summit
- Corporate activists ensure businesses tackle social challenges.
- Industry is key to solving problems from climate change to social divisions.
- The Pioneers of Change meeting, 16-20 November, will discuss how innovation can build a better world after the pandemic.
The role of companies is on the move: long gone are the times when the sole responsibility of a business was to make profit. The 21st century belongs to corporate activists: companies that take concrete action on the most prominent challenges that we are facing.
There is a wide recognition that tackling challenges such as the climate crisis, the increasing disconnection of urban and rural communities, or even the current global pandemic, requires the private sector to step in. The decarbonization goal aimed at limiting warming to 1.5 degrees Celsius set in the Paris agreement alone requires significant adaptation from industry.
Multiple global efforts are in place in order to engage the private sector. The United Nations has public-private partnerships for the Sustainable Development Goals. The OECD has launched the Business for Inclusive Growth Initiative. The World Economic Forum itself has been in the forefront of global debate on the role of the private sector.
There are also emerging corporate forerunners. For example, many consumer oriented companies have taken activist positions regarding topical societal debates. Nike, with their Colin Kaepernick campaign, is likely the most recognised recent example, but more long-term efforts include the work on climate change by ice cream brand Ben & Jerry’s, which is owned by Unilever.
Yet when we take the perspective of a single company, there is little in terms of a framework. A way forward that starts from core business, and focuses on solving significant societal problems by concrete actions. In contrast to focusing on individual trends or emerging topics or, even worse, simply stating ambitions in annual reports.
For us, corporate activism means a holistic approach to bring about political or social change through core business activities. This is distinct from exercising social responsibility through single specific projects or investing profits into societal causes.
Corporate activism is not a bad bet as a business strategy either. It can have a significant impact on the bottom line, for instance through higher loyalty among your customers and top talent who share your values, access to an increasing capital market of impact investing as well as being upfront in regards to tightening regulation.
This article aims to provide a framework based on the experience from the Finnish real estate and service company Ylva and the work think tank Demos Helsinki has done with both small and large companies. Based on what we learned, we have identified five steps needed to become a corporate activist.
Step 1. Understand the impact of your industry
It is important to recognise what role your industry plays in global challenges, and which are the key changes needed within the industry. Every company can and should have an impact that goes beyond its clients or immediate supply chain. For instance, 40% of global CO2 emissions comes from construction and real estate.
New regulation towards sustainability targets, or engaging directly with the industry in order to increase national standards, should be on the roadmap of all companies wanting to build sustainable futures.
Step 2. Start from action
Too often societal goals are stated in abstract speeches or on the pages of annual reports. Alternatively, companies take action that is irrelevant or completely disconnected from the core activities of the organisation. For a corporate activist, action should focus on the core operations of the company.
For a restaurant chain this can mean, for instance, banning the use of beef while at the same time investing in vegan food offerings. Beef-free restaurants not only reduced CO2 emissions immediately, but can also catalyse a national debate on the role of beef and dairy in climate change.
Step 3. Align the culture with impact
In the end, culture matters most for the permanent transition of any organization. Moving from a company that primarily focused on profit to a corporate activist is a big leap within the organisation. Yet, there are multiple benefits such as significant increase in employee retention or recruitment. A concrete way forward can be, for instance, co-creating a set of guiding principles together with all employees in which key values and goals of the company are clearly stated.
This type of concrete deliberation of how corporate activism should be reflected in everyday work can enable every individual to reflect on their work and the importance of their roles in achieving the goal.
Step 4. Change the core of the company
Change should be reflected in the whole organisation, including its structures. This should mean multiple things, from ensuring that there is a strong societal analysis to documenting corporate activism in strategy or rules. In more concrete terms, the leadership team should use a significant amount of time to have a strong and future-oriented analysis of society and its challenges. Secondly, corporate activism should be stated as a strategic position that is reflected in all operational activities.
For instance, in order to cut emissions, CO2 reduction should be used as a key performance indicator in determining employee incentives, alongside more traditional profitability metrics. Thirdly, the societal goal should be reflected in the bylaws. An example of such documentation would be WWFs suggestion for companies to commit to the Paris agreement climate targets.
Step 5. Share, share, share
Corporate activism also means radical transparency in sharing learnings and best practices. This means being actively involved in different networks, whether national or international. And open sourcing as much of the development work for instance on new sustainability innovations. A concrete way for companies to achieve this is to document the steps they are taking to improve society.
The world needs more corporate activism. These five steps have helped us to get started. Corporate activism is a broad topic and there are many unanswered questions ranging from political philosophy to corporate management. While seeking answers, we need to simultaneously accelerate action in order to ensure that the private sector plays a significant role in solving the most urgent challenges of our times.
Originally published at World Economic Forum's pages.