CSR in 2005

The tsunami disaster of last December brought to light many peripheral stories: the need for a global tsunami alert system, the fact that some members of both the politically disenfranchised and the empowered were incapable of dropping squabbles in times of tragedy, and that global corporations were among the first and largest donors to hit the scene.

The tsunami disaster of last December brought to light many peripheral stories: the need for a global tsunami alert system, the fact that some members of both the politically disenfranchised and the empowered were incapable of dropping squabbles in times of tragedy, and that global corporations were among the first and largest donors to hit the scene.

There are examples of the latter in plentitude. Pfizer donated $10 million in cash to multiple relief organizations, as well as providing $25 million in medicines and other health products to the relief effort. Nike donated $500,000 each from its corporation and its philanthropic foundation. Wal-Mart donated $2 million and facilitated ways for customers to more easily and cheaply donate goods.

In an environment where so many corporations give so much money, there's no guarantee that consumers will immediately change their minds about a certain corporation due to its contribution, nor may the public be likely to recount exactly what company donated what. And while the media reported on these donations, organizations were for the most part low-key about their contributions. It was just part of doing business in a global economy.

This charitable generosity is another example of how the practices of the burgeoning field of corporate social responsibility (CSR) are changing and how companies are integrating the practice into the core protocol of their operations in 2005.

Chris Deri, an SVP of CSR communications at Edelman, says that businesses are approaching CSR as a business process, rather than something done solely out of goodwill.

"Companies [have] wanted to do the right thing, but now many companies understand these issues are also directly relevant to their business and performance," Deri says.

"Four years ago, people were saying, "[CSR] is not material to my business," Deri adds, but in the wake of corporate malfeasance and intense public scrutiny of corporations, companies of all stripes were taken aback and delved into CSR as a way to show the positive sides of corporations.

"This got under their skin," Deri says. "The initial response was, 'How do I undermine the credibility of these detractors?'"

The fundamental shift is that companies are being much more proactive about their CSR practices, rather than just responding to external campaigns and criticism.

Christina Siun O'Connell, director of CSRWire, a press release distribution service for announcements related to CSR that are distributed to CSR organizations, says companies are also beginning to understand the balance of alerting the public to its initiatives, while not overtly promoting their good deeds.

"Companies in the past had been hesitant to talk about their programs because they thought it was boasting," O'Connell says. "A lot of companies have done wonderful things, but never talked about it."

Deri says this new and improved approach to corporate responsibility parallels what works successfully in ordinary media and investor relations.

"Companies don't engage in IR or media relations for just one story," Deri says. "You engage [journalists and investors] on that continuum."

Deri adds: "The only thing that come close to inoculating a company against [an NGO maelstrom] is dedicating itself to a continuum of credibility."

"We certainly see more companies not only developing their initiatives, but talking about them, issuing press releases, and integrating CSR into their corporate communications," O'Connell says. "That's a major change from four years ago when companies weren't doing [any of] that."

Companies are also focusing CSR efforts on narrow fields so they can develop an expertise.

Mike Virgintino, manager of CSR for Canon says the company is focusing on two major CSR tenets: youth-related programs, such as its corporate sponsorship of the National Center for Missing or Exploited Children, started by television personality John Walsh; and the environment, through its work with Yellowstone Park.

"Any company [can] be focused on several items, but it needs to ask, 'Where does it want to place its concentration?'" Virgintino says.

Canon's main push in 2005 is providing the Children's Medical Fund of New York with pro bono communications help, advising it on how to broaden communications beyond the core group of individuals and families that have supported CMF, according to Mike Virgintino, manager of CSR for the company.

Virgintino says the guidance provided by Canon includes structuring the non-profits communications to run as if it were a corporation, using PR, marketing strategies, and improving its internet and intranet sites.

"Canon is very strong on environmental issues; it's important to the company as a whole and a key to Canon's existence," Virgintino says. "This is an area where more companies are becoming involved because they wish to give back to the communities."

Above all, Virgintino says that CSR is a commitment and not a tool for repelling criticism.

"Customers and consumers know whether a company is normally involved in CSR practices by its day-to-day activities," Virgintino says.

Delta Faucet is brokering relationships with water conservations organizations in 2005.

"We've identified a number of organizations that we might partner with and align ourselves with a program to make the most impact on the community," says Cori McCormick, director of Delta Faucet's advertising and brands.

"When faced with a choice, many consumers would rather buy from a company they feel better about," McCormick says.

Jeff Erickson, director of operations at SustainAbility, agrees that customers will choose a more socially responsible company's product among products of similar quality, price, and service.

While Erickson says those corporations have to realize their stake and influence on change, government involvement is very important.

"Like any social movement in the last 200 years, regulation will make [CSR] happen for everyone," Erickson says, pointing to historical issues of slavery, diversity, and hazard waste.

"That's what will occur on issues of CSR," Erickson says. "In the meantime, companies will look at the business side of it, and that will drive the companies to embrace CSR."

Erickson decries the current situation where companies are focused primarily on quarterly results, instead of long-term commitments.

"Until that changes and more analysts are focused on long-term goals, it will be more difficult for companies to make a plunge when there's not a strong business case for it," Erickson says.

Edelman's Deri cites The Home Depot as a company that made a strong business decision motivated by CSR principles, when it made it a priority to purchase sustainable wood for its stores. This pleased a lot of NGOs who were campaigning against the company.

When the company communicated that it missed some targets in purchasing certified wood, Deri says the NGOs said, "We understand that the company is working hard and taking its goals seriously."

Deri says CSR will reach its critical point when it just becomes a part of the larger landscape and it's just one more facet by which a company judges its processes, and not in its separate silo. But he hastens to add it's still a slow process.

"Like any other business decision, you have to walk before you run," Deri says. "If I were the Tide brand manager when it launched, and I said to the CEO we should launch this in all different types of formulas, he would have thought I was crazy."

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