One of these questions is how these developments will affect the number of companies that report.  More than 4,000 companies in 60 countries report their sustainability performance according to GRI guidelines, including 80 percent of the world’s 250 largest companies.  While the number of companies has increased each year, there is some concern that this may change, as leading companies like Coca-Cola have been particularly vocal in their criticism of G4.  And, how many companies will decide to jump on the integrated reporting bandwagon and produce one financial, environmental and governance report in line with IIRC’s recommendations?

Other important questions are how these guidelines and tools relate to one another and how they will provide more common and clear metrics.  The G4 and tools created by SASB put more emphasis on reporting on topics and impacts that are most material to companies and the industry in which they operate.  For example, the G4 offers more detailed directions on how to identify and define the boundaries of material topics, and along the same lines, SASB provides “maps” that offer guidance on selecting the most material issues based on industry.  This can potentially help companies develop more relevant key performance indicators and allow for better comparisons with competitors—both concepts that are especially attractive to the investor community.  But, this may also demand substantial shifts in the ways companies have reported in the past.  Some companies, for instance, have focused their reports on telling their best stories, which are not necessarily aligned with the companies’ most material issues.

We are continuing to watch how the conversation evolves and are interested in hearing your questions and thoughts. Share your perspective in the comments below.

Here is a summary of the healthy discussion from the week:

The Opportunities

• Businesses of the Future: With shared value, companies have the opportunity to become much more than they were before. Take GE* and their shared value initiatives including ecomagination and healthymagination, which sparked new product development, created new revenue streams, inspired their employees and positioned them as an innovator. Companies that take a shared value approach craft strategies that are specific to their particular business.
• Solving Social Problems: Shared value views social problems as both business problems and opportunities – and as a core element to the long-term success of the business. True innovation starts by gaining a deep understanding of the problem in order to inform the development of the solution. Through shared value, we have an opportunity to make progress on a scale governments and NGOs have not been able to achieve alone.
• Reconceiving Cross-Sector Collaboration: Shared value is sparking new collaborations across and within sectors and industries and requires all sectors to think differently. For instance, the social sector must embrace the profit motive of business. As Judith Rodin, president of The Rockefeller Foundation expressed, “There isn’t enough philanthropic money to solve the world’s problems. We now seek to create alliances with the private sector in anything we do.”

The Challenges

• Building More Shared Value Enterprises: A few pioneering companies, like Nestlè*, could be called “shared value enterprises,” since they have embraced shared value at the executive level, embedded shared value into their core company mission and trained employees across the company to understand shared value so they can design and implement aligned programs. Yet for most companies, a shared value approach is still nascent – and is reflected in specific programs versus a company-wide approach. Most people at the summit agreed that it was important to meet clients where they are along the shared value continuum and that executive education may be one great way to educate C-Suite leaders on the effectiveness of shared value as a core business strategy.
• Embedding Shared Value Throughout Global Companies: There was also healthy discussion on the opposite challenge – the difficulty of ensuring shared value understanding and engagement across the company even when there is not executive buy-in. CEO support was described by some at the summit as necessary, but not sufficient, to implementing shared value effectively across the business. People talked about rolling out shared value training and performance metrics as ways to develop full company shared value integration at the regional and local level.
• Getting Investors on Board: While there was acknowledgement that impact investing is growing in scale, Peter Brabeck-Letmathe of Nestlè said the pervasive short-term mentality of investors today is not sustainable. As a private company, Nestlè has done away with quarterly earnings reports. Michael Porter suggested that investors can do their part in helping to create shared value by getting capital to those who will generate better long-term returns.

It is invigorating to be part of this conversation and help to move this promising field forward. There is still tremendous untapped potential to create exponentially more shared value by addressing these challenges and leveraging these opportunities. Porter summed it up best, “Shared value is the business growth opportunity. Shared value is capitalism. It is scalable and self-sustaining.”

*APCO client

What is remarkable about tri-sector collaboration is the importance given to the social sector.  The social sector has been long undervalued. Even the terminology people typically use to describe the work of this sector – nonprofits, non-governmental organizations – define what it is not rather than highlighting the social missions that are at their core. Yet the social sector has unique advantages to help confront today’s challenges, including an intimate understanding of the communities in which they work and the issues impacting those communities.

