CSR program leaders from top organizations joined Bernadette Casey at this Cone-sponsored roundtable in New York City to discuss how the function is making its presence felt in every aspect of companies' efforts.
Pam Alabaster, SVP, corporate comms, sustainable development, and public affairs, L'Oreal
Dan Bross, senior director, corporate citizenship, Microsoft
Bob Langert, VP, CSR, McDonald's
Linda Padon, GM, global corporate public policy, Chevron
Jenni Pustinger, associate marketing director, global sustainability, Procter & Gamble
Lisa Rickert, director, Clinton Global Initiative International
Dave Stangis, VP, CSR/sustainability, Campbell Soup Co.
Alanson Van Fleet, head of social responsibility and executive comms, Wells Fargo
Becky Vollmer, SVP and co-chair of global sustainability practice, Fleishman-Hillard
Michael Washburn, director of sustainability, Nestlé Waters
Jonathan Yohannan, SVP, corporate responsibility, Cone
Breaking down silos
Bernadette Casey (PRWeek): Is CR breaking down silos within companies given the need to leverage operational information?
Pam Alabaster (L'Oreal): Often, it doesn't happen naturally unless you have a structure that helps facilitate it. We formed a US Sustainability Council, which is a cross-functional approach to driving and identifying strategy-need gaps and laying the course forward, but also helping with implementation. Those are senior officers that lead functional areas, operations, supply chain, marketing, communications, HR, and so on. People have been very engaged in this council. They've wanted to actively partake and really help set the strategy.
The challenge for us now is how the US Sustainability Council works with the global sustainability leadership. We haven't quite reconciled that yet.
Alanson Van Fleet (Wells Fargo): We also have an enterprise-wide stakeholders group that looks at sustainability and social responsibility issues at the business level. Our group presidents, as well as functional presidents, are there, so it's very similar.
Our communication teams were deeply siloed, each supporting their own business unit. We've recently formed a social responsibility communication council where we have the heads of all the communications, heads that support all those different businesses and functions, meet on a monthly basis.
Lisa Rickert (CGI): We've seen our members move from just acting in philanthropic ways to what we call “corporate engagement,” or market-based solutions – corporate engagement being the use of your operational efficiencies to achieve a good impact even if it's not for profit and market-based. To do that, you must move outside of just the CSR department and into the operating entities.
Jonathan Yohannan (Cone): More than ever, marketers and brands want to be able to make claims and leverage that operational data. There needs to be some sort of line of communication. That's increased quite a bit over the past couple of years. Then there's how brands turn those business commitments into branded marketing opportunities through storytelling and engagement. There are still silos and challenges in terms of the gap between marketers and operations, but I think it's getting closer.
Dave Stangis (Campbell): We created formally charted functional organizations, not direct line but matrix, for environment, sustainability, everything around community, what we do in the workplace, and then what we do in the marketplace. They meet every other month and have a standard agenda to drive it. You can't get anything done unless you have all the people working for it.
Linda Padon (Chevron): There's a balance between recognizing that our autonomous businesses around the world all have relationships and activities that they are very interested in, but there also needs to be, for global companies, a global approach. Our approach is to layer along with our local business approach. Business success is tied to community success. They're inextricably linked.
Jenni Pustinger (P&G): We did a similar thing, which was to break down the functional silos at a global level. We have an internal sustainability board that we meet with on a quarterly basis. The officers include those from brand building, external relations, R&D, and project support. Then that group, plus our VP of sustainability, is accountable to the CEO.
Alabaster (L'Oreal): How do you drive that down into subsidiaries around the world if they're not at the table and they don't have representation in building that strategy?
Pustinger (P&G): The leader of our North American business actually sits on there. That's kind of the first step, and then we ask how does it filter out into all the different regions? I would agree that's probably still the biggest challenge.
Dan Bross (Microsoft): We're sort of talking about two different things. One is the coordination internally at the functional area on supply chain practices, or in our industry, privacy and security policies and that sort of thing. Then we are talking about a coordinated approach for external engagement.
