CSR has often been mis-labelled as “green washing”, or just a bit of fluff to boost marketing efforts. But it, or at least the principles behind it, really do matter to corporate reputation.
Corporate reputation matters - perhaps now more than ever. The evolution of social media as an access point to companies and company leaders, and the ongoing debate around issues such as data privacy, supply chains and employee rights mean that businesses are being compelled more and more to be transparent; we know more, and therefore we expect more – including how far a company lives up to its values and has purpose.
Indeed, CBI’s Reputation Business Tracker survey showed that in an era of Brexit and political uncertainty, the public wants businesses and their leaders to provide a sense of stability and speak up about the big social issues that matter to them, their consumers and the community.
To take two recent examples: Nike’s decision to use Colin Kaepernick in its advertising campaign was the move of a brand ‘taking a stand’ on an issue that mattered to it, and that resonated with its values and those of its stakeholders and customers. Nike’s market value rose by a reported £6bn since the campaign. In the UK, frozen foods seller Iceland has been hitting the headlines after its Christmas TV ad was barred from being broadcast by Clearcast. Iceland’s underlying strategy can be debated but the message of environmental responsibility and sustainability matched up with the brand’s ongoing campaign on Palm Oil and tapped into a public increasingly environmentally aware thanks to the roaring success of things like Blue Planet II.
But this trend shouldn’t be frightening. Responsible business means valuable business – but businesses have to identify and define their goals, engage authentically, and practice what they preach in order to build both stakeholder trust and wider public trust. Socially responsible business can improve brand sentiment and lead to increased numbers of voluntary recommendations – which can boost revenue for businesses of any size. This is particularly true of younger people, with research from Forrester showing that almost 70% of millennials (in the US) actively consider company values when making a purchase.
Increasingly, business leaders are baking this understanding into the way they run their companies as they think beyond the financial bottom line and adapt their businesses to benefit their “triple bottom line” – the social, environmental, and financial outcomes of their business. Consider Larry Fink of Blackrock’s now famous letter calling for companies to consider, if not focus on, the social implications of business decisions.
This tide of change has been long in the making, with the rise of bCorps – such as Cabot Creamery Cooperative – showing how a focus on social and environmental issues can create competitive advantage. Meanwhile in the UK, new reporting expectations will see companies of a certain size include analysis not just of financial performance, but on social and environmental impact in strategic reports.
The business case for CSR is now generally accepted by company leaders, but there do remain barriers to full implementation.
Perhaps CSR itself needs rebranding. Maybe, instead, we should just call it responsible business – maybe this would best reflect the changed understanding of the role that business plays in addressing social and environmental issues and its inextricable link with corporate reputation. Maybe, eventually, we’ll simply call it good business.
Read here to learn about Infinite Global's policy on corporate responsibility.