A social and environmental wake up call for corporate America: 3 Actions to take now to avoid a crisis in your company.

How Charlottesville is a larger signal to American Companies
It began with the resignation of Ken Frazier, CEO of Merc​k, from Trump’s Manufacturing Council over the President’s stunning remarks on the violence at rallies in Charlottesville, Virginia. It cascaded. Other CEOs followed him and within 24 hours seven had left the group.
On Wednesday, the members of the Strategic and Policy Forum, another elite industry group formed to advise the president on economic issues, agreed to self-disband. Before their announcement Trump himself eliminated both business Councils. It was a political case of, if my boyfriend’s coming over to break up with me, I’ll text him that we’re history, and tweet the breakup.
These were CEO’s who had stood by the President, remaining on the Councils even as he enacted policies that they didn’t always like. They stood by him when he pulled the US out of the Paris Climate Accord. They stayed during the Immigration ban even though many depend on talent from overseas. Charlottesville was a step too far. It affected Americans and on American soil.
The CEOs and companies represented on the Councils were under great pressure from their shareholders, employees and the public to take a stance, especially companies that seemed slow to respond. PepsiCo CEO Indra Nooyi was targeted, Advocacy groups marched to the Manhattan headquarters of JP Morgan and Blackstone to deliver a petition signed by 400,000 people urging them to sever ties with the White House. Several companies scrambled to issue statements assuring the public of their corporate values.
The stunning and rapid fall out is a wake up call to Corporate America. A social-environmental accountability movement is underway that will have major consequences. Today’s is a sophisticated, globally-connected, technologically-savvy and quick to mobilize world. Consumers have spent their lives on social media where group consciousness spreads ever more quickly. Corporate ethics on social and environmental issues will be increasingly scrutinized, judged and acted upon.
This places U.S. and multi-national companies firmly in the spotlight. Some are seeing the trend. Jamie Dimon, (CEO of JPMorgan) in a recent letter to shareholders described trust as America’s secret sauce and he worries that the bottle is running dry. Companies need to pay attention. The public and shareholders will increasingly ask: Does a company live up to its own diversity policies? Does its rhetoric on environment and sustainability match its actions? Does it take measures to reduce emissions? How are its workers treated?
Companies can be proactive to reduce their social-environmental risks or they can scramble to manage the fallout. There are three actions that a prudent company can take today:
1. Lead
Don’t wait for the spotlight to fall on your company. If you have exposure you are already in someone’s crosshairs. It’s a matter of time before you read about yourself in the media and find that you have to respond. CEOs, executives and boards constantly tout the value of effective leadership. This is a good opportunity to put it into practice and help the company avoid a crisis.
2. Learn
Several peer companies have been putting social-environmental practices in place for years. For example, Levi Strauss and Unilever, both multi-national in their activities, have enacted strict standards for workplace and environment.
3. Drive
Design or adapt social-environmental standards and corporate policies that are smart, meaningful and strategic for your company. Good environmental and social practices do not mean poor business ones. Levi Strauss and Unilever’s profits are improved, not harmed, by their responsible practices. Take charge to adopt Company policies before less favorable ones may be imposed by the public, judges or legislation.
The current social and political upheaval gives corporations a unique opportunity. Those who embrace the trend and the mood of the public can build recognized and appealing brands that demonstrate sound financial sense while paying attention to environmental-social factors that their consumers want. But that window of opportunity is narrow. Don’t squander the limited time. Act now.