Four Regions, Four Trends: Corporate Giving Around the World

12/01/2017 02:47 pm ET

As we recently witnessed during #GivingTuesday, the global initiative encouraging giving, there are multiple ways companies can invest in making a positive impact on society. These strategies range from the familiar ways – giving cash donations to charities – to newer approaches such as using groundbreaking technology as a way to solve big, global problems.

For many companies looking to expand their community investments outside the US, the big question is how do they stay true to their company’s strategic focus while also adapting for local norms? And are there global trends in corporate social investment that business should be aware of—and from what important cultural dimensions do these trends stem? These are some of the questions CECP: The CEO Force for Good wanted to answer in Giving Around the Globe: 2017 Edition. The study, now in its fifth year, is based on data from 120 of the world’s largest companies headquartered in Africa, Asia, North America, South America, and Europe. CECP found that while companies always differ in how their approach ties to their core business, collectively, the data point to four key trends.

The Offerings: Regional Differences in How Companies Invest in Society

First, let’s look at the differences. We found that companies in South Africa overwhelmingly favor company-wide “Days of Service” more than any other region. These are a day or, in many cases multiple days, dedicated to volunteering on company time in the community. These volunteer initiatives—seen as a way to enter the world of corporate volunteerism and show true community engagement--provide valuable help to charitable causes, foster a greater sense of teamwork, and increase employee engagement. In addition to the prominence of company Days of Service, nearly nine out of ten South African companies offer paid-release time for volunteering; coming in second to European companies that saw a rate of 94%.

Corporate volunteering is also important in Asia where 61% of companies offer pro-bono services, more than any other region. Pro bono services are volunteer opportunities where an employee helps a charitable organization on company-time and does so performing his or her professional function – such as an account reviewing financial reports. This preference in Asia may be due to a cultural norm to separate corporate and social sectors, therefore volunteering focused on business skills is a better fit. Strikingly, companies in this region also donate more than US$1,000 per employee, more than any other region and more than three times the amount of the next highest region.

While companies based in Asia tend to give more on a per employee basis, European companies are more likely to give across borders. Almost all European companies surveyed – 95% – contribute to international end-recipients, the most out of all the regions studied. This suggests that European companies have made the strategic decisions and have the internal resources to engage communities globally. Indeed, more than any other region, European companies have larger teams of employees that focus on their company’s social impact strategies and programs as part of their job. Additionally, given the formal cross-border channels already in place through the European Union, companies can lever these same paths to make social investments close to home and abroad.

Companies based in Latin America structure their societal investments differently than other regions. As an example, all Latin American companies surveyed report having a corporate foundation whereas only 50-58% of companies in Africa, Asia, or Europe give donations through a foundation. In many cases, there is a cultural preference by Latin American companies to establish “operating foundations” that carry out the social services themselves. In addition, 86% of Latin American companies offer family volunteering opportunities.

The “Even Bigger” Picture: Trends in Corporate Societal Investments

While these regional differences in strategies are indeed noteworthy, but they become fascinating when you see them coalesce on a grander, global scale. Indeed, after conducting a literature review of recent research and tapping other CECP sources, we see four key global trends in how companies invest in society:

  1. Reporting and regulations are widespread: In three short years, the number of mandatory or voluntary sustainability-reporting systems surged from 180 in 44 countries in 2013 to almost 400 instruments in 64 countries in 2016. More specifically, social impact measurement and reporting methods have doubled since 2013, growing faster than those that focus on environmental issues. This means that companies are being encouraged to share more information in structured ways about their social and environmental initiatives. The current impact of these disclosure instruments is unclear, but what is likely is that the interest in corporate social and environmental responsibility activities will not recede in oncoming years.
  2. Advocacy is a business imperative: At the 2016 annual CECP Board of Boards meeting, a live polling exercise revealed that two-thirds of CEOs agree that companies will lead progress on long-term societal improvement. Indeed, we see the private sector collaborating with different stakeholders to find solutions for important – and sometimes less popular – causes. For example, at a time of growing antipathy towards refugees, some companies have stepped up and offered advocacy, cash donations, technology, and job training programs.
  3. The UN’s Sustainable Development Goals (SDGs) are informing business decisions: Companies are highly interested and engaged in achieving the SDGs. While there is broad based support – 87% of CEOs see the SDGs as a way to create value – there are some differences in priorities. For example, companies in developed economies primarily focus on SDG goals on climate action while other regions prioritize SDG goals on education. Interestingly, there is also an important role for technology. Big Data, the Internet of Things, circular economies, and Artificial Intelligence are emerging as business opportunities as well as powerful SDGs accelerators.
  4. Companies are leveraging technology for improved employee engagement and discovery of purpose: Stakeholders are pushing business leaders to rethink the purpose of their organization to include something bigger than just making profits. In response, company leaders are creating long-lasting and coherent strategies that help attract, retain, and motivate employees. At the same time, these employee engagement strategies are being facilitated by better tools, stronger infrastructure, and innovation in HR software platforms. The goal is to ultimately help employers find more reliable ways to tap into employees’ passions and inspire them to perform at their best.

As CECP’s report identified, it is true that there are regional differences in how companies approach investments in social and environment progress. But in the course of conducting the research for what is now five editions of Giving Around the Globe, CECP has witnessed a significant uptick in the adoption of formal social investment strategies across all four of the regions we surveyed. Moreover, as the four trends indicate, there is also a deepening of commitment and an increasing sophistication of these approaches as companies understand the long-term value of investing in global communities as a part of their overall social strategy. Taken together, businesses can indeed be a force for good.

This post is hosted on the Huffington Post's Contributor platform. Contributors control their own work and post freely to our site. If you need to flag this entry as abusive, send us an email.

CONVERSATIONS