Companies Need to Take a Stand. Here’s How to Do It Right.
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In the last few years, companies have experienced disruptions from extreme weather events, the ongoing COVID-19 pandemic, and violence and legislation that exacerbate systemic inequality. Many companies are quick to issue a call for unity or state in vague terms that they stand with their affected employees, but few have anything substantive to offer in terms of their own understanding of these issues and their intention to address them.
More than ever before, the public is turning its attention to business leaders and saying “how are you going to be a part of the solution?”
One of many lessons from these eventful and calamitous years has been that issuing a meaningful position statement backed up with credible commitments for action pays off – so long as it’s done well.
For the most part though, companies are still issuing broad and vague positions on corporate responsibility that address a range of overlapping social and environmental issues.
Oftentimes these statements are a paragraph or two in length. Sometimes they’re fifty pages. Almost always, however, they provide too little of the content their audience wants and needs and too much of what they don’t.
An important reason for this variability is that, for too long, there were no effective guidelines for how to produce statements that make a clear strategic connection between pressing issues and their implications for businesses.
That’s where we come in.
At the Embedding Project, we’ve analyzed thousands of position statements. We try to understand what works well and what does not, and we have built a database to show examples of leading positions.
We have found that a really good position statement does three things: it explains the issue, links the issue to the company’s strategy, and clarifies their commitments to take action. To help companies take a credible position, we have created a straight-forward eight-step approach that will help you to craft a comprehensive yet concise position statement.
A quick note: if you find that you are unable to complete every single step in the checklist the first time, don’t sweat it – just be transparent about your limitations and aspirations and clarify the steps you will take to overcome these gaps.
1) Explain your understanding of the issue
Begin your position statement with a brief explanation of the issue you’re addressing. Your summary should explain 1) what is happening, 2) why it is happening, 3) what this will mean for society and/or the environment, and 4) the response to date.
Say you want to write a position statement on climate change. A strong introduction would:
Explain how human activities are contributing to a disastrous rise in greenhouse gas emissions;
Explain how this rise in emissions is increasing the pace and severity of extreme and unpredictable weather events;
Explain how this trend will impact society and industry;
Explain the actions and commitments that relevant communities, governments, and industries are taking and making to address this issue.
Note that this section is focused on addressing the broader implications - there will be plenty of space to talk about how the issue and the relevant trends and patterns will affect your company, in particular, starting in step 3 below.
2) Explain the social and/or environmental limits that safeguard resilience
Your statement should identify and explain what your company sees as the limit, or ‘tipping point’, for which there is a compelling need for action. What is your understanding of the point at which the resilience of the underlying social or environmental system will be compromised? If you read ‘limits’ and ‘resilience’ and aren’t precisely sure what I mean, never fear - I discuss both in my how-to breakdown for developing credible goals blog.
When explaining relevant limits, it can be helpful to reference key sources of authority, as well as your rationale for choosing them. This can help clarify how your company understands the issue and its limits and it enables the reader to quickly gauge your company’s maturity on this issue. You should also identify any frameworks or initiatives that help inform your thinking. For instance, companies are beginning to reference frameworks such as the UN Sustainable Development Goals, the Planetary Boundaries Framework, the Doughnut of Social and Planetary Boundaries, and the Future-Fit Business Benchmark, or even local community resilience plans to support their understanding of relevant social and environmental trends and their associated limits.
Finally, help your reader understand what collective action is needed to adhere to relevant limits. What do industry leaders, government(s), communities, and others within the system need to do? What is the scope of change required? Is it local, regional, national, or global?
This section is also a good place to explain your understanding of how this issue may be linked with other issues or limits. Climate change, water scarcity, immigration and refugee crises, war and conflict – these things don’t happen in isolation. They are often deeply interconnected.
3) Link the issue to your business, including its strategic impact and the constraints it will place on your decision-making
You’ve explained your understanding of the issue. That’s good. You’ve explained how this issue will impact communities and nature. Even better.
The next step is to discuss how this issue will impact your business and to link this to your strategy. Why does this issue in particular matter to your company? What are the potential risks and opportunities? Perhaps climate change will impact your access to raw materials, or perhaps you have facilities located in areas at risk from flooding and wildfires. Maybe water scarcity, heat waves, and other extreme weather events threaten your operations, the health of your workers, or your ability to attract and retain local and suitable talent.
