Corporate Welfare and Sustainability

Sustainability is no longer a choice. In fact, more and more manufacturing companies – Italian and international – are paying attention to their conduct in terms of environmental, social and community impact. As Giuseppe Catturi pointed out in the article entitled “Potere aziendale, pandemia e smart working” (Corporate Power, Pandemic and Smart Working), we are witnessing a paradigm shift in the way companies act: no longer focused on the power-success-profit relationship, but attentive to fostering sustainable, fair and inclusive economic growth.

A radical change is taking place in the way we do business. This applies both to production processes (raw materials used, waste recycling processes, environmental impact, etc.) and to the relationship with human and “intangible” capital, i.e., that set of non-material factors that enable a company to differentiate itself from its competitors. For example: corporate culture, intellectual property, expertise, management skills, training, staff experience, trust in business and collaboration.

In this direction, companies are strengthening their ESG investments, covering the three areas Environmental (environment), Social (social impact) and Governance (stakeholder relations). A category within which a multitude of actions by companies can fall. First, there are interventions related to the energetic transition, decarbonisation and the use of renewable sources, but also to the circular economy. And then socially oriented initiatives, such as CSR (Corporate Social Responsibility) practices. Lastly, of course, but certainly not least, there is corporate welfare, especially if implemented with actions that relate to the company’s stakeholders, from employees to customers and the territory.

The role of corporate welfare for the 2030 Agenda

From this perspective, corporate welfare can be interpreted as a tool for the pursuit of a business model that is more attentive to the dynamics of sustainable development. Corporate welfare refers to the set of benefits, perks and services that companies and employers make available to their employees as a supplement to regular pay. These measures are fully consistent with some of the SDGs (Sustainable Development Goals) defined by the UN 2030 Agenda.

These include, in the first instance, Goals 5 – Gender Equality, 8 – Decent Work and Economic Growth, and 9 – Enterprise, Innovation and Infrastructure. Regarding Goal 5, which aims to achieve gender equality and empowerment of all women and girls, business interventions are crucial to foster the spread of measures inherent in work-life balance. One only has to think of parental and family leave, flexible working hours and smart working, but also of the costs borne by companies for nursery fees, school and recreational activities for children and young people. Such interventions are useful in promoting women’s employment and, as a result, partially counteracting the disparities that persist in the labor market.

Corporate welfare is also decisive for Goals 8, which aims to stimulate lasting, inclusive and sustainable economic growth, and 9, which aims to build a resilient infrastructure and promote innovation and responsible and sustainable industrialization. The set of measures and services made available by companies to their employees represents an element of profound innovation in the labor relationship and contractual exchange. Unlike salary and other contractual provisions, welfare is in fact the only element within the company-employee relationship that deals with a private and personal issue, such as that of well-being. In this way, the economic organisation takes on completely new aspects, once outside the “normal” employment contract.

Corporate welfare can also be relevant to Goals 3 (Health and Welfare) and 4 (Quality Education). This is because, through occupational welfare interventions, it contributes to the creation of an integrative social protection system that can provide new responses to social needs. Through structured welfare plans, companies have the opportunity to encourage the spread of supplementary health care and sectoral and intersectoral funds (crucial for Objective 3). In addition, organisations can promote training and learning formulas for their employees (and also their children) by supporting training courses and through the reimbursement of school and university activities (Goal 4).

Business and sustainable mobility

Corporate welfare plans can also promote sustainable mobility (a key theme for Goal 11-Sustainable Cities and Communities and Goal 13-Fighting Climate Change). This term refers to all those actions and practices aimed at reducing the environmental, social and economic impacts of travel. Sustainable mobility interventions – which usually focus on the use and diffusion of alternative fuel vehicles, but also on the reinterpretation of city spaces and the territory – therefore aim at limiting air and noise pollution, road and traffic congestion, accidents, land consumption caused by the construction of roads and infrastructures, and the costs of travel for both the community and the individual.

Companies have a keen interest in contributing to the pursuit of these goals. As argued by ASviS, the Italian Alliance for Sustainable Development, this is particularly dependent on the impacts generated by travel between workers’ residences and company headquarters. Precisely for this reason, companies that are truly attentive to sustainability could focus on two strategies: the implementation of agile work – which allows people to travel less frequently and thus reduce the number of kilometres travelled and pollution – and the initiation of actions related to sustainable mobility. With regard to the latter, the legislation regulating corporate welfare already provides tax benefits for the provision of collective transport services (such as company or inter-company shuttle systems) and for the purchase and reimbursement of season tickets for local, regional and inter-regional public transport (including for the employee’s family members). But these kinds of practices represent only one of the possibilities for companies to engage in mobility. Especially in the wake of the pandemic, many organisations have started to invest in the implementation of plans to simplify and optimise employee travel through mobility management actions.

A new approach to sustainability practices in the company

Corporate welfare practices and investments in work-life balance are a strategic way for companies to strengthen their commitment to sustainability. In fact, for the achievement of the 2030 Agenda Goals, it is essential to actively involve productive realities as well. And corporate welfare is certainly one way to do that. The issues in which companies can make a difference through welfare are many. They range from combating poor work to education, from health to physical and psychological well-being, from employment support and economic development to organisational innovation, from sustainable mobility and reduced environmental impact to gender equality and work-life balance.

But it doesn’t end there. Corporate welfare also makes it possible to experiment with new forms of collaboration with stakeholders and community involvement. Welfare practices are often implemented through the establishment of networks and partnerships that involve the local productive fabric, social partners, service providers (and in particular the Third Sector), and local shopkeepers. In this direction, corporate welfare is an opportunity to involve the territory to a greater extent, favouring a logic based on what Porter and Kramer have defined “shared value“, i.e. shared value (not only economic) that is generated through collaboration between the actors in a territory.

Welfare facilitates the creation of networks and, in this direction, encourages the company to abandon even more its isolated monad status: it pushes it to open up to the territory and actively involve it. This is why it manages to intercept the various facets of the concept of sustainability, becoming indispensable for any organisation that wishes to define itself as environmentally and socially responsible.