As the frequency, intensity, and economic fallout from natural disasters continues to rise, employees are fast-emerging as an influential force driving their companies' disaster philanthropy efforts. Nearly two-thirds of companies surveyed say employee expectations are a top reason they participate—an increase of 50 percentage points from 2020 to 2021. That is according to Disaster Philanthropy Practices 2021, the latest edition of an annual report from The Conference Board ESG Center.

The report also found that 73 percent of respondent companies' first priority is providing disaster relief—responding immediately after a disaster strikes. Only 22 percent say their first priority is preparedness—taking action to mitigate the effects of a natural disaster before it occurs. As companies continue to focus on communities—especially the socioeconomically disadvantaged—many have an opportunity to enhance their impact by devoting more resources to preemptive action.

The report sheds light on the priorities of companies' disaster philanthropy and what they seek to achieve from their efforts. In addition, it offers recommendations to CEOs for how they can improve the efficiency and effectiveness of their companies' disaster philanthropy initiatives. Key insights include:

More than ever, employees are influencing companies' disaster philanthropy efforts.

• 65 percent of surveyed companies cite employee expectations as a top reason they engage in disaster philanthropy—an increase of 50 percentage points from 2020 to 2021.

• 43 percent say pressure from employees leads them to take unplanned action—deviating from the established playbook—when disaster strikes.

• 63 percent elicit information from employees about which non-profits to fund in communities affected by natural disasters.

"Companies are increasingly responding to employees' concerns and proactively seeking their input on how to respond to disasters. It reflects the broader trend of employees' influence on how companies respond to social issues," said Robert Schwarz, Senior Researcher at The Conference Board ESG Center.

To enhance their impact, companies can consider reallocating resources from disaster relief to preparedness and long-term recovery.

• The top funding priority for surveyed businesses is disaster relief (73 percent).

• 22 percent cite preparedness as their top priority, and only 3 percent cite long-term recovery and reconstruction.

• Funding for both preparedness and recovery are essential to the welfare of communities, given the forecast anticipating more frequent, intense, and costly natural disasters. Preparedness reduces the need for relief and builds trust with communities, while resources for long-term recovery and reconstruction reduce the time it can take for communities to return to normal.

The main driver for participating in disaster philanthropy: companies' commitment to communities.

• 93 percent of respondents cite their commitment to communities as the top reason for engaging in disaster philanthropy. 82 percent cite values alignment, and 65 percent cite employee expectations.

To ensure the efficient use of limited resources, companies should analyze the effectiveness of their disaster philanthropy efforts.

• Just 5 percent of respondents cite analyzing the efficiency and effectiveness of disaster philanthropy as a top priority over the next three years.

• CEOs can insist that corporate citizenship departments conduct a more rigorous analysis of the efficiency and effectiveness of their firm's disaster response efforts.

In the midst of responding, 99 percent of companies break from their disaster philanthropy priorities.

• The reasons companies cite for deviating from their established playbook include employee pressure (43 percent) and pressure from senior management (37 percent).

"Natural disasters can trigger heightened emotions, prompting companies to shift their resources away from established priorities," said Jeff Hoffman, Leader of the Corporate Citizenship and Philanthropy area at The Conference Board. "While companies should be able to provide unplanned relief, CEOs can ensure that there is buy-in from senior management regarding the firm's disaster response priorities."

"While companies routinely work with non-profits and government agencies on disaster relief and recovery efforts, just 16 percent of surveyed companies partner with other companies," said Paul Washington, Executive Director of The Conference Board ESG Center. "To increase the scale and effectiveness of their disaster philanthropy, CEOs can encourage their corporate citizenship leaders to explore partnerships and coalitions with other firms. Such partnerships are especially valuable with companies that have complementary core competencies with respect to responding to natural disasters."

The report is based on survey responses of 126 corporate citizenship and philanthropy professionals at public and private companies; the proceedings of disaster philanthropy-related sessions at The Conference Board 2021 Corporate Citizenship & Philanthropy Toolbox Series; and external research.