COVID-19 Accelerated Corporate Responsibility by at Least Five Years
Updated: Apr 9, 2020
When talking heads on primetime news mention the Defense Production Act (DPA) in reference to World War II they’re only half right (Shocking, I know). You see, the DPA (now being invoked in response to COVID-19) wasn’t even written into law until years after the war ended. Matter of fact, it wasn’t until the latter half of 1950 at the beginning of the Cold War (think Korean War) that it became law.
Not to give a history lesson, but when World War II production is referenced, they should be talking about the War Powers Act of 1941 (or the Second War Powers Act passed a year later). Like the War Powers Act, the DPA allows for additional methods of “war-related” production contracting and the acquisition of land for military use if necessary.
While many are acting like the invocation of the DPA is a big deal, I must point out the DPA has been authorized over 50 times since 1950. When put in perspective the DPA being invoked is not that extraordinary a measure. But we’ve bore-witness to something that is, and it may not be obvious. What I’m referencing is what I believe to be the accelerated progression of corporate social responsibility (CSR) in how companies respond to critical issues as a result of the COVID-19 pandemic. While It’s generally understood that it takes around three to five years to change culture, we’re seeing that shift in just several months. Don't believe me? We're seeing this manifest elsewhere.
Restaurants and fast-food chains that have traditionally only provided dine-in are now providing curbside and delivery.
Four-year universities that have traditionally only been brick and mortar have finally embraced distance learning.
Companies and organizations that had never provided remote, video or virtual services have all mostly went digital.
Unfortunately, this accelerated pace is the result of what could arguably be the single most critical issue society has faced in the past ten years.
If not for the COVID-19 pandemic, there’s a chance it wouldn’t have been until the year 2025 that we see this level of social responsibility displayed by the private sector globally.
Be wary of society’s perception and how it's driving the narrative.
There are still many uncertainties, but what remains certain is that perception will shape who’s responsible and who’s not… even when the court of public opinion is dead wrong.
Over the past month we’ve seen millions of employees laid off and furloughed, CEOs forgoing their salary to keep employees on payroll. We’ve also seen great agility in the private sector’s ability to quickly scale production of medical and personal hygiene supplies they’re not traditionally chartered to create. The telecommunications industry even provided greater access to services as tens of millions begin working from home while students navigate distance learning. This should be lauded.
However, each of these actions exist on the spectrum of public opinion and are incredibly subjective. There are people that will be highly critical of companies claiming some didn’t do enough, while others will suggest companies did the right thing.
My fear, however, is that the actions taken will be what they’re most remembered for, right or wrong. Some companies will unjustly face harsh criticism for making tough decisions, and others will rise to the top for making the most modest of contributions. If we were able to fast-forward to this time next year, it would be interesting to see which companies maintain their glow. But regardless of anything, I believe we’re just witnessing the accelerated progression of more purposeful and conscious CSR. There's a good chance many companies were already on course to make this shift. I also believe that if not for the COVID-19 pandemic these same companies would’ve waited another five years to act in this manner.
The accelerated shift will inaccurately paint some companies as villains.
Let’s face it, some industries were harder hit compared to others. Thinking through this rationally, for those hit hardest, I can’t expect their COVID-19 response to be identical to those largely unaffected.
For companies feeling the most extreme financial and operational disruption, this is a case of the would-be rescuer needing rescue. They’ve historically provided relief during times of disaster and are now seeking that same relief. Companies in hospitality, service, leisure, travel, and aviation (and many small businesses alike) have been designated as “nonessential” by governments globally.
Through no fault of their own they’ve closed shop. Without revenue they simply have little to give. Not because they don’t care, but because they’re on the brink of collapse. What’s been their response to the COVID-19 pandemic you ask? Simply doing what they can to keep their employees from becoming an unemployment statistic permanently. Does this mean some are furloughing tens of thousands of employees? Yes. But in these grim circumstances where these companies are between a rock and a hard place they simply cannot be graded with the same critical eye as companies that are experiencing greater demand as a result of the same pandemic.
In this instance, the harsh grading is akin to expecting someone whose home was just burned down by a wildfire to give shelter to others who have been displaced by the same fire. Then criticizing them when they have nothing to offer.
That’s crazy. But the sad truth is society isn’t rational.
I fear that companies making the truly hard choices will be perceived as not doing anything, when the reality is, they themselves where the ones being kicked while face down in the muck.
Those same companies have everything to lose.
They’re in the position of being damned if they do and damned if they don’t.
Meanwhile, the companies largely unaffected by the pandemic have everything to gain. All they need to do is make some masks and sanitizer and they’re golden.
So, we must be careful on how we grade these companies. As social good professionals we must step forward and defend these companies when the uninformed seek to savage them.
And boy they’re going to be savaged.
That said, there is a silver lining, and it’s that we’re witnessing a shift in companies and how they seek to solve problems proactively.
Private sector proactively joins “war effort” without prompt.
Initially companies responded in the traditional manner, announcing large monetary donations to support regional COVID-19 response efforts. Additionally, many companies expanded their healthcare and sick-leave policy. But that clearly wasn’t enough.
Once states began issuing stay-at-home orders and closures of nonessential business, many closed their doors. Companies then had no choice but to expanded their telecommute options. Those in the telecommunications industry expanded accessibility of their technology to families now confined to their homes. Then came the unthinkable. The laying off and furloughing of hundreds of thousands of employees. CEOs forgoing salaries to keep their workers on payroll.
While grim circumstances for sure, what happened next was astounding.