There is also a need to develop tri-sector leaders who have experience in all three sectors and other requisite skills to lead these collaborative initiatives. The importance of cultivating this class of leaders has even been noted by the White House in their recent White House Forum on Cross Sector Leadership, and a recent Harvard Business Review blog highlighted the six characteristics of tri-sector leaders.

Organizations that strive to engage this diverse experience and pursue collaboration across all three sectors are likely to see stronger results are also more likely to be what we call Champion Brands. Is your organization seeking out tri-sector talent? Tell us how! You can find me on Twitter @LeelaStake or APCO @APCOWorldwide.

As the 50^th anniversary of the Equal Pay Act approaches in June, it’s appropriate to stop and see how far we’ve come and how much work needs to be done to close the wage gap between women and men. Activists and economists alike have expressed concern over the extremely slow rate of progress in the wage gap between men and women in the United States, and to highlight this lack of progress, the National Partnership for Women & Families released a study on the gender wage gap in the 50 largest metropolitan areas in the United States. What city was the worst offender? Seattle.

This came as a surprise to many of us here in Seattle, as the city is known for its progressive policies and focus on social justice. In fact, just a few months ago, several of the APCO Seattle staff and alumni volunteered at City Hall to help with Seattle’s Marriage Equality Day, where same-sex couples were legally married for the first time. Yet the facts remain that on average women in Seattle earn 73 cents for every dollar men here earn. This is even lower than the national average of 77 cents to the dollar.

So naturally, after absorbing the shock, I tried to figure out how this could be. I was scrolling though comments from local media about the study when I came across this take on the data. The author, a local radio personality, argues that the study’s findings were downright “phony” and that the data are simply a manipulation of census numbers. The author’s main contention is that men are more likely to, “choose high-paying majors such as engineering and computer science,” which usually pay more.

Indeed, this is one contributing factor to the wage gap that is easily measurable. Gender disparity in occupations and industries accounts for 27.4 and 21.9 percent of the wage gap respectively. Labor force experience accounts for 10.5 percent, with union status and race/ethnicity contributing another 3.5 and 2.4 percent respectively. Recent trends in higher education have actually lowered the gap by 7 percent, as women have a slight edge in educational attainment. However, this still leaves more than 40 percent of the wage gap unexplained. The opportunity for significant progress lies in this unexplained 40 percent.

An editorial in The Seattle Times also attempted to down play the wage gap in Seattle, saying “The ‘gap’ everyone talks about is not between men and women with the same jobs.” This statement, as it turns out, is just not true. Even Seattle Mayor Mike McGinn has jumped in on the debate. He cited a study the non-profit group Catalyst, which found that even among MBA grads with similar experience and education, there was still a significant pay gap between men and women.

Since Seattle is a science and engineering hub, it seems safe to assume that some of the city’s wage gap could be narrowed by a greater push to have more women enter careers in the STEM fields. We know from national data that women make up roughly 47 percent of the U.S. workforce, but less than 25 percent of STEM workers. Companies in Washington, including Boeing*, Microsoft* and SAFECO, are already addressing this issue, through a joint initiative called Washington STEM. The organization supports various projects across the state that focus on STEM education, with some programs focusing specifically on girls.

If more companies follow this approach of supporting STEM education, especially girls in STEM, we may be able to make significant progress on decreasing the wage gap. The next step will be to address that unexplained 40 percent of the wage gap, and there will likely be opportunities for companies to take a leadership role in addressing that next step as well.

*APCO client

Three years ago I predicted the coming armageddon for brands by discussing databases and highlighting the Good Guide mobile app. If you haven’t heard of it, that’s the app where you scan the barcode of a box of cereal in a store with your smartphone and the app tells you that the cereal manufacturer “violated the Clean Water Act” or has some controversial ingredient in it. It also offers any number of “higher rated” substitute products that more closely meet the app founder’s standards. Back then I tried it and then I wrote:

And then I realized it’s just a matter of time before I’m going to learn if a company discriminates against gay people, or is a union buster, or has a CEO that denies climate change, or has a political action committee that gives only to Republicans, or has a slew of OSHA violations, or doesn’t pay any taxes, or has another product that’s being recalled – ALL AT THE POINT OF SALE.

The good news about Good Guide is the database is responsibly curated – while the owners of the database are of the west-coast, granola-crunchy variety, they are at least open to discussion with people from other points of view or agendas.