I actually worry less about the coordinated external engagement than I do about a holistic approach on some of these corporate functions. If we aren't successful in embedding CSR policies and practices at corporate functions in some of these really critical issues, I don't know how we talk about ourselves as sustainable, responsible companies on supply chain management, human rights policies, or whatever the issue might be.
But corporate policy functions are the most challenging to really try to reshape the company's position on a critical policy issue.
Becky Vollmer (Fleishman-Hillard): With CR, you have the opportunity to really be the convener and innovator within a company. It's more than just around communications, but operationally as well. By helping to align your CR activities with the overarching business strategy, you're giving your business units, and your employees as a whole, a rallying point to get excited about it and a common cause to bring those company values into play throughout the rest of the operations.
Bob Langert (McDonald's): When you can educate and raise awareness of all the different leaders and functional leaders of the company, in general, this is not an issue where you need to push, pull, and prod. All you need to do is unleash the power.
There is a big lack of understanding on what sustainability is. We all know this. I was just meeting with leaders in this area and none of us can agree to the definition of it. So imagine trying to integrate this into your own company?
The bulk of my time is spent raising awareness and on education. That formula works because it empowers them and it gets them to realize, “OK, here's how I can embed it in my job, in my function.” Then things can happen more naturally after that.
Michael Washburn (Nestlé Waters): Being patient with that process can be a real art. We have a corporate citizenship committee that's comprised of every division of the company. On that committee are approximately 16 people, four of them are on the executive team. So it's very clear that the leadership of the organization has bought into the agenda our sustainability work and that really helps me much more in the role of facilitator or convener.
Van Fleet (Wells Fargo): We're the nation's largest home mortgage. CSR convened a meeting not long ago asking, “OK, what can the different businesses, not just the mortgage business, do to help people stay in their homes?”
Our student-lending group might not ever talk to the mortgage-lending people, but then you get to this question, “How do we help people stay in their homes?” All of a sudden, you start looking more broadly across the business lines. People ask, “Well, if we're going to forgive some part of the mortgage, can we forgive some part of the student loan?” It was one of the first times the business lines really talked together about how they could help the customer.
Casey (PRWeek): This is all probably further complicated as things span globally and programs get bigger.
Vollmer (Fleishman): It speaks to the importance of having a really integrated and multidisciplinary approach to communications. Getting on board your public affairs, your IR, marketing, and corporate communications, so that they are all on board with the understanding of the company's mission, business mission, as well as corporate responsibility mission and how that's coming to life, how real people are being benefited. Then finding ways to communicate that in a way that will matter with the people who matter to you.
Before the roundtable began, PRWeek and Cone hosted a breakfast event featuring Bob Langert, VP of CSR at McDonald's. The quick-serve chain's global CSR team is comprised of five people who provide strategy and frameworks, as well as the company's beliefs and values in the space. Langert says his team's most important role is bringing the outside community in. “We're there to push the envelope and be a voice where the gaps are,” he explains. “Too often, companies just listen to themselves. We really have to get business leaders from the outside. Today, it's not just business. It's business and society together. It's about defining that sweet spot where they intersect. Doing it the right way is a key role for people like us in this field.”
Gaining the customer's attention
Casey (PRWeek): How are companies and brands making CR commitments relevant to consumers and customers? Are there key learning aspects that can help?
Washburn (Nestlé): I can give an example. We're the world's largest bottled-water company. Water is something most people care about. So when you go into the community with the intention of taking water out of the ground and putting it into bottles, it tends to evoke people's curiosity.
For us, it's less about the fact we're taking water. It's much more about how we have the conversation with people in the community and how much they are in possession of the facts about what we're doing. People don't like being surprised. Ten, 15 years ago, we used a minimalist approach. These are the permits that we need and then there would be an announcement in the middle of the paper that Nestlé Waters was suddenly in a community. People would go crazy.
