Corporate Citizenship During a Geopolitical Crisis
Jeff Hoffman, NACD.DC
Global I CSR I ESG I Purpose I Culture I Board Director I Philanthropy I Reputation I B2B I B2C I Innovator I Mentor
June, 24, 2022.?Four months ago, today, Putin invaded Ukraine.?The world changed yet again.?During this time, we came together as corporate citizenship practitioners, shared our ideas, what we are thinking, and heard from those on the front lines including representatives from UNOCHA, UNHCR, and CARE.?Some of the insights gained we published in this five-part series:
As the impact of the war in Ukraine reverberates around the world, this five-part series provides practical guidance on how the business community can continue to help in the short and long-term. Parts 1 and 2 discuss the differences and similarities between providing relief during a time of war vs. a natural disaster. Parts 3 and 4 provide insights on short- and long-term efforts to assist not only the millions of refugees, but also the even larger number of vulnerable Ukrainians who are trapped in place in their country. Part 5 outlines the long-term impact the war is having – on food, energy, supply chains, and inflation – and how companies' corporate citizenship response also needs to be global.?
By:
Jeff Hoffman, Institute Leader, Corporate Citizenship & Philanthropy, ESG Center
Paul Washington, Executive Director, Environmental, Social & Governance Center
Part 1
War Is Different
Over the past two years, executives who lead corporate citizenship efforts have been among the very first at their companies to marshal resources to take on emerging societal issues. Whether facing the initial spread of COVID-19 in Africa, the surge of the Delta variant in India, or the racial reckoning in the summer of 2020, citizenship teams are frequently the corporate equivalent of first responders.1
With the invasion of Ukraine, corporate citizenship leaders are again moving swiftly. In this report, we offer four insights that reflect the significant ways in which responding to a geopolitical crisis?differs?from responding to a natural disaster in time of peace. In?Part 2?of this series, we address the similarities.
As corporate citizenship teams respond to the invasion of Ukraine and its inevitable fallout, it will be critical to ensure that senior management, employees, and other stakeholders understand the differences from the company’s approach for natural disasters. Shared expectations will help the company respond more efficiently and effectively now and in the future.
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1?Corporate Citizenship in the Global South During Covid-19: Part 1 - Africa,?The Conference Board ESG News & Views podcast, June 18, 2020;?The Covid-19 Crisis in India and the Global South – How the Business Community Can Help, The Conference Board Corporate Citizenship Watch webcast, May 11, 2021.
2?Protecting Charitable Organizations, US Department of the Treasury.
3?Robert Schwarz,?Disaster Philanthropy Practices 2021, The Conference Board, November 22, 2021.
Part 2
How the Natural Disaster Playbook Can Help
As discussed in?Part 1?of this five-part series, when companies respond to a geopolitical crisis, such as Russia’s invasion of Ukraine, they need to set aside the natural disaster playbook. But don’t put it too far away. Because that playbook, as well as the one used to respond to social issues during the COVID-19 pandemic, can still be immensely helpful.?
Here are five ways how:
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Many companies with significant operations in Ukraine and Russia have made initial stand-alone statements, while other firms are making their own internal statements directed at their employees and joining in broader industry statements focused on the public. As the crisis evolves, companies may make future statements, and additional commitments to humanitarian relief. Following the guidelines set forth above can help set a good precedent for future crises and protect the company against backlash from those who will inevitably challenge its approach for doing too little or too much.?
As with a natural disaster, when a geopolitical crisis brings death and hardship, there is a powerful desire to help. While firms need to be mindful of the very real differences between natural disasters and wartime situations, they can still benefit from the lessons in disaster relief in terms of engaging senior management and employees, utilizing a wide range of financial resources, forging partnerships with other firms, and approaching communications with stakeholders in a consistent and thoughtful manner.?
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1?Robert Schwarz,?Disaster Philanthropy Practices 2021, The Conference Board, November 22, 2021.
2?Schwarz,?Disaster Philanthropy Practices 2021.
3?Paul Washington and Merel Spierings,?Choosing Wisely: How Companies Can Make Decisions and a Difference on Social Issues, The Conference Board, June 27, 2021.
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Part 3
Refugees
“A refugee is someone who has been forced to flee his or her country because of persecution, war, or violence. An internally displaced person, or IDP, is someone who has been forced to flee their home but never cross an international border. These individuals seek safety anywhere they can find it—in nearby towns, schools, settlements, internal camps, even forests and fields.”
—United Nations High Commissioner for Refugees
Insights
·????????The refugee crisis in Ukraine is the largest and fastest outflow of people from a country since WWII but is just one part of a bigger picture of a humanitarian crisis also involving the internally displaced and trapped.?In the five weeks since the invasion, approximately 4 million Ukrainians have fled the country (2.3 million to Poland), the United Nations estimates. Beyond those refugees, more than 6.5 million have been displaced internally. An additional 13 million, in many ways the most vulnerable, are stranded in place due to ongoing conflict, destroyed roads and bridges, or lack of information on where to go.