That’s all changed. Welcome to Buycott, the new wild west of social activism.

This is the app brands should have spent the past three years preparing to address. It’s the app that has the best chance to politicize purchasing decisions more than we’ve ever seen. It’s deep enough to offer tools that sophisticated activists want, like a corporate “family tree” that lets you identify corporate partners and parent companies. It’s open enough to let users crowd-source the database and it’s social enough to let people start or join causes and specific boycotts. And it’s audacious enough to get good press.

So now when mom walks into a store, she has an entire social movement or two on her phone. And she has so much more data at her fingertips than just three years ago. The advice I gave three years ago, however, still applies:

So there are a few things companies should be doing YESTERDAY to protect their reputations and their brands:

• Upgrade your social media monitoring efforts to see what’s written about you in all these mobile-accessed databases. Good Guide is a start. Make sure the info is accurate. Contact them if it’s not.
• Build relationships with the folks who make these databases and these apps. Understand their motivation, work with them to make sure you’re presented in the best possible light.
• Partner with credible organizations to build your own databases and applications. Support some of these groups by underwriting some of the cost, providing technical support, and letting them know they can work with you.
• Promote responsible efforts to give consumers all the information they want and need to make smart decisions. Consumers reward the companies that advocate for them.

Or, sit back and wonder why people stopped buying your stuff.

Now it’s a bit harder to build those relationships, but at least we know where to look.

I wrote earlier this year that Washington state Governor Jay Inslee has pledged to focus on developing renewable energy and clean technology as a high priority of his new administration. In his budget, made public this week, the governor called for more than $100 million in state investments to be made in these fields, including in higher education, research and other initiatives to reduce emissions and address climate change.

Governor Inslee’s proposals come at an interesting time for clean tech, as more and more movement on issues like renewable portfolio standards (RPS) is occurring at the state level. The Washington Post put a spotlight on the topic recently (The biggest fight over renewable energy is now in the states), noting that thanks to such focus, renewable energy capacity in the U.S. has doubled in the last four years.

The team at the Washington Clean Technology Alliance has a comprehensive look Governor Inslee’s proposals over on their blog, but I wanted to highlight a few interesting takeaways:

States are moving renewable energy proposals forward, but not without a fight.

Significant innovations in renewable energy, like those in Governor Inslee’s proposals, have been met favorably by the clean tech industry here in the Pacific Northwest. But, as Greentech Media reports, there continue to be major legislative hurdles. For example in Washington state some lawmakers have pushed for continued focus on existing hydroelectric projects rather than on incentives to create new sources of wind and solar power. From Connecticut to Oregon, it’s clear that these kind of legislative challenges aren’t going away, and proponents of renewable energy investment will need to continue to communicate the positive impacts of  these policies to lawmakers as well as the public. This means linking such policies to not just addressing climate change, but also to economic outcomes and job creation. Governor Inslee did exactly this in his remarks on the budget.

There is growing recognition of the link between education and clean tech innovation.

Science, technology, engineering and mathematics (STEM) education continues to be a hot topic and for good reason. Among Governor Inslee’s proposals are investments to increase the state’s supply of engineers and skilled workers qualified for tech jobs. While many initiatives in STEM have focused on creating the next Mark Zuckerberg or Steve Jobs, clean tech innovation benefits from improved STEM education as well. Increasingly, it will play a major role in our ability to innovate and solve energy problems over the coming decades.

Research and public-private partnerships will continue.

Investments in clean tech research are significant items in Governor Inslee’s budget, including R&D at the state’s largest universities. In addition, public-private partnerships continue to play a major role in developing renewable energy solutions – namely biofuels. Development of such biofuels has been a major focus in the Pacific Northwest – see a report from Climate Solutions on advanced aviation biofuels. The value of such partnerships is pretty well established, and they continue to be a large part of the way forward on clean tech innovation.

As these proposals in Washington and in other states around the country move forward, it will be interesting to see which components gain traction and which fall by the wayside.

If you’ve opened a laptop or turned on a TV in the last week, you know the Supreme Court has just heard arguments in two landmark cases involving same-sex marriage: a challenge to California’s controversial ban on same-sex marriage (Prop. 8), and to the so-called Defense of Marriage Act (DOMA).

