I’ve been preparing some notes for a talk I am giving tomorrow on brands and CSR.
I was surprised at how little is around when you search using Google on the topic.
Lots of material out there is pretty old. I’ve been digging out some more recent examples and stats from reports I’ve come across in the last few days and that contacts have sent me.
Here’s what I’ve put together. I’ve tried to boil it down to the important stuff. I’d be interested in reader comments on the below.
Bear in mind I wrote this for a non CR-audience!
Brands and corporate responsibility
What do we mean by corporate responsibility today?
It’s about how a large company interacts with lots of emerging and existing important issues.
These include areas from climate change to water, waste to labour standards in developing countries.
It also includes more traditional areas such as how companies treat their customers, their staff, and health and safety.
One major emerging area of CSR is employee and customer well being.
For example, we see companies such as Alliance Boots how they are both working with their staff to introduce flexible working systems and using the power of their brand to promote medical car and customer well being in their stores. It’s part of their business model today. I’ll come to other examples a little later.
Why CR? Where has it come from?
It’s come from transparency and changing expectations. 30 years ago companies were simply expected to obey English law.
Then from the environmental and apartheid movements in the 1960s, 70s and 80s arose great expectations on business relating to impacts on society.
That combined with the rise of international campaign groups, opening of markets, globalization of business, communications and technology to provide all of us with more information on the impacts of business and brands on society.
Why CR matters
CR matters because it can enable brands to connect with customers by building up trust.
With good communication on real issues, brands can demonstrate that they can play a positive role in their communities, supply chains and with customers by encouraging progressive behaviour
According to Globescan’s 2008 survey “Global Public Opinion on the Expectations of Companies” expectations of companies with regard to responsibility has risen dramatically in recent years.
In big developing countries it is still rising fast, and not declining in markets such as the UK.
In general GlobeScan says Consumers tend to look favourably on brands who have partnered with NGOs to deliver positive messages.
But Edelman’s 2009 Trust Barometer says that in the US, only 38% of “informed public” trust business today.
And this is the most business-friendly country on earth!
In the UK it’s a little higher, but still only 45%, according Edelman.
Two thirds of 25-64 year olds surveyed by Edelman said business should be partnering with governments and other third parties to address important global issues.
Healthcare is definitely one of these big issues. Companies are beginning to think about how they can help here.
Brands and CSR
Academics and commentators, from Stewart Hart to branding legend Wally Olins, have said that CR is “the biggest business opportunity on the planet” and “the last great differentiator”. But there’s a long way to go:
A 2009 PWC study study of FTSE 350 companies predicts investors will respond by demanding evidence of green thinking in the future.
PwC found only 31% of the FTSE 350 align sustainability measures with their key performance indicators, and many are reticent to provide about their “key dependencies”.
Jeff Swartz, CEO of Timberland told Ethical Corporation earlier this year: “Consumers are starting to value brands as social institutions,”
Examples: Unilever and Dove, and others
In 2004 Unilever began using Dove’s powerful position as a trusted, widely used brand to tackle the issue of self-esteem among women.
Market research that showed that 90% of women were unhappy with the way they looked. Dove used powerful advertising campaigns to challenge narrow perceptions of beauty.
The company launched the Dove Self-Esteem Fund to provide educational materials for young women and tied the campaigns to product ranges such as Pro-Age and Firming, which used real women, with normal body shapes, in their advertising, in place of models.
The campaign, and its impact on the brand’s reputation, was hugely successful. Sales of Dove products increased by about 600% in the first two months, with an overall sales increase across the entire brand of 20% in the year after the campaign began.
In 2008 B&Q launched 2,000 products in its One Planet Home range designed to save customers money and reduce their environmental impact. A customer who buys products across all six categories in the range could reduce their ecological footprint by 10%, B&Q says.
Innocent Drinks is a great example of an ethical company that is both authentic, healthy and successful. So much so it has sold a 10-20% stake to Coca-Cola for £30 million pounds recently. It’s a brand that has come from nothing in just ten years, and is now moving into fresh food.
Marks and Spencer has their 100 point Plan A strategy. Around 20% achieved so far. Much consumer advertising. M&S’s “Look Behind the Label” campaign had the best response to a marketing campaign ever, according to the company.
Starbucks has just become more than 90% Fairtrade, and is marketing the fact hard in stores and UK papers now. This is a significant shift in brand alignment and communiations
There’s also a big Environmental opportunity for manufacturers. According to the UK government, the percentage of environmental impacts of energy-using products like home appliances account for is around 35-40 per cent.
Other consumer opinions tested by Mintel in a July 2009 survey show that:
49% stated clothing retailers should make it clear whether garments have
been produced to a high ethical standard.
45% stated the big retailers are motivated by profits and only take action
if there is a cost saving.
39% said they would consider boycotting a brand or retailer if they source goods made under conditions of hardship for workers.
27% said they would consider boycotting a brand or retailer if they do not reduce their impact on the environment.
20% said they are trying to save on food bills but are still buying organic foods.
19% said hey are not in a financial position to think about ethical or environmental issues.
12% said they have cut back on spending on organic foods due to the recession.
The report makes clear that advertisers need to give shoppers more reasons to buy ‘green.
Where is the CSR agenda heading next for brands?
More transparency: Driven by both communications, and tracking and tracing technology
A more complex debate: Not just about plastic bags, but about the trade-offs around plastic bags. For example: What about the carbon in bags/bottles if they biodegrade? What about efficient use of resources? Choices as to what is best are complicated.
Better and more honest consumer communications: This is very hard to do. The simple messages of marketing do not always translate the complex trade offs of corporate responsibility well! On some issues, this will continue to be true. But on clearer areas, such as certification: Wood, fish, coffee, tea, chocolate, palm oil, we will see much faster progress as brands understand that third party endorsement is key.
More public engagement in the issues: The great positive power of brands is their convening ability. Companies can help create the debate that recognizes trade offs and complexity.
They can support positive campaigns and they can promote energy efficiency, well-being and lower carbon and healthier lifestyles with products, services, and by supporting programmes like those of the NHS.
More sustainable products and services will also be vital to help brand maintain market share, innovate and change, and demonstrate to customers that they can be trusted to do the right thing by them.