Wednesday, June 16, 2021

CEO Insider

Turning Outrage into Corporate Activism

Steve Davis

No one can be blamed for wanting to turn off their mobile device and shut out the world these days. Between climbing pandemic death counts and record-setting unemployment rates, the headlines on any average day are flat-out overwhelming. Don’t even think about the debates whether capitalism and democracy are failing, or even more existentially, whether damage to our planet is already too far gone to fix.

In the face of these challenges, what keeps people fighting for change, and what, if anything, can businesspeople learn from them? The answer to both questions is the same: optimism. Maybe that sounds like a strange concept to advance right now. But from where I sit, as a business school professor and an advisor to — and former leader of — successful nonprofits and private-sector firms, the post-Covid rebuild to come will offer unprecedented opportunities for businesses of all types and sizes to get involved with social activism – while benefitting their bottom line.

I can almost hear corporate officers blanching at that word: activism. But corporate social activism doesn’t always mean picketing protestors or unhappy shareholders. In fact, proactive corporate activism can have an outsize effect on improving the state of our world while simultaneously boosting the health of balance sheets.

Don’t believe me? Consider decisions made at AXA, one of the world’s largest insurance and asset management corporations. Recently, leaders at AXA renounced all investment in tobacco. By 2040, they plan to do the same for coal. Along the way, AXA also anticipates doubling its commitment to green technologies. This from a company said to be one of the most important on the planet for ensuring global financial stability.

When you step back to think this through, it isn’t terribly surprising. For an insurer, less serious illness and fewer climate-based disasters mean smaller payouts and, ultimately, more profit. AXA’s chief officer for corporate responsibility, Celine Soubranne, put it this way when discussing the firm’s interest in supporting biodiversity: “A forest helps regulate a region’s water cycle, which improves flood resilience and mitigates the adverse effects of heat waves. Biodiversity also enables the efficient functioning of agriculture and human nutrition. In fact, biodiversity is essential for health.”

Soubranne is the kind of person I often describe as a “practical activist,” someone focused on building bridges across various economic sectors – public, private, and nonprofit – to get stuff done. And from where I sit, there has never been a moment so ripe for this kind of corporate engagement.

“It’s gone way beyond a question of image,” Soubranne told me recently. “AXA now sees sustainability as relevant to profitability.”

You can see similar ideas at work in companies committing to stronger gender and racial equity in their policies, products, programs, and investments. While slow in coming, programs like those at PepsiCo to make massive investments in people, supply chains and communities to advance racial equity, or Apple’s launch of the Apple Racial Equity initiative, with an initial investment of $100 million, aspire to demonstrate that these program benefit the company, their employees, their communities, and their bottom lines. A recent study in the Harvard Business Review analyzed data from 1,069 of the planet’s leading companies and found that in places like Scandinavia, where gender parity is a cultural value, diverse businesses posted better numbers—higher market value, revenues, and productivity.

Make no mistake—this is activism, not just a feel-good exercise. And customers are responding because they too want a better, healthier world. (Consider the explosive growth in organics, a market that has more than doubled over the last decade due in part to its environmental benefits, despite the higher cost for customers.) When consumers believe a business is aligned with their own goals, they spend accordingly. My point is that businesses themselves can generate significant forward momentum on the myriad of social challenges facing us.

Over the next decade, I expect to see this kind of activism ramping up across many issues, from gender and racial inequity, to health, climate, and education. Less apparent are the underlying forces – call them macrotrends – shaping those efforts and positively empowering social activism of all types. Some of these forces are obvious. For instance, the yet-unknown possibilities for digital and data technology. I also anticipate increased emphasis on diversity in social activism; more demand for agency among communities that want a greater say in their own development; and a focus on scaling innovation for broad benefit.

But for business, the most meaningful macrotrend will be the continued growth of the global middle class, now expanding at rates unheard of in human history. More countries able to participate in the global marketplace will naturally lead to increased opportunity for corporations to engage with developing communities as customers. In fact, this is already happening.

Consider Zipline, a medical supply company that uses drones to deliver blood, medicine, and other tools to hard-to-reach regions of the world. In the seven years since its founding by engineer Keller Rinuado, Zipline has expanded to supply the entire country of Rwanda. Ghana will be next, and several projects are underway in the U.S. Venture capitalists have flocked to support Zipline, now valued over $1 billion, but the increased economic power within Africa was key to getting the company off the ground. Rinaudo, 33, is one among a new breed of corporate executives who believe it is not only possible, but increasingly incumbent upon corporations to get involved in helping to improve society.

“The old conventional wisdom has been that building a successful technology company requires exploiting people’s personal information or hijacking their attention,” Rinaudo said last year. “Zipline wants to establish a new model for success in Silicon Valley by showing the world that the right technology company with the right mission and the best team can help improve the lives of every person on the planet.”

Another exciting trends in corporate social activism is the growing opportunities and programs for direct employee engagement on social issues. Plenty of corporations offer their employees ways to get involved in activism through philanthropic gift programs or issue-based affinity groups. But with stronger employee demands, voiced often by a younger generation, more companies are finding ways for employees to directly engage on addressing serious social issues as part of their day job. Take Tableau, a leading data visualization firm. In 2014, Tableau teamed up with infectious disease experts from global health nonprofit PATH to see if its tools and approaches could help in fight against malaria. The partnership was so successful that Tableau began sending its data-visualization geeks – known fondly as zen masters — around the world to help public health officials battle malaria, HIV and, now, Covid-19, providing meaningful social impact while building goodwill, learning about new markets, and retaining top employees. And In the six years since beginning this work, Tableau’s share price has nearly tripled.

Most of these examples don’t involve corporations off on their own, saving the world. The most successful projects combine government policies and influence with nonprofit expertise and community reach, and the outcomes-based capabilities and delivery models of the private sector. As we now face tremendous economic duress around the globe, the role of such trisector activism has never been more important.

To tackle our planet’s most complex challenges, we’ll need activism on a grand scale, with the private sector as a full partner. Such collaboration creates a rising tide that lifts all boats. And it might make us happier to get up in the morning too.

Written by Steve Davis.

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Steve Davis
Steve Davis is a Lecturer at the Stanford Graduate School of Business, interim China Country Director and Senior Strategic Advisor at the Bill & Melinda Gates Foundation and the co-chair of the World Health Organization’s Digital Health Technical Advisory Group. He is the author of the forthcoming book, “Undercurrents: Channeling Outrage to Spark Practical Activism.” Steve Davis is an opinion columnist for the CEOWORLD magazine. Follow him on Twitter or connect on LinkedIn.