Also, consider including a short section that outlines the motivation for your position statement, as well as the process that led to its development. Why are you writing about racial equality now? Why are you speaking out on privacy and water scarcity and human trafficking now? Were there specific learning outcomes or consequences that motivated this statement?
Honestly, any thoughtful and nuanced response will benefit credibility and transparency, even if you don’t have all the answers.
4) Discuss your direct operational and value chain impacts on the issue
Every single business produces negative externalities, and the public knows it. There’s no sense in trying to hide it or in pretending otherwise.
That being said, nothing will establish the credibility of your stance on touchy topics and your readiness to act more than describing clearly and concisely the direct and indirect impacts that your activities have on communities, the environment, and other systems.
Transparently outline how you determined both the direct impact of your own company’s operations and the indirect impacts from your value chain and investments. If your company is still developing its understanding of its impacts then outline how you plan to gather the information you need.
5) Clarify how you will do your part to address the impacts of your direct operations
By now you’ve explained the issue, discussed the implications for your company, and highlighted your company’s contributions, both positive and negative.
Essentially, you’ve explained the “problem.” The next step is to clarify your role and intentions towards providing a “solution.”
Start by clarifying your operational commitments. How will you address the impacts that are within your sphere of control? Explain your approach to determining your responsibility, and be explicit about your rationale and key assumptions. The better your readers understand your calculated share of the responsibility, the better their understanding of the actions you intend to make.
Your statement should clearly indicate how you will ‘do your part’ by working within the limits previously stated, and, ideally, in a way that allows for assessment. Your commitment(s) should have a clear starting time, a desired endpoint, and the timeframe it will take to get there.
For example, you could say “we commit to paying all of our workers a living wage by 2025, using transparent, publicly available cost-of-living data from the communities in which they live as an initial baseline.”
Your statement will also benefit from transparently discussing how this commitment will shape your strategy going forward. Acknowledge where new learning, new processes, or other changes are needed, as well as where you will need to collaborate with others.
6) Clarify how you will do your part to address the impacts of your value chain
Depending on the issue at hand, you may find that your direct impact is very small, but that the impacts that reside in your value chain – whether that’s from the goods and services you buy, what you finance or your customer’s use of your product – are tremendous.
The emissions footprint from the operations of a financial institution, for example, tends to be insignificant in comparison to the footprint of their lending portfolio.
How will you leverage your influence to help others operate within limits? How will you support your suppliers, customers, partners, and the organisations you lend to and in which you invest?
Once again, you will want to acknowledge how this commitment will shape your strategy going forward.
7) Clarify how you will support positive systems change
Beyond your commitments to address issues in your operations and value chain, you may find that your organisation has other leverage points to contribute to positive system change.
Do you have resources, expertise, or the legitimacy to convene?
Are you able to leverage these assets to support others in making change?
Consider where you are best positioned to have a positive influence on the systems on which your business depends.
8) Articulate a pattern of past decision-making and clarify future accountability
You can reinforce your organisation’s commitment by highlighting examples that illustrate choices you have made to acknowledge this issue and to act to address it. Perhaps your company has made choices that have made you a leader on sustainable apparel, or perhaps your commitments on water usage have evolved over the years from token reductions to specific, context-based solutions in areas where water is most scarce.
Regardless, you should devote some time to teasing out this story.
Identify the parties who will be responsible for overseeing relevant future commitments. Who is making the commitment? Has the board and/or CEO signed off on your position? Who is taking accountability for it? Be sure to include a sign-off date and commit to a transparent cycle of review. This will help to show the progress you are making towards achieving your commitments and will enable your audience to set expectations for updates.
Developing a position statement is an iterative process, and you’re (almost certainly) not going to get it perfectly right on the very first try. Your company’s understanding should – and will – change and advance as new information becomes available and as new learning takes place. Perhaps the science is still evolving, or maybe you don’t yet have a super clear understanding of your impacts on the issue.
You also don’t need to develop a position statement on every single issue. Start with the issues that are most relevant and meaningful to your organisation.
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