Moving CSR from philanthropy to alignment with commercial objectives

There is an increasing disconnect between the amount of brands invest in their CSR programmes and the messaging that is actually getting across to consumers, a trend which suggests companies need to work harder to ensure their CSR initiatives are directly linked to commercial success and not just treated as a “philanthropic” exercise.

Reputation Institute’s global CSR RepTrak 100 report found the top companies for CSR reputation spend an average of $50m per year on CSR activities, yet more than half (55 to 61 per cent) of consumers are “neutral” or “not sure” if those brands can be trusted to be good corporate citizens, behave ethically nor are they appealing places to work that treat their employees well.

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Sainsbury’s says sustainability should be embedded into business structure.

The report’s authors say one of the main critiques of the CSR field is the lack of data to prove the ROI of activity, but the Reputation Institute claims for every 5 points a company improves on its scale, consumer recommendations about that brand increase by 9 per cent.

]Kasper Ulf Nielsen, Reputation Institute executive partner, says so few CSR programmes are linked to business strategy they are at risk of becoming “irrelevant”, which is in part due to CSR being placed in the hands of the CMO.

He adds: “CSR is doomed if it’s put under the responsibility of the wrong CMO. Marketers are so used to putting out messages that they’re missing the point, it’s about what stakeholders expect of the company. The company that gets it right is one that listens rather than one that talks – this is not about spending more money on campaigns.”

Sue Unerman, MediaCom’s chief strategy officer and author of Tell The Truth, says a CMO should co-ordinate everything that impacts the brand and brand value – but some aspects of CSR do not appear to be high up the list of priorities.

“Some companies spend a lot of time and energy on [engaging employees] and some wouldn’t even show them an ad before it breaks on TV. [Elsewhere], when companies do econometric modeling, they tend to look at the effect something like the weather can have on sales. But an ongoing CSR programme and how that can be leveraged? That I’ve not seen,” she says.

Sainsbury’s has noticed increased pressures on household budgets mean shoppers are more carefully considering purchase decisions and placing an “increased” importance on CSR. This is why it now links its financial trading updates with corporate responsibility reporting and placed the same importance of its corporate responsibility and sustainability committee as all other plc board committees – the first FTSE company to do this, the grocer claims.

A spokeswoman says: “We’ve worked hard to integrate and embed sustainability within our business structure. We do not believe that sustainability should be a specialist silo, rather it is the responsibility of the whole business.”

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