The playwright Tom Stoppard once said, “Words are sacred… if you get the right ones in the right order, you can nudge the world a little…” We took a look the annual corporate social responsibility (CSR) reports of several top B2B companies in an effort to observe trends and common practices, and we couldn’t help but notice the multitude of acronyms and terms used by companies to categorize their philanthropic behavior. From CSR to ESG (environmental, social, and governance) to SRI (socially responsible investing), from mission to purpose, the words can get tricky for readers and content creators alike, especially since acronyms are easily confused for one another. We’re here to bring clarity, so you can accurately communicate your company’s stance — or quickly grasp someone else’s.
Companies define their CSR activities in myriad ways. Clockwise from top: Cisco, Dell, Commonfund, Nuveen
CSR is most often used as an umbrella term for sustainability, corporate philanthropy and employee volunteerism initiatives. The language surrounding CSR can be manipulated and utilized in various ways to highlight certain aspects of a CSR program. As Managinc.com puts it, CSR describes a company’s efforts to ensure its actions have a positive impact on all stakeholders. CSR goes beyond a responsibility to follow the law; it is the extra actions that ensure a company’s interactions with employees, suppliers, customers, and society are fair, respectful, and charitable.
Although environmental considerations can be part of CSR, they are not CSR’s only focus. The “social” in CSR is indicative; at its root, CSR is about supporting and respecting a company’s employee, partner, and external communities. CSR is a good overarching term for companies to use when describing exemplary programs, behaviors and beliefs. Cisco, Allergan, and Dell are three major B2B companies that have prominently used the phrase to unite their community, environmental, and employee support programs.
First discussed in 2006 by the UN Principles for Responsible Investment (PRI), ESG criteria are measures by which companies and individual investors assess a firm’s commitment to its CSR goals. In short, they hold companies accountable for their CSR promises and help investors do market research.
ESG measures recognize that the safest investments are in companies that act as good corporate citizens. So while they take into account the goodwill and positive results derived from responsible and philanthropic activities, they also value safety measures, environmental stewardship, prudent management practices, and other policies that reduce risk. Marketers can use the term “ESG” to describe a company’s transparent evaluation of its responsibility practices according to PRI principles. For example, J.P. Morgan publishes an Environmental, Social and Governance Report that frames its high level sustainability policies for investors and the market, as well as a Corporate Responsibility Report that acts as more of a showcase of individual activities.
PRI is a UN organization that promotes and assesses responsible investment, whose foundation is a document of “voluntary and aspirational” principles for institutional investors. If a company becomes a signatory of the principles, it means they have committed to working towards these aims — either as an asset owner or manager or as a service provider. Signatories are responsible for providing a yearly assessment of their progress.
Being an active signatory of the PRI is an important mark of commitment; in some industries, such as timberland investing, in which customers and investors are concerned about reputational risk, it is table stakes. While it shouldn’t be a central part of your CSR communications, your PRI affiliation should be mentioned as a proof point. For example, although the majority of the content in State Street Global Advisor’s Stewardship Report focuses on their actions — such as its Fearless Girl campaign — the company is clear that its programs are built to purposefully align with elements of the PRI.
The Fearless Girl statue in lower Manhattan
SRI is the investment philosophy adhered to by those who are interested in using ESG criteria to evaluate a company’s CSR. Now that’s a mouthful! Commonfund, a DeSantis Breindel client, defines SRI as “investments driven first by ethical values.” These values are unique to each investor. Unlike the ESG criteria, which do not exclude investments from consideration but do rank them in accordance to adherence, SRI often involves negative screens; some investors may not want any investment in fossil fuels, while others may not be interested in investing in weapons.
SRI is still a very popular term, but we’ve noticed a trend of term simplification. Many companies that once spoke of SRI now simply refer to it as responsible investing (RI). Perhaps they grew tired of three-letter acronyms, or maybe they wanted to indicate that their investment philosophy was simultaneously socially, financially, and environmentally sustainable. Whatever the reason, although SRI is still a more frequently searched term, responsible investing is becoming increasingly recognized as a way to refer to an ethically-motivated investment philosophy.
One company that has fully committed to the term “responsible investing” is Nuveen, a TIAA-owned investment manager. It offers its client a wealth of resources about RI strategies and its benefits, ranging from reports on specific Nuveen products to broader insights, such as market surveys.
CSR communications is one of the best ways to showcase your company’s values and culture. It’s also becoming increasingly important as SRI is embraced by more and more investors — individual and institutional. By understanding the “alphabet soup” of common acronyms cleared up, you’ll be one step closer to creating messaging that attracts investors, builds goodwill, and secures loyalty.
To learn more about implementing the right CSR language, contact us.
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