And, if you logged onto Facebook or Twitter yesterday, you no doubt saw a lot of red and pink, thanks to a campaign by supporters of same-sex marriage. The campaign encouraged users to change their profile pictures to a red and pink equal sign to show support for legalizing same-sex marriage. Almost immediately, a new meme was born – even the famed grumpy cat made an appearance. Along the way, some major brands in corporate America started to jump on the bandwagon.

Online retailer Bonobos posted their own version of the image, replacing the equal sign with two pairs of Bonobos-brand pants. HBO’s popular series True Blood posted a version sporting vampire fangs. Anheuser-Busch’s takefeatured two frosty cans of Bud Light.

I wrote about support for gay rights causes from American businesses a month ago, but I want to revisit the topic as the spotlight shines squarely on the issue this week. What does all of this mean for cause-conscious companies? Here are three thoughts:

Issue-based approaches to communications aren’t going away.

There is a case study in clever viral marketing in here somewhere, but I want to reiterate the importance of companies approaching a social matter like same-sex marriage from an issues-based standpoint. Business that are willing to put their brand behind an issue are demonstrating their ability to engage proactively with stakeholders ranging from media to consumers. They are moving beyond a purely reactive stance to a position of leadership, and that’s good because…

Communicating successfully means staying ahead of the issues.

Technology, and social networking in particular, has created a constant two-way flow of communication between organizations and their stakeholders. Every good communications practitioner knows this has turned the world of communications on its head.

That’s why those omnipresent red equal signs are significant as more than just a marketing tactic.They’re an indication of how businesses can stay ahead of issues important to shareholders and consumers alike, and how they can thrive in this world of constant two-way communication.

Shareholders, stakeholders and consumers want brands to take bold, authentic stands.

Starbucks CEO Howard Schultz gave us a prime example of this last week when he doubled down on the company’s support for same-sex marriage at its annual investor meeting. When pressed by a shareholder critical of Starbucks’ stance on the issue, Schultz responded by encouraging the shareholder to take his investments elsewhere:

“If you feel, respectfully, that you can get a higher return than the 38 percent you got last year, it’s a free country. You can sell your shares of Starbucks and buy shares in another company. Thank you very much.”

The room applauded, and The Washington Post’s Jena McGregor has a great write-up of the positive response Schultz has received for his leadership on the issue. She also discusses the business reasons for this kind of stance, like brand value, employee retention and of course, revenue.

We all can see the rising trendlines in popular support for same-sex marriage (a record high 58% according to an ABC News/Washington Post poll this month). As the country continues to evolve on this issue, so must the ways that businesses communicate.

Hillary Clinton visited more countries than any other secretary of state – 112 – and on most trips, she made visiting women’s projects, businesses or advocates a priority. Her commitment to promoting women’s social, political and economic rights and opportunities inspired both conversation and action the world over.

Melanne Verveer, the first ever U.S. Ambassador-at-Large for Global Women’s Issues, leaves her successor with big shoes to fill. While serving in the Obama administration, she forged public-private partnerships to strengthen opportunities for women globally, and worked tirelessly to fulfill her duty to ensure that women’s issues were integrated in the formulation and implementation of U.S. foreign policy. It will be very exciting to see what she accomplishes as the head of Georgetown’s new Institute on Women, Peace and Security.

Ellen Johnson Sirleaf, President of Liberia and the first female elected head of state in Africa, was awarded the Nobel Peace Prize in 2011 for her work to secure peace, promote economic and social development and strengthen the position of women.

Sheryl Sandberg’s “Lean In: Women, Work, and the Will to Lead,” will be published next week, and she has created a foundation that will provide professional women access to research, stories and career development support to advance in their careers*.

I would be remiss if I did not highlight APCO’s founder and current CEO, Margery Kraus. Under Margery’s leadership APCO has grown from a one-woman consultancy founded in 1984 to one of the largest independent strategic communication consultancies in the world – and one of the few certified women-owned businesses of our size and scope. She lifts other women up as chairman of the board of the Women Presidents’ Organization and by sitting on the steering committee for the J.L. Kellogg Graduate School of Management Center for Executive Women at Northwestern University.

I am proud to work for a majority women-owned company that knows first-hand that investing in and championing women offers tremendous win-win opportunities.

