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The Top Issues Shaping Corporate Policy in 2022 You Should be Tracking

by Lydia Stowe, FiscalNote

As companies face increasing pressure from employees, the public, and stakeholders, here are the issues you should be tracking to stay ahead of the changing corporate policy landscape.

Corporate policy

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In a changing social and political landscape, corporate policy and corporate social responsibility have also begun to change in many organizations. Employees, stakeholders, and the public are expecting more from organizations, holding them to a higher standard.

Whether it’s due to public opinion or shifting external policies, businesses are feeling the pressure to adapt their policies on topics such as environmental policy; diversity, equity and inclusion (DEI); and corporate activism. The “great resignation” over the last year (roughly 47.4 million people voluntarily left their jobs in 2021, according to CNN) is an added pressure on organizations to keep employees happy and to make policies aligned with their values.

Tracking corporate policy issues is critical for a successful government affairs strategy to ensure compliance with the law, employee satisfaction, and positive public perception. Investors are also looking at companies’ corporate policies more closely. If these issues are ignored, your organization could end up in hot water, either violating a law or in the court of public opinion. To help you prepare for what’s ahead and build a successful government affairs strategy, we bring you the top issues shaping corporate policy in the coming year.

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Environmental Corporate Policy

Environmental corporate policy has been on organizations’ minds for over a decade, with a focus on climate and an organization’s impact on the environment a high priority for many companies. With financial regulators making it a huge priority under the Biden administration and organizations pledging various green standards and clean energy commitments, the focus on climate change has made it even more apparent that taking a stand on this issue — and opening up the books to show transparency — is more pressing than ever.

Nature and biodiversity are also a heavy environmental focus in corporate policy in 2022. Companies like IKEA and Chipotle, as well as many agricultural organizations, have become very conscious of their impact on nature loss and will soon start reporting their impact, according to Frank Meehan, CEO of Equilibrium.

The U.S. Securities and Exchange Commission (SEC) is working on creating standards on environmental and decarbonization commitments that will hold businesses accountable for their environmental promises. This means companies will be held to their promises and to higher standards for environmental impact.

In February 2021, SEC acting chair Allison Herren Lee directed the Division of Corporation Finance to enhance its focus on climate-related disclosure in public company filings. “Now more than ever, investors are considering climate-related issues when making their investment decisions,” Lee stated.

Diversity, Equity, & Inclusion

Since the murder of George Floyd in 2020, social issues have gained increased visibility within corporate policy. However, this issue is harder to measure than sustainability efforts in terms of goals, tracking progress, and what actions are appropriate, says Bruce Mehlman, founder of lobbying firm Mehlman Castagnetti Rosen & Thomas. 

Organizations have realized that achieving DEI goals means implementing strong strategies throughout an employee's lifecycle — from attraction and recruitment to career advancement, all the way through the exit interview.

DEI is increasingly important to employees and is something they look for in the workplace. A recent CNBC/SurveyMonkey survey found that nearly 80 percent of employees want to work for a company that values DEI issues, but only one-third said their companies are doing “a lot” of work in this area.

In June 2021, President Biden signed the Executive Order on Diversity, Equity, Inclusion, and Accessibility in the Federal Workforce. This order stated that, as the nation’s largest employer, the federal government should be a model for diversity, equity, inclusion, and accessibility in the workplace. It mandated that the federal government must strengthen its ability to recruit, hire, develop, and retain talent and remove barriers to equal opportunity while providing resources and opportunities to strengthen diversity. 

“For the federal government to take this seriously was a huge win,” says Jena Roscoe, senior vice president of government relations at Operation HOPE, a nonprofit organization working to disrupt poverty for low-income youth and adults. “It’s not just lip service, it’s actually putting public policy positioning behind the federal bottom line.” 

Having a robust DEI corporate policy goes beyond ensuring there are no violations of Title VII of the Civil Rights Act. Employees expect their companies to identify issues of concern, implement trainings, recruiting strategies, and diversity policies to address DEI and make a genuine cultural commitment. 

