What is corporate social impact sprawl?

The question we should really be asking ourselves is whether it’s a good thing for companies or not. If the term persists in business, that’s the debate people will have.

It’s the growing number of engagement programs, social outreach initiatives and charitable foundations that a single company pursues simultaneously in the name of social development. 

It’s a very new phrase – coined in a Fortune feature analysing the various attempts by companies to increase their social outreach during the pandemic. 

So far, there is no universal consensus on whether it’s a positive or negative phenomenon.

Let’s look at the two elements of the term – “corporate social impact” and then the idea of “sprawl”.

By itself, corporate social impact is significant because it feeds into one of the core modern stakeholder demands of a business. 

Investors, regulators, local communities and employees will often demand a high standard of social outreach and consideration from a company. Often, boards and management will take this demand and adapt it into programs, initiatives and foundations, making everything more official and integrated with company strategy. 

Ultimately, it feeds into the “S” pillar of ESG – the dominant corporate buzzword that increasingly needs a central role in any company’s strategy.

Most companies have accepted the need for social responsibility, but have they thought through how far their work could stretch?

This is what brings us to sprawl. 

Between the pandemic and subsequent global crises, efforts for social outreach have shot up. Now, companies are taking stock of their new activity and how many initiatives they need to oversee. 

This is also critical for strategic decisions.

This is the question companies are beginning to ask. 

The word “sprawl” has bad connotations. It suggests lousy planning, mismanagement, and a lack of capacity to cope with current trends. 

Combine this with the typical corporate attitude of wanting to “streamline” efforts, and you might find many businesses automatically assuming that their goal now is to condense their work into something more manageable.

Critics of this outlook, including the writers and followers of the Fortune feature, argue that the sprawl, in this case, may be necessary – reflective of the current, diverse needs of stakeholders. 

In other words, while having various social outreach programmes might have stemmed from gut reactions and urgency, there’s doubt over whether that means there’s anything to clean up now. 

Essentially, the programmes might be worth keeping in their current form and diversity, critics say. This will feed into wider culture of ESG.

But the fact remains that as ESG continues to command respect in corporate boardrooms, higher volumes of social initiatives may be the only strategic option – even if it does look messy. 

You can read the full Fortune article here.