December 18, 2016
As we tackle the many ways a Trump presidency may impact investor relations and public companies, it’s also worth examining how the landscape of corporate social responsibility (CSR) and sustainability may be affected. As with many issues, we do not yet know the reality of Trump’s plans or his ability to implement his agenda, but here are five things we do know about CSR/sustainability in a world with President Trump:
1. We are likely to see some changes and rollbacks on the regulatory side of things.
It seems clear that EPA is in for a shake-up, given Trump’s appointment of Oklahoma Attorney General Scott Pruitt, an outspoken climate change skeptic, to lead the agency. Exactly how much change is still unknown, but there’s a good chance, for example, that carbon emission rules for power plants and renewable transportation fuels standards will be relaxed.
2. International climate negotiations – i.e., the Paris agreement – are also facing uncertainty.
The week of the election, Morocco and were certainly thrown by the outcome. Some advocates believe they will need to move forward without the U.S., while others tout the unstoppable “drive for change.”
3. Other areas of CSR may also become more difficult to implement and manage.
For example, challenges related to tolerance and bridging feelings of “us versus them.” Companies looking to increase the diversity of its talent and leadership pool may face pushback.
4. Importantly, however, CSR/sustainability seems like an irreversible trend, with 81 percent of S&P 500 Index companies publishing CSR Reports in 2015 and even investors beginning to demand increased sustainability disclosures.
Plenty of companies are engaging in positive activities (beyond compliance) based on the demands of their employees, customers and end users, as well as their overall belief in doing the right thing. There’s no reason to think this trend won’t continue.
5. All this together means that, under the new political landscape, companies have the opportunity and the challenge of playing a greater leadership role in all areas of social responsibility.
Companies may be inspired to be more vocal about their voluntary commitments if mandates from EPA, the White House and Congress are on the decline. For example, Shell’s decision to link executive bonuses to emissions targets suggests the company is committed to reducing its environmental footprint regardless of decisions made at EPA. Looking for ideas for leadership actions? I recommend this Fast Company article, which has some great tips, such as “decide what your company is ready to fight for.”
Want to strategize how to position your CSR efforts in a time of great political and regulatory change? E-mail me to start a conversation.