Report Released: Solving Social Problems Through CSR Business Strategy

According to a recently released report "Shaping the Future: Solving Social Problems through Business Strategy" by *CECP and McKinsey & Company, the problems of society are forecasted to become involved and require CSR leaders and executives to re-structure community, philanthropic and business strategies. The two primary questions that the report attempts to answer are: over the next decade, what are the key implications for corporate participation in addressing social issues?; and how can companies position their operations now to maximize profits and societal impact?

The report includes analysis and interviews with more than 12 CEO members representing corporations such as DuPont, Duke Energy, General Mills, Verizon, Johnson & Johnson and Aetna. It also includes data from case studies from organizations such The Dow Chemical Company, IBM, McDonalds, Nestle, Walmart and Western Union.

Five particular issues were identified as having the most significant impact on how corporations engage with society and in the context of CSR. These include changes in economic activity centers away from the west; mismatches of talent; worldwide connectivity; constraints on resources; and governments playing a more significant role.

Here's a brief recap of the five transformation points that businesses and CSR officials can expect to be impacted by over the next 10 years:

1. Brazil, Russia, India and China (BRIC) are expected to have a continued growth rate.It's estimated that by 2020, a total of 55% of global GDP will be accounted by developing nations. The number of BRIC nations with Fortune Global 500 companies doubled from 27 in 2005 to 58 last year. Emerging-market leaders are expected to pose increasing competition to large corporations by 2010.  According to Duke Energy Chairman, President and CEO Jim Rogers, "China is where the growth is going to be in the next ten years. It has the potential to truly leap frog more developed countries in the use of smart grid technology."

2. Talent shortages in the developed world are changing the productivity imperative. In fact, productivity gains, in other words, obtaining more output per worker, will be lead by labor productivity gains, particularly given aging populations in the developed world. Over the next decade, as the labor population "ages out" of the working pool, 30% of growth will rise out of adding new workers and the rest will need to come from the remaining workers becoming more productive.

3. By the 1Q2009, global trade had dropped 33%, introducing an "unprecedented cross-border ripple effect," according to the report. The interconnectedness amongst people will also a play a key role in the global integration of trade, capital and technology. Today, two out of three folks own a cell (it was 1 in 10 a decade ago). To offer another example of the rate of technology integration is the growth of Facebook from its start in 2003. If Facebook were a country today, it would claim the third largest population in the globe.

4. As global and CSR demands increase over the next decade, partially due to a spike in emerging-market economies, natural resources, including water, food and energy, can be expected to be in short supply. And as the demand increases from developed and developing nations, the worldwide supply of associated business inputs such as oil, metals, forests and arable lands will be strained. If left unchecked, international water consumption could reach 40% beyond reliable supplies by 2030.

5. Governments have been and will continue to shoulder significantly larger regulatory and support roles in business. They'll continue to weather pressure to stimulate growth by ensuring "their economy recovers from crisis and to maintain the long-term health of public finances."

*CECP stand for the Committee Encouraging Corporate Philanthropy.