The case for the defence

Large corporations have come under fire from all quarters in recent years, and now two of the most derided, Tesco and McDonald’s, are fighting back. But changing brand perceptions and developing successful corporate social responsibility policies is no easy task. By David Benady

Tesco and McDonald’s have soaked up increasingly stinging attacks from anti-corporate campaigners over the years. But last week, both launched surprise counter-offensives to strike back at their critics.

Retail chain Tesco took out ads in national newspapers proclaiming its Community Plan policy, announced last month – quite out of the blue – by chief executive Sir Terry Leahy. It consists of “simple changes” the supermarket chain is making in response, it claims, to customers’ wishes for it to “change a few things for the better”. These range from spending £100m on renewable energy and making carrier bags degradable, to cutting the noise of delivery vans.

At the same time, McDonald’s has launched its most concerted fight back against the criticisms of its opponents since the McLibel trials of the 1990s. Steve Easterbrook, McDonald’s UK chief executive and president, appeared last week on a televised “head-to-head” confrontation with arch-McDonald’s basher Eric Schlosser, author of the coruscating nemesis of the industry, Fast Food Nation. Last weekend, the chain launched ads promoting its new website “makeupyourownmind.co.uk” which it claims is intended to “make sure there is a balanced debate” and fight off criticisms of its allegedly poor record on the environment, animal welfare, labour rights and health.

In short, the war over corporate social responsibility (CSR) has broken out into the open, after being presaged by Conservative Party leader David Cameron in his attack on irresponsible marketing and a call for greater CSR at the beginning of the year (MW January 12).

As former Enron bosses Kenneth Lay and Jeffrey Skilling await sentence after being convicted last week of one of the most infamous examples of corporate irresponsibility in history – a multi-billion dollar fraud – the issues of business ethics and the role of corporations in modern society have never appeared more important.

Image versus reality

Enron was famed in the 1990s for pushing its community values and CSR agenda. As former Enron executive and whistleblower Lynn Brewer says in her co-written book Managing Risks for Corporate Integrity/ “To the outside world, Enron was committed to the community, but behind closed doors, it was all about money and it was willing to jeopardize the safety of the community to raise its earnings.”

She says Enron-branded Post-It Notes bore the words of Dr Martin Luther King Jr: “Our lives begin to end the day we become silent about things that matter.” Brewer took the advice and did not remain silent – so in a sense the CSR initiative worked, as it inspired her to blow the whistle on corporate fraud, though it also destroyed the company.

It is clear that CSR has to go a lot further than quotes on Post-It Notes. Tesco and McDonald’s are involved in long-term strategies to show their business practices are acceptable and to smooth the path for their continued expansion.

Media punch bags

However, it seems surprising that they have taken so long to develop their ripostes. They have been used as punch bags in the media for some time now, with barely a whimper from either. As market leaders, they are bound to attract the attentions of campaigners, but that is even more reason for them to be well prepared.

Perhaps the years of bad headlines that accompanied the McLibel trial had a sobering effect on corporate strategies in general. But now the giants have been roused and are moving on to the front foot.

Many brand owners have taken steps to improve their social credentials of late. Nestlé, for years the subject of a campaign opposing its marketing of powdered baby milk in developing countries, has launched a fair trade coffee. Cadbury Schweppes has purchased “ethical” brand Green & Black’s. Even the drinks industry has launched “responsible drinking” campaigns and toned down the content of its ads. BP is the daddy of them all with its Beyond Petroleum campaign that kicked off in the late 1990s, and still features prominently in national newspapers.

So Tesco and McDonald’s have a deep well of experience to draw from. Andrew Wanliss-Orlebar, head of corporate responsibility at consultancy Corporate Edge, sees a certain maturity in the approach pursued by McDonald’s: “We are seeing an openness to discuss many aspects of its business. The tone is no longer defensive but one that is inviting discussion. That is what these larger groups have to do. McDonald’s is saying we are open to criticism, we are not pretending problems do not exist.”

But according to Russ Lidstone, chief strategic officer at Euro RSCG and a former planner on the Tesco advertising account, the two brands have sharply contrasting images among the UK public. The Brand Momentum research study carried out by Euro measures attitudes of consumers and “pro-sumers” – those who influence what other people buy. Lidstone claims Tesco is perceived to be gaining ground and moving forward as a brand, while McDonald’s is seen by the public as losing momentum.

Significant results

He says of the Tesco Community Plan: “It has been thinking about this for a long time. It runs extensive research programmes and has customer conversations all the time.” He believes the chain has been waiting until it felt able to deliver something significant.

That said, the reason many brands shy away from proclaiming an ethical stance is the fear that by raising their head above the parapet they will become an even bigger target. Indeed, these campaigns could come across as opportunist responses to the latest newspaper headlines. Tesco’s CSR onslaught coincides with the Competition Commission’s investigation into anti-competitive practices by supermarkets. McDonald’s new-found love of talking to Schlosser comes as a fictional Hollywood film version of Fast Food Nation is being prepared for release and a young people’s book version called Chew On This is released in the UK.

Orwellian promise

Meanwhile, Tesco appears to be responding to criticisms from the “Tescopoly” alliance of environmentalists, farmers and small businesses. Andrew Simms, policy director of alliance member New Economics Foundation, mocks the supermarket’s campaign. “Exactly how Orwellian is Tesco’s new promise to become a good neighbour? Interestingly, it is an admission that it hasn’t been one up until now, and it is loaded with double speak.”

And environmentalist Julia Hailes, while welcoming some of the steps, believes Tesco should do something about its use of HFCs in refrigerants and says degradable plastic bags are responsible for CO2 emissions. She says: “Tesco used to be receptive about these things, but it has closed the doors as it has focused on growth.”

But the real test of the big brand fightback will only become apparent over time. The campaigns will require constant updating and refreshing – and perhaps the occasional Post-It Note proclaiming corporate values.