·????????A sustained period of uncertainty is likely for all those who flee and those who take them in: the corporate response to the Ukrainian refugee crisis should recognize this reality.?While Afghanistan was a planned evacuation (with big planes flying out refugees to designated locations around the world), the Ukrainian refugee crisis has been spontaneous with little coordination. Moreover, refugees will need permanent relocation as so many homes have been destroyed. But for the most part, finding a lasting new home is not yet an option until families are reunified, as men (and some women) have stayed behind to fight and keep essential services operating.
·????????Companies’ humanitarian aid needs to be balanced between the near-term needs and the long-term daunting task of either helping to repopulate Ukraine (with much capital investment to rebuild) or permanently relocating the refugees to other countries.?In the near term, corporate employees in the neighboring countries are not only helping their coworkers from within Ukraine, but are also opening their homes to strangers who have fled. This has caused companies to rethink how they support their employees who are helping on the ground and facing unprecedented risks associated with doing so.
The Refugee Reality
For refugees, the journey out of Ukraine can be perilous. As men ages 18 to 60 have been asked to stay and fight, around 90 percent of the refugees are women and children, the UN estimates. As such, there are many opportunities for abuse based on age and gender. As of March 18, approximately 265,000 Ukrainian women are pregnant, according to Friends of UNFPA. Refugees who are expecting or breastfeeding are traveling without prenatal and postnatal care, and there are relatively few places along the way to give birth. Those leaving Ukraine typically head for bordering countries: Moldova, Romania, Hungary, Slovakia, and Poland. Some Ukrainians are relocating to Russia and Belarus, while people living in these two countries are themselves leaving for other parts. But even amid the extreme conditions and chaos, many Ukrainians do not want to relocate or leave their country.
The Response
Taking the lead on refugee coordination and registration is the United Nations High Commissioner for Refugees (UNHCR). Registration is critical because it provides refugees with identification, access to aid, and protections though international law.
The UNHCR was established to assist in Europe in the aftermath of WWII, but since then most of its work has been elsewhere. As a result, UNHCR and other refugee-serving organizations didn’t have the infrastructure in place in Europe that they have in other parts of the world as they scrambled to respond to the Ukrainian crisis. Advocacy, legal assistance, mental health care, intensive services for women and children, and of course food and shelter, have all had to be set up—often by bringing in trained personnel from elsewhere. Against that backdrop, the response has been dramatically fast: the agency was able to set up in the first month what usually takes two to three years.
The Role of Business in Assisting Refugees
Many companies that are Members of The Conference Board have employees in Ukraine, Russia, and the neighboring countries. In many cases, companies have continued to pay the employees who are still in Ukraine the best they can knowing that access to banking is not always available. Company employees are welcoming their colleagues who have fled. Companies are offering various options, including employee relief funds, to assist their employees and their families.
On March 9, Members of The Conference Board Corporate Citizenship Councils met virtually with the head of external affairs for UNHCR and the lead for corporate partnerships at CARE to be briefed on the refugee situation and to learn how business can best help.
NEAR TERM?
·????????Cash is what most organizations need and most companies can give. Companies are making charitable contributions to an array of vetted NGOs assisting in and around Ukraine.
·????????Employees in the neighboring countries sometimes host refugees in their homes, among other kinds of assistance, and firms are supporting these employees.?
·????????Companies are also supplying debit cards so refugees can purchase what they need from local stores, primarily food, clothing, and hygiene items. This assistance helps refugees stay as independent as possible and preserves their dignity—a level of consideration that is common after natural disasters but a novelty in refugee situations.
·????????Hotels and short-term rental businesses are offering rooms for both aid workers and refugees.
·????????Telecommunications companies are providing SIM cards, dropping roaming charges, and offering free international calling.
·????????Logistics companies are providing in-kind shipping to assist in getting what is needed to where it is needed, among other services.
·????????Tech companies are trying to keep internet and cellular communications activated and to connect those seeking services with up-to-the-minute information.
·????????Retailers, manufacturers, and food producers are working with NGOs to ensure that shelters have what they need to operate.
·????????Some companies in the neighboring countries are offering employees paid time off for volunteering. United Nations Volunteers, Points of Light European Affiliates, and various government entities are providing clearinghouses for volunteers.?
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LONG TERM?
The long-term needs of the refugees are difficult to predict. Will they be able to return to Ukraine? If so, when? And even when they can, will they want to? Most refugees will likely not want to relocate far until they know whether they can reunite with family members who did not flee.?
