Falling in Love with Corporate America
The idea of the soulless corporation is becoming a thing of the past as more companies focus on not only doing well, but also doing good.
By Clare Fitzgerald |
Call them socially conscious, purpose-driven or simply good corporate citizens. Companies focused on cracking the make-money-do-good nut are using a variety of corporate responsibility and sustainability initiatives to make a difference. While they’re working to drive change on social and environmental issues, they’re also boosting profits, increasing customer and employee loyalty, and gaining a competitive advantage.
Doing good appears to be good for business. According to a March 2015 Small Business Pulse Survey from The Alternative Board, a business advisory organization, nearly twice as many socially driven business owners expected revenues to increase in the next year, and 48 percent characterized themselves as “ahead of the competition.”
Clients and customers are definitely taking notice. The 2015 Global Corporate Social Responsibility Study conducted by marketing agency Cone Communications and analytics firm Ebiquity, reports that 84 percent of global consumers seek out responsible products whenever possible, and 9- out-of-10 expect companies to do more than make a profit.
When it comes to socially responsible organizations—often characterized as companies that focus on their people and strive to positively contribute to society— big names like Google, Microsoft, The Container Store, Patagonia, Whole Foods and Starbucks often get all the press. But they aren’t the only ones focused on doing well by doing good. From the big to the small, many national and regional corporate citizens are working to fulfill their own lofty goals of contributing to the greater good. Here are just a few.
> The Allstate Corporation
Northbrook, Ill.-based Allstate provides auto, home, life and other insurance and financial services to approximately 16-million households— and it’s the nation’s largest publicly held personal lines insurer. In addition to protecting policyholders from the mayhem of life’s uncertainties, the company also works to be a “force for good,” according to Craig Keller, Allstate’s director of corporate responsibility and sustainability. Keller says the phrase has become an internal mantra at Allstate, and explains that, “Corporate responsibility is as much a part of who we are as our products and services.” In fact, Allstate was ranked 74th on the 2015 100 Best Corporate Citizens list compiled by Corporate Responsibility magazine, and was recently named as a 2015 World's Most Ethical Company® by the Ethisphere Institute.
Included among the company’s chosen causes are teen safety while driving, youth empowerment and domestic violence. When it comes to the issue of domestic violence, the company’s efforts focus on financially empowering domestic abuse survivors since, “The number one reason cited for staying in abusive relationships is lack of financial resources,” explains Sue Duchak, senior manager at the Allstate Foundation. The company sponsors financial literacy programs, awards grants to local organizations working on the issue and provides small loans directly to victims. “We’ve invested $43M on this issue over the last 10 years and have contributed to helping nearly 600,000 survivors get back on their feet,” Duchak states proudly.
Allstate’s teen driving programs date back to 1952, when the Allstate Foundation awarded one of its first grants to a nonprofit dedicated to keeping teens safe on the road. Today the company continues to operate educational and awareness campaigns designed to change the ways teens think and act behind the wheel. The company also conducts research to better understand the causes of car accidents involving teens and to develop prevention strategies.
In recent years Allstate has strengthened its commitment to youth empowerment by launching a new partnership with international charity Free The Children and investing in other nonprofit organizations that help young people build the life skills they need to succeed in school and the workplace. Programs offer curriculums and activities that encourage student volunteerism and leadership, improve money management, develop entrepreneurial skills, and promote adult-to-teen and teen-to-teen mentoring.
In addition to these issues, the company invests in the passions of its employees and agency owners by offering several grant programs to support favorite charities. In 2014, Allstate, the Allstate Foundation and its agency owners and employees gave $34M to nonprofits across the nation and volunteered more than 200,000 hours. “Corporate philanthropy is part of our DNA,” says Duchak.
Sustainability and environmental stewardship are also at the top of Allstate’s priority list. According to Keller, a cross-functional team develops sustainability goals for energy use, facilities construction and management, and recycling and conservation. The company recently met its long-term goal of a 20-percent reduction in energy use from the baseline it established in 2007. Allstate also monitors the environmental practices of its vendors and recently incorporated sustainability criteria into key supplier contracts.
The overarching goal of the company’s corporate responsibility program is to improve local communities. Doing so actively builds the company’s reputation among shareholders, policyholders, employees and consumers.
“Impact can be hard to measure, but we see corporate responsibility as a key intangible that makes an important difference to how people perceive us and the choices they make,” says Keller.
> Illinois Tool Works (ITW)
ITW manufactures industrial equipment for everything from cars, oilrigs and bridges to aerospace technology, restaurant ovens and mobile devices. Operating in 57 countries and employing 49,000 people, the Glenview, Ill.-based company has gained quite a reputation for being a good corporate citizen, and was recently named a top socially responsible dividend stock by the Dividend Channel.
