Understanding your material issues is essential to corporate citizenship success

“If you can’t explain it simply, you don’t understand it well enough.”—Albert Einstein

What did Einstein mean by this? There have been two spins on this statement. The first being that some things are too complex to be understood fully and thereafter simplified and the second being that real understanding allows us to focus on what matters and describe the problem to be solved.


Why is this relevant to the corporate citizenship practice? Our work context is incredibly complex. The arenas routinely touched by corporate citizenship programs include the natural environment, financial markets, investors, communities, employees. How do we balance those priorities? Creating a materiality assessment focused on opportunities for success and risk of negative outcomes is critically important. Understanding our goals as problems that we are solving helps to keep in focus the most material facts of our case as they shift or intensify over time and guide our allocation of effort and resources. The Center has resources that can help you determine which issues are most important to your success.

Once you’ve done the important work of identifying your company’s most material issues—communicating them is the next crucial step. As the playwright George Bernard Shaw said: “The single biggest problem with communication is the illusion that it has taken place.” You and your teams know why you are focusing on the issues you’ve identified as most material, but do your stakeholders? Do your colleagues? In order to successfully execute environmental, social, and governance programs, and ensure they continually receive investment, communication is critical. You must be able to explain—in less than a minute—how your initiatives bring value to the organization, and to the listener.

How can you do this best? By ensuring that your corporate citizenship programs are just that—strategic. You must ask yourselves—if you don’t feel comfortable communicating the work you’re doing—should you be doing that work at all? Can it be modified, even just slightly, to better align to the business strategy and brand? If you can’t identify your ROI, can you really understand the material strategic connection of the program to your business?

As the pioneer of modern physics, Einstein understood this challenge better than others. He knew that to gain support and investment for a complex concept, you must express it simply—and to do that, you have to understand it from all angles.

You must also ensure that you’re reaching all of your salient stakeholders. The support of executives and employees is critical, but research finds that companies achieve the greatest financial value from corporate citizenship efforts when external stakeholders are informed also.[i] Environmental, social, and governance programs influence your customer’s purchase intentions and brand loyalty,[ii] your investors’ valuations,[iii] and the access your company has to public policymakers[iv]—but only when these stakeholders are aware of your work.

The purpose of corporate citizenship communication isn’t what it was, even just a few years ago. It is no longer simply issuing a press release with the goal of possibly scoring a positive media story. It is creating a dialogue that increases awareness of and interest in the cause you’re trying to support or the problem you are trying to solve. No longer the final step in a corporate citizenship plan, communication can inform your vision and strategy, and aid you in executing it.

To learn more about identifying your most material issues and integrating communication tactics into your corporate citizenship strategy, consider taking our online course to learn to conduct a materiality assessment, or join us in-person for our Corporate Citizenship Communications course.

The course offers IACET and CPE credit and can be counted towards your Certificate of Corporate Citizenship Practice.

[i] Hawn, O. Ioannu, I. (2016). Mind the gap: The interplay between external and internal actions in the case of corporate social responsibility. Strategic Management Journal. Retrieved from http://onlinelibrary.wiley.com/doi/10.1002/smj.2464/abstract

[ii] Batista-Foguet, J.M., Iglesias, O. & Singh, J.J. (2012). Does having an ethical brand matter? The influence of consumer perceived ethicality on trust, affect and loyalty. Journal of Business Ethics, 111 (4), 541-549.

[iii] Matsumura, E.M., Prakash, R., & Vera-Munoz, S.C. (2013). Firm-Value Effects of Carbon Emissions and Carbon Disclosures. The Accounting Review, 89 (2), 695-724.

[iv] Werner, T. (2015). Gaining access by doing good: The effect of sociopolitical reputation on firm participation in public policy making. Management Science, 61 (8), 1989-2011.