ESG and DE&I Activities Still Essential During Supply Chain Disruption
Beth Crisafi Smith
March 5, 2021
Many advanced manufacturing headlines in early 2021 have focused on supply chain disruption, partial factory shutdowns, and labor and material shortages. The bottom line has been an inability since mid-2020 to keep up with surging consumer demand for semiconductor chips, cars, building supplies, mattresses, pharmaceuticals...nearly everything.
On February 23, President Biden convened a bi-partisan meeting of legislators to discuss America’s supply chains. The next day, he signed Executive Order 14017, directing a 100-day review of supply chains across four critical materials:
Pharmaceuticals and ingredients
Semiconductors and advanced packaging
High-capacity batteries (i.e. lithium ion)
Critical minerals and strategic materials
The order also included a one-year review of supply chains covering six broader sectors:
Defense industrial base
Public health and biological preparedness
Agricultural commodities and food products
Information and communications technology (ICT)
Energy sector industrial base
Transportation sector industrial base
“The American people should never face shortages in the goods and services they rely on, whether that’s their car, their prescription medicines or the food at the local grocery store,” Mr. Biden declared.
2020 Was an Inflection Point for Corporate ESG and DE&I Policy and Action
Historically, economic downturns have tended to reduce corporate emphasis on sustainability and social initiatives. Not this time. COVID-19 is a uniquely people-centered crisis amplified by uneven economic impacts and a surge in social justice efforts. Even as companies worldwide struggle to repair disrupted supply chain disruption, corporate and business leadership is experiencing intensified interest in their Environment, Social and Governance (ESG) and Diversity, Equity, and Inclusion (DE&I) policies and actions by all stakeholders.
3 Out of 4 Investors Increased ESG Investments During the Pandemic
Among the most telling metrics is the dramatic increase in ESG-based investing. According to a global survey of institutional investors released by MSCI* in February, 2021 – 77 percent of investors increased ESG investments “significantly” or “moderately” in response to COVID-19. This figure increases to 90 percent for the largest institutions with over $200 billion of assets.
Sustainability has been a requirement – a “license to operate,” in ESG parlance – for the entire global manufacturing supply chain for roughly two decades. Firmly embedded into corporate culture and decision-making, supply chain partners not only expect and demand reliable business partners, but allies for helping each other achieve sustainability goals as well.
DE&I Remains a High-priority for Company Leaders and Workers
Before the pandemic struck, there was also a growing trend toward alignment with supply chain partners that share DE&I values. Anti-racism movements, among other organized efforts focused on creating a more equitable world, created a groundswell in 2020 that federal and corporate leaders could not ignore. These catalysts, along with the pandemic, accelerated this trend for shared societal values, even in the midst of serious supply chain disruptions. Companies in every sector are under pressure to explain and demonstrate their “purpose” beyond creating shareholder value.
According to a survey conducted by G&S Communications in February 2021, many Americans believe private corporations should prioritize specific ESG and DE&I issues, particularly health and safety, which ranked first among other issues of equality, inclusivity and sustainability.
The most important issues that private corporations should focus on are:
Health and safety for workers and communities
Equal pay policies
Ethical business practices
Inclusive labor/employment opportunities
Product and service quality
Reducing carbon footprint
Reducing toxic emissions and waste
Safe, sustainable supply chain practices (e.g., engaging with manufacturers and other business partners who follow safe and sustainable practices)
Question: In your opinion, what are the most important issues that private corporations should focus on improving? Please check all that apply.
How Manufacturers Should Promote Their ESG and DE&I Activities and Programs
A year into the pandemic, people are overloaded with online content and suffering from Zoom/video chat/webinar fatigue. This is an opportunity for manufacturers to make their efforts stand out.
Start by making your content more engaging – whether that’s your digital content – such as your web presence and social media feeds – or the content that you’re sending to media. You want to draw your audiences in with compelling end-use stories that amplify how your product has made an impact on performance, sustainability, and/or social justice for your customers and the world. Invest in outstanding photography and interactive animations to help bring the stories to life. Make the stories more tangible by showing how your products and policies align with one or more of the 17 United Nations 2030 Sustainability Goals, which also embrace social and DE&I objectives.
Bring your ESG and DE&I annual reports and statements to life with enticing, interactive animations. And amplify those visuals by creating social media graphics, icons, and videos that, in addition to being used on owned digital channels, can also be pitched for media use, to help drive more traffic to your report and your website.
Humanize your story with real people. Designate internal and external “ambassadors” to project key messages and stories to company, industry and consumer audiences. Partner with Key Opinion Leaders (KOLs) to help bring your company and product stories to life and build brand awareness across key growth markets. And don’t forgot to engage your online followers in a two-way dialog; this can be as simple as asking them to participate in a Twitter poll or asking them a question to solicit a response to your social content.
These are just a few ideas for creating more memorable user experiences. Public interest in corporate purpose and contributions to a better world has never been stronger, making this the perfect time to shine a light on your unique ESG and DE&I stories.