What if every company gave 1%?

The very essence of sustainability is about companies achieving long-term success. A sustainable strategy entails companies reinvesting in the company’s capital, their employees and their communities. Like a good long-term profitable strategy, ESG disclosures should be tailored rather than required.

An example of a voluntary ESG measure that is particularly encouraging and heartwarming is community investment. While comparing sustainability reports of Fortune 500 companies, Nike’s report captured my attention for the simplicity in which they report their investment in the community. Their goal is to annually invest 1.5% of Pre-Tax Income (PTI) to drive positive impact in the community through charitable contributions, involvement, and volunteerism. Nike has exceeded this goal for the last three years. Community investment as a percentage of PTI is a simple and voluntary ESG measure. It is also self-motivating because it requires a company to be profitable.  And best of all, it is universally applicable because the formula can be used by any company regardless of size, capital structure or country. This measure, while perhaps monetarily immaterial in some instances, can have significant impact because it connects business profits to the community and to an individual’s sense of meaning. Giving to one’s fellow human beings is a central part of human spirituality.