The learning that occurred for us is that we now go in very visibly, very publicly. After we've done our due diligence and we're serious about exploring a site, we tell the community, “We'd like to have a conversation with you about doing business.” That fundamentally changes the outcome.
Pustinger (P&G): You've hit on a couple of things. Most stakeholders don't expect perfection. They expect dialogue to be part of the process. They expect transparency. They expect progress.
Langert (McDonald's): In our business, we used to always concentrate on the “What will we do.” As this evolves, the “how” is almost as important as the “what.” A lot of companies still concentrate on the “what” in terms of meeting the program of policy. Oftentimes, everything has to be buttoned up and perfect before you announce it.
Consumers are looking for the “what,” but probably of more importance they're looking for the “how.” It's the things you just mentioned. How is the company engaging? Are they listening? Are they learning? Are they trying? Are they reporting their progress? Are they acknowledging that there are problems and barriers and being honest? I mean it's all more of an approach, an attitude of trying versus waiting for everything to be perfect. That's a big change.
Bross (Microsoft): We're helping people who have functional responsibilities understand that it's OK to engage with Greenpeace or a privacy group and that you don't need to have everything buttoned up. It's OK to say, “Well, we have more work to do in this area.” That's where some of the biggest resistance comes internally. If you are able to have some successes and demonstrate the successes, then there is less resistance going forward.
Padon (Chevron): The move from philanthropy to actual partnerships was mentioned earlier and that's the approach we've taken. It's much more partnership-focused than philanthropic – and investment focused, social investment, in our communities, as opposed to looking at it from a charitable standpoint. That's where we've seen the difference – engagement and partnership.
Yohannan (Cone): Honesty and transparency trump perfection. Certainly stakeholders and consumers will assume you are doing nothing if you are not communicating at all. The real art is figuring out what's relevant at the time. How do you make it relevant to the customer, the employer, the investor? There is no shortage of proof points. It's about what do you use and how do you tell that story in a way that's going to move the business. That's the hard part.
Stangis (Campbell): Consumers don't expect the world from us. They expect progress. What you see is the maturation of CSR sustainability strategies, both from the communications and the operation side. Now everybody has an environmental program, a workplace program, a community program. If you took away the name, you couldn't tell the companies apart. But that's changing.
Rickert (CGI): Employees are a big part of this. Giving them stories to tell their family and friends, either in the recruiting process or just even enhancing the brand, having ambassadors out there who are proud of who they work for.
Alabaster (L'Oreal): The storytelling has to be crafted. Consumers are not really interested in what L'Oreal the enterprise is doing, as much as they are [L'Oreal brands] Lancôme or Garnier, so being able to adapt the storytelling to be meaningful and relevant for the audience type is important.
Pustinger (P&G): The principles are still true, though. In thinking about a brand such as Pampers, it's a brand that needs to be transparent about its sustainability progress. They're still approaching it. The language is different. The story they tell might be told in a more consumer- friendly way.
Padon (Chevron): So it goes back to the corporate core values, right? Someone mentioned earlier, “How do you define CSR?” Even around my own leadership team table there were different answers. At the end of the day, however, if you say that CR is really putting your core corporate values into action, then it can go across any brand, product, story, or community. That's the approach we've started.
Langert (McDonald's): As I mentioned before, the consumer is looking, especially at bigger companies and multinationals, through a lens of a lack of trust. If you look at any trust survey, who ends up in last place? It's our sector. Who finishes in first place? It's the NGO community. More and more, consumers are getting their confidence when a company is doing something through the voice of an NGO.
We started this 20 years ago with a big partnership with the Environmental Defense Fund. We were under a lot of heat on packaging waste, so we worked with them and came up with a 42-step way to reduce, reuse, recycle. We ended up reducing 300 million pounds in our operations.
If we had done that work without the Fund and only did it by ourselves, even in those amounts, it would have had no relevance. There is not enough credibility for a company alone to communicate big initiatives.
