ANALYSIS: 'Bad industries' fight back with CSR

BAT faced criticism last week for pursuing a corporate social responsibility strategy when its products kill millions. They are not the only 'bad industry' operator to face the challenge of making CSR credible, says Adam Hill.

British American Tobacco's attempt last week to show its CSR credentials by issuing a first social report was dismissed as 'a PR exercise' by one group. Meanwhile scores of medical bodies and political representatives had resisted entreaties to open a meaningful dialogue with the maker of Dunhill and Lucky Strike (PRWeek, 12 July).

Such was the reaction to BAT's CSR efforts that head of CSR Adrian Marshall sounded hurt: 'We have been under such attack from pressure groups and regulators that we felt trying to have a rational debate was futile and we needed to demonstrate a different approach.'

The triumph of shallow 'touchy-feeliness' over policy action is the obvious worry for those who challenge the right of some firms to 'do' CSR. In truth, BAT was probably not surprised by the furore, as it is the first tobacco outfit to try anything as ambitious. It has increased its resolve to shine in this area: more CSR reports will follow, whether we want them or not.

This is a good thing, says Ray Eglington, partner at CSR firm Four Communications: 'It's too easy to say firms in the perceived "bad industries can't be involved in CSR. If it means a company's social responsibility programmes are opened up to greater scrutiny, that has to be desirable.'

The term 'bad industries' is usually understood to include not just tobacco, but also arms firms and to a lesser extent, alcohol companies and those that sell non-renewable energy.

Alan Tull, comms director at arms group BAE Systems, takes the point about some corporations appearing less welcome than others at the CSR party. But he says: 'I'd put the question the other way round. We have a responsibility to deliver on CSR because of the business we're in. We know there is criticism in some quarters because we have to manage it every day. But we are determined to present, as comprehensively as possible, all the positive things we do. It's still for people to make their own minds up.'

In 2001 BAE created the role of safety, health and environment director, with responsibility for CSR, and in April the group produced its second annual CSR report. Again the message seems to be: like us or not, we are here, so get used to us.

CSR lobbyist Business in the Community comms consultant Elizabeth Forbes, says. establishing dialogue with critics, as BAT was attempting, is crucial: 'If you want an industry to be stopped, that's a separate issue. But if a company is acting legally, it is going to be around for a while and there is nothing to be gained by not encouraging it to act as responsibly as it can. We take an inclusive approach to CSR.'

Although BAT rival Gallaher Group does not feel the need to have a CSR policy - at least in name - it insists the tenets of CSR are enshrined in its 'ten principles' of business. External comms manager Michelle McKeown stresses the company makes a legal product and issues such as action on underage smoking and exploitation of child workers on tobacco farms are included in these corporate principles.

It is the sort of thing the various CSR indices that have sprung up in recent years, such as Business in the Environment and FTSE4Good, were intended to measure, and McKeown admits that expectation from the City and other stakeholders will eventually force the company to bring its initiatives under the CSR umbrella: 'We don't communicate it as CSR but I'm sure, in the future, we will do.'

Other firms with poor public images have already seen the benefits. A report this week from researcher Springpoint might give BAT hope. The Body Shop, predictably, tops the list in a survey of firms perceived to have integrated CSR activities most effectively into the core of their brand. But former environmental pariahs Shell and BP appear at numbers two and three - ahead of Co-Operative Group and ice cream provider, Ben and Jerry's.

As Eglington says: 'Oil is a good example of one sector that ticked all the boxes. Alcohol has also tended to be more advanced.' Indeed drinks giant Allied Domecq this week announced that some future advertising will contain socially responsible slogans about moderation, while Diageo head of external comms, Jane Richardson, says: 'The attitude to alcohol and how it is consumed is at the heart of our corporate citizenship strategy.'

As for the rest, making judgments on the moral worth of cigarette, defence or oil firms may be morally dubious and commercially confused but those companies and their PROs simply have to live with it. 'The question is whether they are credibly socially responsible - and the bar for them is raised higher than for a typical widget manufacturer,' says one CSR expert.

'One way for a firm to appear socially enlightened is to have been seen to be "bad and then to have addressed it,' the Springpoint report concluded.

While such counter-intuitive logic may be seized on by BAT's opponents as confirming their worst fears, the same critics should content themselves with this point: they remain in the best position to ensure that invitees to the CSR party do not get prizes simply for turning up.

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