Whatever the uncertainties, a comprehensive refugee plan and operation will be needed. Key elements of such a plan include:
·????????Refugee resettlement: the transfer of?refugees?from an?asylum?country to another nation that has agreed to admit them and ultimately grant them permanent residence.
·????????Welcoming migrant program?(reception centers): a location with?facilities?for receiving, processing, and attending to the immediate needs of refugees or asylum seekers as they arrive in a country of asylum.
·????????Family reunification: reuniting separated families where at least one member is a registered refugee.
·????????Refugee foster care: provides a long-term home for children who have been permanently separated from their families, preparing them for independent adulthood.
·????????Long-term support including housing, employment, and financial aid: community-based partners and resettlement agencies connect people with vital, culturally responsive, and linguistically appropriate services like food and cash assistance, temporary and long-term housing, medical screenings and behavioral health services, employment and training programs, childcare assistance, and help navigating social services.?
Companies can support a more comprehensive refugee plan with:
·????????Cash contributions to vetted refugee-serving organizations.
·????????Pro bono support by law firms and professional services organizations to help with legal services and to assist organizations to scale to meet the anticipated needs.
·????????Employee volunteers at welcoming centers.
·????????Scholarships to relocate outside the EU, including the US.?
The example of the August 2021 evacuation from Afghanistan illustrates the challenges associated with a long-term refugee program. That evacuation was organized, with 76,000 Afghans arriving in the US after the Taliban takeover. Organizations such as Lutheran Immigration Refugee Service have since been working with mosques and halal markets to help refugees settle. Even so, tens of thousands struggle with basics such as finding good and affordable housing as they move off military bases into US cities and towns.?
Last week, the US administration said the country would accept 100,000 refugees from Ukraine, roughly 30 percent more than were accepted from Afghanistan. But despite the larger number, and chaos involved in fleeing from Ukraine to other countries in Europe, there is reason for optimism that the public and private sectors can rise to the challenge. Those migrating will come over time, not all at once as we saw last summer with Afghanistan. And the governments, nonprofits, and businesses in the US and other countries outside Europe will have more time to plan and put programs in place to more effectively and efficiently acclimate these new residents.?
Businesses and their employees are stepping up to address the Ukrainian refugee crisis. As they provide short-term relief, they should also recognize the long road ahead, when even greater resources may be needed. Moreover, they should be mindful that the refugee situation is part of a larger mosaic of the humanitarian crisis inside Ukraine. Companies’ response therefore needs to be informed by both urgency and a broader strategy in stepping forward, once again, to fulfill their humanitarian mission.
Part 4
How Companies?Can?Help?the Displaced and Trapped?Inside Ukraine?How
In our most recent?essay, we focused on ways that companies can assist the more than 5 million refugees who have fled Ukraine (over 10 percent of the population). We noted that the refugees are part of a broader picture of 7.1 million who are displaced internally and another several million who are effectively trapped in place. In this essay, we offer five concrete steps that companies can take to help these vulnerable Ukrainians inside the country.?
·????????First, if you haven’t already, it’s time to revise your overall Ukraine relief plan.?In the first weeks of the war, companies addressed immediate needs, with a particular focus on refugees. This was based on the premise that Russian forces would quickly overtake territory and it would be difficult to provide relief in a war zone. Yet given the resistance and resilience of the Ukrainian people, the dynamic has changed. There is both a greater need—and opportunity—to provide assistance to those who remain Ukraine. Support now needs to be viewed as a long-term proposition.?
·????????Second, be flexible in addressing critical needs as they emerge.?For example, the number of verified attacks on health care facilities in Ukraine?has risen to more than 100. Consider how you can help provide trauma and surgical supplies, essential medicines, backup generators and fuel, as well as support emergency medical teams (EMTs) that are being sent to Ukraine. There is also an ongoing need for goods, such as food, water, and shelter; for communications services to reduce the reliance on the national communications infrastructure; and specialized support for people with disabilities and/or serious medical conditions, as well as older people and minority groups increasingly facing barriers in accessing the services they need.?
·????????Third, consider providing aid to farmers.?We are facing the prospect of a global food crisis;?Ukraine and Russia are major exporters of wheat and barley, as well as fertilizer. While agribusiness adjusts their global supply chains, we should not lose sight of the farmers in Ukraine. According to the?Food Security Cluster, which coordinates food security responses during a humanitarian crisis, farmers urgently require support with food for young animals (cattle, goats, sheep, etc.) and agricultural inputs, including seeds, livestock fodder, and fuel. The focus on farmers can extend to rural communities. Roughly a third of the country’s population, around 12.6 million, live in rural communities. Population displacement and damage to agricultural infrastructure and land will likely have significant short- and longer-term impacts on food security.?