*APCO client

As we all know, consumer attitudes toward sustainability are a hot topic in the CR world. A recent webinar from Regeneration Roadmap, an initiative that engages the private sector in addressing environmental and social sustainability challenges, explored just this topic. Their presentation featured some interesting insights on the issue. Here are three points that we thought were most notable:

1. The majority of consumers want to support companies that act responsibly and are willing to change their purchases if these companies more clearly and actively engage them. In particular, they want to better understand the environmental and social benefits of companies’ products and services.
2. Companies should engage consumers through the sources that they trust and find most influential. Forty percent of consumers trust certification seals or labels on products, followed by media reports (31%) and consumer reviews (28%).
3. 

   Click for full-size image

   The largest consumer segment, the Aspirationals, are looking for companies and brands that benefit their lives and at the same time, serve society at large.  This segment represents approximately 37% of consumers globally and is generally untapped, as companies have typically targeted their sustainability communications to “the Advocates,” a relatively small group with limited influence and strong attitudes towardsustainable consumption.

The findings of this report present new opportunities for companies. By better understanding the “Aspirationals,” including the sources they trust and behaviors, companies can more effectively communicate about and motivate purchase of environmentally and socially responsible products. This can further provide the “business case” for the creation of more responsible products and for the integration of sustainability into companies’ day-to-day operations. These findings all correlate with APCO’s recent analysis into what makes a company a Champion Brand.

We encourage you to look that the research report or watch a recording of the webinar for more information. You can view the slides below:

However, even with this growing momentum, an article from Bloomberg caught my eye this week.

Bloomberg reports that 60 companies have signed an amicus brief encouraging the Supreme Court to recognize a Constitutional right to marriage for all citizens throughout the entire United States, something the court could do in its upcoming review of California’s controversial ballot initiative Proposition 8.

Furthermore, in the second of the two cases, Bloomberg notes that another 200 companies will formally encourage the court to overturn the Defense of Marriage Act (DOMA) which federally defines marriage as being between a man and a woman and denies legally married same-sex couples tax breaks and other federal benefits.

This is notable not because business support for gay rights is a new phenomenon. Over the last year, Washington State companies including Microsoft*, Nordstrom, Starbucks and Amazon have endorsed same-sex marriage legislation, both vocally and financially.

What does make this news notable is twofold. First, the sheer number of businesses declaring public support for the nationwide legalization of same-sex marriage is significant. Second, and related, is the rationale behind the decision of these companies to file such a brief: that remaining state bans on same-sex marriage hurt employee morale and recruiting, and that the existing state-by-state patchwork of laws governing these unions creates a significant burden on businesses operating nationwide.

It’s not surprising that such companies would want consistency in the law from coast to coast, and the list of American brands joining the brief is impressive – including household names like Apple, Google, Goldman Sachs, Morgan Stanley, Microsoft*, Office Depot, Amazon and many others.

This link between an issue like same-sex marriage and business outcomes is not just a major development in the push for gay rights, but also an acknowledgement that brands can and should play a major role in the public sphere. Not only are these companies meeting their accountability to a wide range of stakeholders ranging from employees to customers, but they are taking a practical approach to an issue they have identified as material to their business.

This case plays out in the marketing arena as well. A number of companies have adopted LGBT-inclusive marketing and advertising in recent months – see Oreo’s gay pride-themed cookie, J.C. Penney’s Father’s Day ad featuring a same-sex couple and Amazon’s new ad for its Kindle featuring a married same-sex pair.

But the decision by so many U.S. businesses to file a public brief with the Supreme Court goes beyond marketing. It’s an example of companies linking a social issue to business outcomes, both internal (like employee retention) and external (read: sales). By championing the cause, these companies have adopted a bold means of addressing issues material to both their business and ESG (environment, social and governance) objectives, and that’s a significant observation for those of us in the corporate social responsibility world.

As Bloomberg points out, there’s no guarantee the Supreme Court will consider briefs like this in its rulings. Paired with a separate brief filed by prominent Republicans who have declared support for same-sex marriage, this strategy is likely aimed at convincing the moderate Justice Anthony Kennedy, generally viewed as the swing vote in these two cases.

There’s no guarantee how the court will rule, either, though the views of corporate America and the general public have evolved remarkably quickly. Regardless of the outcomes in these two cases, the acknowledgment by U.S. companies that they can and should advocate on behalf of this kind of an issue signifies a major development in how corporations define and treat issues material to their business.

*APCO client