Pustinger (P&G): We also have a huge partnership with World Wildlife Fund. Beyond the credibility, they've taught us a lot. We really have learned, going back to our supply chain in areas that are great to improve on, so they bring a lot to the table.
Bross (Microsoft): In addition to the partnerships with NGOs, we should not discount opportunities to collaborate with other companies in our industry. Microsoft, Intel, and Cisco have a partnership focused on education, empowerment in education, skill, and training. That was a great partnership we actually got a lot of credit for because we were breaking down some corporations who do compete with each other in some instances and joined together to address a global social issue.
Casey (PRWeek): We've heard for years how consumers have expectations of what companies should be doing, but is the customer now rewarding the company with their purchase decision? Are we moving the needle?
Pustinger (P&G): If we look at the needle over the last three years, I don't think it has moved that much, if at all, in terms of the percentage of consumers that are willing to make that tradeoff. It's still a really small group of people that don't care as much about performance or price and are willing to sacrifice all that to be more sustainable. The innovation challenge is giving them performance, good value, and an increasingly more sustainable product. That's what we're focused on.
Stangis (Campbell): Yeah, that purchase is an emotional choice. For years we tried to make a case that people would pay more for these products. We knew some people would, but not everybody.
Casey (PRWeek): Is driving environment efficiencies enough to create strong marketing plans or do customers see it as too aligned with the big business/self-interest?
Washburn (Nestlé): We have reduced our greenhouse gas emissions in the past 10 years as we've grown. That's increased our efficiency. I'm sure that has allowed more investment in the establishment of better supply chain and more marketing dollars, but it's not visible to the consumer.
Vollmer (Fleishman): There is no shame in acknowledging that sustainability and profitability absolutely go hand in hand. It's a fact and a company shouldn't be apologetic about it. That speaks to an important part of the triple bottom line. To your question about whether environmental efficiencies alone are enough to resonate with consumers, it can't be done in a vacuum. The environmental piece must be just as strong as the rest of the CSR commitment to be relevant and authentic.
Yohannan (Cone): I agree. Companies shouldn't shy away from communicating operational efficiencies where there is a perceived benefit for consumers. If consumers can feel they are buying a product that has a lighter footprint and has the same quality and advocacy, fantastic. There is no reason not to.
Alabaster (L'Oreal): I can share an example. We used to take mascara – Maybelline and L'Oreal Paris mascaras – and sell them packed by threes. A little cardboard box would then go in another box to CVS.
One day we had this meeting with CVS management and they asked, “What could we do to reduce the impact of all of this packaging? Why do you send the mascara vials in the cartons that then go in the other cartons?” We said, “Well, we thought you preferred it that way.” But they said, “Well no. In fact, it's really inefficient for us. Not only to we have to dispose of it and it becomes waste for us, but our clerks have to take them out and then flatten the box. It's inefficient for them as well.”
Now mascaras just get dumped in one big box and the savings on that little project was $900,000. Just like that. There is no shame at all in sharing the efficiencies of driving waste out of the system with your customers.
Pustinger (P&G): It's part of that progress, right? It's just good business right now. It's not enough yet, at least in our industry, to tip the purchase intent if the other elements are not there with performance and price. Is it still a good thing to continue to communicate? Absolutely. It's part of laying that foundation of what you are doing as a company and part of that broad definition of good.
Langert (McDonald's): But it must go way beyond just efficiencies. I agree with everything that's been said, but to have credibility you need to do more than that. For instance, initially, a lot of stuff we do is more break-even. I always ask, “What's the return on the brands?” A lot of our packaging uses recycled paper. We don't save money doing it. We try to manage it so that it's a break-even point. There are other things where you are going to spend some money.
For our fish program, which we don't talk about publicly much, we spend more money on sustainable fish and we made decisions not to purchase from certain areas. It's just something we do.
I spoke earlier about how we all need to raise the bar for industry. Sometimes you spend more money to get the standard to be higher. Then it becomes more shared cost for everybody.