Having a process in place for adequate oversight into diversity and inclusion is key, says Stina Warnstam Drolet, head of sustainability at Oxford Analytica. There are many more initiatives, especially in the U.S., to introduce diversity mandates on companies’ boards of directors, which organizations should keep an eye on in 2022.

The companies that don’t practice what they preach seem inauthentic, but the companies that do the right thing when no one is watching are under a lot less pressure to get in the middle of political fights.

Bruce Mehlman

Corporate Activism

Participating in corporate activism creates opportunity and risk for any business, Mehlman says, as no matter what causes you support, you’re like to offend “at least 40 percent of people.” Deciding on corporate activism initiatives depends largely on your organization and who it serves: consumer-facing businesses may have different priorities than B2B, for example, and companies in urban areas with a workforce of college-educated Gen Z employees will be different from a manufacturing workforce in southern states, Mehlman adds.

The last two years have been marked by social movements that gained traction. Taking stances on the latest social issues has become a common practice for organizations of all sizes, as they face increasing pressure to address what’s going on in the news and to make internal changes as a result.

Corporate activism isn’t just important when a tragedy comes to the nation’s attention — it can be done 12 months of the year with monthly observances around inclusiveness and diversity. For example, many companies have programs and initiatives for Black History Month in February or National Disability Awareness Month in March.

Celebrating diversity through those observances is important, but it’s also necessary to “have practices for the other 11 months of the year, not just the month dedicated to that issue,” Roscoe says. “I want my employer to focus on wanting the best of me throughout the year, not just during that month. So organizations should applaud their success in that month, but keep working at it the other 11 months.”

No matter what approach to corporate activism you take, “actions matter more than words,” Mehlman says. “The companies that don’t practice what they preach seem inauthentic, but the companies that do the right thing when no one is watching are under a lot less pressure to get in the middle of political fights.”

Impacts of the COVID-19 Pandemic on Corporate Policy

One of the effects of living with a global pandemic for two years has been an increase in communications and transparency from businesses. This has led to more openness and a willingness to take a hard look at corporate policy. With more virtual all-hands meetings, opportunities to frankly share feedback, and the “great resignation,” employers felt the pressure to keep their employees satisfied and informed.

As a result, the 2021 Edelman Trust Barometer found that business is the most trusted institution — trusted more than government, NGOs, and media — with a 61 percent trust level globally, and the only institution seen as both ethical and competent. An increase in communication, partly brought on by the pandemic, has contributed to this growing trust, Mehlman says.

Employees have to see that the leadership from the top is committed to that focus.

Jena Roscoe, Senior Vice President of Government Relations
Operation HOPE

Creating Meaningful Corporate Policies

Many organizations simply haven’t thought through their processes and how they want to deal with pressing social and environmental issues. “It’s fundamentally healthy to force them to think through their processes and teams,” Mehlman says.

Companies need to create teams and groups that are diverse and representative of stakeholders, and to remember that “the best insurance against people being mad at you is doing the right thing before they ask,” Mehlman adds.

DEI doesn’t just impact what companies can say and do, but also what employees can say. Employees who have shared “egregious things on social media” have lost their jobs because of it, Roscoe points out. “The companies realize they have to do a better job within their company culture,” she says. “You can’t devoid your personal and your professional life.”

When creating annual reports, authenticity is crucial and should show that the company’s leadership is truly behind corporate policy initiatives. “If the leader of the organization doesn’t believe in it, whatever’s on paper isn’t going to stick,” Roscoe says. “Employees have to see that the leadership from the top is committed to that focus.”

Annual reporting on corporate policy initiatives and improvements should take an honest look at how the company is growing over time. “Look at where you were 10 years ago,” Roscoe says. “If your report is mildly consistent over time, fire yourself.”

In the past few years, there has been a greater focus on companies being asked to speak on certain issues that historically they wouldn’t have been called upon to speak about. The most important thing to remember when creating corporate policy is to be authentic and consistent — do what you say you’ll do.

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FiscalNote provides a strategic approach to mitigating the risk and pursuing the opportunities that arise from public policy. From awareness to action, FiscalNote’s suite of products helps you discover bills or regulations that affect your organization, manage key stakeholder networks, create strategic road maps, take action, and demonstrate your success through metrics and reporting.

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