Introduction to corporate social responsibility
It's difficult to offer a straightforward definition of Corporate Social Responsibility (CSR), when not even the experts agree. However, in today's globalised marketplace, there is growing acceptance that the corporate sector has a role to play in securing a sustainable future. The scope of this is variously defined as:
- Business for Social Responsibility - who you are, what you do and what you say about it.
- Business in the Community - CSR is about how companies manage their business processes to produce an overall positive impact on society.
- CSR network - CSR demands that businesses manage the economic, social and environmental impacts of their operations to maximise the benefits and minimise the downsides.
- UK government (www.csr.gov.uk ) - CSR is essentially about companies moving beyond a base of legal compliance to integrating socially responsible behaviour into their core values.
The notion, if not the jargon, of CSR has been around since the 50s, when academics and business leaders first began to identify and articulate the impact of global businesses on society. Now more and more companies are getting involved in areas such as human rights, fair trade, local economic development, non-discriminatory employment practices and reducing waste and emissions.
This was originally driven by regulation of the utilities in the 80s and early 90s, which spawned the first-generation environmental reports. The social dimension emerged as the business community's response to complaints that it had failed to create trusting relationships with its stakeholders. Notably, numerous food scandals in recent years have in marketing terms turned consumers into choosers - indicating that the balance of push and pull between providers of products and services and customers who may or may not choose them has changed.
So how does a company convince a 'chooser' to choose its products and services over those of its competitors? As Wally Olins said in The Economist in September 2001: 'The next big thing in brands is CSR...it will be clever to say there is nothing different about our product or service, but we do behave well'. Unfortunately, the marketeers saw this as an opportunity to deliver brand promise and many offers turned out not to be what it said on the tin. It's no wonder that consumers are increasingly cynical when 'healthy option' ready meals turn out to have more than the Recommended Daily Allowance of salt in one serving.
This has hampered the development of CSR in that more and more companies have allowed the marketeers to hijack the agenda, causing CSR to become confused with greenwash, cause-related marketing and chequebook charity.
So how can business overcome growing consumer cynicism? Business for Social Responsibility's definition (above) is an admirably succinct way to say that organisations have to 'walk the talk'. In marketing terms, brand promise needs to be replaced by brand integrity. Effective stakeholder communication has therefore become a key issue for companies that want to respond effectively to consumers who don't want to leave their values at home every time they go shopping.
Increasingly well-informed stakeholders now demand clear, hard facts about a company's social and environmental performance. People want to know, for example, that children did not make their trainers, that the manufacturing process does not pollute the environment excessively and that their food is safe to eat.
Such growth in consumer pressure has been matched by increased regulatory requirement to report on what is material to a company’s historic and future performance, including its impact on the environment and the wider community.
This information needs to be presented in a way that is accessible, honest and engaging. More than that, companies are now expected to form partnerships with their stakeholders. Rather than just talking to them about their performance, they must find ways to empower stakeholders with information, listen to their opinions and involve them in key business decisions.
The communication challenge for responsible companies is compounded by the fact that most businesses have numerous stakeholder groups, each with very different demands, expectations and communication needs. The right medium and message for employees may not be right for consumers, and entirely inappropriate for the Non Governmental Organisations (NGOs) and the regulatory bodies that monitor business performance.
Instead of simply promoting a brand or even helping businesses talk to their audiences, design and communication consultancies must now create channels of dialogue between stakeholder and corporation, tailored to the communication needs of different audiences.
Most FTSE top 100 companies now produce CSR reports alongside their annual reports. Published either in print or as part of a company website, these reports usually follow a standard format. They outline the company's social and environmental performance, show performance against targets set the previous year and set out targets for the year ahead. CSR reports often try to encourage feedback through posted or online feedback forms. There is a move to more web-based reporting because companies can publish more information, tailored to different audiences, and users can choose what they read. But there are disadvantages too, because the web is still accessible to only half the UK population and, even if they have access, users can get lost in poorly structured information.
Companies that aim to innovate in CSR practice are increasingly integrating CSR issues into the way that they do business, and aligning their company vision and value statements with the CSR agenda. This moves them towards so-called triple bottom line, or sustainability, reporting, which combines their financial, social and environmental performance in a single report.
Although CSR reports are essential to give a picture of a company's social and environmental performance, it is clear they have limitations as tools for inclusive dialogue. The amount of complex information demanded by reporting best practice means that reports can make dull reading for non-expert audiences. For this reason, companies are beginning to look beyond the CSR report and find new avenues to reach non-specialist audiences, such as consumer groups and employees, to invite their feedback and opinions.
As CSR matures, more effort will be targeted at communicating with customers by integrating CSR issues into a company’s brand, and less on producing lengthy reports. This will drive product and service innovation, as well as brand communication.