Rickert (CGI): This goes back to the trust issue. It's telling them how the transparency helps build all that.
Padon (Chevron): Sustainable corporate responsibility is both good for the business and the society. That's the sweet spot. Finding that and then communicating it.
Langert (McDonald's): You'll see our communications efforts expand. When we study what consumers want to know more about, they want to know about that space. How they want it delivered to them would be the next question. Do they want it in front of their face at the counter or the restaurants? Not all the time. We need to be subtle and strategic. Certainly through all forms of digital communications. That's the space we believe in. Should it be on the package? Should it be on the menu board? Those are other questions.
Van Fleet (Wells Fargo): We invested a lot of money in new paperless ATMs. We know that's going to save 22,000 trees this year. It's going to cost us some money. So when you pull up to an ATM, to these electronic screens, should we promote this paperless feature? Would somebody drive across town to use this? Probably not, but if you were there and we could make that point, that's really immediate. It's very relevant to the consumer where they are transacting business.
Yohannan (Cone): The McDonald's case is interesting. Is there an obligation or opportunity to educate consumers about sustainable seafood and what it means to be buying tilapia in, say, farm-raised conditions in China? There are other things you do that are highly visible and great, but have no messaging on them. Offering apples, say, as an option for added nutrition. You don't need to message that blatantly. It's interesting with this line – where do you communicate?
The role of social media
Casey (PRWeek): What is social media's role? How much time are you spending on it? Is it having the effect you would like?
Alabaster (L'Oreal): We're in our infancy of understanding how to use that medium at a corporate enterprise level. The brands are a lot more adept at it. We don't even have a corporate Facebook page at the moment.
Van Fleet (Wells Fargo): It's certainly a hot topic for us, but right now our investment is on face-to-face conversations with stakeholders. We have to pay attention to social media, but those one-on-one conversations are a higher priority right now.
Langert (McDonald's): It's a terrific revelation to realize you no longer own your brand – and why don't we own our brand? It's mostly due to the digital medium. We're still early on in the journey, but we're working very, very hard to integrate everything we can. McDonald's USA's Facebook page has at least 9 million fans now. On Twitter, we have a corporate page. It's been a tough decision for us to make. To me, it's almost a mandatory in the space.
Vollmer (Fleishman): Being in the social media space may be the best place to get at consumers. For other audiences, whether it's investors or public affairs, one-on-one conversations may be right. For others it might just be word of mouth and getting your brands and your messages to be part of the conversation. Ultimately, it speaks to the importance of getting everybody within your organization to buy into the idea of how important corporate responsibility and sustainability commitment and actions are to your overall business and your overall business strategy. Getting everybody aligned, getting them all singing from the same hymnal, and talking about your progress and your achievements, really, in surround sound, and making sure you're doing it at a place where your key stakeholders already are. In a lot of cases, social media is an outstanding way to achieve that, especially when you can get others talking about your brand on your behalf.
Casey (PRWeek): As the corporate representatives charged with getting the CSR program message out, are you concerned about resources – budgeting, staffing – with everyone having to do more with less these days?
Bross (Microsoft): I'm less concerned about the number of people on my team and more focused on making sure various people across the corporation understand how this work relates to their job. So we'll have a software developer in the Windows group making sure that she understands the importance of whatever she's developing, that privacy concerns are taken into consideration, or that if we have somebody over in the gaming division that issues around appropriate content are thought about while games are in development. That's where we need to be focused, not the number of people on each of our respective teams.
Pustinger (P&G): If we do this right, it should be everybody's job.
Stangis (Campbell): There is a huge role for HR in this. They are one of those later players to the game, not that they don't want to be involved. We try to incentivize it. We put it in recognition systems. We put it in compensation systems.
Bross (Microsoft): We had a team off site last week. One of the wishes somebody on the team came up with was that every Microsoft employee carried his CSR commitment on their personal performance review. The way you would meet that commitment is different depending on your job. That's when you can really have some success.
