Looking Ahead — 5 CSR Trends on the Radar for 2014

Submitted by Liz Gorman

By Liz Gorman and Lesley Lammers

Part of the Consumer Perspectives: Turning Insights into Action series

With the New Year almost upon us, companies may be making some resolutions to ensure their CSR and sustainability efforts start off on the right foot in 2014. To give companies a leg up on their planning, we’ve highlighted five CSR trends that are likely to pop up on corporate radar screens and gain more traction in 2014.

1. The Search for New Materials

The gradual depletion of natural resources is occurring, but the impacts of a changing climate are accelerating this process, which should be concerning to all. This reality is slowly starting to sink in at R&D and product development labs around the world, and it’s already prompting some trailblazing companies to look to nature or their innovation centers for novel alternatives to the materials currently used in their products. We predict this trend will be more widely embraced and discussed in 2014 and beyond.

One early adopter is Nike. The company has been on the hunt for more sustainable textiles for some time, and recently went forward with its fourth Launch Challenge. It’s collaborating with some unlikely partners: NASA, the U.S. State Department and USAID, all in an effort to locate the most innovative textile fabricators that could introduce the industry to new, revolutionary materials.

Sprint has turned to biomimicry to harness the intelligence of nature when rethinking its packaging design. It has teamed up with the San Diego Zoo Center for Bioinspiration so species like the tortoise can be observed and studied. The company is hopeful the time spent studying nature will reveal some unconventional solutions. Sprint isn’t alone; the Da Vinci Index measures biomimicry’s impact in the United States and “shows an eleven-fold increase in the incidence of biomimicry in the research pipeline since 2000.”

Our takeaway is that the future will be bright for material science, and will undoubtedly be a growing specialty among product developers and sustainability professionals. If we were starting college all over again, we would be well advised to head to the engineering or chemistry departments and declare our majors in material science.

2. GMOs – The Buck for Transparency Does Not Stop Here

GMO labeling is just the latest example of consumers’ desire to know more about how their food is produced, where it comes from and what ingredients they are putting into their bodies. While the GMO issue is not new, it has recently gained traction with 28 states proposing GMO legislation just this year.

Target recently launched Simply Balanced, a product line that plans to be GMO-free by 2014. Chipotle is the first fast food chain to voluntarily label GMO ingredients in all 1,450 restaurants, while Whole Foods is the first grocery chain to commit to labeling products with GMOs by 2018.

Robin O'Brien calls this a consumer-driven “food awakening,” and those first to market will see the profit. She notes food giants like Kraft or Kellogg would kill for the kind of rise in share price that Annie’s stock has experienced, which may be partly due to meeting consumer demand for transparent products with real ingredients.

While GMOs are the current rage, we believe this cry for transparency is just the tip of the iceberg. Consumers, we predict, will be pressing for more disclosure on food labels – whether it be the labeling of certain allergens not yet on the FDA’s top 10 list, or disclosing what ingredients of concern are in food products that, while technically legal, are perceived to be unsafe for consumption.

Progressive companies will push the envelope on the transparency front and share more facts with consumers about what’s in their food. This could have a ripple effect, placing added pressure on conventional food companies to open up their kimonos and provide consumers with more transparency about what’s in their food.

3. Employee Engagement 2.0 – It's All About Choice

Employee engagement around CSR is evolving and some companies have started turning to gamification or micro-volunteerism to make engagement easy, fun and personalized. More importantly, companies that give employees some choice in how they participate or the ability to influence their company’s CSR efforts may discover they have “improved retention and ultimately, positive bottom line results,” according to Sustainable Brands. It points to two campaigns that give employees options for how to make a personal difference and/or determine the beneficiaries:  Eileen Fisher’s participation in ClimateRide and AT&T’s Do One Thing.

Gamification, or engaging employees through the use of game design, has quickly become a popular human resource tool. Practically Green's whole business model is based on this concept, using interactive tools, game mechanics and social networks to change employee behavior in order to improve the bottom line and reduce environmental impact.

But we see employee engagement around CSR as still in its infancy. Companies already know they need to find more contemporary and scalable approaches that can reach the employee across a spectrum of functions – from the manufacturing plant and distribution center, to the office environment or retail store. But old school approaches aren’t working anymore as there isn’t a one-size-fits-all-employees approach to engaging them in the company’s CSR. In today’s workplace, the need for employee engagement has never been greater.

Look for a stronger emphasis on this in 2014, and some new breakthrough programs designed around flexibility, personalization and choice, that are able to deliver higher levels of employee engagement then we’ve seen in the past.

4. The Rise of Social Entrepreneurs

Corporations would be wise to pay attention to the little guys whose social start-ups are stealing some of the best young talent from the pool of graduating MBAs and millennials – a talent pool that isn’t finding their dream jobs in traditional companies and instead are gravitating to social enterprises.

The research provides evidence that a paycheck is no longer enough for this generation of workers; they want meaningful work with a purpose. Business schools are increasingly incorporating social entrepreneurship into programs, says Harvard Business School, because they know students are attracted to social enterprises that use a business model to deliver a positive societal impact. Just look at the Hult Prize, the start-up accelerator for social entrepreneurship, which received more than 11,000 applicants this year, compared to 1,000 applicants four years earlier.

Corporate executives may want to consider acquiring social enterprises, assuming they can be bought, as they often act as non-traditional R&D centers and change-catalysts that are increasingly reshaping the marketplace. Companies may also want to rethink their old models for innovation and incorporate a social intra-preneurial approach that can unleash a whole new paradigm for creating products that are sustainable, marketable and profitable while delivering an added benefit to society.

5. More Focus on Climate Change Adaptation

While it’s now standard practice for companies to address the environmental and carbon impacts resulting from their operations and products, the time has come for companies to take a hard look at how climate change could impact the company from the outside in and across their entire supply chain. A few companies are already on this and incorporating climate resiliency plans into future business strategies.

Issues like water scarcity, extreme storm systems, floods and wildfires have already caused disruptions for some companies, including their ability to source raw materials reliably and sustainably. This inconvenience should be prompting all companies to assess their climate risks now so they can reinforce systems and infrastructure in preparation for future climate-related uncertainties and realities.

The Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP) have been urging companies to report on their climate change risks and opportunities, while groups like BSR are putting out new guides like this one to help companies plan for climate adaptation.

One client we work with, Green Mountain Coffee Roasters, has a strong focus on supply chain resiliency, which includes efforts to address climate-related impacts on its coffee supply. For instance, one climate impact is the spread of a disease known as coffee rust or “la roya,” which affects the viability of coffee trees. The company was ahead of the curve to recognize the longer-term effect this issue may have on farmers’ livelihoods and assurance of its own supply.

The five trends outlined above are just a few that we spotted as gaining traction. There are undoubtedly other emerging trends and issues you believe companies should be paying attention to and communicating about in 2014. We’d love to hear what you think. This is what CSRwire Talkback is all about – so please, we invite you to share your perspective and "talk back."