Entering a New Era of CSR
The global pandemic has created a major inflection point in our world’s history, forcing a shift in thinking on different aspects of society. One of these areas is a company’s approach to Corporate Social Responsibility (CSR).
In the past, these programs have been important but not always central to every company’s business. That day is gone. As we emerge to a post-pandemic corporate reality, CSR will be a mandatory part of a company’s existence, and the implications will be far-reaching. Virtually every aspect of CSR is being placed in the spotlight by the COVID-19 crisis - from environmental issues and sustainable energy to employee relations and supply chains. Let’s look at key areas of CSR to see how issues are shifting for corporations and their stakeholders.
A New Focus on Fuels and Emissions
Before the pandemic, the energy sector was already moving toward more environmentally responsible solutions. Shelter-in-place orders added another factor accelerating this shift by causing a decline in travel and drop in demand for fossil fuels. The combination of the long-term trend and COVID-19 impact has led to a renewed emphasis on environmental sustainability. In the midst of the pandemic, Shell committed to net-zero emissions by 2050. BP’s chief recently said COVID-19 has only deepened his company’s commitment to shrinking its carbon footprint. The push to lower emissions has sparked long-term interest in green technologies, such as solar and wind. Energy storage solutions (ESS) provide another enabling technology that could make grid systems more reliable and efficient. Carbon capture and storage technologies are also receiving renewed interest as a way to lower greenhouse gas emissions. Electrification remains a major area of activity. While all vehicle sales have fallen in the face of COVID-19, experts predict long-term growth for electric vehicles. BloombergNEF projects that EVs will increase their share of global vehicle sales from 2.7% in 2020 to 10% in 2025. SK Innovation, South Korea’s leading energy company, is playing a significant role in this area with a $2.5 billion investment in two new EV battery plants in Georgia.
Employee Satisfaction Matter Even More
Employee satisfaction is another area of CSR being placed in the spotlight by COVID-19. Health and safety at the workplace has become a major concern. In a recent survey by Citrix, U.S. workers cited certain precautions that would make them feel safe returning to work, including masks for employees (46 percent), disposable gloves (43 percent) and readily available hand sanitizer (42 percent). Flexible work options have become important too. More than half of all U.S. workers now want the ability to work from home, according to a survey by getAbstract. Fortunately, companies are listening. More than 60 percent of U.S. hiring managers say their workforce will be more remote going forward, an Upwork survey found.
The New Measure of Success
Whether its employee relations, sustainability or another aspect of CSR, the global pandemic has only increased the importance of these issues on a company’s ability to attract talent, build partnerships and drive long-term results. Investors are increasingly demanding it too. In January, Blackrock CEO Laurence Fink outlined in his annual letter to clients that sustainability would be the new standard of investment stewardship - a move the company has reinforced during the pandemic. At SK, the group and its operating companies are moving beyond the traditional definition of CSR to take a broader look at the overall impact our businesses have on society. This focus has taken shape through what we call the “double bottom line” - a guiding principle that holds our businesses equally accountable for generating both social and economic value.
This double bottom line approach has led SK hynix, one of the world’s largest semiconductor companies, to develop a water-free scrubber that reduces water waste at plants by an estimated 54 billion tons per year. It’s led SKC Inc., a maker of specialty films, to develop Ecolabel - a shrink-wrap label compatible with the PET bottle recycling stream. SK’s double bottom line is a profound "transition of perspective" that social values should be a fundamental and permanent basis for SK’s vision. Expect more companies to adopt this kind of business philosophy. As the world emerges from crisis, the pandemic has become a tailwind, not a headwind, moving businesses even faster toward placing CSR at the center of its corporate strategy.
