Corporate Citizenship During a Geopolitical Crisis (Part 5 of 5)

War in Ukraine: The Importance of a Global and Long-Term Perspective, co-authored with Paul Washington, Executive Director, ESG Center, The Conference Board
Corporate Citizenship During a Geopolitical Crisis (Part 5 of 5)

War in Ukraine: The Importance of a Global and Long-Term Perspective

“The war in Ukraine is supercharging a three-dimensional crisis—food, energy, and finance—with devastating impacts on the world’s most vulnerable people, countries, and economies. The world is facing hunger on an unprecedented scale, food prices have never been higher, and millions of lives and livelihoods are hanging in the balance.”

United Nations Secretary-General António Guterres. May 4, 2022

The impact of the war in Ukraine is being felt around the world, not only through adjustments in the global political order, but also through inflation, a slowdown in global growth and regional recessions, and sweeping impacts on food, minerals, and supply chains in general.

The humanitarian impact is, likewise, global. In the first four parts of our series of essays on Corporate Citizenship During a Geopolitical Crisis, we focused on what is happening inside Ukraine and surrounding areas since the war began. As with the COVID-19 pandemic, however, the humanitarian impact of the war is global, and companies need to respond accordingly.

Global Humanitarian Impact

As the war is negatively affecting supply chains; creating shortages of minerals, grains, and oil; and contributing to inflation, it is having a particularly harsh impact on those most vulnerable in society, many of whom are still reeling from the ongoing effects of the pandemic.

  • People who are already barely sustaining themselves financially now could lose the ability to house and feed themselves and their families, as the costs of housing, food, transportation, health care, and other basic needs increase. Many types of organizations will need to increase their capacity to meet the demand for safety-net type services. Government, social service agencies, and nonprofit organizations will need to help fill the gap. A similar situation was seen in the early months of the pandemic when many jobs went away.
  • For the vulnerable, the food crisis can mean different things depending on where the person resides in the world. Higher prices will be a primary issue in the developed world, but in parts of the Global South, food itself will be scarce. Indeed, areas of the world that are already food insecure will find it more difficult to purchase food at an affordable price. Some areas of the world have seen their own food output diminish due to climate issues of drought, flooding, and conflict. Regardless, people may need to alter their diets to survive—including rolling back gains made toward more nutritious and balanced meals.
  • It’s not just food. Energy prices or lack of fuel can have serious consequences such as creating difficulties in getting to work and school, pumping water, and safely storing and cooking food. Many parts of the world already only have electricity sporadically. In areas that do have a constant electric flow, affordability might mean that air conditioning wouldn’t be run in extreme heat, potentially causing illness and death. Heating could be curtailed in extreme cold.

What Can Companies Do Through Their Citizenship Efforts? 

The pandemic inspired a global humanitarian response that can, in many ways, serve as a template for what companies can do now. To be sure, war is different: with the pandemic, the “epicenter” has moved around the globe and its course has been marked by seemingly random developments; with Ukraine, the epicenter is in one place and its main shockwaves have moved in concentric and somewhat more predictable patterns. But with both the pandemic and the war, the impact on each locality depends greatly on government policy, resources, (mis)information, and cultural differences. The recent series of essays by The Conference Board on how the war is perceived in different countries brings out that point in high relief. 

  • Corporate humanitarian aid should be global and tailored locally. Multinational corporations should map the challenges created by the war (food, energy, other shortages, and inflation) against where the company operates and where the employees are located to create a “heat map” of need. It should tailor its humanitarian response to address local conditions.
  • Companies should also ask the nonprofits with whom they work how inflation, access to labor, and access to supplies are affecting their ability to deliver their services. Nonprofits of all types—even those far removed from addressing the immediate and knock-on effects of the war—may find it more expensive to meet their organizational mission. Ask them if they will have to reduce services to remain within budget or raise additional funds, or raise fees, to maintain service levels.
  • Unlike the corporate response to the pandemic, when restrictions kept volunteers away, employees may be able to help fill the gaps at local nonprofits by providing additional helping hands. Food banks, social service agencies, and clinics will need to scale up service levels to meet demand and could be resource challenged to do so.

How to Deal with One Large Crisis After Another? 

Over the last two years, we have seen corporate citizenship and philanthropy efforts and budgets increase as the private sector has responded to the pandemic, social upheavals, and now the war in Ukraine—along with a series of hurricanes, earthquakes, and other natural disasters. In the past, crisis fatigue has had a negative impact in that the first disaster can be given more attention and resources than later crises. For example, the 2017 hurricane season produced Harvey, Irma, and Maria. Harvey came first and received the most donations, while Maria came last and received the least, but Maria caused the most damage and created the greatest need. Thus far, we are not yet seeing that kind of effect, as major companies, at least, are maintaining or increasing charitable giving. To avoid crisis fatigue in the future:

  • Ensure philanthropy is part of broader business and sustainability strategies. That type of integration not only provides criteria for allocating resources with the long term in mind (avoiding the instinct to react with everything you’ve got to every crisis), it can also ensure that your organization can sustain its commitment to those crises where you decide to devote significant resources.
  • Employ governance practices over corporate citizenship that reduce the emotion of the decision-making process and ensure that the right decision makers are at the table.
  • Enlist the entire organization, not just corporate citizenship departments, in your efforts. Make it part of your corporate purpose to attract and motivate employees.
  • Be sure those on the front lines working on societal and community issues take care of themselves. The Conference Board Corporate Citizenship Councils held a session on "Coping: Impacted People Helping Impacted People," which suggested that corporate citizenship practitioners were experiencing symptoms of fatigue similar to those of hospital and social service workers as the pandemic continued unabated. Like those in other professions, corporate citizenship practitioners should take turns determining who is “on call” so the others can disconnect—whether for a day or half day, weekends, or vacation time. Corporate citizenship executives should also strive to create an environment where it is safe to discuss mental health issues, that provides training for corporate citizenship practitioners to learn how to spot signs of mental stress, and that encourages their employees to take advantage of available corporate resources to reduce stress.

The war in Ukraine is a powerful reminder that companies, even in times of crisis, need to take a long-term and global perspective. The great challenges of our time as outlined in the 17 United Nations Sustainable Development Goals—from providing for sustained and inclusive economic growth; to ensuring access to reliable, affordable, and sustainable energy; to building effective, accountable, and inclusive governmental and other institutions—require focusing not just on the next quarter, but on the next quarter century. Further, the war in Ukraine and its ripple effects have underscored how the entire world is unavoidably connected —something that will not go away simply by onshoring some parts of a supply chain. This, in turn, requires corporations—and corporate leaders—who can respond to a set of crises with a sense of urgency to address immediate needs, authenticity to motivate others, equanimity and history to maintain a healthy perspective, and humility to recognize the limits of even our best efforts to improve the human condition.