US multinationals in Ireland living up to their social responsibilities

The economic contribution in terms of employment created and taxes paid by US companies in Ireland is well known, but their social contribution is also very significant. Their corporate social responsibility (CSR) activities span everything from local biodiversity projects and support for Tidy Towns efforts, to research partnerships with universities and programmes to tackle educational disadvantage.

“As an AmCham board member, chair of the mid-west region and leader of a US multinational company in Ireland, I have seen first hand the extraordinary commitment by AmCham member companies to go beyond business by contributing to their local communities across a range of social impact programmes covering education, sustainability, inclusion, social justice, the arts and many more,” says Northern Trust general manager Catherine Duffy.

“According to research conducted by the University of Notre Dame, it is conservatively estimated that US companies contribute over 600,000 employer-supported volunteer hours to 7,300 community projects nationwide,” she says.

Team culture

“With the world of work changing and remote and flexible working providing new choices on where people want to live, I believe the role CSR plays will be even more important as an outlet for team culture while also enhancing Ireland’s offering as a community focused society.”

But there are other global trends in evidence which will influence the shape of future CSR activity. Among these is an increase in employee and consumer activism, particularly among younger generations. Research carried out by Cone Communications in the US found that both employees and consumers want to work for and buy from companies that make a positive contribution to society.

The results for millennials and Gen Zs were particularly striking with 80 per cent and 94 per cent respectively saying companies should address social and environmental issues outside of their own business activities. Interestingly, 76 per cent of millennials said they would take a pay cut to work for a socially responsible employer.

Investor activism is another CSR change driver with companies being held to account for their social policies in areas like diversity and inclusion. And this makes solid business as well as social sense. A good diversity and inclusion score can be good for business with a growing body of evidence to show that greater gender diversity in organisations can improve bottom line results.

Research carried out on companies by S&P Global Market Intelligence found that those with female CFOs generated $1.8 trillion (€1.51 trillion) more in gross profit than the average for their sector during the period from the end of 2002 to May 31, 2019. Companies with female CFOs also experienced bigger stock price returns in comparison to firms with male CFOs during their first two years in the role.

Ending poverty

It’s been some time coming but more and more companies are incorporating the UN’s 17 sustainable development goals (SDGs) into their CSR efforts. The SDGs explicitly recognise that ending poverty and other inequalities must accompany actions that improve health and education, and drive economic growth, while tackling climate change and working to preserve oceans and forests.

The commercial opportunities for business solutions to the SDGs are very attractive. A commission chaired by former Unilever CEO Paul Polman reported in 2018 that meeting the SDGs offers a $12 trillion (€10 trillion) business opportunity.

Progress has been slow so far, however. A report from investment research firm MSCI earlier this year measured 8,550 publicly listed companies worldwide against their alignment to SDGs. The bad news is that just 0.2 per cent of companies were strongly aligned to the SDGs.

In better news, companies fell mostly in the middle of the alignment scale with 38 per cent aligned and almost 55 per cent were misaligned or neutral.

And change does appear to be coming. In March, more than 3,000 individuals and organisations representing trillions of euro in assets under management signed up to the UN principles of responsible investment. This will see investment managers around the world judging companies by their performance against SDGs.