Sustainability and Corporate Philanthropy: Un-Blurring the Lines

Authors

• Brooke Avory

  Former Manager, BSR

Over the years, BSR has seen companies’ approaches to sustainability evolve from community engagement and philanthropic programs to integrated strategies that focus on long-term value for shareholders, society, and the environment. BSR is proud to have helped lead the shift of the sustainability concept to an integrated and business-critical issue.

We have also been gratified to observe transformations in corporate philanthropy from approaches that are unconnected to the core business to those that are clearly aligned with broader sustainability initiatives and overall corporate strategy.

And now, businesses have an opportunity to drive even greater impact by exploring how their sustainability initiatives can contribute to the 17 Sustainable Development Goals (SDGs), such as supporting gender equality and ensuring healthy lives and well-being. Companies might approach this by investing in inclusion in the communities where they do business through jobs, infrastructure, and their technical capacity and expertise. In this exercise, companies should also consider how philanthropic dollars can be a part of investment in local communities.

And this brings us back to corporate philanthropy: How can companies integrate their sustainability initiatives and corporate philanthropy programs to maximize their greatest strengths? 

Through our work with BSR members analyzing the relationship between sustainability and philanthropy, we’ve identified three recommendations for companies embarking on this journey:

• Look for alignment: If sustainability and philanthropic activities are detached from one another, such as, in some cases, when philanthropic initiatives are run through a corporate foundation, companies may miss the chance to reinforce or complement their sustainability commitments through their philanthropic programs. For example, a heavy manufacturing and construction company we worked with found that, while an important part of its sustainability strategy was reducing its environmental impact, none of its community investment or philanthropy programs were related to the environment. Additionally, philanthropic activities were not connected to existing programs for local community or stakeholder benefit, another key aspect of the company’s sustainability strategy.
   
• Use business resources: Mapping opportunities for sustainability-philanthropy strategy alignment can also reveal opportunities for maximizing the full value companies have to offer in terms of their access to finance, products, technology, or human capital. For example, investments that companies might make to help the business grow, such as roads or telecommunications infrastructure, could also bring benefits to local communities and contribute to local philanthropic goals.
   
• Focus on impact: As companies seek to understand the benefit that their greater sustainability programs bring, they are also focusing on their philanthropy efforts. While impact measurement is a complex process, companies can move from focusing on outputs—what activity was completed or the extent of the activity—to thinking about the outcomes, or the short- and long-term changes in the external world that their programs are seeking to achieve. Taking an outcomes-based approach can help companies set and track more ambitious targets and goals, such as those in the SDGs. Some companies are also taking steps to better capture the value of their philanthropic programs, including understanding the social return on investment of their philanthropic dollars and understanding the value of outcomes, like the improved well-being of community members due to investments in health, technology, or education. This is another important development in the evolution of corporate philanthropy.