Corporate responsibility has been part of the company’s value system since it was founded in 1912, but has become an increasingly measured and monitored component in the past several years. “Everyone on our leadership team believes that corporate responsibility makes good business sense. It’s part of our overall business strategy,” says Alison Donnelly, ITW’s director of communications.
It’s also integrated into daily operations, adds Renita Dixon, ITW’s sustainability and environmental coordinator. “Corporate responsibility and sustainability are really woven into what we do on a daily basis,” she says, noting that the manufacturer prioritizes efficiency, employee safety, diversity in leadership and product responsibility.
Community involvement is another key. “Giving back to the communities where we live and work is deeply ingrained in our culture,” Donnelly explains. Among its initiatives, the manufacturer funds and supports The David Speer Academy, a recently founded charter school in Chicago’s Belmont-Cragin neighborhood. The Academy is devoted to science, technology, engineering and math (STEM) education, and is named for ITW’s former chairman and CEO, who was passionate about STEM education and supporting underserved communities.
ITW strongly encourages its workforce to follow in its footsteps. The ITW Foundation, for example, donates $10 for every hour employees spend volunteering at approved organizations, and offers a unique 3-to-1 matching program for employee donations to approved nonprofits.
“These types of programs show our recruits and other stakeholders how we’re touching lives and changing lives,” says Dixon. “They show the heart of the company beyond what’s in the stock report.”
> Pekin Singer Strauss
Chicago-based Pekin Singer Strauss is an independent investment advisory firm that also happens to be a benefit corporation, or B corp. A relatively recent classification for businesses, B corps are for-profit businesses certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability and transparency. There are currently about 1,000 certified B corps in 33 countries; Pekin Singer Strauss is the first Chicago investment provider to gain the status.
According to Adam Strauss, co-chief executive officer and portfolio manager, the firm’s designation as a B corp acknowledges just how the firm has been operating since it was founded in 1990. “Everything begins and ends with integrity,” he says.
Central to the firm’s B corp designation is its Appleseed mutual fund, which seeks to generate market-beating returns by investing in quality, undervalued companies screened for social and environmental responsibility. The firm relies on third-party research, sustainability reports and its own research to identify those organizations.
“We look for companies that have strong environmental, social and governance objectives,” Strauss asserts, noting that companies focused on creating enduring value—rather than simply quarterly earnings—are a good match for the firm’s investors. The fund particularly appeals to Millennials and others who want to invest in socially conscious companies.
“It used to be that investors just wanted returns. That’s not the case anymore,” says Strauss. “People are interested in understanding what they’re investing in. We’re seeing more prospects and clients who want portfolios that perform but also that reflect their values.”
He explains that the firm works to customize investments, and cites the example of a client who wanted to avoid companies that used genetically modified organisms. “We can structure investments to achieve their financial goals while also allowing them to sleep at night,” he says.
The firm’s commitment to ethics and sustainability has an impact internally, too, Strauss explains. “It gives all of us a sense of purpose above and beyond collecting a paycheck.”
As the global leader in water, hygiene and energy technologies and services, corporate responsibility and sustainability are core components of Ecolab’s business model. The $14B company delivers solutions and onsite services to promote safe food, maintain clean environments, optimize water and energy use, and improve operational efficiencies for customers in food, healthcare, energy, hospitality and industrial markets in more than 170 countries. Ecolab also has a strong presence in Illinois—Nalco, its water process services division, is based in Naperville.
“Our engagement around sustainability is a resource for growth—for ourselves and for our customers,” says Emilio Tenuta, VP of Sustainability at the St. Paul, Minn.-based company. “And our impact is significant, not only through our work with customers to help them meet their sustainability and operational goals, but also by managing the environmental footprint of our own operations.”
If sustainability recognition is any indication, Ecolab is succeeding. The company is ranked ninth on Corporate Responsibility magazine’s 2015 list of 100 Best Corporate Citizens, and Chairman and CEO Douglas M. Baker, Jr. received the magazine’s 2014 Responsible CEO of the Year Award. The company also was named to the 2015 Dow Jones Sustainability Indices North America index.
Added to all that, Ecolab has become a leader in advancing global water stewardship standards and conservation programs. It’s a founding partner of the Alliance for Water Stewardship’s (AWS) International Water Stewardship Standard, a globally consistent and locally adaptable framework that informs decisions and encourages collective action to promote sustainable freshwater use. In fact, one of Ecolab’s manufacturing facilities in China became the first in the world to be certified under the AWS standard. What’s more, the company partners with organizations like the World Wildlife Fund and The Nature Conservancy to help advance water conservation and stewardship initiatives in priority regions such as China, Mexico and the United States.
As a growing company with a focus on managing increasingly scarce natural resources, Ecolab garners plenty of interest from job seekers. “Our vision to make the world cleaner, safer and healthier motivates our teams and resonates with young people who are passionate about working for a company that aims to make the world a better place,” says Tenuta.