Boardrooms turn corporate shade of green
Corporate social responsibility (CSR) is big business. Its practitioners say it is increasingly driving big business and shaping companies’ marketing, communications, new product development, and reputations.
The number and status of the people working in the “profession” continues to rise steeply and with the growing importance of issues such as climate change, arguably it has never been so much in the spotlight.
The “green” aspect has led some organisations to banish the “social” element from CSR, saying that it puts too much focus on community aspects, leading people to believe that CSR is only about philanthropy. RWE npower head of CR Anita Longley says that the role is evolving. She joined the company six years ago as head of stakeholder relations at a time when it did not have a head of CR.
“The perception has moved on from community programmes and philanthropy,” she says. “It’s much more mainstream now, has moved up the agenda and is accepted as part of good business practice. Investors and employees, particularly new graduates, are starting to ask about it.”
Similarly, at Honda, environment manager John Kingston moved from the customer department – an internal-facing role – to the communications team. In addition the role of Ben Stimson, BSkyB’s director of responsibility, has evolved in his time at the satellite broadcaster, which ran its first CSR brand ad “Cool Cat” at the end of last year.
All three sit within the corporate communications and marketing departments but it is just as common for CSR directors to fall under the chief operating officer’s remit or even operate from the chief executive’s office.
Corporate responsibility is no longer viewed as a niche, thanks to the attention garnered by high-profile launches of ambitious CR initiatives not to mention the growing social and political issues where big business needs to be part of the solution.
Demonstrating this, the UK’s Corporate Responsibility Group (CRG) is in the process of appointing its 100th member company. It launched in 1987 with a handful of community affairs professionals who wanted a peer network in what was then a growing field of community affairs – and a remit to “keep it small”.
However, a group spokeswoman says that because of the increasing growth of CSR within companies, that simply was not possible. Moreover, institutions such as the University of Nottingham Business School offer PhDs in the discipline.
Stimson, a former CRG chairman, says it isn’t surprising the industry has grown. He explains: “CSR wasn’t invented ten years ago. There has always been some element of awareness of the role in managing corporate responsibilities but it has been building as a professional function.”
However, he concedes that CSR can be an off-putting label, allowing detractors to dismiss it as corporate “fluff” used to market a message or jump on board an environmental and social bandwagon.
But that is not the case, adds Stimson. A CSR professional’s role is as an internal and external lobbyist, he points out, driving change and allowing employees and executives to pick up the baton: “There are fewer cynics now,” he continues. “But the key is to talk about the things that actually are relevant, how to engage people and build initiatives into development plans.”
Stimson believes that organisations must listen to their stakeholders, such as customers, and strive to meet their CSR expectations, but also drive change and set the agenda. “There is a judgement to be made – if you are being purely responsive you are not showing leadership,” he says.
A recent report for the CRG by leading business school Ashridge shows that professionals in UK-based companies increasingly see CSR as a source of competitive advantage for their companies. According to the report, creating and maintaining leadership for their companies in corporate responsibility is set to continue to grow in importance.
Indeed, 90% of practitioners believe that it will be an important part of their role by 2009.
There is also a “strong desire” to move the sector from a risk management and compliance focus to one in which CR leadership is a source of competitive advantage. This is likely to have a marked impact on how practitioners will be spending their time.
Now it is much more important to understand and engage a broad range of business functions, with marketing core among those. Just 45% of practitioners in 2007 thought working with sales and marketing was “important” or “very important”, but 59% believe it will be by next year.
Working with human resources, and understanding and working with purchasing and the supply chain are also growing in importance. Longley says: “Supply chains are important. How do you work or help with suppliers, particularly the smaller companies?”
A number of organisations are starting to demand that their suppliers, including the Government, take steps to adopt green policies. COI is understood to be ready to force ad agencies to implement green policies as it adopts a strategy of “sustainable procurement”.
The reality, says Kingston, is that companies and brands must live the promise or the premise of their CSR activities. Honda prides itself on becoming greener, an ethos Kingston says was there from the start.
However, what is changing is how the car manufacturer is communicating the green message, which is becoming an increasingly important priority throughout the industry.
Honda’s media monitoring shows that more than three-quarters of what is written in the UK motoring press is about the environment, whereas just a few years ago the emphasis would have been about safety or production.
Along with much of the motoring industry Honda is pushing billions of pounds into new product development, such as hybrid cars – and later this year in California the first production-line hydrogen fuel cell vehicle. The move has created positive headlines and boosted the marque’s corporate reputation.
Stimson says: “Climate change is one of those single issues around which a number of things have happened – there is a lot of political attention focused on it. And organisations have dealt with it in a number of ways. They have either led or responded to it.
“But there are other issues that are coming to the fore, which have not had the same attention,” he adds. “It doesn’t mean that we’re not tackling them. What has happened around climate change has had a big effect on the corporate social responsibility community.”
Longley cautions that some argue that climate change is a distraction – “although not in our sector, for whom it is critical”. But customers, she says, are starting to talk about issues such as greener fuel, though the “biggest issue for our customers at present is energy prices”.
Despite sitting firmly in a company’s communications space, few practitioners have a high public profile, which many of them argue is for the best. A good CSR programme, they say, should showcase the chiefs and employees as ambassadors, not create siloed department heads.
But for Stimson, perhaps the most encouraging evolution of CSR is the “win-win” he says that companies are seeing.
“Business success and making a positive social contribution are not mutually exclusive,” he adds. “Investors are increasingly seeing that link.”