Companies in expert fashion began changing their goods and services to assist the gargantuan effort of providing front-line healthcare workers and first responders with necessary personal protective equipment (PPE).
As store shelves became bare and supply chains anemic, companies took it upon themselves to pivot, creating necessary items like hand sanitizer, protective gowns, face shields, ventilators and face masks.
Companies like Bacardi pledged to create hundreds of thousands of gallons of sanitizer globally while still maintaining current production of beverages. Other beverage companies also made similar changes to operations. So many in fact, the list continues to grow. While not a complete list, you can view a fairly accurate master list here. Some companies you may be familiar with include Dogfish Head Brewery, Tito’s Handmade Vodka and Absolut Vodka. Even beauty companies have changed their manufacturing to include hand sanitizer for healthcare workers. These companies include Coty Inc. (parent company of Covergirl), Estée Lauder Companies, L’Oreal and LVMH (who produce Dior and other luxury perfume brands in their facilities).
And while the Food and Drug Administration (FDA) regulates the production of these products, with the observed demand and constraints in sourcing these items, the FDA will not act against these companies. Matter of fact the FDA provided less restrictive guidance allowing these companies to produce the sanitizer legally.
But even in the recent weeks, governments and the healthcare industry sought support from those in aerospace and automotive industries to build ventilators amidst what appears to be a global shortage. In recent days companies like General Motors and Tesla have pledged to create the much-needed ventilators. In the case of General Motors, they’ll partner with Ventec to create tens of thousands of ventilators over the next 100 days. Meanwhile, Tesla has agreed to partner with Medtronic to create ventilators although the quantity wasn’t disclosed.
And while masks and gloves have been front and center, there are companies even going the next step and creating face shields to protect the eyes front-line workers. One company includes an Indiana based company called Primex Design and Fabrication.
So, healthcare and other essential workers must go to work, and all the rest stay home? No problem, we’ll just cancel life as we know it. No big deal, many American’s can work from home. Not to mention students of all ages can participate in distance learning.
There’s just one problem, the vast majority of American’s lack access.
While many questioned whether we could bridge the digital divide, companies stepped up to provide accessibility. Comcast being one of them. Some service changes include making available their Xfinity WiFi for free across the country. And before you think it’s only available to subscribers, you’d be wrong. Secondly Comcast paused their data plan to free up the necessary data required for an entire family to be home and running internet around the clock. They’ve put in measures to allow for flexible payments in the event families can’t pay their bill and put a pause on enforcing disconnects and late fees. And lastly, they’re providing internet essentials free of charge to new customers.
I’d be remiss if I didn’t mention that many companies (more than can be listed here) are supporting COVID-19 response efforts. To see the ever-changing response by corporations globally visit Just Capital.
But what happens after the pandemic is long behind us? I believe we’ll be living in a world with greater expectations placed on corporations, increased sensitivity and harsher criticism for those deemed irresponsible (even if unwarranted).
The alternate social good universe we’ll live in afterword’s.
I believe after all is said in done, we’ll have learned a few things.
For starters, some companies will finally understand their crucial role in society beyond generating revenue.
Those that conform (or being perceived as contributing in response to the pandemic) will be lauded as heroes. They’ll join the ranks of Superman, Spider-Man and all the others in both the Marvel and DC Universes. Be warned though, this is both good and bad. Keep reading and I’ll tell you why.
The heroes will come out looking like a pretty penny, having set the bar incredibly high for both themselves and others. The result will be greater expectations placed on companies during times of need by the general public and lawmakers alike. Such immense pressure to maintain this high bar will discourage companies to take steps backwards in their social impact and sustainability programming.
For all the other companies they’ll come out the other side looking battered and bloody. Especially companies that realistically couldn’t do more than furlough their employees. Those companies will unfortunately be stigmatized through no fault of their own. They’ll be forced to get incredibly creative in how they justify their actions, even if those were the best course of action and most responsible at the time.
People will even remember that some companies (cough, Hobby Lobby, cough, cough) defied state orders to close, arguably putting their employees at greater risk. As a result, a world will have been created where the public will ask “what did your company do in response to COVID-19?”.
That’ll be the tough question many will answer.
And while companies making poor decisions should face tough questions, we can’t afford to let the perceptions of the ill-informed drive the narrative of who is deemed responsible. It’ll be on us as social good professionals to police and shape that.
I feel strongly that It’s unjust to find fault in a company having to furlough employees because of the financial and operational impact to their business. Remember, they’re furloughing their employees so that they have a job to come back to. If not for the furloughing of employees it’s very likely the company does not rebound, leaving those employees with nothing to come back to. Perhaps furloughing employees so they can remain on payroll and retain health insurance is the responsible thing to do. No?
Lastly, related to this, all the above will most certainly influence strategy for future CSR programming.
There will have to be a complete rethinking of future corporate and foundation grants, the limitations (or flexibility) placed on funding for community partners, and even volunteer engagement.
For some, I suspect it’ll be necessary to change their social impact and sustainability goals entirely.
But what’s your take on the future of CSR in a post-COVID-19 world? Maybe you believe the current events will be a blip on the map and that CSR business as usual will resume come 2021. Or perhaps you agree that we’ve hit a time warp and progressed five years in the evolution of CSR. Whatever it may be, let me know. I’m a firm believer in greater diversity of thought, even if it’s in opposition to my own. After all, the next three to six months is unwritten and very uncertain. The only thing that's certain is that we must continue to be Responsible AF.