June 11, 2018
How companies can use data and technology to improve Corporate Responsibility impact
Technology platforms are enabling collaboration, improving efficiency and facilitating quicker decision making
In February 2018, BlackRock chief executive officer (CE) Larry Fink sent a warning letter to the C-Suite executives across the world – ‘Start accounting for the societal impact of your companies, or risk disappointing the largest asset manager in the world’.
Communities are critical stakeholders of any business. Today, if we want our business to grow, we need to do so without compromising prospects for the future generations. This can only do happen when we begin to fulfill business objectives along with our societal and environmental responsibilities.
Today, investors want to be associated with companies that have a long-term strategy to sustainably operate and maintain harmonious relationships with their stakeholders. Companies who demonstrate greater responsibility towards their triple bottom line, eventually attract larger and more investments.
A whopping 75 percent of individual investors – according to a Morgan Stanley poll – were interested in sustainable investing. The study also reveals that 71 percent respondents believed that companies with a sustainable and responsible outlook earn better returns. Another interesting study by Harvard Business School, inferred that, 20 years ago, if you invested a dollar in a portfolio of companies focusing on business growth, you would earn $14.46 versus $28.36 if the same dollar was invested in a portfolio focusing on environmental and societal issues while growing the business.
There’s ample research available proving how not only the investors but also millennials are wisely choosing companies to build their careers. According to a study, 62 percent millennials want to work for a company that makes a positive social impact.
Enough can’t be said about how investing in community programs leads to effective risk mitigation for businesses. These risks could be of multiple kinds – reputational, operational, compliance related, financial and those related to business sustainability. Companies feel a lot of pressure from within and outside, to demonstrate themselves as more strategic and accountable. They need to demonstrate how the funding is being used and what social and business outcomes are achieved.
Hence, it is not only important to invest in community projects but also to measure the impact. It allows organisations to ‘prove and improve’. Proving impact will demonstrate to the stakeholders and investors that the organisation’s actions are making a positive difference. It will subsequently enable identifying the gaps and undertaking measures to fill them. It is a great boost to an organisation’s reputation since it showcases its strengths and success.
Having said that, impact measurement is not easy. It requires considerable effort to set a baseline, mid-line and then assess the impact comparing those to the end line status of a community program. Traditional ways of impact assessment will include maintaining and comparing documentation regarding the operations, finances, resource utilisation and progress of the program on ground. Managing and analysing large amount of information and drawing inferences and insights from there can be a tedious task. The development ecosystem lacks transparency, accountability and efficiency and the reason stems from the fact that it’s management is still largely paper-based. In today’s tech-enabled age, we can leverage the power of technology to draw actionable inferences and insights from the data.
Technology platforms are the best way for program stakeholders to collaborate and be more efficient. They allow seamless interactions among the stakeholders to facilitate quicker decision making and undertaking mid-course corrections. Program stakeholders can access program-related information in a free and transparent manner which eventually, generates a strong sense of trust amongst them.
Let’s consider a company implementing a sanitation program in some small community of Jharkhand. It is not feasible for the company’s key stakeholders such as employees, consumers, board members to visit the program on ground. Technology can bring that experience to their desktop and keep them not only informed about the program progress but also install a sense of pride that their organisation is engaged in meaningful social activities having a long-term impact on the community’s overall health. It can also create goodwill among the customers and other external stakeholders by sharing the impact of the company’ social investments.
Having last mile visibility into the program is important for building a strong foundation of trust between the donors / companies and the implementation partners. Technology can ensure more frequent communication between the two based on deeper and meaningful insights. This builds trust of the donors, keeping them invested in the program for a longer time.
Furthermore, the world of philanthropy is accused of being plagued with fund leakage. Ban Ki-Moon, the ex-Secretary General of the United Nations – mentioned that 30 percent of the global aid is lost due to corruption. Leveraging technology for managing community programs may arrest this issue with increased transparency in operations and stronger sense of accountability among the stakeholders. Moreover, it will help in channelising the funds towards genuine programs and partners.
Today, our time is running out to fix global issues pertaining to social development and environment. The world has no resources to waste while working on developmental priorities. Optimum utilisation of monetary funds, human resources and time are crucial to create larger and lasting social impact.
To being with, automation will free more time for the donors and companies to invest in strategic work and critical decision making. It will also help create a global pool of sectoral and geographical intelligence based on multiple case studies collated across the world. Automation of the systems and process deployed in the development sector will be key to achieve the global targets such as Sustainable Development Goals (SDGs) within the set timeline of 2030, as rightly identified by the UN as one of the main “means of implementation” to achieve the SDGs.