The forthcoming 2015 Community Involvement Survey illustrates that many companies are addressing relevant social issues, with a prominent focus on K-12 education. The survey shows that nearly 55 percent of companies include education among their top issues for attention and investment. With nearly 20 percent of students failing to graduate on time, or at all, corporations are making investments to try and increase student achievement and graduation rates for a more educated workforce.[i]
"Someone's sitting in the shade today because someone else planted a tree long time ago" - Warren Buffett
Last week I was reading a whitepaper from MFS Investment Management about the benefits of investing on a longer horizon.
Corporate citizenship leaders, take note. There is more and more being written about the need for investors to take a longer view. This perspective presents a potential opportunity for companies that are willing to make longer-term investments in environmental, social, and governance dimensions of their businesses to improve their operating environments so that they can sustain positive returns for the longer term.
While I was on the road for Center business a couple of weeks ago, I caught BlackRock CEO Larry Fink on Squawk Box. Fink is bullish on U.S. equities. With $4.4 trillion under management, he is someone who a lot of investors listen to, whether they agree with him or not. The panel of Squawk Box interlocutors was discussing with Fink how our dovish Fed is dampening volatility (and trading volume) in the markets, reducing the opportunity to make quick money. Fink’s position in this conversation caught my attention. “Lack of volatility is not an investor problem,” he said, “It is a trader problem.” During the 20 minutes or so I watched, Fink talked about a longer-term perspective as being important to the future of our national and global economy—promoting longer-term corporate governance, public and private capital investments, and public policy. He and others have noted that many large corporations are sitting on a lot of cash that can be put to work to create more business value and more social good.
Where should your company invest?—a question that is asked time and time again to all corporate citizenship managers and one that is not easily answered. Although there is no one size fits all perfect formula, there are different tools and models that can help with strategically thinking about the best way to leverage a firm’s resources to help society as a whole.
Corporate citizenship professionals often debate which issues warrant a commitment by their firms. Selecting poorly can be costly. A firm’s corporate citizenship efforts may amount to nothing if it invests heavily in, say, political campaigns when its customers and employees really care about green energy or education programs. Understanding both where a company is best positioned to make an impact and which issues are most important to its stakeholders is critical.