Corporate social responsibility: when silence was no longer an option

Thursday, December 31, 2020 by Robinhood Snacks | Disclosures

Microsoft embarking to remove all the carbon

Corporate steps up... 2020 was a year of cries for change and tragic injustices. This raised our expectations of company leadership, and caused a seismic shift in how corporations view their responsibility to society. Companies that saw themselves as pure profit-makers started taking on the role of change-makers.

Racial Equality: A series of deaths of Black Americans at the hands of police spurred months of protests across the US. On a single day in June, half a million people participated in demonstrations seeking justice for George Floyd, Breonna Taylor, and all Black lives. In addition to this massive civic reaction, corporations also took action, making record-setting donations to racial justice groups across America.

  • 58 of the 100 largest US companies pledged $3.3B by September, the largest amount in history ever committed to racial equity causes. Then, in October...
  • JPMorgan Chase pledged a whopping $30B (~83% of its 2019 profit) over the next five years to help close the racial wealth gap.

Diversity in the Workplace: Companies also made big moves toward more diversity in the workplace, starting with the corporate boardroom.

  • Nasdaq pushed for SEC approval to create a significant board diversity rule for the ~3K companies listed on its exchange: include at least one woman on the board and a director who is a racial minority or who identifies as LGBTQ — or risk getting delisted.
  • Goldman Sachs said it would no longer ship IPOs of American companies that don't have at least one “diverse” board member.

Environmental Causes: Companies stepped up their commitments to reducing environmental harm.

  • Microsoft pulled an ambitious “carbon-negative,” pledging to remove all the carbon it has ever emitted since 1975.
  • Amazon, AT&T, IKEA, and DHL – all companies with major delivery fleets – formed an alliance to pressure EV makers to scale electric delivery vans faster.

“No comment” is no longer an option... For decades, corporations' only focus was returning value to shareholders through profits. In 2020, silence and inaction on important societal issues is no longer accepted — our expectations of companies’ responsibilities have changed. And in some cases, like Nasdaq's board diversity push, these companies can even act as de facto lawmakers.