By Emily Kane Miller
Chief marketing officers are being bombarded with reports on trends they need to focus on.
Socially conscious employees, especially younger ones, and customers are leading marketing executives to measure and report on their companies’ “social impact” – a sweeping category that includes everything from environmental impact of its products to the diversity of its workplace.
From AI to regulatory mandates, 2024 will usher in what many new “social impacts.”
Cooperation Over Competition
Rivals are teaming up to advance environmental issues and other social justice initiatives. Take The Footwear Collective, a consortium of what may seem like competitor brands (Brooks, New Balance, On, Vibram, Crocs, Ecco, Reformation, and Target) joining together to advance sustainability in the shoe industry.
More often, for-profits link arms with nonprofits. Consider the World Surf League’s WSL One Ocean initiative, which aims to protect the ocean so generations to come can enjoy safe waters for surfing. “Recognize your partners and everyone who’s been part of or amplified your company’s efforts. Our ESG report highlights the local communities, Indigenous and First Nations peoples, surfers, and a coalition of over 100 organizations that helped us achieve our impact,” said John Suhar, WSL’S vice president of environmental and social impact. “It’s not just about achieving sustainability milestones; it’s about fostering enduring relationships and driving a collective movement toward a healthier planet, empowered communities, and sustainable practices.”
Retail Circularity
Recycling is being replaced by “retail circularity,” where they buy back merchandise that customers no longer use. After going through rigorous quality assurance, the retailer then adds the merchandise back into its inventory so new customers can buy the old goods. Not only does this open a new revenue stream for stores, but it also reduces the demand for new, virgin materials.
Poshmark is one of the trailblazers in the re-commerce space. “Circularity isn’t just a buzzword reserved for niche companies and brands,” Poshmark’s head of communications, Kelly Mason, said. “There are some obvious participants in the circular economy because they make a product that can easily be repurposed, or operate a resale marketplace like Poshmark, that allows consumers to keep items out of landfills.” Mason said. “Consumers want products that last, and they want to know that they have options to lessen their environmental impact.”
Stricter Regulation
The European Union’s Corporate Sustainability Reporting Directive, a.k.a. “CSRD,” went into effect in 2023 mandating that large, publicly-traded European companies track and disclose sustainability metrics. The Biden administration is likely to follow suit. Many American companies with operations in the EU are already legally bound to this mandate. According to PwC, “…consolidated sustainability reporting will be required for non-EU headquartered companies at a global level if a company generates a certain amount of revenue in the EU and has at least one EU subsidiary or branch that meets certain criteria.”
Supporters of corporate sustainability scores say that this data allows firms to make better decisions. Since companies already use data and forecasting to buy merchandise, shape marketing campaigns, and mitigate risk, they may as well leverage social impact data to build a more robust business strategy.
“As practitioners, rather than perceiving these regulations as constraints, we should consider them catalysts for positive change to elevate our commitment to social responsibility and champion the cause for the planet,” said Christina Beckman, Senior Manager of ESG at Culligan International.
Of course, these regulations will increase costs at a time when consumers, in both Europe and North America, say they are concerned about rising prices and slower economic growth.
Impact Investing
“[Our] analysis indicates financially successful companies that integrate environmental, social, and corporate governance (ESG) priorities into their growth strategies outperform their peers—provided they also outperform on the fundamentals, ” says a McKinsey report. It pays to invest in ESG efforts at the corporate level and it’s no different for individual investors.
That said, politically conscious consumers are less interested in how shareholders are faring and more interested in how stakeholders are impacted. They want to know who the beneficiaries of the impact investments are, what outcomes materialize, and ensure that spending is allocated meaningfully.
Impact investing is an avenue that can offer expedited outcomes that are typically harder to achieve in more bureaucratic structures like nonprofits and governmental agencies. “At Chime, we have a program called Chime in for Changemakers, and the goal is to invest in organizations that are driving systemic level change. The reality is that many for-profit companies are doing this in ways that are massively accelerated,” said Kira Traore, the Head of Corporate Social Impact at the fintech company Chime. “We may have to rethink how partnerships happen, but I don’t think that donations are the only lever that we should be pulling anyway.”
Ethical AI Utilization
While AI gets a lot of ink for both legitimate worries (white-collar jobs will be replaced by AI-driven automation) and ridiculous fears (AI will start a nuclear war all on its own, like the 1983 movie “WarGames”), some real-world uses of AI can create a fairer and more inclusive hiring process. Unilever is using AI to fight discrimination in the hiring process by steering around covert biases that keep women and minorities from getting crucial first job interviews.
“The social impact space in 2024 will be shaped by major challenges like climate change and opportunities like the growing adoption of AI,” the chief impact officer at IBM, Justina Nixon-Saintil said. “The demand for AI and sustainability skills is already on the rise, and I think this will be a major driver of initiatives across industries.”
The sheer range of “social impact initiatives” will keep chief marketing officers busy throughout 2024.