Stangis (Campbell): We have it as a mandatory field on everybody's personal performance objective. We've also added it to incentive compensation for managers and above.
There is a field you have to fill out on your review. What is it you are going to do or what is it you and your manager are going to do to activate and help advance one of our four strategic areas in CSR.
Bross (Microsoft): That's great. Was that a difficult task?
Stangis (Campbell): Once we got agreement at the top it wasn't. It actually happened sooner than we had hoped.
Casey (PRWeek): What do see as the next challenge or the next opportunity in CSR?
Stangis (Campbell): The biggest opportunity for us and the other consumer brands is the consumer dialogue, to get the engagement. A lot of experimentation is going on with how to get the consumers involved and engaged in our strategy in a way that's good for them and us. I haven't seen a company that's got it right. We're working on that strategy now.
Padon (Chevron): Our challenge, whether it's two months, two years, or the foreseeable future, is the recognition, both internally and externally, that corporate responsibility is a journey. There isn't a beginning or an end, but we need to continually show progress. Also, continuing to show the connection between what's good for business and good for society is actually what corporate responsibility is.
Langert (McDonald's): The consumer engagement part, that's both the challenge and the opportunity. Within a company like ours, you probably need to start inside out. So inside out means we employ 1.7 million people. Then we add up the suppliers. Our challenge, and opportunity, is to engage our system as well. That's a big task. If you ask me this question five or 10 years from now, it will probably be the same answer. It's an ongoing effort.
Again, consumers want to know where the food is coming from, what's it made from, and how did you bring it along the system. Can you imagine if all of our sourcing practices, which are sort of invisible to the consumer, were to become more transparent?
Alabaster (L'Oreal): When we think about CSR, we often think about doing less harm and shifting that paradigm to creating that positive impact. We have a new plant in India and the water that comes into the manufacturing facility there was undrinkable. Through capital investment we have changed that, so the waste water that leaves the plant is actually drinkable for the community. Those are the kinds of examples we need to aspire to.
Bross (Microsoft): For those of us around the table who work for large multinational, US-based, global companies, the challenge is thinking about CSR in a more culturally sensitive way globally. How do we, as leaders of this function at the corporate level, help our leaders in various countries around the world understand how they should localize this work? Are we as companies receptive to hearing other voices from other countries and other governments in looking at the concept of corporate responsibility? Long-term, that is the challenge, but also the opportunity.
Rickert (CGI): It's taking what we're talking about here as corporate responsibility and embedding it throughout a company, all decision-making processes. It really needs to be seen as the core of the company and not CR driving their agenda, but the company driving CR.
Van Fleet (Wells Fargo): Right now we are facing so many corporate responsibility issues all at once. So it's deciding which are those that are most important to address now with our core businesses? The answer for us is going to be around how we build and strengthen sustainable communities, whether that's through lending practices, through financial education practices, from strong and stable community banks across this country. Improving the economy in our communities and our country is so central.
Pustinger (P&G): Our biggest challenge is how do we deliver breakthrough innovation that can have a measurable impact on some of the key indicators for sustainability that don't require the consumer to give up performance. How do we get more Tide Coldwaters? If everybody's willing to switch to cold, it will have a measurable impact on the energy grid. How do we do more of that? That's a big challenge.
Washburn (Nestlé): For us there are two different sets of issues. There's stuff we can control directly: what happens in our plants, how we site our springs, how we procure materials, how we manage our fleets. We've got a pretty good handle on that. There is still room to grow, but we know where we're going and we're moving as quickly as we can.
The other circle is outside our direct control. For example, my job is to try to get back all those pesky little plastic bottles from all over the US, have a robust recycling system that gets them back, and an industry that reprocesses them into usable plastic that we can put back in the box.
In order for me to do that, I need the collaboration of other CPG companies that do packaging. I need municipal recycling programs. I need state legislatures. I need a whole lot of things outside of my control to move that agenda. And that's our biggest vulnerability.