The Associiation of Corporate Citizen Professionals ( ACCP) recently said that 2023 has been a year of contradictions in corporate social impact – equal part triumphant and challenging. The association, whose membership includes corporate social responsibility (CSR) and environmental, social and corporate governance (ESG) professionals at leading companies, said this year’s major takeaway is how “companies are triumphantly rising to the occasion” and given the environment “can no longer stand on the sidelines of corporate citizenship.”
“New ESG regulations in CA and the EU, the Supreme Court ruling on affirmative action, and wars in the Middle East and Eastern Europe, continue to test the resilience of U.S. corporations and the risks they are willing to take to align with their values," said ACCP CEO Carolyn Berkowitz, in a statement. "However, the metrics are clear and the major takeaway in 2023 is that regardless of the backlash, C-suite leaders have awakened to a new reality that if their companies are to be successful, they can no longer stand on the sidelines of corporate citizenship.”
Despite challenges and the recent ESG backlash, companies remain committed to the work of ESG and CSR. Recent data supports the continued relevance of ESG and CSR practices, underlying their critical role in risk mitigation and financial success. A June 2023 study from the Center for Audit Quality found that ESG reporting among the S&P 500 is now approximately 99%.
Contrary to the narrative that companies are scaling back or abandoning ESG and CSR, most are continuing to prioritize progress towards their social impact goals. According to KPMG’s 2023 CEO Outlook report, 69% of CEOs have embedded ESG into their business as a means of value creation.
They also recognize that there is more work to do. 68% indicate that their current ESG progress is not yet strong enough to withstand the scrutiny of stakeholders and shareholders. But progress won’t continue if resources are not commensurate with the expected growth.
“Now is the time to stay the course and double down on CSR and ESG practices,” continued Berkowitz. “In a post-pandemic world, millennial and Gen Z employees flourish at companies whose values align with their own. And if they don’t align, those valuable employees will move on to companies where they do.
"Today’s climate risk is corporate risk, and risk mitigation starts with addressing a company’s material environmental risks. In an era of heightened societal polarization, companies are expected to take stands on critical social issues. These are the realities of today’s marketplace, which are unlikely to change any time soon.”
Headling into a presidential election year where ESG and CSR practices are likely to be further scrutinized, Berkowitz calls on C-suite leaders to “be prepared to respond to the fluidity of external events with decision making models in place and by fully funding social impact budgets. 2024 will test the mettle of executives and their commitment to being good corporate citizens. And if this past year is any indicator, companies are willing to stand up to the scrutiny and are on course to make the year ahead one of impact because they know it is ultimately good for future business success.”
