Corporate social responsibility: Power to the people
Corporate citizens: An effective corporate social responsibility policy will build a strong brand and customer trust, and can be used to motivate employees.
The tax furore hitting the likes of Google and Amazon is the latest controversy in a long list to damage trust in brands, including the horsemeat debacle; Libor rate-rigging; and oil companies accused of price fixing.
It is no wonder that consumers are asking serious questions about brands’ operations, product sourcing and ethical outlook. But while some companies are affected negatively, others stay above the fray, and they often have one thing in common – a close attention to corporate social responsibility (CSR) and a grasp of how to be a good corporate citizen.
When a host of food retailers discovered that horsemeat had entered their supply chains and been sold as beef, Sainsbury’s had no positive tests in its products. That outcome could partly be as a result of a long-term CSR target of doubling the amount of British food it sources by 2020 from a 2011 level of £4bn.
Sainsbury’s head of corporate responsibility and sustainability Stuart Wright says: “We are working across 10 different agricultural and produce development groups, working closely with farmers to help them improve efficiencies, and sharing lots of information to help them grow their business as we grow ours.”
Sainsbury’s, Marketing Week’s Engage Awards Brand of the Year in 2013, has a long history of CSR – from making carrier bags from recyclable material for the first time in 1989 to being a founding partner of the FareShare community food donation programme in 1994. In October 2011, the retailer launched its 20x20 sustainability plan, which sets out a range of targets to meet by 2020.
Embedding CSR into a business so that it genuinely underpins corporate decisions requires a tough cultural change, and it needs to start at the top, says Wright. Sainsbury’s chief executive Justin King chairs its CSR steering group, while a non-executive director chairs a separate CSR committee. “From the top down it really sets the tone as to how seriously we take it,” Wright says.
When woven into the fabric of an organisation, CSR can be a powerful force in winning customer trust and building a stronger brand and business. But getting it right is not easy, as Bob Thust, head of corporate responsibility at Deloitte, explains.
If our employees understand what we’re doing and why, they will buy in and become brand ambassadors
“You can’t avoid these sorts of scandals by donating an extra £10m or doing another charity programme. These are not bad things – they should be lauded – but they don’t affect core business.”
In 2011, Deloitte launched Social Innovation Pioneers, supporting 30 socially innovative UK businesses that have a positive effect on their local community. Deloitte offers a package of support to help companies become ready to attract investment and grow, and is committing more than £1m a year to the programme.
“They are carefully selected organisations that we felt had some alignment to our industry groups or key areas of business,” says Thust. Because of this connection with the core business strategy, Deloitte has also entered into a number of joint ventures with the organisations, for example Autism Works, a software testing company that employs people with autism. “We have a software testing business so we have now signed an agreement and we are jointly bidding for work. It also adds value because clients are interested in the fact that we are working with Autism Works.”
Carpet tile maker Interface laid out its stall early on the subject of climate change. In 1994, the company’s late founder and chairman Ray Anderson set a goal to eliminate any negative effects the company has on the environment by 2020. Called Mission Zero, it underpins every aspect of the business, from sales and marketing to design and manufacturing.
“For example, we know from product lifecycle analysis that most of our environmental impact stems from our use of raw materials in making our carpet tiles,” says Majken Bulow, marketing communications director for Europe, the Middle East, Africa and India. “We have concentrated on reducing these impacts and finding alternatives by engaging with our suppliers and looking beyond our own industry for inspiration.”
This has led to successful product innovations. One of its products, Biosfera Micro, is made from recycled materials such as fishing nets and limestone and contains up to 50 per cent less yarn than standard designs.
Bulow says CSR has to make business sense and have a positive effect on the bottom line. “Mission Zero has been a tremendous source of inspiration for our design teams. Our service offerings have allowed us to expand to adjacent markets and our Microtuft products – a cross between hard flooring and carpet – have allowed us to enter markets that are traditionally adverse to carpet.”
Brands can also gain huge benefits from being recognised internally as a good corporate citizen and from enabling each employee to be one too. Heineken UK has shifted the focus of its CSR activity, which previously looked only at alcohol consumption habits, after a staff survey
showed a desire to focus on good works within their local communities.
Head of public affairs and corporate responsibility David Paterson says: “We had many colleagues who were doing the right things themselves – there was high engagement in terms of charitable giving and sponsorship activities – but there was a sense that Heineken wasn’t helping them to do that in an organised and structured way in their local areas. That was one of the big shifts – asking what we can do that really makes an impact locally and isn’t directly around alcohol responsibility.”
Last year, Heineken began working with Your Square Mile, a mutual organisation that specialises in devising local CSR initiatives. It began by talking to people in three local communities where Heineken has facilities and finding out where they could make a difference. One project the brewery has embarked on is Our Bright Future, in response to each community’s concerns about getting young people into work.
“It’s really simple, we can work with local schools to develop employability events, whether that’s getting them working in group business challenges, holding mock interviews or giving feedback on CVs. We have people who have great experience and are happy to give up time to do that.”
Getting employees involved is as important as getting buy-in from the top when embedding CSR. Paterson says: “If our employees understand what we’re doing and the reasons for doing it, they will buy in, and, of course, they will be an ambassador for the brand, and there is clearly value to that.”
At Sainsbury’s, Wright ensures the right messages are communicated internally. The company also has a ‘Tell Justin’ scheme, where colleagues can write to King with ideas. “Lots of good sustainability ideas have resulted from that, and initiatives like Active Kids and Million Meal Appeal allow colleagues to get involved,” says Wright.
This emphasis on central messaging is also illustrated well at Deloitte. Thust believes that while CSR used to be the preserve of marketing and communications – “if they did nice things they could get good profile out of it” – this evolved into dedicated CSR teams, but it has now returned to the branding sphere. “There is a much more sophisticated understanding of what it means to have a strong brand – it isn’t about traditional marketing or PR – it’s about cultural change.”
Deloitte is also seeing benefits to its employer brand. “People are interested in working for a business that they believe has the same values that they do. We wouldn’t recruit the same calibre of people if we weren’t seen to be acting in a responsible way,” says Thust.
John West aims to become Europe’s number one supplier of sustainable seafood by 2015, demonstrating how vital CSR and sustainability are to the brand.
In October 2011, it worked with PR agency Grayling to develop a Can Tracker on its website, enabling people to trace their tuna to the boat that made the catch. The device used data including catch certificates and shipping documents from fishing sites across the supply chain to record and map where each fish was sourced.
John West marketing director Jon Walsh says: “The Can Tracker was a worldwide first and gave John West a unique position that no other fish manufacturer could benefit from, which gave the brand a strong commercial advantage. The Can Tracker has built John West’s brand value and helped boost its market share through an enhanced reputation in sustainability, sending a strong message to the industry.”
In 2011, John West regained the number one position in its market with a 33 per cent value share and an increase in revenue of £29m year-on-year, the company says. Last year, it was listed as one of the top 10 fastest growing grocery brands, according to data from Nielsen.