I saw this article on MarketingVox over the weekend and thought it might be worth spending a little quality time discussing the social merits and marketing opportunities presented by corporate social responsibility (CSR) programs.

Over two-thirds of companies surveyed by a team from IBM claimed to take a more “strategic” view of CSR programs than simple philanthropy.  And over half of the companies interviewed said their CSR programs were profit centers. 

IBM Report on Corporate Social Responsibility - (download the report here)

What it comes down to is the fundamental premise that companies can make money by doing social good.  But this is more than just having corporate “nice guys” finish first.

Probably the most notable thing to keep in mind when discussing CSR programs is that they take time to evolve and even more time to provide a demonstrable return on investment.  As a result, many of the early CSR efforts undertaken by companies and their PR advisors were accused of being “high on production value and low on substance.”

Fortunately, these early criticisms did not prematurely end the growth of corporate social responsibility programs as a viable business strategy.

The primary reason for this is the fact that nearly two-thirds of consumers who hear and successfully process a CSR-related message for a brand develop a strong positive inclination towards that brand that often changes buying behavior and, eventually, market share.  The influence works the other way, too, creating consumer pressure on brands that are seen as ignoring social issues or just behaving badly.

In fact, a 2004 study of CSR programs conducted by APCO Worldwide found the following:

“Positive CSR information has led 72% of the respondents to purchase a company’s product or services and 61% to recommend the company to others. Conversely, negative CSR news has led 60% to a boycott a company’s products and services,” (as reported in PR Week).

These economic realities make it even more tempting for businesses to adopt a CSR position in name only, leaving the harder cultural and financial changes undone in the process.  In the case of environmental programs and positions (now so favored among US businesses), the term is called “Greenwashing.”

Now, admittedly, you can’t make all the environmentalists happy all of the time, but some of the corporate initiatives to “go green” seem to be a bit half-hearted.  Some environmental groups play along – becoming, in effect, corporate cheerleaders.  But most groups know adopting a environmentally-friendly market position is a daily grind.  An on-going task.

How do you know if your company (or your client) is attempting to ”greenwash” a situation?  Here are some helpful tips from a comprehensive article on the subject:

  • Follow the Money Trail: many companies are donors to political parties, think tanks and other groups in the community. Few companies actually disclose in their annual reports exactly whom they are donating to, even though it is shareholders money. Ask about all their donations, not just those they boast about in glossy documents such as the corporate social responsibility reports.
  • Follow the membership trail: Many companies boast about the virtues of their environmental policy and performance but hide their anti-environmental activism behind the banner of an industry association to which they belong. Find out what industry association companies are members of and check and see what their policies are. Assume that all individual companies support the trade associations policy positions until such time as they publicly state that they don’t agree with them or they resign. (See the article on the third party technique, a central plank in most PR campaigns).
  • Follow the paper trail: Most companies, or their trade associations, will make submissions to government and other inquiries on a wide range of issues. Often these submissions will be posted to a website. They will also send lots of letters to politicians and government agencies, which can be accessed by Freedom of Information Act searches. Ask about submissions made by the company and their lobbying on issues you are interested in. You will probably discover that instead of lobbying for tougher environmental standards, they are busy trying to weaken the ones that exist.
  • Look for skeletons in the company’s closet: Every company has major problems that it doesn’t want the public and regulators to know about. Some companies include information in the annual reports about problems that have been in the news in the last year. More often, there will have been problems, occasionally reported in the media, which they don’t want to tell shareholders about. Check for information on the company with watchdog groups and in the media and compare that with what they disclose.
  • Test for access to information: Many companies will make lofty claims about their commitment to transparency and providing information to ‘stakeholders’. Don’t just take them at their word. In their reports they will probably refer to environmental impact statements, reviews, audits, monitoring data and other information. If it relates to an issue you are interested in, ask to see it. And remember that ‘commercially confidential’ is just corporate speak for ‘no’.
  • Test for international consistency: Most companies will operate to different standards in other countries. Check and see whether their operating standards and procedures are consistent or whether they opt for lower standards where they think they can get away with it.
  • Check how they handle their critics: Some companies go to extraordinary lengths to try and silence their critics. This can involve everything from legal threats (see the article on SLAPPs) to funding and collaborating with police and military forces.
  • Test for consistency over time: It is common for a company to launch a policy or initiative and then starve it of funds. Or a company will make promises when they are under public pressure but never implement them when the spotlight fades.

So you have to take the good with the bad.  It’s like that in life, I suppose.  CSR programs are important and, thankfully, they’re here to stay.  But companies who take their eye off the social “prize” and focus too much on trying to find a competitive marketing advantage by adopting the mantle (but not the cultural change that goes with it) can run afoul of watchdog groups who can turn the tide of goodwill against them.

It will be an interesting marketing trend worth watching over the foreseeable future. 

If you’re interested in learning more, you can check out CSR-related stories every day by going here.

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