12 February 2008

If the result is the same...thoughts on Corporate Social Responsibility

*Boring article alert*

Let me apologise first for what is to follow. I never thought I would ever be able to think this deeply about CSR and still not understand it!

JD is doing her PhD on Corporate Social Responsibility and we frequently discuss the difference between Marketing-led CSR (i.e. CSR for the benefit of marketing exposure and enhanced profits) and so-called Ideology-led CSR: CSR from an ideological point of view. A more 'selfless' approach.

Perhaps it is because I do not know much about the whole topic but I struggle with a fundamental question about it.

Does it matter if a company does CSR only to get good marketing exposure if the result of the CSR efforts are the same as a company that does it for ideological reasons?

If I give £100 to a good cause because it gets me good publicity, is that £100 worth less than the £1000 that was donated by someone who strongly believes in the idea of empowerment or whatever else that charity does?

Is the reason behind it as important as the outcome? Should we distrust companies that send their staff to build orphanages in Sri Lanka and give it lots of press attention to improve their profit and applaud companies that send their staff to Sri Lanka to build orphanages because they passionately believe in the cause and so they do not try to get much marketing mileage out of it?

For example, I came across this quote from the Gala Coral Group's website:

We believe that by being socially responsible as a company, not only will Gala Coral become more profitable, it will be a better place to work.

How come as soon as profit and CSR go hand-in-hand, it is called Marketing-led CSR? As if that is a bad thing that should be distrusted.

Another example: Marks & Spencer. They are really heavily in to CSR. Their current boss really believes in it and is a strong champion of introducing changes throughout the entire business: ethical sourcing of clothes, food, organic stuff, no more plastic bags, get discount when recycling M&S clothes at Oxfam and what have you. But believe me, as soon as the profits are seriously affected by this new direction, it will be the first policy to be dropped. They will replace the boss with one who focuses again on the bottom line and all these CSR policies will be abandoned. They are currently getting loads of good PR from it all and are seen as a company with 'pure' motives in the whole process.

But really, they too simply practice marketing-led CSR. On their own website it says:

CSR can help us to draw shoppers to our stores, attract and retain the best staff, make us a partner of choice with suppliers and create value for our shareholders.

Not a word on how their CSR policies are good for the stakeholders.

Of course a lot of marketing-led CSR is usually just cosmetic, green-washing to make it look like they care so you buy their stuff, and can therefore not be compared to Ideology-led CSR. This discussion may therefore be purely theoretical but even so...

If Nestle decide to create a separate Fair Trade coffee product and they say:"Look at us being all CSR", We all know it is really just a marketing ploy. Because if they really believed in Fair Trade, they would overhaul their business and make all their coffee Fair Trade.

But take a company like Ben & Jerry's, the ice cream people. They founded the company on a basis that a business needs to take responsibilities in society. it does therefore a lot of good things for the community. That is of course a really good thing. But in the end, at the bottom line, the company needs to make a profit. So no matter how much money they donate to good causes, no matter how much more they are willing to pay for Fair Trade ingredients and locally sourced goods, there comes a point where they have to say: Sorry, but if we do this, we will no longer be profitable. And that would of course be the end of the company.

Is the difference merely in the marketing approach to how they communicate their actions? M&S said good CSR will make them attractive to shareholders, suppliers, staff and shoppers (not mentioning it will also be good for the people in the 3rd world, the environment etc). Ben & Jerry's say their CSR will help poor people, help the world and whatever else good they do (not mentioning it will also make people want to buy their stuff and increase profits for shareholders). So just by focusing on the OTHER parties that will benefit from CSR, Ben & Jerry's look like they 'really mean it' and M&S just looks like it is all about the profit in the end.

Maybe it is all just clever marketing, rather than true Ideology-led CSR?

So does that not mean that Ideology-led CSR simply can not be possible? I mean, in the end, it really is about what is left at the bottom of the balance sheet. Are there rules for how much a company needs to engage in CSR be seen as Ideology-led CSR, rather than the more cynical Marketing-led CSR? Is it marketing-led when you draw the line at 40% of the profit or is it Ideology-led CSR when you are willing to sacrifice 70% of the profit? 86% perhaps? 100%?

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