·????????Fourth, when evaluating which organizations to support, look at the run-rate of the relief they provide.?While it may appear that certain organizations are awash in resources, those effectively deploying their resources may often have just days or weeks of cushion to continue their work.?
·????????Finally, consider what form long-term investment in Ukraine might take.?While we’ve noted the many ways in which providing assistance during a war is?unique, established frameworks for natural disasters can provide a model. As with a natural disaster, much of the focus—including in the suggestions above—is on providing?immediate relief.?Yet while much of the long-term work of?recovery?and?rebuilding?are the responsibilities of government, corporations have a role to play. They can not only rebuild their own operations, but also lend their expertise by working closely with governments to help rebuild infrastructures needed for commerce to return. And, of course, there will be much humanitarian work to be done tending to the mental and physical health of employees and extending that to others in supply chains.?
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It’s important to think about not just how to help Ukraine, but what we can learn from Ukraine and Ukrainians. We’re learning more about how to respond with greater flexibility in a crisis—simultaneously focusing on immediate relief, preparedness, and longer-term recovery. Most of all, we have seen how people can come together against all odds. Ukrainians have demonstrated selflessness, resilience, a sense of unity and purpose, and an extraordinary sense of volunteerism. It is an inspiration to us all.
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In our most recent?essay, we focused on ways that companies can assist the more than 5 million refugees who have fled Ukraine (over 10 percent of the population). We noted that the refugees are part of a broader picture of 7.1 million who are displaced internally and another several million who are effectively trapped in place. In this essay, we offer five concrete steps that companies can take to help these vulnerable Ukrainians inside the country
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·????????First, if you haven’t already, it’s time to revise your overall Ukraine relief plan.?In the first weeks of the war, companies addressed immediate needs, with a particular focus on refugees. This was based on the premise that Russian forces would quickly overtake territory and it would be difficult to provide relief in a war zone. Yet given the resistance and resilience of the Ukrainian people, the dynamic has changed. There is both a greater need—and opportunity—to provide assistance to those who remain Ukraine. Support now needs to be viewed as a long-term proposition.?
·????????Second, be flexible in addressing critical needs as they emerge.?For example, the number of verified attacks on health care facilities in Ukraine?has risen to more than 100. Consider how you can help provide trauma and surgical supplies, essential medicines, backup generators and fuel, as well as support emergency medical teams (EMTs) that are being sent to Ukraine. There is also an ongoing need for goods, such as food, water, and shelter; for communications services to reduce the reliance on the national communications infrastructure; and specialized support for people with disabilities and/or serious medical conditions, as well as older people and minority groups increasingly facing barriers in accessing the services they need.?
·????????Third, consider providing aid to farmers.?We are facing the prospect of a global food crisis;?Ukraine and Russia are major exporters of wheat and barley, as well as fertilizer. While agribusiness adjusts their global supply chains, we should not lose sight of the farmers in Ukraine. According to the?Food Security Cluster, which coordinates food security responses during a humanitarian crisis, farmers urgently require support with food for young animals (cattle, goats, sheep, etc.) and agricultural inputs, including seeds, livestock fodder, and fuel. The focus on farmers can extend to rural communities. Roughly a third of the country’s population, around 12.6 million, live in rural communities. Population displacement and damage to agricultural infrastructure and land will likely have significant short- and longer-term impacts on food security.?
·????????Fourth, when evaluating which organizations to support, look at the run-rate of the relief they provide.?While it may appear that certain organizations are awash in resources, those effectively deploying their resources may often have just days or weeks of cushion to continue their work.?
·????????Finally, consider what form long-term investment in Ukraine might take.?While we’ve noted the many ways in which providing assistance during a war is?unique, established frameworks for natural disasters can provide a model. As with a natural disaster, much of the focus—including in the suggestions above—is on providing?immediate relief.?Yet while much of the long-term work of?recovery?and?rebuilding?are the responsibilities of government, corporations have a role to play. They can not only rebuild their own operations, but also lend their expertise by working closely with governments to help rebuild infrastructures needed for commerce to return. And, of course, there will be much humanitarian work to be done tending to the mental and physical health of employees and extending that to others in supply chains.?
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It’s important to think about not just how to help Ukraine, but what we can learn from Ukraine and Ukrainians. We’re learning more about how to respond with greater flexibility in a crisis—simultaneously focusing on immediate relief, preparedness, and longer-term recovery. Most of all, we have seen how people can come together against all odds. Ukrainians have demonstrated selflessness, resilience, a sense of unity and purpose, and an extraordinary sense of volunteerism. It is an inspiration to us all.
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Part 5
War in Ukraine: The Importance of a Global and Long-Term Perspective
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“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.
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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.
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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.
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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.
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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.