The pandemic and purpose movement helped crystalize the need to link social impact to business strategy. Far from conflicting with financial goals, ESG initiatives are now primary drivers of them. Take Pfizer, for instance. The COVID-19 pandemic put the biopharmaceutical industry front-and-center, underscoring the link between research and development and public health in a way few people thought about before. “The pandemic required us to be more visible and more outspoken about fighting misinformation and educating the public on vaccine development and a new technology called mRNA,” says Sally Susman, Executive Vice President and Chief Corporate Affairs Officer at Pfizer. The response by Pfizer and others to the pandemic reminded the public of the value of scientific innovation—something not possible without a thriving biopharmaceutical industry. As Susman says of the link between impact and financial performance, “If biopharmaceutical companies want to dependably reward shareholders, they need to be doing the right things for patients, colleagues, and all stakeholders.”
The reverse is also true, however—organizations that dismiss ESG concerns risk financial and reputational damage. “One of my closest business partners has to be my chief financial officer,” says Ioanilli. “They have to understand how impact strategies create value for the company.” Part of the reason why organizations are integrating the responsibility for impact into the corporate affairs function is because it is one of the few areas that has insight across the entire enterprise and its stakeholders. The scope of areas corporate affairs oversees includes: corporate and business line communications, government relations, media relations, public affairs and policy, employee communications, consumer and community relations, philanthropy, and sometimes marketing and investor relations.
McDermott says the broad canvass gives corporate affairs executives a unique viewpoint on how social impact can be embedded into an organization’s actions to drive financial performance, regulatory change, consumer perception, and even talent recruitment and retention. “You need a holistic view of the organization in order for impact strategies to make a difference,” he says.
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One of the challenges with social impact is that it is such a hot area that everyone wants in on it. It isn’t hard to envision communications, public affairs, and investor relations all staking claim to an initiative around, say, net-zero carbon emissions.
To avoid such turf wars, Beth Fowler, a senior client partner in the global government affairs practice at Korn Ferry, says impact leaders need to act like political campaign coordinators, helping individual corporate affairs units tailor messages to their unique audiences and tying it all together for the benefit of the entire organization. “Each area has accountability for a different aspect of the overall narrative,” says Fowler. For instance, communications could message consumers and the media to enhance brand reputation around a net-zero initiative, while public affairs could target politicians and environmental activists and investor relations could appeal to institutional investors and shareholders.
Another important audience to target with social impact messages is the employee base. In fact, employees may be the most important audience, say Nina DeLorenzo, Chief Global Impact Officer at Indivior, a pharmaceutical company focused on treatments for substance use disorders and other serious mental illnesses. At a time when employees are leaving because of burnout or sheer frustration and managers are struggling to connect with their teams in a remote work environment, DeLorenzo says social impact initiatives can be a route to increasing engagement and attracting and retaining talent. She says part of the reason Indivior created the impact officer role was to advance its mission of not just treating people with opioid addiction and other illnesses, but also to help families and communities dealing with the disease. “What better way is there to get employees excited and engaged than for them to see the effect their work can have on the world beyond what they see in their day jobs,” DeLorenzo asks rhetorically.
In fact, that excitement and engagement is already happening in the corporate affairs function. Fowler notes that the rise of social impact is attracting new kinds of talent to the corporate affairs function. She says recent client searches have included candidates from media, political office, technology, academia, and more. She says leaders from non-traditional areas are looking to come into corporate affairs because they view the impact component as a career development opportunity. “The talent available is improving and growing,” says Fowler.