Go Big. Then Go home and go small.

For better and usually worse for our psychological health, humans seem to innovate best under high pressure — we are apex procrastinators — and we have put ourselves under the highest possible pressure with the climate crisis and attendant social challenges. At the same time, exciting innovations seem to be popping up in all directions, from a recent announcement that Air Company is ready to rapidly scale up its plant-based jet fuel that sucks CO2 out of the air, to PayPal’s CEO Dan Schulman admitting that stakeholder capitalism is “economics 2.0” and is in dire need of a rethink and “clearly needs an upgrade.”

Enter Patagonia.

Earlier this month, Patagonia made a huge splash by announcing that moving forward, all of its profits would be donated to groups working to save the planet. At the moment, that’s something in the neighborhood of $100 million going directly to efforts to save as many people, plants, and animals as possible from the climate crisis. Patagonia’s historic move — which included casting off shareholder capitalism in favor of a new model that they themselves invented, where “earth is [their] only shareholder” — comes as companies everywhere are trying to puzzle through mandatory ESG (environmental, social, and governance) reporting, and as investors, the public, and employees are all demanding businesses come with strong and meaningful responses to humanity’s most pressing challenges. 

We’re in an era with an exceptionally savvy public, with Gen Z and Millennials, especially, able to smell greenwashing from a mile away, and Millennials and Gen X stepping into leadership roles long-held by Baby Boomers. Social norms and values are rapidly changing, accelerated by the pandemic, necessitated by our cascading crises. 

In response, many companies have focused on large-scale efforts like green supply chains, labor practices that center human and environmental rights, eliminating pay gaps by gender and race, and rolling out tech-centered approaches to decarbonization and plastics elimination. These are all deeply needed and long overdue. They also lend themselves to the kinds of quantitative metrics investors look for in ESG reporting. 

And yet, when asked how they thought that Patagonia should spend its $100 million, experts from the fields of conservation, energy, security, and international relations all cited grassroots groups, agreeing that the money would be best spent in a complementary effort to bridge the grassroots and grasstops. In other words, companies that want true impact need to tackle pressing issues at multiple scales, embracing both big-eyed strategies that will influence policy and infrastructure (that’s your supply chain, net-zero, and labor policies), with backyard approaches that empower local communities to implement life-altering changes in their neighborhoods and cities (that’s your high-impact, lesser known grassroots community groups).

Grassroots groups — which consist of people who are directly affected by a problem and who use bottom-up decision making and collective action in many forms to address that problem — have an outsized positive impact not only in their local communities, but also at the national and international levels. Because they’re directly impacted by local manifestations of global issues, they’re experts at local solutions in global contexts and have their fingers on the pulse of public sentiment and community needs. In many cases, large-scale models — like circularity — have their origins in grassroots approaches that were born out of necessity to support and strengthen local communities. 

Innovation flows both ways. 

That’s why a bridged approach to grassroots and grasstops stands to be the gold standard for ESG, which continues to suffer from the often-fair perception that companies are talking big talk when it comes to their positive impact, but not actually walking the walk. As Lynn Forester de Rothschild, founder of investing firm Inclusive Capital Partners, noted at the Innovation Festival, “There’s virtue signaling, greenwashing, companies that put out glossies but don’t do the right thing . . . then there’s Wall Street hijacking ESG as a marketing tool, slapping a label on it, and charging a bit more.” None of this is fooling anyone; 90% of people want businesses to do more about social and environmental issues, but as of 2021, only 25% believed that companies genuinely care about the issues they say they’re helping to address.

Too many companies see local groups as PR and community impact report fodder. They send employees to volunteer for a day; they implement employee match donations, sending $1000 donations to many different organizations while missing the opportunity to meaningfully support any of them; they view grassroots groups as recipients of charity instead of powerful local partners in impact. These low-impact, short-term engagements help to fuel skepticism, reinforcing the public’s belief that a business does little more than pay lip service to the causes and issues it claims to tackle. 

Using CSR (corporate social responsibility) programs to develop real, meaningful, long-term relationships with local grassroots organizations that are working on issues in line with a company’s ESG goals is one way to not only avoid greenwashing and virtue signaling, but to knit together the “E” and “S” domains, creating a rich tapestry of interconnected impact; impact that centers meaning, connection, and belonging as its social drivers. 

Imagine you’re addressing the environmental domain by greening your supply chain and working to eliminate your carbon emissions. These efforts have an incredible global ripple effect on policy, infrastructure, and economics. At the same time, you’ve committed to ten years of diverse support for five grassroots groups in the community where you’re headquartered. These groups are working to expand EV infrastructure and green spaces in low-income neighborhoods that have been disproportionately impacted by pollution. They’re implementing neighborhood-level circular economies that eliminate food waste and reduce the need for plastic packaging. They’re planting and caring for trees and creating community gardens to clean the air and reduce heat island effects. 

As a business partner, you provide them with requested specialized skill sets over the long term; you stand with them when they advocate with local and state politicians for beneficial policies; you pool your employee match so that each group gets a high-impact, no-strings-attached donation each year, enabling them to scale up their efforts according to their intimate knowledge of on-the-ground contexts. You partner with them to identify ways in which the technologies and approaches you’re using to address your environmental impact could be implemented on the local level. You co-create avenues for your employees to get meaningfully involved with these groups, which increases their capacity and reach while deepening your team’s sense of connection and belonging in their community. In short, you accomplish greater impact with the same resources, while avoiding brand-damaging accusations of inauthentic social responsibility. 

Norms are indeed shifting, and as Rothschild went on to say, “Issues around how people treat their workers and how they treat their planet are not yet financial, but they will be. Because if you lose your customers, your employees, or your community, you’re not going to exist.”

Meaning, connection, and belonging fuel a fulfilling life and strengthen our social contract. By implementing CSR programs that center these emotional domains and strategically tying those programs to efforts to operationalize ESG, companies of all sizes can integrate their environmental and social domains to ensure they are mutually reinforcing at multiple scales. In doing so, they stand to discover innovative new models of community-led impact, improve their company culture, and confidently show the public that they truly care about the issues they claim to care about. It’s moral and it’s financial.